78R6521 AJA-F
By: Gallegos S.B. No. 1693
A BILL TO BE ENTITLED
AN ACT
relating to enforcement of certain provisions in construction
contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 6, Civil Practice and Remedies Code, is
amended by adding Chapter 138 to read as follows:
CHAPTER 138. CERTAIN PROVISIONS IN CONSTRUCTION CONTRACTS
Sec. 138.001. DEFINITION. In this chapter, "construction
contract" means a contract or agreement entered into or made by an
owner, contractor, subcontractor, or supplier concerning the
construction, alteration, repair, troubleshooting, or maintenance
of a building, structure, appurtenance, or other improvement to or
on real property, including moving, demolition, and excavation
connected with the real property.
Sec. 138.002. AGREEMENT VOID AND UNENFORCEABLE. 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:
(1) is caused by or results from the sole or concurrent
negligence or fault, including strict liability, of the indemnitee,
an agent or employee of the indemnitee, or an independent
contractor directly responsible to the indemnitee; and
(2) arises or results from:
(A) death or bodily injury to a person;
(B) damage to property;
(C) a fine, penalty, administrative action, or
other action by a governmental entity; or
(D) any other loss, damage, or expense that
arises from an occurrence described by Paragraph (A), (B), or (C).
Sec. 138.003. EFFECT ON INSURANCE POLICY. (a) 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) 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) 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. The provisions of this
chapter may not be waived by contract or otherwise.
Sec. 138.005. CONFLICT OF LAWS. 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
if:
(1) the premises where the labor is performed or the
materials are delivered under the contract are in this state or its
territorial reach; or
(2) the contract was negotiated in whole or in part in
this state.
Sec. 138.006. APPLICABILITY OF OTHER LAW. This chapter
prevails over any other law that conflicts with or is inconsistent
with this chapter.
SECTION 2. (a) This Act applies to a construction contract
entered into or renewed on or after the effective date of this Act
and to any specific, terminable performance of a specific job or
activity begun under a construction contract after the effective
date of this Act, including performance under a master or general
service agreement, a blanket or maintenance contract, or any
similar agreement or contract that purports to provide indemnity to
the indemnitee for all or part of the work performed, in whatever
form and by whatever name, regardless of whether the agreement or
contract was entered into or renewed before the effective date of
this Act.
(b) A construction contract entered into or renewed before
the effective date of this Act and any job or activity under the
contract begun before the effective date of this Act is governed by
the law in effect immediately before the effective date of this Act,
and that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2003.