78R4355 JMM-D

By:  Shapleigh                                                    S.B. No. 536



A BILL TO BE ENTITLED

AN ACT

relating to the regulation of certain accountants; providing an 
administrative penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter J, Chapter 901, Occupations Code, is 
amended by adding Section 901.461 to read as follows:
	Sec. 901.461.  SERVICES FOR CERTAIN CORPORATIONS AND OTHER 
BUSINESS ENTITIES.  A person who holds a certificate or firm license 
under this chapter and who is providing audit services for a 
publicly held corporation, or for any other business entity if the 
amount of the audit services exceeds $250,000, may not provide any 
other service for the corporation or other entity.
	SECTION 2.  Subchapter J, Chapter 901, Occupations Code, is 
amended by adding Section 901.462 to read as follows:
	Sec. 901.462.  AUDIT ROTATION; CONFLICTS OF INTEREST RELATED 
TO AUDIT SERVICES.  (a)  A person who holds a certificate or firm 
license under this chapter may not provide audit services for a 
publicly held corporation if the person has provided audit services 
for the corporation for each of the five previous fiscal years of 
the corporation.
	(b)  A person who holds a certificate or firm license under 
this chapter and who has performed in the preceding two years audit 
services for a publicly held corporation, or for any other business 
entity if the amount of the audit services exceeded $250,000, may 
not be an employee of or have any personal financial relationship 
with the corporation or other entity.
	SECTION 3.  Section 901.552, Occupations Code, is amended by 
amending Subsection (a) and adding Subsection (c) to read as 
follows:
	(a)  The amount of an administrative penalty may not exceed 
$1,000,000 [$1,000] for each violation.
	(c)  The board by rule shall adopt a schedule for purposes of 
this subchapter that prescribes ranges in the amounts of 
administrative penalties to be imposed for specified types of 
conduct and circumstances.
	SECTION 4.  (a)  This Act takes effect as follows:                             
		(1)  Section 1 of this Act takes effect immediately if 
this Act receives a vote of two-thirds of all the members elected to 
each house, as provided by Section 39, Article III, Texas 
Constitution.  If this Act does not receive the vote for immediate 
effect, Section 1 of this Act takes effect September 1, 2003;
		(2)  Section 2 of this Act takes effect January 1, 2004;  
and               
		(3)  Section 3 of this Act takes effect September 1, 
2003.                  
	(b)  The change in law made by this Act to Section 901.552, 
Occupations Code, applies only to a violation of Chapter 901, 
Occupations Code, or of a rule or order adopted by the Texas State 
Board of Public Accountancy under that chapter that occurs on or 
after September 1, 2003.  A violation that occurs before that date 
is governed by the law in effect on the date the violation occurred, 
and the former law is continued in effect for that purpose.
	(c)  The Texas State Board of Public Accountancy shall adopt 
rules as required by Section 901.552(c), Occupations Code, as added 
by this Act, not later than January 1, 2004.