1-1  By:  Harris                                            S.B. No. 309
    1-2        (In the Senate - Filed January 24, 1995; January 25, 1995,
    1-3  read first time and referred to Committee on Economic Development;
    1-4  April 6, 1995, reported adversely, with favorable Committee
    1-5  Substitute by the following vote:  Yeas 6, Nays 2; April 6, 1995,
    1-6  sent to printer.)
    1-7  COMMITTEE SUBSTITUTE FOR S.B. No. 309                   By:  Harris
    1-8                         A BILL TO BE ENTITLED
    1-9                                AN ACT
   1-10  relating to certain acts of public accountants.
   1-11        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-12        SECTION 1.  Title 4, Civil Practice and Remedies Code, is
   1-13  amended by adding Chapter 91 to read as follows:
   1-14                    Chapter 91.  PUBLIC ACCOUNTANTS
   1-15        Sec. 91.001.  DEFINITIONS.  In this chapter:
   1-16              (1)  "Accountant" means a person or firm holding a
   1-17  certificate or registration issued by the Texas State Board of
   1-18  Public Accountancy.
   1-19              (2)  "Claimant" means a party, including a plaintiff,
   1-20  counterclaimant, cross-claimant, or third-party claimant, seeking
   1-21  recovery of damages from an accountant.
   1-22              (3)  "Client" means the party directly engaging an
   1-23  accountant to provide public accountancy services, including
   1-24  examining, compiling, reviewing, certifying, auditing, providing an
   1-25  opinion about, or otherwise reporting on a financial statement or
   1-26  other information.
   1-27        Sec. 91.002.  LIABILITY LIMITED.  Except as provided by
   1-28  Section 91.003, an accountant is not liable to the claimant for
   1-29  negligence with respect to an act or omission in connection with
   1-30  the provision of public accountancy services including examining,
   1-31  compiling, reviewing, certifying, auditing, providing an opinion
   1-32  about, or otherwise reporting on a financial statement or other
   1-33  information.
   1-34        Sec. 91.003.  EXCEPTIONS.  Section 91.002 does not apply:
   1-35              (1)  where the claimant is the client; or
   1-36              (2)  where the accountant:
   1-37                    (A)  was aware at the time the services of the
   1-38  accountant were engaged, or agreed with the client after the time
   1-39  of the engagement, that a financial statement or other information
   1-40  would be made available to the claimant for use in connection with
   1-41  a specified transaction and the claimant was specifically
   1-42  identified to the accountant;
   1-43                    (B)  communicated directly with the claimant
   1-44  concerning the financial statement or other information; and
   1-45                    (C)  was aware that the claimant intended to rely
   1-46  on the financial statement or other information in connection with
   1-47  the specified transaction and communicated that awareness by words
   1-48  or conduct; or
   1-49              (3)  to acts or omissions by an accountant involving
   1-50  fraud.
   1-51        SECTION 2.  This Act takes effect September 1, 1995, and
   1-52  applies only to a suit that is commenced on or after that date.  A
   1-53  suit that is commenced before the effective date of this Act is
   1-54  governed by the law in effect immediately before the effective date
   1-55  of this Act, and that law is continued in effect for that purpose.
   1-56        SECTION 3.  The importance of this legislation and the
   1-57  crowded condition of the calendars in both houses create an
   1-58  emergency and an imperative public necessity that the
   1-59  constitutional rule requiring bills to be read on three several
   1-60  days in each house be suspended, and this rule is hereby suspended.
   1-61                               * * * * *