By: Duncan, Harris S.B. No. 346
 
 
A BILL TO BE ENTITLED
AN ACT
relating to indemnification provisions in construction contracts.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  The Civil Practice and Remedies Code is amended
by adding Title 10 to read as follows:
TITLE 10.  ADDITIONAL MISCELLANEOUS PROVISIONS
CHAPTER 502.  INDEMNITY PROVISIONS IN CONSTRUCTION CONTRACTS
       Sec. 502.001.  DEFINITIONS. In this chapter:
             (1)  "Additional insured" means a person covered under
another person's insurance policy for an occurrence caused by
something other than the sole negligence of the first named insured
under the policy.
             (2)  "Construction contract" means a contract or
agreement entered into or made by an owner, contractor,
subcontractor, or supplier concerning the construction,
alteration, remodeling, repair, or maintenance of a building,
structure, appurtenance, or other improvement to or on public or
private real property, including moving, demolition, and
excavation connected with the real property.  The term includes a
contract or agreement described by this subdivision under which the
construction, alteration, remodeling, repair, or maintenance is
performed under a consolidated insurance program.
       Sec. 502.002.  AGREEMENT VOID AND UNENFORCEABLE. (a)  A
covenant, promise, or understanding contained in a construction
contract, or in an agreement collateral to or affecting a
construction contract, is void and unenforceable if it purports to
indemnify, hold harmless, or defend a person against loss or
liability for damage that is caused by or results from:
             (1)  the breach of contract or warranty by the
indemnitee;
             (2)  the sole or concurrent negligence of the
indemnitee; or
             (3)  a fine, penalty, administrative action, or other
action assessed by a governmental entity directly against the
indemnitee except to the extent that the indemnitor contributed to
the violation upon which the fine, penalty, or administrative
action is based.
       (b)  For the purposes of this section, an indemnitee includes
the indemnitee's agent or employee or an independent contractor,
other than the indemnitor, directly responsible to the indemnitee.
       Sec. 502.003.  UNENFORCEABLE INSURANCE PROVISIONS. (a)  A
covenant, promise, agreement, or understanding contained in a
construction contract, or in an agreement collateral to or
affecting a construction contract, that requires a person to
provide insurance coverage or does provide insurance coverage, is
void and unenforceable to the extent that it requires:
             (1)  contractual liability coverage that exceeds the
limitations of the indemnity obligations of this chapter;
             (2)  that a person be an additional insured for that
additional insured person's own negligence; or
             (3)  a workers' compensation insurance policy to be
endorsed to provide a waiver of subrogation.
       (b)  An insurance contract may not provide an additional
insured endorsement or a waiver of subrogation that is in
contravention of this chapter. Any purported endorsement or waiver
described by this subsection is void and unenforceable.
       Sec. 502.004.  INSURANCE CONTRACTS; WORKERS' COMPENSATION;
CERTAIN WAIVERS.  This chapter does not otherwise affect the
validity and enforceability of:
             (1)  an insurance contract;
             (2)  the benefits or protections under the workers'
compensation laws of this state; or
             (3)  a waiver of subrogation between contractors or
between a principal and a contractor for coverage provided by a
consolidated insurance program.
       Sec. 502.005.  WAIVER PROHIBITED. The provisions of this
chapter may not be waived by contract or otherwise.  Any purported
waiver of a provision of this chapter is void and unenforceable.
       Sec. 502.006.  APPLICABILITY OF OTHER LAW. This chapter
prevails over any other law that conflicts with or is inconsistent
with this chapter.
       SECTION 2.  Section 2252.902, Government Code, is repealed.
       SECTION 3.  This Act applies only to liability for an act of
negligence under a construction contract entered into on or after
the effective date of this Act.  Liability for an act of negligence
under a construction contract entered into 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 4.  This Act takes effect September 1, 2007.