BILL ANALYSIS S.B. 341 By: Armbrister Economic Development 04-05-95 Committee Report (Amended) BACKGROUND Current law restricts an engineer's ability to seek contractual indemnification from others. Engineers are prohibited from requiring a contractor to indemnify the engineer against the engineer's negligence. The engineer is prohibited by law from passing the liability for his or her negligence onto a contractor, but can be required to accept the negligence of an owner. PURPOSE As proposed, S.B. 341 amends the process of indemnification in construction contracts by prohibiting owners from requiring registered engineers or architects to indemnify the owner, owner's agent, or employee against liability caused by the owner's, owner's agent's, or employee's negligence. 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 Sections 130.001, 130.002, and 130.004, Civil Practice and Remedies Code, as follows: Sec. 130.001. DEFINITION. Redefines "construction contract." Sec. 130.002. COVENANT OR PROMISE VOID AND UNENFORCEABLE. (a) Created from existing text. Makes a nonsubstantive change. (b) Provides that except as provided by Subsection (c), a covenant or promise in connection with, or collateral to a construction contract for other than a single or multifamily residence is void and unenforceable if the covenant or promise provides that a registered architect or engineer whose work is the subject of the contract must indemnify the owner or the owner's agent or employee against liability for damages caused by or resulting from the negligence of the owner or the owner's agent or employee and arising from personal injury or death; property injury, or any other expense that arises from personal injury, death, or property injury. (c) Provides that a covenant under which a registered architect or engineer agrees to indemnify or hold harmless the owner or the owner's agent or employee against liability arising from personal injury or death of the architect or engineer or employees of the architect or engineer is enforceable. Sec. 130.004. OWNER OF INTEREST IN REAL PROPERTY. Makes conforming changes. SECTION 2. Amends the heading of Chapter 130, Civil Practice and Remedies Code, as follows: CHAPTER 130. New title: INDEMNIFICATION IN CERTAIN CONSTRUCTION CONTRACTS SECTION 3. Makes application of this Act prospective. SECTION 4. Emergency clause. Effective date: upon passage.