By Brimer H.B. No. 505 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to public accountants and to certain acts of public 1-3 accountants. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 4, Civil Practice and Remedies Code, is 1-6 amended by adding Chapter 86 to read as follows: 1-7 CHAPTER 86. PUBLIC ACCOUNTANTS 1-8 Sec. 86.001. DEFINITION. In this chapter, "accountant" 1-9 means a person or firm holding a certificate or registration issued 1-10 by the Texas State Board of Public Accountancy. 1-11 Sec. 86.002. This Section applies to all causes of action 1-12 of the type specified herein filed on or after the effective date. 1-13 Sec. 86.003. This Section governs any action based on 1-14 negligence brought against any accountant or firm of accountants 1-15 practicing in this state by any person or entity claiming to have 1-16 been injured as a result of financial statements, or other 1-17 information examined, compiled, reviewed, certified, audited or 1-18 otherwise reported or opined on by the defendant accountant or in 1-19 the course of an engagement to provide other public accountancy 1-20 services. 1-21 Sec. 86.004. No action covered by this Section may be 1-22 brought unless: 1-23 (A) The plaintiff: 2-1 (1) is issuer (or successor of the issuer) of 2-2 the financial statements or other information examined, compiled, 2-3 reviewed, certified, audited or otherwise reported or opined on by 2-4 the defendant; and 2-5 (2) engaged the defendant accountant to examine, 2-6 compile, review, certify, audit or otherwise report or render an 2-7 opinion on such financial statements or to provide other public 2-8 accountancy services; or 2-9 (B) The defendant accountant or firm: 2-10 (1) was aware at the time the engagement was 2-11 undertaken that the financial statements or other information were 2-12 to be made available for use in connection with a specified 2-13 transaction by the plaintiff who was specifically identified to the 2-14 defendant accountant; and 2-15 (2) was aware that the plaintiff intended to 2-16 rely upon such financial statements or other information in 2-17 connection with the specified transaction; and 2-18 (3) had direct contact and communication with 2-19 the plaintiff and expressed by words or conduct the defendant 2-20 accountant's understanding of the reliance on such financial 2-21 statements or other information. 2-22 SECTION 2. This act takes effect September 1, 1995, and 2-23 applies only to a cause of action that accrues on or after that 2-24 date. A cause of action that accrued before the effective date of 2-25 this Act is governed by the law in effect at the time the action 3-1 accrued, and the former law is continued in effect for that 3-2 purpose. 3-3 SECTION 3. The importance of this legislation and the 3-4 crowded condition of the calendars in both houses create an 3-5 emergency and an imperative public necessity that the 3-6 constitutional rule requiring bills to be read on three several 3-7 days in each house be suspended and this rule is hereby suspended.