A07275 Summary:

BILL NO    A07275B

SAME AS    SAME AS S05038-A

SPONSOR    Schimminger

COSPNSR    Lupardo, Jaffee, Raia, Garbarino, Curran

MLTSPNSR   

Add S103-h, Gen Muni L; add S2879-d, Pub Auth L; amd S136-a, St Fin L

Requires contracts between professional design firms and municipal
corporations, state and local authorities, or state departments contain
language concerning indemnification.
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A07275 Actions:

BILL NO    A07275B

05/08/2013 referred to corporations, authorities and commissions
05/16/2013 amend (t) and recommit to corporations, authorities and commissions
05/16/2013 print number 7275a
01/08/2014 referred to corporations, authorities and commissions
02/20/2014 amend and recommit to corporations, authorities and commissions
02/20/2014 print number 7275b
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A07275 Votes:

There are no votes for this bill in this legislative session.
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A07275 Memo:

BILL NUMBER:A7275B

TITLE OF BILL:  An act to amend the general municipal law, the public
authorities law and the state finance law in relation to contracts
with professional design firms

PURPOSE OF THE BILL: To make indemnification language in contracts
with public entities standard throughout the state and to prevent
design professionals from indemnifying clients for damages that fall
outside their professional standard of care.

SUMMARY OF SPECIFIC PROVISIONS:

S 1- Amends article 5A of the General Municipal Law by adding a new
103-h.

S 2- Amends Title 4 of Article 9 of the Public Authorities Law by
adding a new S 2879d.

S 3- Amends S 136-a of the State Finance Law by adding a new
subdivision 6.

S 4- Effective date.

JUSTIFICATION: Indemnification is an agreement between two parties for
one party to assume liability in the event of a loss. A consultant may
at times indemnify a client and assume some of the client's legal
liabilities and thereby acts as an insurer for the client. Some public
clients in New York State have been asking consultants to indemnify
them for things that cannot be insured. If a consultant signs an
indemnity that is not limited to just the consultant's negligence they
are accepting liability beyond that required by law and beyond that
for which they are insured.

Professional liability insurance covers consultants against damages
resulting from negligent professional acts, errors or omissions. To
prove negligence, a claimant must establish a professional standard of
care, establish the consultants' duty to adhere to that standard of
care, and establish their failure to do so - and then prove that this
failure proximately resulted in injury or damage to the claimant.

This legislation will make indemnity language standard throughout New
York State for public entities. Professional firms will indemnify and
hold clients harmless from all third party claims, liabilities,
damages and costs arising out of negligent acts, errors and omissions
for which the design consultant is legally liable.

PRIOR LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect immediately.
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A07275 Text:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                        7275--B

                              2013-2014 Regular Sessions

                                 I N  A S S E M B L Y

                                      May 8, 2013
                                      ___________

       Introduced  by  M.  of A. SCHIMMINGER, LUPARDO, JAFFEE, RAIA, GARBARINO,
         CURRAN -- read once and referred to  the  Committee  on  Corporations,
         Authorities  and  Commissions  --  committee discharged, bill amended,
         ordered reprinted as amended and  recommitted  to  said  committee  --
         recommitted  to the Committee on Corporations, Authorities and Commis-
         sions in  accordance  with  Assembly  Rule  3,  sec.  2  --  committee
         discharged, bill amended, ordered reprinted as amended and recommitted
         to said committee

       AN  ACT  to  amend the general municipal law, the public authorities law
         and the state finance law in relation to contracts  with  professional
         design firms

         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:

    1    Section 1. The general municipal  law  is  amended  by  adding  a  new
    2  section 103-h to read as follows:
    3    S  103-H.  INDEMNIFICATION  LANGUAGE IN CONTRACTS.  1. DEFINITIONS. AS
    4  USED IN THIS SECTION:
    5    A. THE TERM "MUNICIPAL CORPORATION" SHALL MEAN A  COUNTY,  TOWN,  CITY
    6  AND VILLAGE.
    7    B.  THE TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL OR
    8  SOLE PROPRIETORSHIP, PARTNERSHIP,  CORPORATION,  ASSOCIATION,  OR  OTHER
    9  LEGAL  ENTITY  PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITEC-
   10  TURE, ENGINEERING OR SURVEYING.
   11    2. ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE  THE  FOLLOWING
   12  LANGUAGE:
   13    "TO  THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
   14  TO INDEMNIFY AND HOLD THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS
   15  AND EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES
   16  AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE)
   17  TO WHICH THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS AND  EMPLOY-
   18  EES  MAY BE SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO ANY

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10729-03-4
       A. 7275--B                          2

