BILL ANALYSIS
C.S.H.B. 2318
By: Allen
04-04-95
Committee Report (Substituted)
BACKGROUND
The current TYC Industries program is operated largely in house and
does not provide for the payment of juvenile offenders while
working at industries jobs. As a result, restitution, crime
victims compensation fund payments and other liabilities cannot
reasonably be paid by the juvenile offender. Additionally, one of
the single best predictors of recidivism is employment-- people who
have jobs are less likely to commit crimes than those ex-offenders
who are unemployed.
PURPOSE
C.S.H.B. 2318 allows the Texas Youth Commission to establish and
operate an industries program at any commission facility. It
allows them to create an advisory committee consisting of nine
members and give cities and counties the ability to provide tax
incentives to businesses that hire and pay TYC youth. The bill
also prescribes four uses for the money a youth earns: payment of
restitution; contributions to the Crime Victims Compensation Fund;
money to a trust fund for the student upon release, and money to
the general revenue fund as reimbursement for the cost of the
child's confinement. C.S.H.B. 2318 is intended to stimulate
productive job training and actual employment of TYC youths and to
enhance victims' restitution and payments to the Crime Victims
Compensation Fund.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 61, Human Resources Code, by adding
Subchapter H as follows:
SUBCHAPTER H. INDUSTRIES PROGRAM.
Sec. 61.121. PROGRAM; PURPOSE.
(a) Allows the commission to establish and operate an
industries program at any commission facility.
(b) Provides that the purpose of the industries program is to
provide adequate employment and vocational training for
children; and to develop and expand public and private
commission industries.
(c) Requires the commission to use children as workers in the
industries program to the greatest extent feasible and to
expand the industries program by pursuing arrangements with
business to use children as workers.
Sec. 61.122. ADVISORY COMMITTEE.
(a) Creates a commission industries advisory committee
consisting of 9 members appointed by the commission. Requires
efforts to be made to include representatives of industries
appropriate for hiring young offenders.
(b) Provides that members serve staggered 3-year terms, with
the terms of three members expiring February 1 of each odd-numbered year.
Sec. 61.123. PAY AND DISTRIBUTION OF PAY.
(a) Allows the commission to develop and administer an
incentive pay scale for children who participate in the
industries program.
(b) Requires the commission to apportion wages earned by a
child working under the industries program in amounts
determined at the discretion of the commission to: a person
to whom the child has been ordered by a court to pay
restitution; the general revenue fund of the state as
reimbursement for the cost of the child's confinement; the
compensation to victims of crime fund and the compensation to
victims of crime auxiliary fund; a trust fund for the child.
Sec 61.124. INDUSTRIES FUND.
(a) Creates a Texas Youth Commission industries program fund
in the state treasury.
(b) Requires the proceeds from the operation of Private
Sector/Prison Industries certified industries program to be
deposited in the fund.
(c) Provides that money from this fund may only be
appropriated for use by the commission for the administration
of the industries program.
(d) Provides that Sections 403.094 and 403.095, Government
Code, do not apply to the fund.
Sec. 61.125. CONTRACTS. Allows the commission to contract
with a private person to conduct an industries program on or
off premises operated by the commission.
Sec. 61.126. GRANTS. Allows the commission to accept a grant
for the vocational rehabilitation of children and requires
them to maintain a record of the receipt and disbursement of
a grant.
Sec. 61.127. LEASE OF LAND. Allows the commission to lease
land owned by the commission to a private business to expand
and develop the industries program. Provides that the term of
the lease may not exceed 50 years and the business must lease
the land at fair market value. Allows the business to
construct a new facility on the land or convert an existing
facility.
Sec. 61.128. CERTIFICATION FOR FRANCHISE CREDIT. Requires
the commission to prepare and issue a certification that a
corporation requires to establish eligibility for the
franchise tax credit for wages paid as provided by Subchapter
M, Chapter 171, Tax Code.
Sec. 61.129. OPTIONAL AD VALOREM TAX ABATEMENT. Provides
that a business contracting with the commission may enter into
an ad valorem tax abatement agreement under Subchapter B and
C, Chapter 312, Tax Code, with the governing body of the
municipality and county in which the business is located.
(b) Provides that if an area in which businesses contracting
with the commission under this subchapter is designated as a
reinvestment zone under Chapter 312, Tax Code, the area
satisfies Section 312.202 (a) (6), Tax Code, in that the area
would be reasonably likely, as a result of the designation, to
contribute to the retention or expansion of primary employment
or to attract major investment in the zone that would be a
benefit to the property and that would contribute to the
economic development of the entity designating the area as a
reinvestment zone.
SECTION 2. Amends Chapter 171, Tax Code, by adding Subchapter M as
follows:
SUBCHAPTER M. TAX CREDIT FOR WAGES PAID TO CERTAIN CHILDREN
COMMITTED TO TEXAS YOUTH COMMISSION
Sec. 171.681. DEFINITIONS. Defines "Commission" and
"eligible child."
