By Armbrister S.B. No. 742 76R2170 SMJ-D 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 Subsection (b) 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 taxpayer acted or 1-12 at the time the claim is settled; 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 SECTION 2. (a) This Act takes effect on the first day of 1-18 the first calendar quarter beginning on or after the earliest date 1-19 that it may take effect under Section 39, Article III, Texas 1-20 Constitution, and applies to a report filed on or after the 1-21 effective date. 1-22 (b) A report filed before the effective date of this Act is 1-23 governed by the law applicable to the report when the report was 1-24 filed, and that law is continued in effect for that purpose. 2-1 SECTION 3. The importance of this legislation and the 2-2 crowded condition of the calendars in both houses create an 2-3 emergency and an imperative public necessity that the 2-4 constitutional rule requiring bills to be read on three several 2-5 days in each house be suspended, and this rule is hereby suspended, 2-6 and that this Act take effect and be in force according to its 2-7 terms, and it is so enacted.