SRC-JFA S.B. 530 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 530
By: Duncan
Economic Development
4-9-97
As Filed


DIGEST 

Currently, the Civil Practice and Remedies Code does not prohibit certain
real property services indemnity agreements.  Thus, in construction
contracts, owners will require general contractors to assume liability for
the owner's negligence.  In turn, general contractors will require
subcontractors to assume such liability.  As a result, a subcontractor may
be liable for an accident even though the subcontractor's involvement in
the accident may have been minimal.  This bill would permit
indemnification for a company's actions to the extent of the company's
responsibility for that action; permit the indemnitee to require
indemnification from the indemnitor for bodily injury or death to an
indemnitor or the indemnitor's employees or agents; prohibit the
indemnitee from requiring the indemnitor to indemnify the indemnitee for
the indemnitee's sole negligence, gross negligence or willful misconduct
as well as fines and penalties assessed by governmental entities, and,
finally, prohibit waiver of the provisions of this Act by contract.    

PURPOSE

As proposed, S.B. 530 provides that certain real property services
indemnity agreements are void and unenforceable and limits the
indemnification permitted in those agreements that are valid.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Title 6, Civil Practice and Remedies Code, by adding
Chapter 145, as follows: 

CHAPTER 145.  INDEMNITY PROVISIONS IN CERTAIN
AGREEMENTS RELATING TO REAL PROPERTY

Sec. 145.001. DEFINITIONS.  Defines "loss," "real property," "real
property services," "real property services contract," and "real property
services indemnity agreement."   

Sec. 145.002. SCOPE OF CHAPTER.  Provides that this chapter applies only
to a written or oral agreement or understanding concerning the provision
of real property services; or a written or oral agreement or understanding
under which a person will perform certain acts relating to real property
services.   

Sec. 145.003. AGREEMENT VOID AND UNENFORCEABLE.  Provides that a real
property services indemnity agreement is void and unenforceable to the
extent the agreement purports to indemnify a person against certain
losses.  

Sec. 145.004.  LIMITED INDEMNIFICATION PERMITTED.  Authorizes a real
property services indemnity agreement to indemnify a person only for
certain losses.  Prohibits the liability of a person for indemnity from
exceeding the percentage of responsibility for the harm caused by the
person in a real property services indemnity agreement authorized in this
section.  Defines "percentage of responsibility."  Provides that this
section does not require a person to assume a liability or obligation
described in this section.   
 
Sec. 145.005. INSURANCE LIMITATIONS.  Sets forth the limits of liability
for indemnity under a real property services indemnity agreement
authorized under Section 145.004. Prohibits a real property services
indemnity agreement that requires a liability insurance policy held by the
person obligated to make the indemnification to name the person to be
indemnified as an additional insured from requiring coverage for liability
other than the liability assumed under the agreement.  Provides that the
foregoing provision applies without regard to whether the person to be
indemnified is named in the policy by endorsement or otherwise.  Provides
that a policy provision or agreement described by this section, or a
different policy provision or endorsement intended to accomplish the same
purpose, that imposes obligations on the insurer that are greater than the
indemnity obligations authorized by this chapter is void and
unenforceable.  Provides that a provision in a real property services
indemnity agreement that requires a person to provide insurance coverage
is void and unenforceable to the extent that the required coverage exceeds
the limitations of this section. 

Sec. 145.006. EFFECT ON INSURANCE CONTRACT.  Provides that except as
provided by Section 145.005, this chapter does not affect the
applicability, validity, or enforceability of an insurance contract.  

Sec. 145.007. WAIVER PROHIBITED.  Prohibits the provisions of this chapter
from being waived by contract or otherwise.  

Sec. 145.008. APPLICATION OF CHAPTER.  Provides that this chapter does not
apply to indemnity provisions in mineral agreements governed by Chapter
127 of this code.   

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Makes application of this Act prospective.

SECTION 4. Emergency clause.