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.