By McCall H.B. No. 2543 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to settlement of a claim for a tax penalty or interest on 1-3 a tax. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Section 111.103, Tax Code, is amended by adding 1-6 Subsections (b) and (c) to read as follows: 1-7 (b) A taxpayer exercises reasonable diligence to comply with 1-8 the provisions of this title in relation to a tax item when the 1-9 taxpayer acts in good faith with respect to that item and: 1-10 (1) substantial authority for the tax treatment of 1-11 that item by the taxpayer existed at the time the claim is settled; 1-12 or 1-13 (2) the taxpayer adequately discloses the relevant 1-14 facts affecting the item's tax treatment in the report or in a 1-15 statement attached to the report and there is a reasonable basis 1-16 for that tax treatment. 1-17 (c) The terms "substantial authority" and "reasonable basis" 1-18 shall be further defined in rules issued by the comptroller, but 1-19 are intended to be generally consistent with the manner such terms 1-20 have been implemented and interpreted for federal tax purposes. 1-21 SECTION 2. (a) This Act takes effect on the first day of 1-22 the first calendar quarter beginning on or after the earliest date 1-23 that it may take effect under Section 39, Article III, Texas 1-24 Constitution, and applies to tax penalty or interest proposed on or 2-1 after the effective date. 2-2 (b) A report filed before the effective date of this Act is 2-3 governed by the law applicable to the report when the report was 2-4 filed, and that law is continued in effect for that purpose. 2-5 SECTION 3. The importance of this legislation and the 2-6 crowded condition of the calendars in both houses create an 2-7 emergency and an imperative public necessity that the 2-8 constitutional rule requiring bills to be read on three several 2-9 days in each house be suspended, and this rule is hereby suspended.