1-1 By: Allen (Senate Sponsor - Shelley) H.B. No. 1718
1-2 (In the Senate - Received from the House May 12, 1993;
1-3 May 13, 1993, read first time and referred to Committee on Finance;
1-4 May 21, 1993, reported favorably, as amended, by the following
1-5 vote: Yeas 9, Nays 0; May 21, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 COMMITTEE AMENDMENT NO. 1 By: Sims
1-22 Amend House Bill 1718 by inserting New SECTION 5 as follows and
1-23 renumbering remaining SECTIONS accordingly:
1-24 SECTION 5. Section 497.035(a), Government Code, is amended
1-25 to read as follows:
1-26 Sec. 497.035 OFFENSE: SALE OR OFFER OF SALE OF
1-27 PRISON-PRODUCED ARTICLES OR PRODUCTS. (a) A person commits an
1-28 offense if the person intentionally sells or offers to sell on the
1-29 open market in this state an article or product the person knows
1-30 was manufactured in whole or in part by an inmate of the
1-31 institutional division or an inmate in a correctional facility in
1-32 any other state, other than an inmate who was on probation or
1-33 parole or employed by an enterprise who has employed the inmate to
1-34 advantage themselves of the Franchise Tax Credit offered under
1-35 Subchapter L, Chapter 171, Tax Code at the time of manufacture.
1-36 A BILL TO BE ENTITLED
1-37 AN ACT
1-38 relating to work programs for inmates and former inmates of a
1-39 county jail or state prison.
1-40 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-41 SECTION 1. Chapter 171, Tax Code, is amended by adding
1-42 Subchapter L to read as follows:
1-43 SUBCHAPTER L. TAX CREDIT FOR WAGES PAID TO INMATES
1-44 OR FORMER INMATES
1-45 Sec. 171.651. DEFINITIONS. In this subchapter:
1-46 (1) "Inmate" means an inmate in a prison industries
1-47 program operated by the prison industries office of the
1-48 institutional division under Subchapter A, Chapter 497, Government
1-49 Code.
1-50 (2) "Institutional division" means the institutional
1-51 division of the Texas Department of Criminal Justice.
1-52 Sec. 171.652. CREDIT. A corporation that meets the
1-53 eligibility requirements under this subchapter is entitled to a
1-54 credit in the amount allowed by this subchapter against the tax
1-55 imposed under this chapter.
1-56 Sec. 171.653. CREDIT FOR WAGES PAID TO INMATE. (a) The
1-57 amount of the credit for wages paid by a corporation to an inmate
1-58 is equal to 10 percent of that portion of the wages paid that the
1-59 institutional division apportions to the state under Section
1-60 497.004(b)(3), Government Code, as reimbursement for the cost of
1-61 the inmate's confinement.
1-62 (b) A corporation is eligible for the credit under this
1-63 section only if it receives before the due date of its franchise
1-64 tax report for the privilege period for which the credit is claimed
1-65 a written certification from the institutional division stating the
1-66 amount of the wages that the corporation paid to an inmate during
1-67 the privilege period and the amount of those wages that the
1-68 institutional division apportioned to the state as reimbursement
2-1 for the cost of the inmate's confinement.
2-2 (c) A corporation is eligible for the credit under this
2-3 section only if the inmate for whom it is paid has been
2-4 continuously employed for not less than six months.
2-5 Sec. 171.654. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
2-6 INMATE. (a) The amount of the credit for wages paid by a
2-7 corporation to an employee who was employed by the corporation when
2-8 the employee was an inmate is equal to 10 percent of that portion
2-9 of the wages paid that, were the employee still an inmate, the
2-10 institutional division would apportion to the state under Section
2-11 497.004(b)(3), Government Code, as reimbursement for the cost of
2-12 the inmate's confinement.
2-13 (b) A corporation is eligible for the credit under this
2-14 section only if:
2-15 (1) the employee who was formerly an inmate was
2-16 continuously employed for not less than six months while an inmate
2-17 and has been continuously employed by the corporation for at least
2-18 one year after the date that the employee was released from prison;
2-19 (2) the nature of the employment is substantially
2-20 similar to the employment the employee had with the corporation
2-21 when the employee was an inmate or the employment requires more
2-22 skills or provides greater opportunities for the employee;
2-23 (3) the corporation has provided the institutional
2-24 division a statement of the amount of wages paid the employee
2-25 during the accounting period on which the credit is computed; and
2-26 (4) the corporation receives before the due date of
2-27 its franchise tax report for the privilege period for which the
2-28 credit is claimed a written certification from the institutional
2-29 division stating the amount of the wages that, were the employee
2-30 still an inmate, the institutional division would have apportioned
2-31 to the state as reimbursement for the cost of the inmate's
2-32 confinement.