Sec. 171.682. CREDIT. Provides that a corporation that meets
the eligibility requirements under this subchapter is entitled
to a credit in the amount allowed by this subchapter against
the tax imposed under this chapter.
Sec. 171.683. CREDIT FOR WAGES PAID TO ELIGIBLE CHILD.
(a) Provides that the amount of the credit for wages paid by
a corporation to an eligible child is equal to 10 percent of
that portion of the wages paid that the commission apportioned
under Section 61.125(b), Human Resources Code.
(b) Provides that a corporation is eligible for the credit
under this section only if it receives, before the due date of
its franchise tax report for the privilege period for which
the credit is claimed, a written certification from the
commission stating the amount of the wages that the
corporation paid to an eligible child or to the commission and
the amount of those wages apportioned under Section 61.123(b),
Human Resources Code, during the privilege period and not more
than six months of the preceding privilege period for wages
for which a credit has not previously been claimed.
(c) Provides that a corporation is eligible for the credit
under this section only if the eligible child, to whom or for
whose benefit it pays wages, has been continuously employed by
the corporation for not less than six months.
Sec. 171.684. CREDIT FOR WAGES PAID TO EMPLOYEE WHO WAS AN
ELIGIBLE CHILD.
(a) Provides that the amount of the credit for wages paid by
a corporation to an employee who was first employed by the
corporation when the employee was an eligible child, is equal
to 10 percent of that portion of the wages paid that, if the
employee was still an eligible child, the commission would
apportion.
(b) Provides that a corporation is eligible for this credit
only if:
(1) the employee who was formerly an eligible child was
continuously employed for not less than six months while
an eligible child, and has been continuously employed
by the corporation for at least one year after the date
that the employee was released from commitment to the
commission or released under supervision by the
commission;
(2) the nature of the employment is substantially
similar to the employment that the employee had with the
corporation when the employee was an eligible child or
the employment requires more skills or provides greater
opportunities for the employee;
(3) the corporation has provided the commission a
statement of the amount of wages paid the eligible child
during the accounting period on which the credit is
computed;
(4) the corporation receives before the due date of its
franchise tax report for the tax privilege period for
which the credit is claimed, a written certification
from the commission stating the amount of the wages
that, were the employee still an eligible child, the
commission would apportion.
(c) Provides that a corporation may claim a credit under this
section only for wages paid an employee after the employee has
been employed by the corporation for more than one year after
the earlier of the date of the employee's release from
commitment to the commission or release under supervision by
the commission; and for wages paid the employee for not longer
than one year.
Sec. 171.685. LIMITATION. Provides that the total credits
claimed under this subchapter for a privilege period may not
exceed 50 percent of the amount of net franchise tax due for
the privilege period after any other applicable tax credits.
Sec. 171.686. APPLICATION FOR CREDIT. Provides that a
corporation must apply for a credit under this subchapter on
or with the tax report for the period for which the credit is
claimed. Requires the comptroller to promulgate a form for
the application for the credit, and a corporation must use
this form in applying for the credit.
Sec. 171.687. PERIOD FOR WHICH CREDIT MAY BE CLAIMED.
Provides that a corporation may claim a credit under this
subchapter for wages paid during an accounting period only
against the tax owed for the corresponding privilege period.
SECTION 3. Provides that a corporation may claim the credit under
Subchapter M, Chapter 171, Tax Code, as added by this Act, only for
any wages paid or incurred on or after the effective date of this
Act and only a franchise tax report due under Chapter 171, Tax
Code, on or after January 1, 1996.
SECTION 4. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The original bill created an Industries Office within the Texas
Youth Commission and under the direction of the Executive Director.
The substitute allows the TYC to establish and operate an
industries program at any commission facility, and the commission
is to direct the program. The substitute adds language that
provides for an effort to be made to include representatives of
industries appropriate for hiring young offenders in the advisory
committee. The substitute also adds that the commission may
apportion wages earned by a child to the general revenue fund of
the state, as reimbursement for the cost of the child's
confinement. The substitute deletes language that provides that
the industries office may enter into a contract with a private
business under this subchapter only if the contract specifies that
the industries office and the business will comply with the Private
Sector/Prison Industry Certification Program operated by the Bureau
of Justice Assistance. The substitute does provide that proceeds
from the operation of Private Sector/Prison Industries certified
programs shall be deposited in the industries program fund.
SUMMARY OF COMMITTEE ACTION
H.B. 2318 was considered by the Committee on Corrections in a
public hearing on April 4, 1995.
The following person testified against the bill:
Emmett Sheppard, representing Texas AFL-CIO.
The following person testified neutrally on the bill:
Byron Griffin, representing the Texas Youth Commission.
The committee considered a complete substitute for the bill. The
substitute was adopted without objection. The bill was reported
favorably as substituted, with the recommendation that it do pass
and be printed, by a record vote of 6 ayes, 1 nay, 0 pnv, and 2
absent.