    1  PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED
    2  BY THE NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR WILLFUL MISCONDUCT OF THE
    3  PROFESSIONAL FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED  UNDER
    4  THIS  AGREEMENT  AND THOSE OF ITS SUB-CONSULTANTS OR ANYONE FOR WHOM THE
    5  PROFESSIONAL FIRM IS LEGALLY LIABLE."
    6    "TO THE FULLEST EXTENT PERMITTED BY  LAW,  THE  MUNICIPAL  CORPORATION
    7  AGREES  TO  INDEMNIFY  AND  HOLD THE PROFESSIONAL FIRM HARMLESS FROM ALL
    8  THIRD PARTY  CLAIMS,  LIABILITIES,  DAMAGES  AND  COSTS  (INCLUDING  ALL
    9  REASONABLE  ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY
   10  THE NEGLIGENT ACTS, ERRORS OR OMISSIONS OF  THE  MUNICIPAL  CORPORATION,
   11  ITS  CONTRACTORS,  CONSULTANTS  OR  ANYONE FOR WHOM THE MUNICIPAL CORPO-
   12  RATION IS LEGALLY LIABLE."
   13    3. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS REQUIRING A NOTICE OF
   14  CLAIM OR OTHER CONDITION PRECEDENT  IN  LITIGATION  FOR  ANY  PARTY  NOT
   15  OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE ANY ACTION TO BE
   16  BROUGHT  BY  OR  AGAINST  ANY PARTY IN THE COURT OF CLAIMS UNLESS SUCH A
   17  REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
   18    S 2. The public authorities law is amended by  adding  a  new  section
   19  2879-d to read as follows:
   20    S  2879-D.  INDEMNIFICATION LANGUAGE IN CONTRACTS.  1. DEFINITIONS. AS
   21  USED IN THIS SECTION:
   22    A. THE TERM "STATE AUTHORITY" SHALL MEAN A PUBLIC AUTHORITY OR  PUBLIC
   23  BENEFIT  CORPORATION  CREATED  BY  OR EXISTING UNDER THIS CHAPTER OR ANY
   24  OTHER LAW OF THE STATE OF NEW YORK, WITH ONE  OR  MORE  OF  ITS  MEMBERS
   25  APPOINTED BY THE GOVERNOR OR WHO SERVE AS MEMBERS BY VIRTUE OF HOLDING A
   26  CIVIL  OFFICE  OF  THE  STATE, OTHER THAN AN INTERSTATE OR INTERNATIONAL
   27  AUTHORITY OR PUBLIC BENEFIT CORPORATION, INCLUDING SUBSIDIARIES OF  SUCH
   28  PUBLIC AUTHORITY OR PUBLIC BENEFIT CORPORATION.
   29    B.  THE  TERM  "LOCAL AUTHORITY" SHALL MEAN: (A) A PUBLIC AUTHORITY OR
   30  PUBLIC BENEFIT CORPORATION CREATED BY OR EXISTING UNDER THIS CHAPTER  OR
   31  ANY OTHER LAW OF THE STATE OF NEW YORK WHOSE MEMBERS DO NOT HOLD A CIVIL
   32  OFFICE  OF THE STATE, ARE NOT APPOINTED BY THE GOVERNOR OR ARE APPOINTED
   33  BY THE GOVERNOR  SPECIFICALLY  UPON  THE  RECOMMENDATION  OF  THE  LOCAL
   34  GOVERNMENT  OR  GOVERNMENTS; (B) A NOT-FOR-PROFIT CORPORATION AFFILIATED
   35  WITH, SPONSORED BY, OR CREATED  BY  A  COUNTY,  CITY,  TOWN  OR  VILLAGE
   36  GOVERNMENT;  (C) A LOCAL INDUSTRIAL DEVELOPMENTAL AGENCY OR AUTHORITY OR
   37  OTHER LOCAL PUBLIC BENEFIT CORPORATION; (D) AN AFFILIATE OF  SUCH  LOCAL
   38  AUTHORITY;  OR  (E)  A LAND BANK CORPORATION CREATED PURSUANT TO ARTICLE
   39  SIXTEEN OF THE NOT-FOR-PROFIT CORPORATION LAW.
   40    C. THE TERM "PROFESSIONAL FIRM" SHALL  MEAN  ANY  INDIVIDUAL  OR  SOLE
   41  PROPRIETORSHIP,  PARTNERSHIP,  CORPORATION,  ASSOCIATION, OR OTHER LEGAL
   42  ENTITY PERMITTED BY LAW TO PRACTICE  THE  PROFESSIONS  OF  ARCHITECTURE,
   43  ENGINEERING OR SURVEYING.
   44    2.  ALL  CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE FOLLOWING
   45  LANGUAGE:
   46    "TO THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM  AGREES
   47  TO  INDEMNIFY  AND  HOLD  THE  STATE  AND LOCAL AUTHORITY, ITS OFFICERS,
   48  DIRECTORS AND EMPLOYEES HARMLESS FROM ALL THIRD  PARTY  CLAIMS,  LIABIL-
   49  ITIES,  DAMAGES  AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND
   50  COST OF DEFENSE) TO WHICH THE STATE AND LOCAL AUTHORITY,  ITS  OFFICERS,
   51  DIRECTORS  AND  EMPLOYEES MAY BE SUBJECT TO, ARISING OUT OF THE DEATH OR
   52  BODILY INJURY TO ANY PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY
   53  TO THE EXTENT CAUSED BY THE NEGLIGENT  ACTS,  ERRORS  OR  OMISSIONS,  OR
   54  WILLFUL  MISCONDUCT  OF  THE  PROFESSIONAL FIRM'S PERFORMANCE OF PROFES-
   55  SIONAL SERVICES PROVIDED UNDER THIS AGREEMENT AND THOSE OF ITS  SUB-CON-
   56  SULTANTS OR ANYONE FOR WHOM THE PROFESSIONAL FIRM IS LEGALLY LIABLE."
       A. 7275--B                          3

