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.