SRC-BWC S.B. 561 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 561
77R1963 AEI-FBy: Sibley
Jurisprudence
2/28/2001
As Filed


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.  As proposed, 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 exist 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,
registered 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 certain
damages. 

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 a conforming change. 

SECTION 5.  Amends Section 271.904 (Purchasing and Contracting Authority of
Municipalities, Counties, and Certain Other Local Governments), Local
Government Code, by deleting Subsection (b) which makes reference to an
agreed upon covenant. 

SECTION 6.  Effective date:  September 1, 2001.
                       Makes application of the Act prospective.