    1    "TO THE FULLEST EXTENT PERMITTED BY LAW, THE STATE AND LOCAL AUTHORITY
    2  AGREES  TO  INDEMNIFY  AND  HOLD THE PROFESSIONAL FIRM HARMLESS FROM ALL
    3  THIRD PARTY  CLAIMS,  LIABILITIES,  DAMAGES  AND  COSTS  (INCLUDING  ALL
    4  REASONABLE  ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY
    5  THE  NEGLIGENT ACTS, ERRORS OR OMISSIONS OF THE STATE AND LOCAL AUTHORI-
    6  TY, ITS CONTRACTORS, CONSULTANTS OR ANYONE FOR WHOM THE STATE AND  LOCAL
    7  AUTHORITY IS LEGALLY LIABLE."
    8    3. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS REQUIRING A NOTICE OF
    9  CLAIM  OR  OTHER  CONDITION  PRECEDENT  IN  LITIGATION FOR ANY PARTY NOT
   10  OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE ANY ACTION TO BE
   11  BROUGHT BY OR AGAINST ANY PARTY IN THE COURT OF  CLAIMS  UNLESS  SUCH  A
   12  REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
   13    S 3. Section 136-a of the state finance law is amended by adding a new
   14  subdivision 6 to read as follows:
   15    6.  (A) DEFINITIONS. AS USED IN THIS SUBDIVISION:
   16    (I)  THE  TERM  "STATE  DEPARTMENT"  SHALL MEAN THOSE STATE GOVERNMENT
   17  DEPARTMENTS, DIVISIONS OR COMMISSIONS EMPOWERED BY THE  STATE  TO  ENTER
   18  INTO CONTRACTUAL AGREEMENTS ON BEHALF OF THE STATE OF NEW YORK.
   19    (II)  THE  TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL
   20  OR SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION, OR  OTHER
   21  LEGAL  ENTITY  PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITEC-
   22  TURE, ENGINEERING OR SURVEYING.
   23    (B) ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE  FOLLOWING
   24  LANGUAGE:
   25    "TO  THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
   26  TO INDEMNIFY AND HOLD THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS  AND
   27  EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES AND
   28  COSTS  (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO
   29  WHICH THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS AND EMPLOYEES MAY BE
   30  SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO ANY  PERSON  OR
   31  THE  DESTRUCTION  OR  DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED BY THE
   32  NEGLIGENT ACTS, ERRORS  OR  OMISSIONS,  OR  WILLFUL  MISCONDUCT  OF  THE
   33  PROFESSIONAL  FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED UNDER
   34  THIS AGREEMENT AND THOSE OF ITS SUB-CONSULTANTS OR ANY ONE FOR WHOM  THE
   35  DESIGN CONSULTANT IS LEGALLY LIABLE."
   36    "TO  THE  FULLEST EXTENT PERMITTED BY LAW, THE STATE DEPARTMENT AGREES
   37  TO INDEMNIFY AND HOLD THE PROFESSIONAL  FIRM  HARMLESS  FROM  ALL  THIRD
   38  PARTY  CLAIMS,  LIABILITIES, DAMAGES AND COSTS (INCLUDING ALL REASONABLE
   39  ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY THE  NEGLI-
   40  GENT ACTS, ERRORS OR OMISSIONS OF THE STATE DEPARTMENT, ITS CONTRACTORS,
   41  CONSULTANTS OR ANYONE FOR WHOM THE STATE DEPARTMENT IS LEGALLY LIABLE."
   42    (C)  NOTHING  IN  THIS  SUBDIVISION  SHALL BE CONSTRUED AS REQUIRING A
   43  NOTICE OF CLAIM OR OTHER CONDITION PRECEDENT IN LITIGATION FOR ANY PARTY
   44  NOT OTHERWISE ENTITLED TO RECEIVE ONE, NOR SHALL IT REQUIRE  ANY  ACTION
   45  TO BE BROUGHT BY OR AGAINST ANY PARTY IN THE COURT OF CLAIMS UNLESS SUCH
   46  A REQUIREMENT PREVIOUSLY EXISTED AS TO THAT PARTY.
   47    S 4. This act shall take effect immediately.
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