1-1     By:  Allen (Senate Sponsor - Wentworth)               H.B. No. 2324

 1-2           (In the Senate - Received from the House May 15, 1997;

 1-3     May 16, 1997, read first time and referred to Committee on Criminal

 1-4     Justice; May 18, 1997, reported favorably by the following vote:

 1-5     Yeas 7, Nays 0; May 18, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the organization and operation of certain prison

 1-9     industries in the Texas Department of Criminal Justice, the Texas

1-10     Youth Commission, and certain county correctional facilities and to

1-11     agricultural programs and work programs of the Texas Department of

1-12     Criminal Justice; providing a penalty.

1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-14           SECTION 1.  Subchapters A and B, Chapter 497, Government

1-15     Code, are amended to read as follows:

1-16                 SUBCHAPTER A.  TEXAS CORRECTIONAL [PRISON]

1-17                             INDUSTRIES [OFFICE]

1-18           Sec. 497.001.  TEXAS CORRECTIONAL [PRISON] INDUSTRIES;

1-19     DEFINITIONS [OFFICE].  (a)  Texas Correctional Industries [The

1-20     prison industries office] is an office in the department.

1-21           (b)  In this subchapter and Subchapter B:

1-22                 (1)  "Office" means Texas Correctional Industries.

1-23                 (2)  "Articles and products" include services provided

1-24     through the use of inmate labor.

1-25           Sec. 497.002.  PURPOSE; IMPLEMENTATION.  (a)  The purposes of

1-26     the [prison industries] office are to implement this subchapter and

1-27     Subchapter B to:

1-28                 (1)  provide adequate, regular, and suitable employment

1-29     for the [and] vocational training and rehabilitation of inmates,

1-30     consistent with proper correctional purposes;

1-31                 (2)  use the labor of inmates for self-maintenance;

1-32                 (3)  reimburse the state for expenses caused by the

1-33     crimes of inmates and the cost of their imprisonment;

1-34                 (4)  provide for the requisition and disbursement of

1-35     department articles and products through established state

1-36     authorities to eliminate the possibility of unlawful private profit

1-37     from the distribution of those articles and products;

1-38                 (5)  provide materials, products, or articles for sale

1-39     to the public, to private enterprises, or to agencies of the state

1-40     or political subdivisions of the state; and

1-41                 (6)  develop and expand public and private prison

1-42     industry operations [development and expansion of public and

1-43     private prison industries].

1-44           (b)  To implement the purposes of the office, the department

1-45     may establish and operate a prison industries program at each

1-46     correctional facility that the department considers suitable for

1-47     such a program.

1-48           Sec. 497.003.  ADVISORY COMMITTEE.  The board may establish a

1-49     prison industries advisory committee.  If the board establishes a

1-50     prison industries advisory committee, the advisory committee must

1-51     be [is] composed of nine members appointed by the board.  Members

1-52     of the advisory committee, if the advisory committee is

1-53     established, serve staggered three-year terms with the terms of

1-54     three members expiring February 1 of each odd-numbered year.

1-55           Sec. 497.004.  INMATE LABOR, PAY.  (a)  The department shall

1-56     use inmate labor in [the] prison industries [program] to the

1-57     greatest extent feasible and shall develop and expand [the] prison

1-58     industries [program] by pursuing arrangements with business for the

1-59     use of inmate labor.

1-60           (b)  The board may develop by rule and the department may

1-61     administer an incentive pay scale for inmates who participate in

1-62     [the] prison industries [program].  Prison industries [The program]

1-63     may be financed through  contributions donated for this purpose by

1-64     private businesses contracting with the department.  The department

 2-1     shall apportion pay earned by an inmate in the same manner as is

 2-2     required by Section 497.051 [under this subchapter to the following

 2-3     persons and entities, in amounts determined at the discretion of

 2-4     the department:]

 2-5                 [(1)  persons to whom the inmate has been ordered by a

 2-6     court to pay restitution;]

 2-7                 [(2)  the inmate's family and dependents;]

 2-8                 [(3)  the state, as reimbursement for the cost of the

 2-9     inmate's confinement;]

2-10                 [(4)  the compensation to victims of crime fund,

2-11     created by Article 56.54, Code of Criminal Procedure; and]

2-12                 [(5)  the inmate's trust fund].

