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.