74R12057 E
          By Brimer                                              H.B. No. 505
          Substitute the following for H.B. No. 505:
          By Culberson                                       C.S.H.B. No. 505
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to certain acts of public accountants.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Title 4, Civil Practice and Remedies Code, is
    1-5  amended by adding Chapter 91 to read as follows:
    1-6                    CHAPTER 91.  PUBLIC ACCOUNTANTS
    1-7        Sec. 91.001.  DEFINITIONS.  In this chapter:
    1-8              (1)  "Accountant" means a person or firm holding a
    1-9  certificate or registration issued by the Texas State Board of
   1-10  Public Accountancy.
   1-11              (2)  "Claimant" means a party, including a plaintiff,
   1-12  counterclaimant, cross-claimant, or third-party claimant, seeking
   1-13  recovery of damages from an accountant.
   1-14              (3)  "Client" means the party directly engaging an
   1-15  accountant to provide public accountancy services, including
   1-16  examining, compiling, reviewing, certifying, auditing, providing an
   1-17  opinion about, or otherwise reporting on a financial statement or
   1-18  other information.
   1-19        Sec. 91.002.  LIABILITY LIMITED.  Except as provided by
   1-20  Section 91.003, an accountant is not liable to a claimant for
   1-21  negligence with respect to an act or omission in connection with
   1-22  the provision of public accountancy services, including examining,
   1-23  compiling, reviewing, certifying, auditing, providing an opinion
    2-1  about, or otherwise reporting on a financial statement or other
    2-2  information.
    2-3        Sec. 91.003.  EXCEPTIONS.  Section 91.002 does not apply:
    2-4              (1)  where the claimant is the client; or
    2-5              (2)  where the accountant:
    2-6                    (A)  was aware at the time the services of the
    2-7  accountant were engaged, or agreed with the client after the time
    2-8  of the engagement, that a financial statement or other information
    2-9  would be made available to the claimant for use in connection with
   2-10  a specified transaction and the claimant was specifically
   2-11  identified to the accountant;
   2-12                    (B)  communicated directly with the claimant
   2-13  concerning the financial statement or other information; and
   2-14                    (C)  was aware that the claimant intended to rely
   2-15  on the financial statement or other information in connection with
   2-16  the specified transaction and communicated that awareness by words
   2-17  or conduct; or
   2-18              (3)  to acts or omissions by an accountant involving
   2-19  fraud.
   2-20        SECTION 2.  This Act takes effect September 1, 1995, and
   2-21  applies only to a suit that is commenced on or after that date.  A
   2-22  suit that is commenced before the effective date of this Act is
   2-23  governed by the law in effect immediately before the effective date
   2-24  of this Act, and that law is continued in effect for that purpose.
   2-25        SECTION 3.  The importance of this legislation and the
    3-1  crowded condition of the calendars in both houses create an
    3-2  emergency and an imperative public necessity that the
    3-3  constitutional rule requiring bills to be read on three several
    3-4  days in each house be suspended, and this rule is hereby suspended.