2-33 (c) A corporation may claim a credit under this section only
2-34 for:
2-35 (1) wages paid an employee after the employee has been
2-36 employed by the corporation for more than one year after the date
2-37 of the employee's release from prison; and
2-38 (2) wages paid the employee for not longer than one
2-39 year.
2-40 Sec. 171.655. LIMITATION. The credit claimed for each
2-41 privilege period may not exceed 50 percent of the amount of net
2-42 franchise tax due for the privilege period after any other
2-43 applicable tax credits.
2-44 Sec. 171.656. APPLICATION FOR CREDIT. (a) A corporation
2-45 must apply for a credit under this subchapter on or with the tax
2-46 report for the period for which the credit is claimed.
2-47 (b) The comptroller shall promulgate a form for the
2-48 application for the credit. A corporation must use this form in
2-49 applying for the credit.
2-50 Sec. 171.657. PERIOD FOR WHICH CREDIT MAY BE CLAIMED. A
2-51 corporation may claim a credit under this subchapter for wages paid
2-52 during an accounting period only against the tax owed for the
2-53 corresponding privilege period.
2-54 SECTION 2. Subchapter A, Chapter 497, Government Code, is
2-55 amended by adding Section 497.009 to read as follows:
2-56 Sec. 497.009. CERTIFICATION FOR FRANCHISE TAX CREDIT. The
2-57 institutional division or the prison industries office on behalf of
2-58 the institutional division shall prepare and issue a certification
2-59 that a corporation requires to establish eligibility for the
2-60 franchise tax credit for wages paid to inmates or employees who
2-61 were inmates under Subchapter L, Chapter 171, Tax Code.
2-62 SECTION 3. Subchapter A, Chapter 497, Government Code, is
2-63 amended by adding Section 497.010 to read as follows:
2-64 Sec. 497.010. COMPLIANCE. The prison industries office may
2-65 enter into a contract with a private business under Section 497.006
2-66 only if the contract specifies that the prison industries office
2-67 and the private business will comply with the Private Sector/Prison
2-68 Industry Enhancement Certification Program operated by the Bureau
2-69 of Justice Assistance and authorized by 42 U.S.C. Section 3701 et
2-70 seq.
3-1 SECTION 4. Section 497.022, Government Code, is amended to
3-2 read as follows:
3-3 Sec. 497.022. Purpose. The purpose of this subchapter is
3-4 to:
3-5 (1) provide adequate, regular, and suitable employment
3-6 for the vocational training and rehabilitation of inmates,
3-7 consistent with proper penal purposes;
3-8 (2) use the labor of inmates for self-maintenance;
3-9 (3) reimburse the state for expenses caused by the
3-10 crimes of inmates and the cost of their confinement; <and>
3-11 (4) provide for the requisition and disbursement of
3-12 institutional division articles and products through established
3-13 state authorities to eliminate the possibility of private profits
3-14 from the distribution of those articles and products; and
3-15 (5) provide materials, products, or articles for sale
3-16 to a private person or for the use of the state or a political
3-17 subdivision of the state.
3-18 SECTION 5. A corporation may claim the credit under
3-19 Subchapter L, Chapter 171, Tax Code, as added by this Act, only for
3-20 any wages paid or incurred on or after the effective date of this
3-21 Act and only on a franchise tax report due under Chapter 171, Tax
3-22 Code, on or after January 1, 1994.
3-23 SECTION 6. The importance of this legislation and the
3-24 crowded condition of the calendars in both houses create an
3-25 emergency and an imperative public necessity that the
3-26 constitutional rule requiring bills to be read on three several
3-27 days in each house be suspended, and this rule is hereby suspended.
3-28 * * * * *
3-29 Austin,
3-30 Texas
3-31 May 21, 1993
3-32 Hon. Bob Bullock
3-33 President of the Senate
3-34 Sir:
3-35 We, your Committee on Finance to which was referred H.B. No. 1718,
3-36 have had the same under consideration, and I am instructed to
3-37 report it back to the Senate with the recommendation that it do
3-38 pass, as amended, and be printed.
3-39 Montford,
3-40 Chairman
3-41 * * * * *
3-42 WITNESSES
3-43 FOR AGAINST ON
3-44 ___________________________________________________________________
3-45 Name: Jeff Kloster x
3-46 Representing: Senator Shelley's Office
3-47 City: Austin
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