BILL ANALYSIS H.B. 1496 By: Sadler (Nixon) Natural Resources 5-25-95 Senate Committee Report (Unamended) BACKGROUND Current law makes it difficult for certain contractors to enter into a valid and enforceable indemnification agreement in favor of their customers that would require the insurance to cover such agreements. In the marketplace, vendors are entering into 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. PURPOSE As proposed, H.B. 1496 deletes language providing that agreements with respect to the purchase, gathering, storage, or transportation of oil, brine water, fresh water, condensate, produced water, petroleum products, or other commodities are exceptions to agreements providing for indemnity supported by liability insurance coverage to which Chapter 127, Civil Practice and Remedies Code, does not apply. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 127.005(a), Civil Practice and Remedies Code, to delete language providing that agreements with respect to the purchase, gathering, storage, or transportation of oil, brine water, fresh water, condensate, produced water, petroleum products, or other commodities are exceptions to agreements providing for indemnity supported by liability insurance coverage to which this chapter does not apply. SECTION 2. Makes application of this Act prospective. SECTION 3. Emergency clause. Effective date: upon passage.