HBA-MSH C.S.S.B. 561 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 561
By: Sibley
Civil Practices
4/29/2001
Committee Report (Substituted)



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.  C.S.S.B. 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

C.S.S.B. 561 amends the Civil Practice and Remedies Code 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 amends the Local Government Code to provide that a covenant or
promise in connection with a contract for engineering or architectural
services to which a governmental agency is a party is void and
unenforceable if the covenant or promise provides that a 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.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.S.B. 561 differs from the original by removing a contract for
construction and contractors from the provision relating to
indemnification.