2023 -- H 5838

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LC002095

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- FACILITATING BUSINESS RAPID

RESPONSE TO STATE DECLARED DISASTER ACT OF 2023

     Introduced By: Representatives Kennedy, Azzinaro, Diaz, Ackerman, Casimiro, and
Bennett

     Date Introduced: March 01, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 5 of the General Laws entitled "BUSINESSES AND PROFESSIONS"

is hereby amended by adding thereto the following chapter:

CHAPTER 93

FACILITATING BUSINESS RAPID RESPONSE TO STATE DECLARED DISASTER ACT

OF 2023

     5-93-1. Short title.

     This chapter shall be known and may be cited as the “Facilitating Business Rapid Response

to State Declared Disaster Act of 2023.”

     5-93-2. Legislative findings.

     The general assembly hereby makes the following findings:

     (1) During times of storm, flood, fire, earthquake, hurricane or other disaster or emergency,

many businesses bring in resources and personnel from other states throughout the United States

on a temporary basis to expedite the often enormous and overwhelming task of cleaning up,

restoring and repairing damaged buildings, equipment and property or even deploying or building

replacement facilities in the state;

     (2) This action may involve the need for out-of-state businesses, including out-of-state

affiliates of businesses based in the state, to bring in resources, property and/or personnel that

previously have had no connection to the state, to perform activity in the state including, but not

limited to, repairing, renovating, installing, building, rendering services or other business activities

and for which personnel may be located in the state for extended periods of time to perform such

activities;

     (3) During such time of operating in the state on a temporary basis solely for purposes of

helping the state recover from the disaster or emergency, these businesses and individual employees

should not be burdened by any requirements for business and employee taxes as a result of such

activities in the state for a temporary period;

     (4) The state’s nexus and residency thresholds are intended for businesses and individuals

in the state as part of the conduct of regular business operations or who intend to reside in the state

and should not be directed at businesses and individuals coming into the state on a temporary basis

to provide assistance in response to a declared state disaster or emergency; and

     (5) To ensure that businesses may focus on quick response to the needs of the state and its

citizens during a declared state disaster or emergency, it is appropriate for the general assembly to

deem that such activity, for a reasonable period of time before, during and after the disaster or

emergency for repairing and restoration of the often devastating damage to critical infrastructure

shall not establish presence, residency, nor doing business in the state nor any other criteria for

purposes of state and local taxes, and specified licensing and regulatory requirements.

     5-93-3. Definitions.

     As used in this chapter, the following terms shall have the following meanings:

     (1) “'Critical infrastructure” means property and equipment located in this state that is

owned or used by communications networks, cable, video, or broadband networks; gas and electric

distribution systems; water pipelines, railways, public roads and bridges and related support

facilities that service multiple customers or citizens including, but not limited to, real and personal

property such as buildings, offices, lines, poles, pipes, structures and equipment.

     (2) “Declared state disaster or emergency” means a disaster or emergency event for which

a governor’s state of emergency proclamation has been issued or for which a presidential

declaration of a federal major disaster or emergency has been issued.

     (3) “Disaster or emergency-related work” means repairing, renovating, installing, building,

rendering services or other business activities that relate to critical infrastructure that has been

damaged, destroyed or lost as a result of the declared state disaster or emergency during the disaster

period.

     (4) “Disaster period” means a period that begins within ten (10) days of the first day of the

governor’s proclamation or the president’s declaration (whichever occurs first) and that extends for

a period of sixty (60) calendar days after the end of the declared disaster or emergency period.

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     (5) “Out-of-state business” means a business entity that, except for disaster or emergency-

related work, has no presence in the state and conducts no business in the state whose services are

requested by a registered business or by a state or local government for purposes of performing

disaster or emergency-related work in the state. This definition shall also include a business entity

that is affiliated with the registered business in the state solely through common ownership. The

“out-of-state business” has no registrations or tax filings or nexus in the state prior to the declared

state disaster or emergency, other than disaster or emergency-related work during the tax year

immediately preceding the declared sate disaster or emergency.

     (6) “Out-of-state employee” means an employee who does not work in the state, except for

disaster or emergency-related work during the disaster response period.

     (7) “Registered business in the state” or “registered business” means a business entity that

is currently registered to do business in the state prior to the declared state disaster or emergency.

     5-93-4. Obligations, rights and duties.

     (a) An out-of-state business that conducts operations within the state for purposes of

performing work or services on critical infrastructure damaged, destroyed, or lost as a result of a

declared state disaster or emergency during the disaster period shall not be considered to have

established a level of presence that would require that business to register, file and remit state or

local taxes or that would require that business or its out-of-state employees to be subject to the state

telecommunications technician, contractor or installer licensing requirements as long as they are

under the supervision of the registered business. This exemption includes any state or local

telecommunications business licensing or registration requirements or state and local taxes or fees

such as unemployment insurance, state or local occupational telecommunications technician

licensing fees and use tax on equipment brought into the state on a temporary basis that is used

during the disaster period as well as public service commission or secretary of state licensing and

regulatory requirements. For purposes of any state or local tax on or measured by, in whole or in

part, net or gross income or receipts, all activity of the out-of-state business that is conducted in

this state pursuant to this chapter shall be disregarded with respect to any filing requirements for

such tax, including the filing required for a unitary or combined group of which the out-of-state

business may be a part. For purposes of apportioning income, revenue, or receipts, the performance

by an out-of-state business of any work pursuant to this chapter shall not be sourced to or shall not

otherwise impact or increase the amount of income, revenue, or receipts apportioned to this state.

     (b) Any out-of-state employee shall not be considered to have established residency or a

presence in the state that would require that person or that person’s employer to file and pay income

taxes or to be subjected to income tax withholdings or to file and pay any other state or local tax or

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fee during the disaster period. This exemption includes any related state or local employer

withholding and remittance obligations.

     (c) Out-of-state businesses and out-of-state employees shall be required to pay transaction

taxes and fees including, but not limited to, fuel taxes or sales and use taxes, except use tax on

equipment specified in subsection (a) of this section, hotel taxes, car rental taxes or fees unless such

taxes or fees are otherwise exempted during a disaster period.

     (d) Any out-of- state business or out-of-state employee that remains in the state after the

disaster period will become subject to the state’s normal standards for establishing presence,

residency or doing business in the state and will therefore become responsible for any business or

employee tax requirements that ensue.

     5-93-5. Administration.

     (a) Notification of out-of-state business during disaster period.

     (1) The out-of-state business that enters the state shall, upon request, provide to the Rhode

Island emergency management agency a statement that it is in the state for purposes of responding

to the disaster or emergency, which statement shall include the business name, state of domicile,

principal business address, federal tax identification number, date of entry, and contact information.

     (2) A registered business in the state shall, upon request, provide the information required

in subsection (a)(1) of this section for any affiliate that enters the state. The notification shall also

include contact information for the registered business in the state.

     (b) Notification of intent to remain in state. An out-of-state business or an employee that

remains in the state after the disaster period shall complete state and local registration, licensing

and filing requirements that ensue as a result of establishing the requisite business presence or

residency in the state applicable under the existing rules.

     (c) Procedures. The emergency management agency shall promulgate necessary rules and

regulations as well as develop and issue forms or online processes to implement these

administrative procedures.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- FACILITATING BUSINESS RAPID

RESPONSE TO STATE DECLARED DISASTER ACT OF 2023

***

     This act would provide thresholds for establishing presence, residency or doing business

in the state for out-of-state employees and businesses including affiliates of in-state companies that

temporarily provide resources and personnel in the state during a state of emergency declared by

either the governor or the President of the United States.

     This act would take effect upon passage.

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