SRC-BWC S.B. 561 77(R)BILL ANALYSIS Senate Research CenterS.B. 561 By: Sibley Jurisprudence 5/23/2001 Enrolled DIGEST AND PURPOSE Currently, Texas law provides that a contractor cannot be required to indemnify an engineer or architect from certain liability arising from the negligence of the engineer or architect. Engineers and architects, however, are often faced with contractual provisions that require the engineer or architect to indemnify an owner against liability arising from the owner's negligence. These provisions are uninsurable under the coverages typically carried by architects and engineers. S.B. 561 provides that these provisions are void and unenforceable to the extent that an engineer or architect is required to indemnify an owner against the owner's negligence. A similar provision applying to construction contracts entered into by governmental entities already exists in the Local Government Code. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 130, Civil Practice and Remedies Code, as follows: CHAPTER 130. New heading: INDEMNIFICATION IN CERTAIN CONSTRUCTION CONTRACTS SECTION 2. Amends Section 130.001, Civil Practice and Remedies Code, by redefining "construction contract" to include "registered architect, licensed engineer, or supplier concerning the design." SECTION 3. Amends Section 130.002, Civil Practice and Remedies Code, by providing that a covenant or promise in, in connection with, or collateral to a construction contract other than a contract for a single family or multifamily residence is void and unenforceable if the covenant or promise provides for a registered architect or registered engineer whose work product is the subject of the construction contract to indemnify or hold harmless an owner or owner's agent or employee from liability for damage that is caused by or results from the negligence of an owner or an owner's agent or employee. Amends reference from "registered engineer" to "licensed engineer." Makes a conforming change. SECTION 4. Amends Section 130.004, Civil Practice and Remedies Code, by providing that except as provided by Section 130.002(b), this chapter does not apply to an owner of an interest in real property or persons employed solely by that owner. Makes conforming changes. SECTION 5. Amends Section 271.904, Local Government Code, by deleting Subsection (b), which makes reference to an agreed upon covenant. Deletes text regarding damages that arise from certain types of injuries. Makes conforming changes. SECTION 6. Effective date: September 1, 2001. Makes application of this Act prospective.