BILL ANALYSIS



H.B. 1496
By: Sadler
May 2, 1995
Committee Report (Unamended)


BACKGROUND

Present language makes it impossible for contractors providing the
services described in the exception to the exception to enter into
a valid and enforceable indemnification agreement in favor of their
customers such that their insurance will be bound to cover such
indemnification agreements. The reality of the marketplace is such
that vendors of these services are having to enter into the
indemnity agreements only to find the illegality and
unenforceability of the agreements providing a defense to insurance
companies with respect to liability on claims arising under the
indemnity agreements. If the statute is amended to delete the
exception within the exception then contractors can continue
providing the services with the only difference being that then
they can have the same opportunity to enter into indemnification
agreements supported by insurance as vendors of services not
included in the exception to the exception.

PURPOSE

As proposed, H.B. 1496 deletes certain exceptions to the exception
relating to indemnity agreements.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not delegate any
additional rulemaking authority to a state officer, institution,
agency.  

SECTION BY SECTION ANALYSIS

     SECTION 1. Amends Section 127.005(a), Civil Practice and
Remedies Code, by deleting the exception with respect to the
purchase, gathering, storage, or transportation of oil, brine
water, fresh water, condensate, produced water, petroleum products,
or other liquid commodities for agreements that provide indemnity
if the parties agree in writing that the indemnity that the
indemnity obligation will be supported by liability insurance
coverage to be furnished by the indemnitor. 

     SECTION 2. Specifies that this Act applies only to an
agreement that provides for indemnity entered into on or after the
effective date of this Act.  

     SECTION 3.     Emergency Clause - Effective immediately.

SUMMARY OF COMMITTEE ACTION

H.B. 1496 was considered by the Civil Practices Committee in a
public hearing on April 12, 1995. The following individuals
testified in support of the bill: Mike Parker, attorney,
representing himself and Taylor Interests, Inc. No one testified in
opposition to or neutrally on the bill. The bill was left pending.
The bill was considered by the committee in a formal meeting on May
1, 1995. The bill was reported favorably, without amendment, with
the recommendation that it do pass and be printed and be sent to
the Committee on Local and Consent Calendars, by a record vote of
seven ayes, zero nays, zero pnv, and two absent.