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AN ACT
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relating to disclosures regarding indemnification obligations and |
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insurance coverage in connection with provision of services |
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pertaining to wells or mines by certain subcontractors. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 6, Civil Practice and Remedies Code, is |
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amended by adding Chapter 127A to read as follows: |
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CHAPTER 127A. DISCLOSURES REGARDING INDEMNIFICATION OBLIGATIONS |
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AND INSURANCE COVERAGE REGARDING WELL OR MINE SERVICES PROVIDED BY |
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CERTAIN SUBCONTRACTORS |
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Sec. 127A.001. DEFINITIONS. In this chapter: |
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(1) "Temporary placement service" means an entity or |
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other person that employs individuals or contracts with another |
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entity or person to refer or assign personnel to the placement |
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service's clients to support or supplement the clients' workforce |
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in a special work situation, including: |
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(A) an employee absence; |
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(B) a temporary skill shortage; |
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(C) a seasonal or cyclical workload; |
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(D) work requiring uniquely skilled personnel; |
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or |
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(E) a special assignment or project. |
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(2) "Temporary subcontractor" means an independent |
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contractor who, in connection with performing well or mine |
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services: |
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(A) is referred to or placed by a temporary |
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placement service with the placement service's client; or |
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(B) has entered into an agreement with a |
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temporary placement service to provide those services to the |
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placement service's client. |
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(3) "Well or mine service" has the meaning assigned by |
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Section 127.001. |
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Sec. 127A.002. DISCLOSURE REGARDING TEMPORARY |
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SUBCONTRACTOR INDEMNIFICATION OBLIGATIONS AND INSURANCE COVERAGE |
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REQUIREMENTS. (a) Before a temporary placement service refers or |
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assigns a temporary subcontractor to the placement service's client |
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to perform well or mine services, the placement service shall |
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provide a written disclosure to the subcontractor that: |
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(1) describes the subcontractor's indemnification |
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obligations, if any, to the placement service and to the placement |
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service's client in connection with the services the subcontractor |
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will provide to the client; |
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(2) describes any insurance policy, including the |
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amount of coverage and any limits on coverage, that is provided for |
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the benefit of the subcontractor by the placement service or the |
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placement service's client, or both, in connection with the |
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services the subcontractor will provide to the client; and |
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(3) expressly states whether and to what extent any |
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insurance policy described by Subdivision (2) will cover the |
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subcontractor's tort liability and contractual indemnity |
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obligations arising out of the performance of the services by the |
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subcontractor for the placement service's client or clients. |
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(b) The disclosure required under Subsection (a) may state |
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that the disclosure does not alter, amend, or otherwise modify the |
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terms of any agreement governing services provided by the temporary |
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subcontractor or any insurance policy described by Subsection |
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(a)(2), provided that the temporary placement service is |
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responsible for the content of the disclosure. |
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(c) A temporary placement service shall: |
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(1) provide the disclosure required under Subsection |
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(a) to a temporary subcontractor as a separate document from any |
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agreement entered into with the subcontractor by the placement |
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service or the placement service's client; and |
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(2) ensure that the disclosure is written in plain |
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English and in a manner that is clear, concise, and designed to |
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enable the temporary subcontractor to understand the |
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subcontractor's contractual indemnity obligations, if any, and any |
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insurance policy provided for the benefit of the subcontractor in |
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connection with well or mine services to be performed by the |
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subcontractor. |
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(d) A temporary placement service may satisfy the |
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requirement to describe an insurance policy under Subsection (a)(2) |
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by providing to the temporary subcontractor a certificate of |
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insurance evidencing applicable coverage and limits. |
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Sec. 127A.003. DISCLOSURE REQUIREMENTS FOR ONGOING |
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INSURANCE POLICY. A temporary placement service that provides a |
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disclosure to a temporary subcontractor under Section 127A.002 that |
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states that an insurance policy described in that disclosure that |
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is provided for the benefit of the temporary subcontractor remains |
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in effect for a specified time period and with respect to a |
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specified client or clients is not required to provide that |
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subcontractor with an additional disclosure under Section 127A.002 |
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for future services provided by the subcontractor to that client or |
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those clients until: |
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(1) the insurance policy is no longer in effect; or |
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(2) the placement service is required to provide the |
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subcontractor a new disclosure because of a change concerning the |
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insurance policy as provided under Section 127A.004. |
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Sec. 127A.004. NOTICE REQUIRED FOR CERTAIN CHANGES RELATED |
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TO INSURANCE POLICY. A temporary placement service shall provide a |
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temporary subcontractor who is provided a disclosure of a provided |
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insurance policy under Section 127A.002 a separate written notice |
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of a cancellation or nonrenewal of the policy or a material |
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reduction in coverage under the insurance policy not later than the |
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30th day before the date the cancellation or nonrenewal of the |
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policy or the material reduction in insurance coverage takes |
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effect. |
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SECTION 2. The change in law made by this Act applies only |
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to an agreement entered into on or after the effective date of this |
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Act. |
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SECTION 3. This Act takes effect September 1, 2021. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 3416 was passed by the House on May 8, |
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2021, by the following vote: Yeas 136, Nays 4, 1 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 3416 was passed by the Senate on May |
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24, 2021, by the following vote: Yeas 30, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |