Bill Text: TX HB3416 | 2021-2022 | 87th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to disclosures regarding indemnification obligations and insurance coverage in connection with provision of services pertaining to wells or mines by certain subcontractors.

Spectrum: Bipartisan Bill

Status: (Passed) 2021-06-16 - Effective on 9/1/21 [HB3416 Detail]

Download: Texas-2021-HB3416-Comm_Sub.html

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87R16679 JES-F
By: Darby H.B. No. 3416
Substitute the following for H.B. No. 3416:
By: Geren C.S.H.B. No. 3416

A BILL TO BE ENTITLED
AN ACT
relating to indemnity agreements between contractors and
subcontractors for services pertaining to certain wells or mines.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 127, Civil Practice and Remedies Code,
is amended by adding Section 127.0045 to read as follows:
Sec. 127.0045. TRIPARTY RELATIONSHIP AGREEMENT. (a) In
this section, "triparty relationship agreement" means any
agreement pertaining to a well for oil, gas, or water or to a mine
for a mineral that provides:
(1) that a subcontractor may or will provide any part
of a contractor's services required under a separate agreement with
a third party; and
(2) for a mutual or unilateral indemnity obligation
between the contractor and third party.
(b) Before entering into or renewing a triparty
relationship agreement with a subcontractor or third party, a
contractor shall provide written notice to:
(1) the subcontractor that:
(A) describes the subcontractor's
indemnification obligations to the contractor and to the third
party with respect to the services the subcontractor will provide
under any related agreement between the contractor and
subcontractor;
(B) is provided as a separate document from the
agreements with the subcontractor and third party; and
(C) is written in plain English and in a manner
that is clear, concise, and designed to enable the subcontractor to
understand the subcontractor's contractual indemnity obligations
in connection with any services performed by the subcontractor
pursuant to the triparty relationship agreement; and
(2) the third party that states:
(A) whether the subcontractor possesses
liability insurance coverage or qualified self-insurance in
accordance with Section 127.005 for the subcontractor's indemnity
obligations in connection with any services performed by the
subcontractor pursuant to the triparty relationship agreement; and
(B) the dollar limits of the subcontractor's
insurance policy or qualified self-insurance, if any.
(c) A contractor may satisfy the requirement to provide a
third party written notice under Subsection (b)(2) by providing the
third party a certificate of insurance.
SECTION 2. The change in law made by this Act applies only
to an agreement entered into on or after the effective date of this
Act.
SECTION 3. This Act takes effect September 1, 2021.