75R11994 DLF-F
By Holzheauser, Eiland, Jackson, Elkins, H.B. No. 961
Merritt, et al.
Substitute the following for H.B. No. 961:
By Zbranek C.S.H.B. No. 961
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to indemnity provisions in certain agreements for services
1-3 relating to real property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 6, Civil Practice and Remedies Code, is
1-6 amended by adding Chapter 145 to read as follows:
1-7 CHAPTER 145. INDEMNITY PROVISIONS IN CERTAIN
1-8 AGREEMENTS RELATING TO REAL PROPERTY
1-9 Sec. 145.001. DEFINITIONS. In this chapter:
1-10 (1) "Loss" includes any part of a loss arising from a
1-11 suit or other claim, including:
1-12 (A) the costs of defense of the suit or claim;
1-13 and
1-14 (B) any damages or other loss or liability
1-15 arising with respect to the suit or claim.
1-16 (2) "Real property" includes an improvement to real
1-17 property.
1-18 (3) "Real property services" means any services
1-19 provided in connection with the construction, maintenance, or
1-20 repair of real property, including:
1-21 (A) design services;
1-22 (B) building services;
1-23 (C) services to rework, remodel, repair, or
1-24 improve the real property;
2-1 (D) testing services;
2-2 (E) services to treat the real property;
2-3 (F) services relating to purchasing goods or
2-4 materials for the real property; and
2-5 (G) cleaning services.
2-6 (4) "Real property services contract" means an
2-7 agreement to which this chapter applies under Section 145.002.
2-8 (5) "Real property services indemnity agreement" means
2-9 a written or oral agreement contained in, collateral to, or
2-10 affecting a real property services contract in which a party agrees
2-11 to indemnify another party for a loss.
2-12 Sec. 145.002. SCOPE OF CHAPTER. This chapter applies only
2-13 to:
2-14 (1) a written or oral agreement or understanding
2-15 concerning the provision of real property services; or
2-16 (2) a written or oral agreement or understanding under
2-17 which a person will perform:
2-18 (A) a part of real property services that are to
2-19 be performed; or
2-20 (B) an act collateral to those real property
2-21 services, including providing:
2-22 (i) rental equipment;
2-23 (ii) incidental transportation; or
2-24 (iii) other goods, materials, or services
2-25 furnished in connection with the real property services.
2-26 Sec. 145.003. AGREEMENT VOID AND UNENFORCEABLE. A real
2-27 property services indemnity agreement is void and unenforceable to
3-1 the extent the agreement purports to indemnify a person against
3-2 loss related to or arising out of:
3-3 (1) the sole negligence of:
3-4 (A) the person;
3-5 (B) an agent or employee of the person; or
3-6 (C) a person who is directly responsible to a
3-7 person described by Paragraph (A), other than the person who is
3-8 obligated to make the indemnification;
3-9 (2) the gross negligence or wilful misconduct of any
3-10 person described by Subdivision (1); or
3-11 (3) a fine, penalty, or administrative or other action
3-12 assessed by a governmental entity directly against the person who
3-13 is to be indemnified under the agreement.
3-14 Sec. 145.004. LIMITED INDEMNIFICATION PERMITTED. (a) A
3-15 real property services indemnity agreement may indemnify a person
3-16 only for:
3-17 (1) a loss, whether based on contract, tort, statute,
3-18 or otherwise, related to or arising out of an act or omission of:
3-19 (A) the person obligated to make the
3-20 indemnification;
3-21 (B) an agent or contractor of the person
3-22 obligated to make the indemnification; or
3-23 (C) any person directly or indirectly employed
3-24 by a person described by Paragraph (A) or (B); or
3-25 (2) subject to Section 145.003 and Section 145.005, a
3-26 loss that:
3-27 (A) is associated with bodily injury to or death
4-1 of:
4-2 (i) an employee or agent of the person
4-3 obligated to make the indemnification;
4-4 (ii) a contractor of the person obligated
4-5 to make the indemnification; or
4-6 (iii) any person directly or indirectly
4-7 employed by a person described by Subparagraph (i) or (ii); and
4-8 (B) relates to or arises out of an act or
4-9 omission of the person to be indemnified.
4-10 (b) In a real property services indemnity agreement
4-11 authorized under Subsection (a)(1), the liability of a person for
4-12 indemnity may not exceed the percentage of responsibility for the
4-13 harm caused by the person. In this subsection "percentage of
4-14 responsibility" has the meaning assigned by Section 33.011.
4-15 (c) This section does not require a person to assume a
4-16 liability or obligation described by Subsection (a).
4-17 Sec. 145.005. INSURANCE LIMITATIONS. (a) Liability for
4-18 indemnity under a real property services indemnity agreement
4-19 authorized under Section 145.004(a)(2) may not exceed:
4-20 (1) the coverage and dollar limits of insurance,
4-21 including qualified self-insurance acceptable to the person to be
4-22 indemnified under the agreement, that the person obligated to make
4-23 the indemnification has agreed to provide under the real property
4-24 services contract or indemnity agreement; or
4-25 (2) $500,000, if no coverage and dollar limits of
4-26 insurance are specified in the real property services contract or
4-27 indemnity agreement.
5-1 (b) A real property services contract or indemnity agreement
5-2 that requires a liability insurance policy held by the person
5-3 obligated to make the indemnification to name the person to be
5-4 indemnified as an additional insured may not require coverage for
5-5 liability other than the liability assumed under the contract or
5-6 agreement. This subsection applies without regard to whether the
5-7 person to be indemnified is named in the policy by endorsement or
5-8 otherwise.
5-9 (c) A policy provision or agreement described by Subsection
5-10 (b), or a different policy provision or endorsement intended to
5-11 accomplish the same purpose, that imposes obligations on the
5-12 insurer that are greater than the indemnity obligations authorized
5-13 by this chapter is void and unenforceable.
5-14 (d) A provision in a real property services contract or
5-15 indemnity agreement that requires a person to provide insurance
5-16 coverage is void and unenforceable to the extent that the required
5-17 coverage exceeds the limitations of this chapter.
5-18 Sec. 145.006. EFFECT ON INSURANCE CONTRACT. Except as
5-19 provided by Section 145.005, this chapter does not affect the
5-20 applicability, validity, or enforceability of an insurance
5-21 contract.
5-22 Sec. 145.007. APPLICATION OF CHAPTER. This chapter does not
5-23 apply to:
5-24 (1) indemnity provisions in mineral agreements
5-25 governed by Chapter 127;
5-26 (2) contracts governed by Chapter 130; or
5-27 (3) indemnity provisions contained in financial or
6-1 surety bond agreements, unless the indemnity provisions are
6-2 directly related to real property services.
6-3 Sec. 145.008. WAIVER PROHIBITED. The provisions of this
6-4 chapter may not be waived by contract or otherwise.
6-5 SECTION 2. This Act takes effect September 1, 1997.
6-6 SECTION 3. Chapter 145, Civil Practice and Remedies Code, as
6-7 added by this Act, applies only to a real property services
6-8 contract or indemnity agreement entered into on or after the
6-9 effective date of this Act. A real property services contract or
6-10 indemnity agreement entered into before the effective date of this
6-11 Act is governed by the law as it existed immediately before the
6-12 effective date of this Act, and that law is continued in effect for
6-13 that purpose.
6-14 SECTION 4. The importance of this legislation and the
6-15 crowded condition of the calendars in both houses create an
6-16 emergency and an imperative public necessity that the
6-17 constitutional rule requiring bills to be read on three several
6-18 days in each house be suspended, and this rule is hereby suspended.