2-13           Sec. 497.005.  INDUSTRIAL REVOLVING ACCOUNT.  (a)  The

2-14     legislature may appropriate money to an industrial revolving

2-15     account in the general revenue fund.

2-16           (b)  The office shall administer the industrial revolving

2-17     account.

2-18           (c)  The office may use money in the industrial revolving

2-19     account to purchase real property, erect buildings, improve

2-20     facilities, buy equipment and tools, install or replace equipment,

2-21     buy industrial raw materials and supplies, and pay for other

2-22     necessary expenses for the administration of this subchapter and

2-23     Subchapter B.

2-24           (d)  The office shall remit money received from the sale of

2-25     articles and products produced under this subchapter and Subchapter

2-26     B to the comptroller to be deposited in the industrial revolving

2-27     account.

2-28           (e)  When the governor and the Legislative Budget Board

2-29     determine that the industrial revolving account contains money in

2-30     an amount that exceeds the amount necessary for the administration

2-31     of this subchapter and Subchapter B, the governor and the

2-32     Legislative Budget Board shall certify that fact to the

2-33     comptroller, who shall transfer the excess amount to the

2-34     unobligated portion of the general revenue fund.

2-35           (f)  Section 403.095, Government Code, does not apply to the

2-36     industrial revolving account.  [PROCEEDS FROM PRISON INDUSTRIES.

2-37     Proceeds received from the operation of a prison industries program

2-38     shall be deposited in the industrial revolving fund.  The proceeds

2-39     may be used by the department for the administration of this

2-40     subchapter.]

2-41           Sec. 497.006.  CONTRACTS WITH PRIVATE BUSINESS.  To encourage

2-42     the development and expansion of [the] prison  industries

2-43     [program], the prison industries office may enter into necessary

2-44     contracts  to produce articles and products to be sold on the open

2-45     market [related to the prison industries program].  With the

2-46     approval of the board, the office may enter into a contract  with a

2-47     private business to conduct a program on or off property operated

2-48     by the department.  A contract entered into under this section must

2-49     comply with the Private Sector/Prison Industry Enhancement

2-50     Certification Program operated by the Bureau of Justice Assistance

2-51     and authorized by 18 U.S.C. Section 1761.  In determining under

2-52     Section 497.051 the number of inmates employed in  conditional work

2-53     programs, the department shall count the number of inmates

2-54     participating in a work program under a contract entered into under

2-55     this section.

2-56           Sec. 497.007.  GRANTS.  The [prison industries] office may

2-57     accept any grant designated for inmate vocational  rehabilitation.

2-58     The office shall maintain records relating to the receipt and

2-59     disbursement of grant funds, and shall annually report to the board

2-60     on the administration of grant funds.

2-61           Sec. 497.008.  LEASE OF LAND.  To further the expansion and

2-62     development of [the] prison industries [program], the department

2-63     may lease prison land to a private business.  A lease under this

2-64     section may not exceed a term of 50 years.  The business must lease

2-65     the land at fair market value and may construct or convert plant

2-66     facilities on the land.

2-67           Sec. 497.009.  CERTIFICATION FOR FRANCHISE TAX CREDIT.  The

2-68     department or the [prison industries] office on behalf of the

2-69     department shall prepare and issue a certification that a

 3-1     corporation requires to establish eligibility for the franchise tax

 3-2     credit for wages paid to inmates or employees who were inmates

 3-3     under Subchapter L, Chapter 171, Tax Code.

 3-4           Sec. 497.010.  OFFENSE:  SALE OR OFFER OF SALE OF

 3-5     PRISON-PRODUCED ARTICLES OR PRODUCTS.  (a)  A person commits an

 3-6     offense if the person  intentionally sells or offers to sell on the

 3-7     open market in this state an article or product the person knows

 3-8     was manufactured in whole or in part by an inmate of the department

 3-9     or an inmate in any correctional facility or reformatory

3-10     institution in this state or in any other state, other than an

3-11     inmate:

3-12                 (1)  who was on community supervision, parole, or

3-13     mandatory supervision;

3-14                 (2)  employed by an enterprise that has employed the

3-15     inmate in order to take advantage of the franchise tax credit

3-16     offered under Subchapter L, Chapter 171, Tax Code, at the time of

3-17     manufacture; or

3-18                 (3)  participating in a federally certified prison

3-19     industry enhancement program.

