SRC-JEC S.B. 1693 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1693
78R6521 AJA-FBy: Gallegos
State Affairs
4/22/2003
As Filed


DIGEST AND PURPOSE 

Currently, on construction projects, general contractors and
subcontractors assume liability for accidents on the job, instead of the
job owners, regardless of who is to blame.  As proposed, S.B. 1693 amends
the Civil Practice and Remedies Code to provide that the party at fault is
the one liable for damages in a construction contract. 

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 Title 6, Civil Practice and Remedies Code, by adding
Chapter 138, as follows: 

CHAPTER 138.  CERTAIN PROVISIONS IN CONSTRUCTION CONTRACTS

Sec. 138.001.  DEFINITION.  Defines "construction contract." 

Sec. 138.002.  AGREEMENT VOID AND UNENFORCEABLE.  Provides that a
provision, promise, understanding, or covenant contained in, collateral
to, or affecting a construction contract is void and unenforceable to the
extent that it provides or purports to provide to the indemnitee defense
or indemnity, or both, against loss or liability that meets certain
conditions. 

Sec. 138.003.  EFFECT ON INSURANCE POLICY.  (a) Provides that an insurance
policy provision or endorsement that would frustrate or circumvent the
prohibitions of this chapter, including a waiver of subrogation and an
additional named insured endorsement, is void and unenforceable to that
extent, and the policy may apply only to damages arising from the
negligence of the person who is the named insured in the policy. 

(b)  Provides that a provision, promise, understanding, or covenant in a
construction contract requiring an insurance policy provision or
endorsement that would frustrate or circumvent the prohibitions of this
chapter, including the payment of all or a portion of an indemnitor's
insurance premium by an indemnitee, is also void and unenforceable. 

(c)  Provides that, except as provided by this section, this chapter does
not affect the validity of an insurance policy or contract or a benefit
conferred by the workers' compensation laws of this state. 

Sec. 138.004.  WAIVER PROHIBITED.  Prohibits the waiver of the provisions
of this chapter by contract or otherwise. 

Sec. 138.005.  CONFLICT OF LAWS.  Provides that a covenant, promise,
agreement, or understanding that is contained in or collateral to or that
affects a construction contract or a  related insurance policy provision
or endorsement and that provides that the law of another state will apply
to the contractual relationship between the indemnitor and the indemnitee
is against public policy and void under certain circumstances. 

Sec. 138.006.  APPLICABILITY OF OTHER LAW.  Provides that this chapter
prevails over any other law that conflicts with or is inconsistent with
this chapter. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.  Effective date:  September 1, 2003.