By:  Duncan                                                       S.B. No. 1689


A BILL TO BE ENTITLED

AN ACT

relating to third-party civil liability for certain persons 
entering into building or construction contracts.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Sections 408.001(a) and (b), Labor Code, are 
amended to read as follows:
	(a)  Recovery of workers' compensation benefits is the 
exclusive remedy of an employee covered by workers' compensation 
insurance coverage or a legal beneficiary against:
		(1)  the employer or an agent or employee of the 
employer for the death of or a work-related injury sustained by the 
employee; or
		(2)  a general contractor as defined in Section 
417.0011, if the general contractor has provided worker's 
compensation insurance coverage for the employee.
	(b)  This section does not prohibit the recovery of exemplary 
damages by the surviving spouse or heirs of the body of a deceased 
employee whose death was caused by an intentional act or omission or 
the gross negligence of the employer or other person described by 
Subsection (a)(2).
	SECTION 2.  Section 417.001(1), Labor Code, is amended to 
read as follows:   
	(a)  Except as provided by Section 471.0011, an [An] employee 
or legal beneficiary may seek damages from a third party who is or 
becomes liable to pay damages for an injury or death that is 
compensable under this subtitle and may also pursue a claim for 
workers' compensation benefits under this subtitle.
	SECTION 3.  Chapter 417, Labor Code, is amended by adding 
Section 417.0011 to read as follows:
	Sec. 417.0011. THIRD-PARTY LIABILITY FOR BUILDING OR 
CONSTRUCTION.  (a)  In this section:
		(1)  "Building or construction" has the meaning 
assigned that term by Section 406.096(e).
		(2)  "Contract" means a written agreement enforceable 
under law.
		(3)  "General contractor" means a person who undertakes 
to procure the performance of work or a service either separately or 
through the use of subcontractors.  The term includes a principal 
contractor, original contractor, prime contractor, or other 
similar term.  The term does not include a subcontractor.
	(b)   An employee of a subcontractor or a legal beneficiary 
of the employee, may not seek damages from a third party who is a 
general contractor and who is a party to a building or construction 
contract for an injury or death that is compensable under this 
subtitle if:
		(1)  workers' compensation insurance coverage for the 
employee is provided under the contract as required by Section 
406.096, or the general contractor elects in the contract to 
provide, and does provide, workers' compensation insurance 
coverage for the employee;
		(2)  the employee was employed by a subcontractor who 
entered into a written contract with the general contractor to 
perform building or construction work; and
		(3)  the injury arises out of an act or omission 
directly related to the performance of the work under the contract.
	(c)  Nothing in this subtitle prohibits the employee of a 
subcontractor performing work under a building or construction 
contract from seeking damages from another subcontractor 
performing work under the contract.
	(d)  The immunity from liability under this section and Sec. 
408.001(a)(2) does not apply to a claim for damages in which the 
injury or disease:
		(1)  was caused in whole or in part by exposure to or 
the deposit, discharge, or release into the environment of 
hazardous chemicals, hazardous wastes, hazardous hydrocarbons, 
similarly harmful organic, inorganic, dusts, fibers or mineral 
substances, hazardous radiation sources, and other similarly 
harmful substances; and
		(2)  did not manifest itself within one year of 
exposure to the substance or substances.
	SECTION 4.  Chapter 417, Labor Code, is amended by adding 
Section 417.0012 to read as follows:
	Sec. 417.0012.  INDEMNIFICATION AGREEMENTS VOID.  A general 
contractor defined in Section 417.0011(b) may not require a 
subcontractor or independent contractor who provides workers' 
compensation insurance as a part of a building or construction 
contract to enter into an agreement pertaining to such building or 
construction contract and any such agreement is void if it purports 
to indemnify a person against loss or liability for damage that:
		(1)  is caused by or results from the sole or concurrent 
negligence of the indemnitee, his agent or employee, or an 
individual contractor directly responsible to the indemnitee; and
		(2)  arises from:                                                      
			(A)  personal injury or death;                                        
			(B)  property damage; or                                              
			(C)  any other loss, damage, or expense that 
arises from personal injury, death, or property injury.
	SECTION 5.  The change in law made by this Act applies only 
to a claim based on a compensable injury that occurs on or after the 
effective date of this Act.  A claim based on a compensable injury 
that occurs before the effective date of this Act is governed by the 
law in effect on the date the injury occurred, and the former law is 
continued in effect for that purpose.
	SECTION 6.  This Act takes effect September 1, 2005.