84R7617 EES-F
By: Lucio III H.B. No. 2358
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from certain registration and licensing
requirements and taxes for certain businesses and employees who
enter this state in response to a disaster or emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 5, Business & Commerce Code, is
amended by adding Chapter 112 to read as follows:
CHAPTER 112. FACILITATING BUSINESS RAPID RESPONSE TO STATE
DECLARED DISASTERS ACT
Sec. 112.001. SHORT TITLE. This chapter may be cited as the
Facilitating Business Rapid Response to State Declared Disasters
Act.
Sec. 112.002. LEGISLATIVE FINDINGS. The legislature finds
that:
(1) during times of storm, flood, fire, earthquake,
hurricane, or other disaster or emergency, many Texas businesses
bring in resources and personnel from other states on a temporary
basis to expedite the often enormous and overwhelming tasks of
cleaning up, restoring, and repairing damaged buildings,
equipment, and property, and deploying and building new replacement
facilities in the state;
(2) accomplishing those tasks may necessitate
out-of-state businesses, including out-of-state affiliates of
Texas businesses, bringing into Texas resources, property, and
personnel that previously had no connection to Texas to perform
business activities in Texas, including repairing, renovating,
installing, and building, for extended periods of time;
(3) during those periods of time, out-of-state
businesses and employees performing business activities in Texas on
a temporary basis solely for the purpose of helping the state
recover from a disaster or emergency should not be burdened by any
requirements that the out-of-state businesses or employees pay
taxes as a result of performing those activities;
(4) Texas' nexus and residency thresholds are intended
for businesses and individuals who intend to conduct regular
business operations in the state or to permanently reside in the
state and should not be applied to businesses and individuals who
come to the state on a temporary basis to provide help and
assistance in response to a disaster or emergency; and
(5) to ensure that out-of-state businesses may focus
on quickly responding to the needs of Texas and its citizens during
a disaster or emergency, it is appropriate for the legislature to
provide that those businesses and their employees are not subject
to certain state and local registration and licensing requirements
and taxes for performing business activities before, during, and
after the disaster or emergency to repair and restore devastating
damage to critical property and infrastructure in the state.
Sec. 112.003. DEFINITIONS. (a) In this chapter:
(1) "Critical infrastructure" means equipment and
property that is owned by or used for communications networks,
electric generation, transmission and distribution systems, gas
distribution systems, and water pipelines and related support
facilities, equipment, and property that serve multiple persons,
including buildings, offices, structures, lines, poles, and pipes.
(2) "Declared state disaster or emergency" means a
disaster or emergency event that occurs in this state and:
(A) in response to which the governor issues an
executive order or proclamation declaring a state of disaster or a
state of emergency;
(B) that the president of the United States
declares a major disaster or emergency; or
(C) that requires a good faith response effort
and that an authorized state official, other than the governor,
designates a disaster or emergency in order to invoke this chapter.
(3) "Disaster- or emergency-related work" means
repairing, renovating, installing, building, rendering services,
or performing other business activities relating to the repair or
replacement of critical infrastructure that has been damaged,
impaired, or destroyed by a declared state disaster or emergency.
(4) "Disaster response period" means the period that:
(A) begins on the 10th day before the date of the
earliest event establishing a declared state disaster or emergency
by the issuance of an executive order or proclamation by the
governor, a declaration of the president of the United States, or
the designation of an authorized state official; and
(B) ends on the 60th day after the ending date of
the disaster or emergency period established by the executive order
or proclamation, declaration, or designation or on a later date as
determined by the secretary of state.
(5) "In-state business entity" means a domestic entity
or foreign entity that is authorized to transact business in this
state immediately before a disaster response period.
(6) "Out-of-state business entity" means a foreign
entity that:
(A) except with respect to the performance of
disaster- or emergency-related work:
(i) has no physical presence in this state
and is not authorized to transact business in this state
immediately before a disaster response period; and
(ii) is not registered with the secretary
of state to transact business in this state, does not a file a tax
report with this state or a political subdivision of this state, and
does not have a nexus with this state for the purpose of taxation
during the tax year immediately preceding the disaster response
period; and
(B) enters this state at the request of an
in-state business entity, the state, or a political subdivision of
the state to perform disaster- or emergency-related work in this
state during the disaster response period.
(7) "Out-of-state employee" means an employee who
enters this state to perform disaster- or emergency-related work
during a disaster response period.
(b) For purposes of this chapter, a foreign entity may be
considered an "out-of-state business entity" even if the foreign
entity is affiliated with an in-state business entity through
common ownership.
Sec. 112.004. EXEMPTION OF OUT-OF-STATE BUSINESS ENTITY
FROM CERTAIN OBLIGATIONS DURING DISASTER RESPONSE PERIOD.
Notwithstanding any other law and except as provided by Section
112.006, an out-of-state business entity whose transaction of
business in this state is limited to the performance of disaster- or
emergency-related work during a disaster response period is not
required to:
(1) register with the secretary of state;
(2) file a tax report with or pay taxes or fees to this
state or a political subdivision of this state;
(3) pay an ad valorem tax or use tax on equipment that
is brought into the state by the entity, used only by the entity to
perform disaster- or emergency-related work during the disaster
response period, and removed from the state by the entity following
the disaster response period;
(4) comply with any state or local business licensing
or registration requirements; or
(5) comply with any state or local occupational
licensing requirements or related fees.
