79R9568 DAK-F


By:  Rose                                                         H.B. No. 3406

Substitute the following for H.B. No. 3406:                                   

By:  Grusendorf                                               C.S.H.B. No. 3406



A BILL TO BE ENTITLED

AN ACT

relating to declaratory relief for businesses in this state for 
liability for sales and use taxes of other states.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 37, Civil Practice and Remedies Code, is 
amended by adding Section 37.0055 to read as follows:
	Sec. 37.0055.  DECLARATIONS RELATING TO LIABILITY FOR SALES 
AND USE TAXES OF ANOTHER STATE.  (a)  A district court has original 
jurisdiction of a proceeding seeking a declaratory judgment that 
involves:
		(1)  a party seeking declaratory relief that is a 
business that is:  
			(A)  organized under the laws of this state or is 
otherwise owned by a resident of this state; or
			(B)  otherwise qualified to do business in this 
state; and          
		(2)  a responding party that:                                          
			(A)  is an official of another state; and                             
			(B)  asserts a claim that the party seeking 
declaratory relief is required to collect sales or use taxes for 
that state based on conduct of the business that occurs in whole or 
in part within this state.
	(b)  A business described by Subsection (a)(1) is entitled to 
declaratory relief on the issue of whether the requirement of 
another state that the business collect and remit sales or use taxes 
to that state constitutes an undue burden on interstate commerce 
under Section 8, Article I, United States Constitution.
	(c)  In determining whether to grant declaratory relief to a 
business under this section, a court shall consider:
		(1)  the factual circumstances of the business's 
operations that give rise to the demand by the other state; and
		(2)  the decisions of other courts interpreting Section 
8, Article I, United States Constitution.
	SECTION 2.  Section 37.0055, Civil Practice and Remedies 
Code, as added by this Act, applies only to a cause of action that 
accrues on or after the effective date of this Act.  A cause of 
action that accrues before the effective date of this Act is 
governed by the law in effect at the time the action accrued, and 
the former law is continued in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.