HBA-MSH S.B. 561 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 561 By: Sibley Civil Practices 4/10/2001 Engrossed BACKGROUND AND PURPOSE Currently, Texas law provides that a contractor cannot be required to indemnify an engineer or architect from certain liability arising from the negligence of the engineer or architect. Engineers and architects, however, are often faced with contractual provisions that require the engineer or architect to indemnify an owner against liability arising from the owner's negligence. These provisions are uninsurable under the coverages typically carried by architects and engineers. Senate Bill 561 provides that these provisions are void and unenforceable to the extent that an engineer or architect is required to indemnify an owner against the owner's negligence. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 561 amends the Civil Practice and Remedies and Local Government codes to modify the definition of "construction contract" to include contracts entered into by a registered architect or licensed engineer. The bill provides that a covenant or promise in connection with or collateral to a construction contract other than a contract for a single-family or multifamily residence is void and unenforceable if the covenant or promise provides for a registered architect or licensed engineer whose work product is the subject of the construction contract to indemnify or hold harmless an owner or owner's agent or employee from liability for damage that is caused by or results from negligence of an owner or an owner's agent or employee. The bill applies this provision to an owner of an interest in real property or person employed solely by the owner. The bill also provides that a covenant or promise in connection with a contract for construction engineering or architectural services to which a governmental agency is a party is void and unenforceable if the covenant or promise provides that a contractor, or licensed engineer or registered architect whose work product is the subject of the contract must indemnify or hold harmless the governmental agency against liability for damage that is caused by or results from the negligence of the governmental agency or its agent or employee. EFFECTIVE DATE September 1, 2001.