By Sibley S.B. No. 275 75R1521 MLS-F 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. LIABILITY OF PUBLIC ACCOUNTANTS 1-7 Sec. 91.001. DEFINITIONS. In this chapter: 1-8 (1) "Accountant" means a person holding a certificate 1-9 or registration issued by the Texas State Board of Public 1-10 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 a party who engages an accountant 1-15 to provide public accounting services, including examining, 1-16 compiling, reviewing, certifying, auditing, providing an opinion 1-17 about, or otherwise reporting on a financial statement or other 1-18 information. 1-19 Sec. 91.002. LIABILITY LIMITED. Except as provided by 1-20 Section 91.003, an accountant is not liable for an act or omission 1-21 in connection with the provision of public accountancy services to 1-22 the claimant, including examining, compiling, reviewing, 1-23 certifying, auditing, providing an opinion about, or otherwise 1-24 reporting on a financial statement or other information in the 2-1 course of an engagement to provide other public accountancy 2-2 services to the claimant. 2-3 Sec. 91.003. EXCEPTIONS. Section 91.002 does not apply if: 2-4 (1) the claimant is the client; 2-5 (2) 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 of 2-8 engagement that the financial statement or other information would 2-9 be made available to the claimant and the claimant was specifically 2-10 identified to the accountant; 2-11 (B) was aware that the claimant intended to use 2-12 the financial statement or other information in connection with a 2-13 particular transaction and was aware of only the general terms of 2-14 the particular transaction; 2-15 (C) communicated directly with the claimant 2-16 concerning the financial statement or other information; and 2-17 (D) was aware that the claimant intended to rely 2-18 on the financial statement or other information in connection with 2-19 a particular transaction and communicated that awareness by words 2-20 or conduct; or 2-21 (3) the act or omission of the accountant involves 2-22 fraud. 2-23 Sec. 91.004. WAIVER. An accountant may, in writing, waive 2-24 the provisions of this chapter. 2-25 SECTION 2. This Act takes effect September 1, 1997, and 2-26 applies only to a suit that is commenced on or after that date. A 2-27 suit that is commenced before the effective date of this Act is 3-1 governed by the law in effect immediately before the effective date 3-2 of this Act, and that law is continued in effect for that 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.