3-20           (b)  An offense under this section is a Class B misdemeanor

3-21     [COMPLIANCE.  The prison industries office may enter into a

3-22     contract with a private business under Section 497.006 only if the

3-23     contract specifies that the prison industries office and the

3-24     private business will comply with the Private Sector/Prison

3-25     Industry Enhancement Certification Program operated by the Bureau

3-26     of Justice Assistance and authorized by 18 U.S.C. Section 1761].

3-27          SUBCHAPTER B.  SALES OF PRISON-MADE ARTICLES OR PRODUCTS

3-28                             [GOODS ACT OF 1963]

3-29           Sec. 497.021.  AUTHORITY [SHORT TITLE].  This subchapter

3-30     governs the sale of prison-made products to governmental  agencies

3-31     [may be cited as the Prison-Made Goods Act of 1963].

3-32           Sec. 497.022.  CONTRACTS.  The department may contract with:

3-33                 (1)  another state, the federal government, a foreign

3-34     government, or an agency of any of those governments to manufacture

3-35     for or sell to those governments prison-made articles or products;

3-36     or

3-37                 (2)  a private school or a visually handicapped person

3-38     in this state to manufacture Braille textbooks or other

3-39     instructional aids for the education of visually handicapped

3-40     persons [PURPOSE. The purpose of this subchapter is to:]

3-41                 [(1)  provide adequate, regular, and suitable

3-42     employment for the vocational training and rehabilitation of

3-43     inmates, consistent with proper penal purposes;]

3-44                 [(2)  use the labor of inmates for self-maintenance;]

3-45                 [(3)  reimburse the state for expenses caused by the

3-46     crimes of inmates and the cost of their confinement;]

3-47                 [(4)  provide for the requisition and disbursement of

3-48     institutional division articles and products through established

3-49     state authorities to eliminate the possibility of private profits

3-50     from the distribution of those articles and products; and]

3-51                 [(5)  provide materials, products, or articles for sale

3-52     to a private person or for the use of the state or a political

3-53     subdivision of the state].

3-54           Sec. 497.023. [RULES.  The board may adopt rules necessary

3-55     for the administration of this subchapter.]

3-56           [Sec. 497.024]  PRIORITIES.  Under this subchapter and

3-57     Subchapter A, the office [The institutional division] shall produce

3-58     products and articles [administer this subchapter] first to fulfill

3-59     the needs of agencies of the state [for articles and products

3-60     produced under this subchapter,] and second to fulfill the needs of

3-61     political subdivisions or other purchasers [for the articles and

3-62     products].

3-63           [Sec. 497.025.  PURCHASE OF EQUIPMENT AND SUPPLIES;

3-64     EMPLOYMENT OF PERSONNEL.  To provide articles and products to an

3-65     agency of the state or a political subdivision of the state, the

3-66     institutional division may purchase equipment, raw materials, and

3-67     supplies in the manner provided by law.]

3-68           Sec. 497.024 [497.026].  AGENCIES AND POLITICAL SUBDIVISIONS:

3-69     DUTIES TO PURCHASE.  (a)  If the office [institutional division]

 4-1     produces an article or product under this subchapter, an agency of

 4-2     the state or a political subdivision may purchase the article or

 4-3     product only from the office [division].

 4-4           (b)  If the General Services Commission determines that an

 4-5     article or product produced by the office [institutional division]

 4-6     under this subchapter does not meet the requirements of an  agency

 4-7     of the state or a political subdivision, or that the office has

 4-8     determined [institutional division of the Texas Department of

 4-9     Criminal Justice determines] that the office [division] is unable

4-10     to fill a requisition for an article or  product, the agency or

4-11     subdivision may purchase the article or product from another

4-12     source.

4-13           (c)  An agency of the state or a political subdivision may

4-14     not evade the intent of this subchapter by requesting an article or

4-15     product that varies slightly from standards for articles or

4-16     products established under Section 497.027 [497.029], if the office

4-17     [institutional division] produces a  similar article or product

4-18     that is in compliance with established standards and is reasonably

4-19     suited to the actual needs of the agency or subdivision.