Sec. 112.005. EXEMPTION OF OUT-OF-STATE EMPLOYEE FROM
CERTAIN OBLIGATIONS DURING DISASTER RESPONSE PERIOD.
Notwithstanding any other law and except as provided by Section
112.006, an out-of-state employee whose only employment in this
state is for the performance of disaster- or emergency-related work
during a disaster response period is not required to:
(1) file a tax report with or pay taxes or fees to this
state or a political subdivision of this state; or
(2) comply with any state or local occupational
licensing requirements or related fees.
Sec. 112.006. TRANSACTION TAXES AND FEES. An out-of-state
business entity whose transaction of business in this state is
limited to the performance of disaster- or emergency-related work
during a disaster response period or an out-of-state employee whose
only employment in this state is for the performance of disaster- or
emergency-related work during a disaster response period is subject
to a transaction tax or fee, including a motor fuels tax, sales or
use tax, hotel occupancy tax, and the tax imposed on the rental of a
motor vehicle, that is imposed in this state, unless the entity or
employee is otherwise exempt from the tax or fee.
Sec. 112.007. NOTIFICATION PROCEDURES. (a) If requested
by the secretary of state, an out-of-state business entity shall
provide to the secretary of state a statement that the entity came
to this state for the purpose of performing disaster- or
emergency-related work during a disaster response period and that
includes:
(1) the entity's name;
(2) the entity's jurisdiction of formation;
(3) the address of the principal office of the entity;
(4) the entity's federal tax identification number;
(5) the date that the entity entered the state; and
(6) contact information for the entity.
(b) If requested by the secretary of state, an in-state
business entity shall provide to the secretary of state, along with
the in-state business entity's contact information, the
information listed in Subsection (a) for any affiliate of the
in-state business entity that entered the state as an out-of-state
business entity.
(c) The secretary of state shall keep records of and make
available to the public any statements or information provided to
the secretary of state under this section.
Sec. 112.008. OBLIGATIONS OF OUT-OF-STATE BUSINESS
ENTITIES AND EMPLOYEES AFTER DISASTER RESPONSE PERIOD. An
out-of-state business entity or out-of-state employee who remains
in this state after a disaster response period is not entitled to
any exemptions from obligations provided by this chapter.
Sec. 112.009. REGULATIONS. The secretary of state shall
adopt regulations, including developing any necessary forms or
processes, to implement this chapter.
SECTION 2. (a) Subchapter B, Chapter 151, Tax Code, is
amended by adding Section 151.0241 to read as follows:
Sec. 151.0241. PERSONS PERFORMING DISASTER- OR
EMERGENCY-RELATED WORK. (a) In this section, "disaster- or
emergency-related work," "disaster response period," and
"out-of-state business entity" have the meanings assigned by
Section 112.003, Business & Commerce Code.
(b) An out-of-state business entity is not engaged in
business in this state for purposes of Sections 151.107 and 151.403
or any other provision of this chapter applicable to a person
engaged in business in this state if the entity's physical presence
in this state is solely from the entity's performance of disaster-
or emergency-related work during a disaster response period.
(b) Subchapter H, Chapter 151, Tax Code, is amended by
adding Section 151.3502 to read as follows:
Sec. 151.3502. SERVICES AND TANGIBLE PERSONAL PROPERTY SOLD
IN PERFORMING DISASTER- OR EMERGENCY-RELATED WORK. (a) In this
section, "disaster- or emergency-related work," "disaster response
period," and "out-of-state business entity" have the meanings
assigned by Section 112.003, Business & Commerce Code.
(b) The sale, lease, or rental of a taxable item by an
out-of-state business entity in performing disaster- or
emergency-related work during a disaster response period is
exempted from the taxes imposed by this chapter.
(c) Sections 151.0241 and 151.3502, Tax Code, as added by
this section, do not affect tax liability accruing before the
effective date of this Act. That liability continues in effect as
if this Act had not been enacted, and the former law is continued in
effect for the collection of taxes due and for civil and criminal
enforcement of the liability for those taxes.
SECTION 3. (a) Section 171.0002, Tax Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) "Taxable entity" does not include an out-of-state
business entity whose sole nexus with this state for the purpose of
taxation is the entity's provision of disaster- or
emergency-related work during a disaster response period. In this
subsection, "disaster- or emergency-related work," "disaster
response period," and "out-of-state business entity" have the
meanings assigned by Section 112.003, Business & Commerce Code.
(b) This section applies only to a franchise tax report
originally due on or after the effective date of this section.
(c) This section takes effect January 1, 2016.
SECTION 4. Except as otherwise provided by this Act:
(1) if this Act receives a vote of two-thirds of all
the members elected to each house, as provided by Section 39,
Article III, Texas Constitution, this Act takes effect immediately;
and
(2) if this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2015.