2024 -- S 2214

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LC004192

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- FACILITATING BUSINESS RAPID

RESPONSE TO STATE DECLARED DISASTER ACT OF 2024

     

     Introduced By: Senators McKenney, Sosnowski, Picard, Gallo, and LaMountain

     Date Introduced: January 24, 2024

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

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

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is hereby amended by adding thereto the following chapter:

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CHAPTER 93

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FACILITATING BUSINESS RAPID RESPONSE TO STATE DECLARED DISASTER ACT

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OF 2024

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     5-93-1. Short title.

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

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to State Declared Disaster Act of 2024.”

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     5-93-2. Legislative findings.

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     The general assembly hereby makes the following findings:

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

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

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

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

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replacement facilities in the state;

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

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

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

 

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

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

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services;

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

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

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

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activities in the state for a temporary period;

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

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

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

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

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

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

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

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

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

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

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     5-93-3. Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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period.

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

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

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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-

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

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

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

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

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

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

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immediately preceding the declared state disaster or emergency.

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

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

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

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

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

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

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

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

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

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

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

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

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

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such as unemployment insurance, state or local occupational telecommunications technician

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

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

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

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

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

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

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

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

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

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

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

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

 

LC004192 - Page 3 of 5

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

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withholding and remittance obligations.

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

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

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

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taxes or fees are otherwise exempted during a disaster period.

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

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

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

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employee tax requirements that ensue.

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     5-93-5. Administration.

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

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

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

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

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

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

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

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include contact information for the registered business in the state.

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

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

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

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residency in the state applicable under the existing rules.

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

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

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administrative procedures.

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     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 2024

***

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     This act would exempt out-of-state businesses and their employees performing services,

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during declared state or federal disasters or emergencies, from state or local business requirements,

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as well as state or local taxes or fees.

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     This act would take effect upon passage.

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LC004192

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