SENATE BILL 276
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Carroll H. Leavell
AN ACT
RELATING TO COMMERCIAL INSTRUMENTS AND TRANSACTIONS; VOIDING CERTAIN INDEMNITY AGREEMENTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 56-7-2 NMSA 1978 (being Laws 1971, Chapter 205, Section 1, as amended by Laws 2003, Chapter 309, Section 2 and by Laws 2003, Chapter 421, Section 2) is amended to read:
"56-7-2. OIL, GAS OR WATER WELLS AND MINERAL MINES--AGREEMENTS, COVENANTS AND PROMISES TO INDEMNIFY VOID.--
A. An agreement, covenant or promise, foreign or domestic, contained in, collateral to or affecting an agreement pertaining to a well for oil, gas or water, or mine for a mineral, within New Mexico, that purports to [indemnify] require indemnity, inclusive of any obligation of defense, to save, to hold harmless or to release the indemnitee or any third-party beneficiary against loss or liability for damages, including, without limitation, any claims, liens, punitive and exemplary damages, expenses, court costs, attorney fees, fines, penalties, judgments or settlements, arising from the circumstances specified in Paragraph (1), (2) or (3) of this subsection is against public policy and is void:
(1) the sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee;
(2) the sole or concurrent negligence of an independent contractor who is directly responsible to the indemnitee; or
(3) an accident that occurs in operations carried on at the direction or under the supervision of the indemnitee, an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representatives of the indemnitee.
B. As used in this section, "agreement pertaining to a well for oil, gas or water, or mine for a mineral" means an agreement:
(1) concerning any operations related to drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging or otherwise rendering services in connection with a well drilled for the purpose of producing or disposing of oil, gas or other minerals or water up to and including all operations up to the point of measurement and transfer of ownership and determination of payment for the oil, gas, other minerals or water;
(2) for rendering services in connection with a mine shaft, drift or other structure intended for use in the exploration for or production of a mineral; or
(3) to perform a portion of the work or services described in Paragraph (1) or (2) of this subsection or an act collateral thereto.
C. A provision in an insurance contract consisting of an indemnity agreement naming [a person] an indemnitee as an additional insured or a provision in an insurance contract or any other contract requiring a waiver of rights of subrogation or otherwise having the effect of imposing a duty of indemnification on the primary insured party that would, if it were a direct or collateral agreement described in Subsections A and B of this section, be void, is against public policy and void.
D. A provision in an agreement that agrees to insurance purchase shifting or imposing upon the indemnitor a responsibility to include in any invoice for services a line item for the indemnitor's insurance premiums to be allocable to the work or to arrange for the indemnitee to pay such allocation directly is against public policy and is void.
E. A provision in an agreement that requires the application of laws of another state, that is not mutually selected and that does not provide for a choice of law analysis for a dispute arising from, connecting to or concerning the indemnity obligations for work performed in the state of New Mexico is against public policy and is void.
F. A provision in an agreement that allows exclusive jurisdiction of a foreign government that deprives the courts of the state of New Mexico of jurisdiction or a provision that recognizes venue of a foreign government for any dispute arising from, connecting to or concerning the indemnity obligations for work performed in the state of New Mexico is against public policy and is void.
[D.] G. Nothing in this section:
(1) deprives an owner of the surface estate of the right to secure indemnity from a lessee, operator, contractor or other person conducting operations for the exploration of minerals on the owner's land; or
(2) affects the validity of a benefit conferred by the Workers' Compensation Act."
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