BILL ANALYSIS



H.B. 462
By: Alvarado
March 1, 1995
Committee Report (Unamended)


BACKGROUND

Chapter 151, Tax Code, levies the sales, excise and use taxes. 
Section 151.314 states that "food products" for human consumption
are exempt from these taxes and lists what is and what is not
considered a "food product."  State prisons, county jails and other
correctional facilities maintain commissaries to provide inmates
with personal amenities such as food, candy and soft drinks. 
Although the commissaries are charging a tax on these products when
sold to prison or jail employees, they are not collecting and
remitting tax on the sale of these items to inmates, due to rules
imposed under Section 151.314(d)(3), Tax Code.

A recommendation was made in Gaining Ground, a report from the
Texas Performance Review, to require prison and jail inmates to pay
sales tax on items that are taxable to the general public.  It is
recommendation PSC4. 

PURPOSE

This bill would mandate the collection and remittance of a sales
tax on the commissary sales of soft drinks, candy and other taxable
food products sold to inmates.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 151.314, Tax Code, by adding Subsection
(g) which allows for the collection and remittance of a sales tax
on the commissary sales of soft drinks, candy and other taxable
food products sold to inmates.

SECTION 2.  Effective date: October 1, 1995.

SECTION 3.  Emergency clause.


SUMMARY OF COMMITTEE ACTION

Public notice was posted in accordance to the rules and a public
hearing was held on February 28, 1995.  By a record vote of 7 ayes,
0 nays, 0 present not voting and 4 absent, the committee voted to
report H.B. 462 to the House without amendment with the
recommendation that it be sent to Local and Consent Calendar and
that it do pass.