77R13997 SMJ-D                          
         By Ellis                                              S.B. No. 1037
         Substitute the following for S.B. No. 1037:
         By Ritter                                         C.S.S.B. No. 1037
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to authorizing the comptroller to establish a program to
 1-3     permit certain certified public accountants to perform certain
 1-4     audits.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1. Subchapter B, Chapter 151, Tax Code, is amended by
 1-7     adding Section 151.0232 to read as follows:
 1-8           Sec. 151.0232.  CPA AUDIT PROGRAM. (a)  The comptroller by
 1-9     rule may establish a program in which a taxpayer may hire a
1-10     certified public accountant who is not employed by the comptroller
1-11     to perform an audit to determine a taxpayer's liability for a tax
1-12     imposed under this chapter.
1-13           (b)  A program established under Subsection (a) must include:
1-14                 (1)  eligibility requirements for taxpayer
1-15     participation;
1-16                 (2)  training requirements and qualifications for a
1-17     certified public accountant who is hired to perform an audit under
1-18     the program; and
1-19                 (3)  safeguards to protect the confidentiality of
1-20     information used in connection with the audit, including a
1-21     provision that a certified public accountant hired under the
1-22     program is subject to the requirements and penalties that apply to
1-23     an employee of the comptroller regarding the confidentiality and
1-24     disclosure of information obtained from an audit.
 2-1           (c)  Unless the audit or other information available to the
 2-2     comptroller discloses fraud or wilful evasion of the tax, the
 2-3     comptroller may not assess a penalty and may waive all or part of
 2-4     the accrued interest on an amount identified to be due as a result
 2-5     of an audit performed under Subsection (a).
 2-6           SECTION 2.  This Act takes effect immediately if it receives
 2-7     a vote of two-thirds of all the members elected to each house, as
 2-8     provided by Section 39, Article III, Texas Constitution.  If this
 2-9     Act does not receive the vote necessary for immediate effect, this
2-10     Act takes effect September 1, 2001.