By:  Chisum                                                       H.B. No. 2842



A BILL TO BE ENTITLED

AN ACT

relating to the provision of false information to an independent 
public accounting firm by a public interest entity; providing a 
criminal penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 32, Penal Code, is amended 
by adding Section 32.52 to read as follows:
	Sec. 32.52.  PROVIDING FALSE INFORMATION TO AN INDEPENDENT 
PUBLIC ACCOUNTANT OR ACCOUNTING FIRM.  (a)  In this section:
		(1)  "Financial institution" means a bank, savings 
association, savings bank, or credit union maintaining an office, 
branch, or agency office in this state.
		(2)  "Insurer" means a person who engages in the 
business of insurance in this state, including:
			(A)  an insurer that is not authorized to do 
business in this state; and
			(B)  a person described by Section 82.002(a), 
Insurance Code.       
		(3)  "Issuer" has the meaning assigned by 15 U.S.C. 
Section 7201.    
		(4)  "Public interest entity" means:                                   
			(A)  a financial institution;                                         
			(B)  an insurer;                                                      
			(C)  an issuer;                                                       
			(D)  a county hospital;                                               
			(E)  a pension or retirement plan;                                    
			(F)  the state or a state agency;                                     
			(G)  a school district;                                               
			(H)  a municipality;                                                  
			(I)  a county; or                                                     
			(J)  an institution of higher education.                              
	(b)  An officer or director of a public interest entity, or 
another person designated by the officer or director to provide 
information to an independent public accountant or accounting firm, 
commits an offense if, for the purpose of rendering financial 
statements of the public interest entity materially misleading, the 
person intentionally or knowingly:
		(1)  influences, coerces, manipulates, or misleads the 
independent public accountant or accounting firm engaged in the 
performance of an audit of the financial statements of the public 
interest entity and that conduct renders the financial statements 
materially misleading; or
		(2)  communicates or causes to be communicated 
information to the independent public accountant or accounting firm 
that the person knew was false at the time the information was 
communicated.
	(c)  An offense under this section is a:                                
		(1)  state jail felony if it is shown on the trial of 
the offense that the violation resulted in a monetary loss of less 
than $10,000 or did not result in a monetary loss;
		(2)  felony of the third degree if it is shown on the 
trial of the offense that the violation resulted in a monetary loss 
of at least $10,000 but less and $100,000;
		(3)  felony of the second degree if it is shown on the 
trial of the offense that the violation resulted in a monetary loss 
of at least $100,000 but less than $1 million; or
		(4)  felony of the first degree if it is shown on the 
trial of the offense that the violation resulted in a monetary loss 
of at least $1 million.
	SECTION 2.  This Act takes effect September 1, 2005.