By Allen H.B. No. 1718
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to work programs for inmates and former inmates of a
1-3 county jail or state prison.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 171, Tax Code, is amended by adding
1-6 Subchapter L to read as follows:
1-7 SUBCHAPTER L. TAX CREDIT FOR WAGES PAID TO INMATES
1-8 OR FORMER INMATES
1-9 Sec. 171.651. DEFINITIONS. In this subchapter:
1-10 (1) "Inmate" means an inmate in a prison industries
1-11 program operated by the prison industries office of the
1-12 institutional division under Subchapter A, Chapter 497, Government
1-13 Code.
1-14 (2) "Institutional division" means the institutional
1-15 division of the Texas Department of Criminal Justice.
1-16 Sec. 171.652. CREDIT. A corporation that meets the
1-17 eligibility requirements under this subchapter is entitled to a
1-18 credit in the amount allowed by this subchapter against the tax
1-19 imposed under this chapter.
1-20 Sec. 171.653. CREDIT FOR WAGES PAID TO INMATE. (a) The
1-21 amount of the credit for wages paid by a corporation to an inmate
1-22 is equal to 10 percent of that portion of the wages paid that the
1-23 institutional division apportions to the state under Section
1-24 497.004(b)(3), Government Code, as reimbursement for the cost of
2-1 the inmate's confinement.
2-2 (b) A corporation is eligible for the credit under this
2-3 section only if it receives before the due date of its franchise
2-4 tax report for the privilege period for which the credit is claimed
2-5 a written certification from the institutional division stating the
2-6 amount of the wages that the corporation paid to an inmate during
2-7 the privilege period and the amount of those wages that the
2-8 institutional division apportioned to the state as reimbursement
2-9 for the cost of the inmate's confinement.
2-10 (c) A corporation is eligible for the credit under this
2-11 section only if the inmate for whom it is paid has been
2-12 continuously employed for not less than six months.
2-13 Sec. 171.654. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
2-14 INMATE. (a) The amount of the credit for wages paid by a
2-15 corporation to an employee who was employed by the corporation when
2-16 the employee was an inmate is equal to 10 percent of that portion
2-17 of the wages paid that, were the employee still an inmate, the
2-18 institutional division would apportion to the state under Section
2-19 497.004(b)(3), Government Code, as reimbursement for the cost of
2-20 the inmate's confinement.
2-21 (b) A corporation is eligible for the credit under this
2-22 section only if:
2-23 (1) the employee who was formerly an inmate was
2-24 continuously employed for not less than six months while an inmate
2-25 and has been continuously employed by the corporation for at least
2-26 one year after the date that the employee was released from prison;
2-27 (2) the nature of the employment is substantially
3-1 similar to the employment the employee had with the corporation
3-2 when the employee was an inmate or the employment requires more
3-3 skills or provides greater opportunities for the employee;
3-4 (3) the corporation has provided the institutional
3-5 division a statement of the amount of wages paid the employee
3-6 during the accounting period on which the credit is computed; and
3-7 (4) the corporation receives before the due date of
3-8 its franchise tax report for the privilege period for which the
3-9 credit is claimed a written certification from the institutional
3-10 division stating the amount of the wages that, were the employee
3-11 still an inmate, the institutional division would have apportioned
3-12 to the state as reimbursement for the cost of the inmate's
3-13 confinement.
3-14 (c) A corporation may claim a credit under this section only
3-15 for:
3-16 (1) wages paid an employee after the employee has been
3-17 employed by the corporation for more than one year after the date
3-18 of the employee's release from prison; and
3-19 (2) wages paid the employee for not longer than one
3-20 year.
3-21 Sec. 171.655. LIMITATION. The credit claimed for each
3-22 privilege period may not exceed 50 percent of the amount of net
3-23 franchise tax due for the privilege period after any other
3-24 applicable tax credits.
3-25 Sec. 171.656. APPLICATION FOR CREDIT. (a) A corporation
3-26 must apply for a credit under this subchapter on or with the tax
3-27 report for the period for which the credit is claimed.
4-1 (b) The comptroller shall promulgate a form for the
4-2 application for the credit. A corporation must use this form in
4-3 applying for the credit.
4-4 Sec. 171.657. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
4-5 corporation may claim a credit under this subchapter for wages paid
4-6 during an accounting period only against the tax owed for the
4-7 corresponding privilege period.
4-8 SECTION 2. Subchapter A, Chapter 497, Government Code, is
4-9 amended by adding Section 497.009 to read as follows:
4-10 Sec. 497.009. CERTIFICATION FOR FRANCHISE TAX CREDIT. The
4-11 institutional division or the prison industries office on behalf of
4-12 the institutional division shall prepare and issue a certification
4-13 that a corporation requires to establish eligibility for the
4-14 franchise tax credit for wages paid to inmates or employees who
4-15 were inmates under Subchapter L, Chapter 171, Tax Code.
4-16 SECTION 3. Subchapter A, Chapter 497, Government Code, is
4-17 amended by adding Section 497.010 to read as follows:
4-18 Sec. 497.010. COMPLIANCE. The prison industries office may
4-19 enter into a contract with a private business under Section 497.006
4-20 only if the contract specifies that the prison industries office
4-21 and the private business will comply with the Private Sector/Prison
4-22 Industry Enhancement Certification Program operated by the Bureau
4-23 of Justice Assistance and authorized by 42 U.S.C. Section 3701 et
4-24 seq.
4-25 SECTION 4. Section 497.022, Government Code, is amended to
4-26 read as follows:
4-27 Sec. 497.022. Purpose. The purpose of this subchapter is
5-1 to:
5-2 (1) provide adequate, regular, and suitable employment
5-3 for the vocational training and rehabilitation of inmates,
5-4 consistent with proper penal purposes;
5-5 (2) use the labor of inmates for self-maintenance;
5-6 (3) reimburse the state for expenses caused by the
5-7 crimes of inmates and the cost of their confinement; <and>
5-8 (4) provide for the requisition and disbursement of
5-9 institutional division articles and products through established
5-10 state authorities to eliminate the possibility of private profits
5-11 from the distribution of those articles and products; and
5-12 (5) provide materials, products, or articles for sale
5-13 to a private person or for the use of the state or a political
5-14 subdivision of the state.
5-15 SECTION 5. A corporation may claim the credit under
5-16 Subchapter L, Chapter 171, Tax Code, as added by this Act, only for
5-17 any wages paid or incurred on or after the effective date of this
5-18 Act and only on a franchise tax report due under Chapter 171, Tax
5-19 Code, on or after January 1, 1994.
5-20 SECTION 6. The importance of this legislation and the
5-21 crowded condition of the calendars in both houses create an
5-22 emergency and an imperative public necessity that the
5-23 constitutional rule requiring bills to be read on three several
5-24 days in each house be suspended, and this rule is hereby suspended.