Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Silva

ORIGINAL DATE

LAST UPDATED

2/11/2007

2/24/2007 HB 407/a HJC

SHORT TITLE Motor Carrier Contract Indemnity

SB

ANALYST Schuss

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Public Safety (DPS)

Did Not Respond

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of HJC Amendment

The House Judiciary Committee amendment to HB 407 cleans up some of the language used in

the original bill. The term “one party to the contract" is replaced with “the motor carrier"; the

terms “another party to the contract", “that other party" and “that party" are replaced with

“the shipper".

The amendment also removes Subsection B of Section 1, which read, a provision in a motor

carrier transportation contract that requires a party to provide liability coverage to another

party, as an additional insured, for the other party's negligence or intentional acts or omissions

is against the public policy of this state and is void and unenforceable.

House Bill 407/ a HJC – Page

2

Synopsis of Original Bill

House Bill 407 invalidates indemnity provisions in Motor Carrier Transportation Contracts.

FISCAL IMPLICATIONS

New laws, amendments to existing laws and new hearings have the potential to increase

caseloads in the courts, thus requiring additional resources to handle the increase.

SIGNIFICANT ISSUES

HB 407 makes a provision or agreement contained in, collateral to or affecting a Motor Carrier

Transportation Contract that would require one party to indemnify or hold harmless another

party to the contract from liability for loss or damage resulting from the negligence of that other

party, its agents, employees or independent contractors void and unenforceable.

HB 407 also makes a provision in a Motor Carrier Transportation Contract void and

unenforceable when it requires a party to provide liability coverage to another party for the other

party’s negligence.

DPS notes that HB 407 will require that all responsible parties in a Motor Carrier Transportation

Contract provide their own liability coverage.

BS/mt