LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 18, 1995 TO: Honorable John Whitmire, Chair IN RE: House Bill No. 462, Committee on Criminal Justice as engrossed Senate By: Alvarado, Austin, Texas Raymond FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 462 (relating to the application of the sales and use tax to food products sold to prison inmates) this office has determined the following: This bill would eliminate the sales tax exemption for food products, meals, soft drinks, and candy sold to inmates of public and privately-operated prisons and other correctional institutions, including county jails. This bill would have no effect on the patients of state licensed or operated hospitals, who are also currently exempt. Using fiscal 1992 sales and use tax reports prepared by the Texas Department of Criminal Justice (TDCJ), the annual sales volume of items affected by this bill was estimated to be $59.82 per inmate. This figure was multiplied by the projected number of TDCJ and county jail inmates for the five-year period, 1996-2000. Additionally, the gains for fiscal 1996 were adjusted downward to adjust for the proposed October 1, 1995 effective date. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Revenue Probable Revenue Year Gain to the Gain to Local General Revenue Governments Fund 001 1996 $688,000 $166,000 1997 833,000 201,000 1998 930,000 225,000 1999 962,000 233,000 2000 995,000 241,000 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Source: Comptroller of Public Accounts, Department of Criminal Justice LBB Staff: JK, SM, DF, RR