1-1     By:  Sibley                                            S.B. No. 561
 1-2           (In the Senate - Filed February 6, 2001; February 7, 2001,
 1-3     read first time and referred to Committee on Jurisprudence;
 1-4     March 6, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 6, Nays 0; March 6, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 561                   By:  Duncan
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to indemnification provisions concerning registered
1-11     architects and licensed engineers in certain construction
1-12     contracts.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  The heading to Chapter 130, Civil Practice and
1-15     Remedies Code, is amended to read as follows:
1-16              CHAPTER 130.  INDEMNIFICATION [OF ARCHITECTS AND
1-17                ENGINEERS] IN CERTAIN CONSTRUCTION CONTRACTS
1-18           SECTION 2.  Section 130.001, Civil Practice and Remedies
1-19     Code, is amended to read as follows:
1-20           Sec. 130.001.  DEFINITION.  In this chapter "construction
1-21     contract" means a contract or agreement made and entered into by an
1-22     owner, contractor, subcontractor, registered architect, licensed
1-23     engineer, or supplier concerning the design, construction,
1-24     alteration, repair, or maintenance of a building, structure,
1-25     appurtenance, road, highway, bridge, dam, levee, or other
1-26     improvement to or on real property, including moving, demolition,
1-27     and excavation connected with the real property.
1-28           SECTION 3.  Section 130.002, Civil Practice and Remedies
1-29     Code, is amended to read as follows:
1-30           Sec. 130.002.  COVENANT OR PROMISE VOID AND UNENFORCEABLE.
1-31     (a) A covenant or promise in, in connection with, or collateral to
1-32     a construction contract is void and unenforceable if the covenant
1-33     or promise provides for a contractor who is to perform the work
1-34     that is the subject of the construction contract to indemnify or
1-35     hold harmless a registered architect, licensed [registered]
1-36     engineer or an agent, servant, or employee of a registered
1-37     architect or licensed [registered] engineer from liability for
1-38     damage that:
1-39                 (1)  is caused by or results from:
1-40                       (A)  defects in plans, designs, or specifications
1-41     prepared, approved, or used by the architect or engineer; or
1-42                       (B)  negligence of the architect or engineer in
1-43     the rendition or conduct of professional duties called for or
1-44     arising out of the construction contract and the plans, designs, or
1-45     specifications that are a part of the construction contract; and
1-46                 (2)  arises from:
1-47                       (A)  personal injury or death;
1-48                       (B)  property injury; or
1-49                       (C)  any other expense that arises from personal
1-50     injury, death, or property injury.
1-51           (b)  A covenant or promise in, in connection with, or
1-52     collateral to a construction contract other than a contract for a
1-53     single-family or multifamily residence is void and unenforceable if
1-54     the covenant or promise provides for a registered architect or
1-55     licensed engineer whose work product is the subject of the
1-56     construction contract to indemnify or hold harmless an owner or
1-57     owner's agent or employee from liability for damage that is caused
1-58     by or results from the negligence of an owner or an owner's agent
1-59     or employee.
1-60           SECTION 4.  Section 130.004, Civil Practice and Remedies
1-61     Code, is amended to read as follows:
1-62           Sec. 130.004.  OWNER OF INTEREST IN REAL PROPERTY.
1-63     (a)  Except as provided by Section 130.002(b), this [This] chapter
1-64     does not apply to an owner of an interest in real property or
 2-1     persons employed solely by that owner.
 2-2           (b)  Except as provided by Section 130.002(b), this [This]
 2-3     chapter does not prohibit or make void or unenforceable a covenant
 2-4     or promise to:
 2-5                 (1)  indemnify or hold harmless an owner of an interest
 2-6     in real property and persons employed solely by that owner; or
 2-7                 (2)  allocate, release, liquidate, limit, or exclude
 2-8     liability in connection with a construction contract between an
 2-9     owner or other person for whom a construction contract is being
2-10     performed and a registered architect or licensed [registered]
2-11     engineer.
2-12           SECTION 5.  Section 271.904, Local Government Code, is
2-13     amended to read as follows:
2-14           Sec. 271.904.  INDEMNIFICATION.  (a)  A [Except as provided
2-15     by Subsection (b), a] covenant or promise in, in connection with,
2-16     or collateral to a contract for engineering or architectural
2-17     services to which a governmental agency is a party is void and
2-18     unenforceable if the covenant or promise provides that a licensed
2-19     [registered] engineer or registered architect whose work product is
2-20     the subject of the contract must indemnify or hold harmless the
2-21     governmental agency against liability for damage that[:]
2-22                 [(1)]  is caused by or results from the negligence of
2-23     the governmental agency or its agent or employee[; and]
2-24                 [(2)  arises from:]
2-25                       [(A)  personal injury or death;]
2-26                       [(B)  property injury; or]
2-27                       [(C)  any other expense that arises from personal
2-28     injury, death, or property injury].
2-29           (b)  [A covenant under which a registered engineer or
2-30     registered architect agrees to indemnify or hold harmless a
2-31     governmental agency or its agent or employees against liability
2-32     arising from the personal injury or death of the architect or
2-33     engineer or the employees of the architect or engineer is
2-34     enforceable.]
2-35           [(c)]  In this section, "governmental agency" has the meaning
2-36     assigned by Section 271.003.
2-37           SECTION 6.  This Act takes effect September 1, 2001, and
2-38     applies only to a construction contract entered into on or after
2-39     that date.  A construction contract entered into before the
2-40     effective date of this Act is governed by the law in effect on the
2-41     date the construction contract was entered into, and the former law
2-42     is continued in effect for that purpose.
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