4-20           Sec. 497.025 [497.027].  PURCHASING PROCEDURE.  (a)  An

4-21     agency of the state that purchases articles  and products under

4-22     this subchapter must requisition the purchase through the General

4-23     Services Commission except for purchases of articles or products

4-24     [items or services] not included in an established contract.   The

4-25     purchase of articles or products [items] not included in an

4-26     established contract and that do not exceed the dollar limits

4-27     established under Section 2155.132 [3.08(a), State Purchasing and

4-28     General Services Act (Article 601b, Vernon's Texas Civil

4-29     Statutes),] may be acquired directly from the office [department]

4-30     on the agency's obtaining an informal or a formal  quotation for

4-31     the item and issuing a proper purchase order to the office

4-32     [department].

4-33           (b)  A political subdivision may purchase articles and

4-34     products under this subchapter directly from the office

4-35     [institutional division].

4-36           (c)  If an agency or political subdivision purchasing goods

4-37     under this subchapter desires to purchase goods or articles from

4-38     the office [division], it may do so without complying with any

4-39     other state law otherwise requiring the agency or political

4-40     subdivision to request competitive bids for the article or product.

4-41     A [Nothing herein shall be interpreted to require a] political

4-42     subdivision may decline to purchase goods or articles from the

4-43     office [division] if the political subdivision determines, after

4-44     giving the office a final opportunity to negotiate on price, that

4-45     the goods or articles can be purchased elsewhere at a lower price.

4-46     An [or an] agency may decline to purchase goods or articles from

4-47     the office [division] if the agency determines, after giving the

4-48     office a final opportunity to negotiate on price, and the General

4-49     Services Commission certifies, that the goods or articles can be

4-50     purchased elsewhere at a lower price.

4-51           Sec. 497.026 [497.028].  PRICES.  The office [institutional

4-52     division] and the [State Purchasing and] General Services

4-53     Commission shall determine the sales price of articles and products

4-54     produced under this subchapter.

4-55           Sec. 497.027 [497.029].  SPECIFICATIONS.  (a)  The [State

4-56     Purchasing and] General  Services Commission shall establish

4-57     specifications for articles and products produced under this

4-58     subchapter.  An article or product produced under this subchapter

4-59     must meet specifications established under this subsection in

4-60     effect when the article or product is produced.

4-61           (b)  The office [institutional division] may manufacture

4-62     articles and products to meet commercial specifications for the

4-63     article or product if the [State Purchasing and] General Services

4-64     Commission has not established specifications for the article or

4-65     product and the commission approves the commercial specifications.

4-66           Sec. 497.028 [497.030].  CATALOGS.  The office [institutional

4-67     division] shall prepare  catalogs that accurately and completely

4-68     describe articles and products produced under this subchapter.  The

4-69     office [institutional division] shall send copies of the catalogs

 5-1     to all state agencies and make the catalogs available to political

 5-2     subdivisions.

 5-3           Sec. 497.029 [497.031].  NEW ARTICLES AND PRODUCTS.  The

 5-4     [State Purchasing and] General Services  Commission may request the

 5-5     office [institutional division] to produce additional articles or

 5-6     products under this subchapter.

 5-7           Sec. 497.030 [497.032].  [STATE PURCHASING AND] GENERAL

 5-8     SERVICES COMMISSION REPORTS.  (a)  Not later than the 31st day

 5-9     before the first day of each fiscal year, the [State Purchasing

5-10     and] General Services Commission shall submit to the office

5-11     [institutional division] a report that summarizes the types and

5-12     amounts of articles and products sold under this subchapter in the

5-13     preceding nine months.

5-14           (b)  Not later than the 100th day after the last day of each

5-15     fiscal year, the [State Purchasing and] General Services Commission

5-16     shall submit to the office [institutional division] a report that

5-17     states the types and amounts of articles and products sold under

5-18     this subchapter in the preceding fiscal year.

5-19           (c)  A report submitted by the [State Purchasing and] General

5-20     Services Commission under this section must describe the articles

5-21     and products to the extent possible in the manner those articles

5-22     and products are described in catalogs prepared under Section

5-23     497.028 [497.030].

