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.