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Second Substitute S.B. 124

Senator Gregory S. Bell proposes the following substitute bill:


             1     
INDEMNIFICATION FOR DESIGN

             2     
PROFESSIONAL SERVICES

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Gregory S. Bell

             6     
House Sponsor: Lorie D. Fowlke

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill forbids certain indemnification provisions in contracts entered into using
             11      public funds by a state agency.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines "design professional" to include certain architects, engineers, and surveyors;
             15          .    forbids a design professional from indemnifying certain parties to a contract entered
             16      into by a state agency;
             17          .    provides exceptions for:
             18              .    a design professional's negligence, wrongful conduct, or certain other conduct;
             19      and
             20              .    indemnification of others under the design professional's control; and
             21          .    prohibits waiving the indemnification prohibition by contract.
             22      Monies Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None


             26      Utah Code Sections Affected:
             27      AMENDS:
             28          72-6-107, as last amended by Laws of Utah 2008, Chapter 382
             29      ENACTS:
             30          63A-5-223, Utah Code Annotated 1953
             31          63G-6-603, Utah Code Annotated 1953
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 63A-5-223 is enacted to read:
             35          63A-5-223. Contracts -- Certain indemnification provisions forbidden.
             36          (1) As used in this section, "design professional" means:
             37          (a) an architect, licensed under Title 58, Chapter 3a, Architects Licensing Act;
             38          (b) a landscape architect, licensed under Title 58, Chapter 53, Landscape Architects
             39      Licensing Act; and
             40          (c) a professional engineer or professional land surveyor, licensed under Title 58,
             41      Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act.
             42          (2) (a) Beginning May 12, 2009, a contract, including an amendment to an existing
             43      contract, entered into under authority of this chapter may not require that a design professional
             44      indemnify another from liability claims that arise out of the design professional's services,
             45      unless the liability claim arises from the design professional's negligent act, wrongful act, error
             46      or omission, or other liability imposed by law.
             47          (b) Subsection (2)(a) may not be waived by contract.
             48          (c) Notwithstanding Subsections (2)(a) and (b), a design professional may be required
             49      to indemnify a person for whom the design professional has direct or indirect control or
             50      responsibility.
             51          Section 2. Section 63G-6-603 is enacted to read:
             52          63G-6-603. Contracts -- Certain indemnification provisions forbidden.
             53          (1) As used in this section, "design professional" means:
             54          (a) an architect, licensed under Title 58, Chapter 3a, Architects Licensing Act;
             55          (b) a landscape architect, licensed under Title 58, Chapter 53, Landscape Architects
             56      Licensing Act; and


             57          (c) a professional engineer or professional land surveyor, licensed under Title 58,
             58      Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act.
             59          (2) (a) Beginning May 12, 2009, a contract, including an amendment to an existing
             60      contract, entered into under authority of this chapter may not require that a design professional
             61      indemnify another from liability claims that arise out of the design professional's services,
             62      unless the liability claim arises from the design professional's negligent act, wrongful act, error
             63      or omission, or other liability imposed by law.
             64          (b) Subsection (2)(a) may not be waived by contract.
             65          (c) Notwithstanding Subsections (2)(a) and (b), a design professional may be required
             66      to indemnify a person for whom the design professional has direct or indirect control or
             67      responsibility.
             68          Section 3. Section 72-6-107 is amended to read:
             69           72-6-107. Construction or improvement of highway -- Contracts -- Retainage --
             70      Certain indemnification provisions forbidden.
             71          (1) As used in this section, "design professional" means:
             72          (a) an architect, licensed under Title 58, Chapter 3a, Architects Licensing Act;
             73          (b) a landscape architect, licensed under Title 58, Chapter 53, Landscape Architects
             74      Licensing Act; and
             75          (c) a professional engineer or professional land surveyor, licensed under Title 58,
             76      Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act.
             77          [(1)] (2) (a) The department shall make plans, specifications, and estimates prior to the
             78      construction or improvement of any state highway.
             79          (b) Except as provided in Section 63G-6-502 and except for construction or
             80      improvements performed with state prison labor, a construction or improvement project with
             81      an estimated cost exceeding the bid limit as defined in Section 72-6-109 for labor and materials
             82      shall be performed under contract awarded to the lowest responsible bidder.
             83          (c) The advertisement for bids shall be published in a newspaper of general circulation
             84      in the county in which the work is to be performed, at least once a week for two consecutive
             85      weeks, with the last publication at least ten days before bids are opened.
             86          (d) The department shall receive sealed bids and open the bids at the time and place
             87      designated in the advertisement. The department may then award the contract but may reject


             88      any and all bids.
             89          (e) If the department's estimates are substantially lower than any responsible bid
             90      received, the department may perform any work by force account.
             91          [(2)] (3) If any payment on a contract with a private contractor for construction or
             92      improvement of a state highway is retained or withheld, the payment shall be retained or
             93      withheld and released as provided in Section 13-8-5 .
             94          [(3)] (4) If the department performs a construction or improvement project by force
             95      account, the department shall:
             96          (a) provide an accounting of the costs and expenditures of the improvement including
             97      material and labor;
             98          (b) disclose the costs and expenditures to any person upon request and allow the person
             99      to make a copy and pay for the actual cost of the copy; and
             100          (c) perform the work using the same specifications and standards that would apply to a
             101      private contractor.
             102          [(4)] (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
             103      Act, the department shall establish procedures for:
             104          (a) hearing evidence that a region within the department violated this section; and
             105          (b) administering sanctions against the region if the region is found in violation.
             106          (6) (a) Beginning May 12, 2009, a contract, including an amendment to an existing
             107      contract, entered into under authority of this chapter may not require that a design professional
             108      indemnify another from liability claims that arise out of the design professional's services,
             109      unless the liability claim arises from the design professional's negligent act, wrongful act, error
             110      or omission, or other liability imposed by law.
             111          (b) Subsection (2)(a) may not be waived by contract.
             112          (c) Notwithstanding Subsections (2)(a) and (b), a design professional may be required
             113      to indemnify a person for whom the design professional has direct or indirect control or
             114      responsibility.


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