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By:  Chisum                                                       H.B. No. 2842



A BILL TO BE ENTITLED

AN ACT

relating to the criminal penalty for providing false information to 
outside auditors.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 32, Penal Code, is amended by adding 
Section 32.52 to read as follows:
	Section 32.52.  PROVIDING FALSE INFORMATION TO OUTSIDE 
AUDITORS.  (a)  For purposes of this section:
		(1)  "Public Interest Entity" means entities whose 
audited financial statements are relied upon by significant numbers 
of stakeholders to make investment, credit, or similar decisions or 
by regulators in their oversight role.
	(b)  An officer, director or persons directed by them of a 
public interest entity who is responsible for providing information 
to an outside auditor of that entity, commits an offense if they:
		(1)  communicate or cause to be communicated 
information to the outside auditor that he knew or should have known 
was false at the time it was communicated or;
		(2)  later learn that information that was correct at 
the time it was communicated to the outside auditor is not longer 
correct, fails to promptly notify the outside auditor and provide 
the correct information.
	(b)  An offense under this section is punishable as:                    
		(1)  a 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)  a 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 than $100,000; or,
		(3)  a 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 $1,000,000; or,
		(4)  a 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 $1,000,000.
	SECTION 2.  This Act takes effect immediately if it 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 necessary for immediate effect, this 
Act takes effect September 1, 2005.