Updated from 3:57 p.m. EDT

The battle over stock options escalated Tuesday as a congressional committee passed a measure that would restrict the expensing of options awarded to companies' top executives.

If it becomes law, the bill would override an effort by accounting regulators to require public companies to recognize the expense of granting options to all their employees. In addition to limiting expensing to the top five executives of a company, the measure would require Congress to study the effects of options expensing and exempt both small businesses and companies that have recently gone public from accounting for any options.

The measure passed the House Financial Services Committee with a 45-to-13 vote, said committee spokeswoman Sarah Morgan. The next step before the bill can become law is for the full House of Representatives to vote on it. Morgan said the full House does not yet have a schedule for considering the measure.

Congressman Richard Baker (R-La.), who sponsored the bill, sees momentum building behind it, said his spokesman, Michael DiResto.

"Congressman Baker sees the vote as a strong bipartisan measure of confidence in the bill," DiResto said. "He believes the bill would also garner a great deal of bipartisan support if it comes to a vote on the House floor."

DiRestro didn't know if or when the bill will be considered by the full House. But he noted that David Drier (R-Calif.), who serves as chairman of the House Rules Committee, is a supporter of the measure. The Rules Committee helps set the House's agenda.

While the committee's approval may give the bill some momentum, the measure faces an uncertain future. Richard Shelby, chairman of the Senate banking committee, has said he won't hold hearings on options expensing, preferring to defer the issue to the Financial Accounting Standards Board, or FASB, a quasi-public group that regulates the accounting industry. Shelby is the gatekeeper for accounting legislation in the Senate, meaning that his opposition could effectively kill the House bill.

Despite the bill's passage, Shelby's position has not changed, said Andrew Gray, a spokesman for the Senate Banking Committee. Shelby opposes "congressional interference" in accounting regulations, Gray said. "Senator Shelby would firmly oppose efforts to bring this bill or any similar legislation to the Senate."

FASB has proposed that companies begin expensing stock options next year. The organization is expected to adopt a final rule requiring options expensing in the fourth quarter.

Under current accounting rules, public companies can choose whether or not to expense options. But the leniency of that rule has come under fire following the accounting scandals at

Enron

and

WorldCom

.

Since those scandals, accounting critics have pushed for more honesty and transparency in accounting. The ability to keep options expenses off the balance sheet seemed to run counter to that trend.

Meanwhile, governance experts have charged that many of the accounting scandals can be traced back to the use of options. Because options often reward short-term stock movements, critics charge that they encourage corporate executives to make short-sighted or illegal moves to boost their companies' stock prices.

Companies such as

Coca-Cola

(KO) - Get Report

and

Amazon.com

(AMZN) - Get Report

have voluntarily begun to recognize options expenses in recent years. But many technology and Internet companies, which have been among the most prolific users of stock options, have resisted calls to expense options. Such companies have been the leading proponents of the measure passed by the House committee, seeing it as a reasonable compromise on the options issue.

FASB representatives have argued against the bill that would restrict options expensing. To them the issue boils down to the independence of accounting regulators, said Steven Getz, a spokesman for the Financial Accounting Foundation, which oversees FASB.

"Accounting standards should be left to the experts in accounting," Getz said.

Getz added that the foundation and FASB will continue to oppose the bill. The committee's passage of the bill won't affect FASB's timetable for adopting its own rule on options expensing, he said.

Staff reporter K.C. Swanson contributed to this story.