By Shapleigh S.B. No. 1489
77R8445 DAK-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to indemnification in construction contracts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 6, Civil Practice and Remedies Code, is
1-5 amended by adding Chapter 145 to read as follows:
1-6 CHAPTER 145. INDEMNITY PROVISIONS IN CONSTRUCTION CONTRACTS
1-7 Sec. 145.001. DEFINITION. In this chapter, "construction
1-8 contract" means a contract or agreement made and entered into by an
1-9 owner, contractor, subcontractor, or supplier concerning the
1-10 construction, alteration, repair, or maintenance of a building,
1-11 structure, appurtenance, or other improvement to or on real
1-12 property, including moving, demolition, and excavation connected
1-13 with the real property.
1-14 Sec. 145.002. AGREEMENT VOID AND UNENFORCEABLE. Except as
1-15 provided by Section 145.003, a covenant, promise, agreement, or
1-16 understanding contained in a construction contract, or in an
1-17 agreement collateral to or affecting a construction contract, is
1-18 void and unenforceable if it indemnifies, holds harmless, or
1-19 defends a person against loss or liability for damage that:
1-20 (1) is caused by or results from the sole or
1-21 concurrent negligence of the indemnitee, its agent or employee, or
1-22 an independent contractor, other than the indemnitor, directly
1-23 responsible to the indemnitee; and
1-24 (2) arises from:
2-1 (A) personal injury or death;
2-2 (B) property damage;
2-3 (C) a fine, penalty, administrative action, or
2-4 other action assessed by a governmental entity directly against the
2-5 indemnitee, its agent or employee, or an independent contractor
2-6 directly responsible to the indemnitee; or
2-7 (D) any other loss, damage, or expense that
2-8 arises from an occurrence described by Subparagraph (A), (B), or
2-9 (C).
2-10 Sec. 145.003. INDEMNIFICATION PERMITTED. A covenant,
2-11 promise, agreement, or understanding contained in a construction
2-12 contract, or in an agreement collateral to or affecting a
2-13 construction contract, may provide for a person to indemnify, hold
2-14 harmless, or defend another person against loss or liability for
2-15 damage that is caused by or results from the sole or concurrent
2-16 negligence of the indemnitee or its agent or employee and arises
2-17 from the bodily injury or death of an employee of:
2-18 (1) the indemnitor;
2-19 (2) the indemnitor's subcontractor or supplier;
2-20 (3) any lower-tier subcontractor or supplier of the
2-21 indemnitor's subcontractor; or
2-22 (4) any independent contractor directly responsible to
2-23 a person described in Subdivisions (1)-(3).
2-24 Sec. 145.004. LIMITS ON LIABILITY. Liability for agreements
2-25 under this chapter that indemnify, hold harmless, or defend may not
2-26 exceed the coverage and dollar limits of insurance, including
2-27 qualified self-insurance acceptable to the indemnitee, that the
3-1 indemnitor has agreed to provide under a construction contract or
3-2 in an agreement collateral to or affecting a construction contract.
3-3 Sec. 145.005. INSURANCE CONTRACTS; WORKERS' COMPENSATION;
3-4 CONTRIBUTION. This chapter does not affect the validity and
3-5 enforceability of:
3-6 (1) an insurance contract;
3-7 (2) benefits and protections under the workers'
3-8 compensation laws of this state; or
3-9 (3) any statutory right of contribution.
3-10 Sec. 145.006. EXCLUSION. This chapter does not apply to:
3-11 (1) an indemnity provision in a mineral agreement
3-12 covered by Chapter 127;
3-13 (2) an operation or contract directly concerning or
3-14 arising out of the exploring for, drilling for, producing,
3-15 transportation of, refining of, manufacturing, distribution, or
3-16 sale of oil, natural gas, and other petroleum products; or
3-17 (3) an operation or contract directly concerning or
3-18 arising out of the manufacturing and production of goods, including
3-19 plastics, in which oil, natural gas, or other petroleum products
3-20 are a principal base stock.
3-21 Sec. 145.007. WAIVER PROHIBITED. This chapter may not be
3-22 waived by contract or otherwise.
3-23 SECTION 2. (a) This Act takes effect September 1, 2001.
3-24 (b) The changes in law made by this Act apply only to
3-25 liability for an act of negligence under a contract entered into on
3-26 or after the effective date of this Act. Liability for an act of
3-27 negligence under a contract entered into before the effective date
4-1 of this Act is governed by the law applicable to the contract
4-2 immediately before the effective date of this Act, and that law is
4-3 continued in effect for that purpose.