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.