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  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.