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.