5-24           [Sec. 497.033.  INDUSTRIAL REVOLVING FUND.  (a)  The

5-25     legislature may appropriate in the General Appropriations Act money

5-26     to an industrial revolving fund.]

5-27           [(b)  The prison industries office established under Section

5-28     497.001 shall administer the industrial revolving fund.]

5-29           [(c)  The institutional division may use money appropriated

5-30     to the industrial revolving fund to erect buildings, improve

5-31     facilities, buy equipment and tools, install or replace equipment,

5-32     and pay for other necessary expenses for the administration of this

5-33     subchapter.]

5-34           [(d)  The institutional division shall deposit funds received

5-35     from the sale of articles and products produced under this

5-36     subchapter with the state treasurer to be maintained in the

5-37     industrial revolving fund.]

5-38           [(e)  Subject to the approval of the board, the institutional

5-39     division may use money deposited under Subsection (d) for the

5-40     purposes described in Subsection (c), and for the employment of

5-41     supervisors as necessary for the administration of this subchapter.]

5-42           [(f)  When the governor and the Legislative Budget Board

5-43     determine that the industrial revolving fund contains money in an

5-44     amount that exceeds the amount necessary for the administration of

5-45     this subchapter, the excess amount shall be transferred by the

5-46     institutional division to the general revenue fund.]

5-47           [(g)  Sections 403.094(h) and (i) do not apply to the

5-48     industrial revolving fund.]

5-49           [Sec. 497.034.  SURPLUS PROPERTY AND AGRICULTURAL PRODUCTS.

5-50     (a)  The board may authorize the director of the institutional

5-51     division to sell or dispose of surplus agricultural products and

5-52     personal property owned by the institutional division, other than

5-53     products or property produced for sale by the division.]

5-54           [(b)  Products and property described by Subsection (a) shall

5-55     be sold under rules adopted by the board and at prices and terms

5-56     set by the board.]

5-57           [(c)  The institutional division may use surplus agricultural

5-58     lands to provide agricultural products to a nonprofit organization

5-59     at no profit to the division.]

5-60           [Sec. 497.035.  OFFENSE:  SALE OR OFFER OF SALE OF

5-61     PRISON-PRODUCED ARTICLES OR PRODUCTS.  (a)  A person commits an

5-62     offense if the person intentionally sells or offers to sell on the

5-63     open market in this state an article or product the person knows

5-64     was manufactured in whole or in part by an inmate of the

5-65     institutional division or an inmate in a correctional facility in

5-66     any other state, other than an inmate:]

5-67                 [(1)  who was on community supervision, parole, or

5-68     mandatory supervision;]

5-69                 [(2)  employed by an enterprise who has employed the

 6-1     inmate to advantage themselves of the Franchise Tax Credit offered

 6-2     under Subchapter L, Chapter 171, Tax Code, at the time of

 6-3     manufacture; or]

 6-4                 [(3)  participating in a federally certified prison

 6-5     industry enhancement program.]

 6-6           [(b)  An offense under this section is a misdemeanor

 6-7     punishable by:]

 6-8                 [(1)  a fine of not less than $10 or more than $500;]

 6-9                 [(2)  confinement in jail for a term of not less than

6-10     10 days or more than one year; or]

6-11                 [(3)  both such fine and confinement.]

6-12           SECTION 2.  Section 497.051, Government Code, is amended to

6-13     read as follows:

6-14           Sec. 497.051.  OVERSIGHT [WORK PROGRAM PLAN].  [(a)]  The

6-15     prison industries advisory committee shall approve, certify, and

6-16     oversee the operation of private sector prison industries programs

6-17     in the department, the Texas Youth Commission, and in county

6-18     correctional facilities in compliance [shall establish policies for

6-19     the administration of a conditional work program that may employ

6-20     not more than 500 male and female work program residents.  The

6-21     policies must include a work program contract that includes an

6-22     agreement by the resident to contribute from the wages received by

6-23     the resident for the resident's participation in private industry

6-24     employment a percentage of the wages, in accordance with rules

6-25     adopted by the board to comply] with the federal prison enhancement

6-26     certification program established under 18 U.S.C. Section 1761[,

6-27     and a percentage of the wages for:]

6-28                 [(1)  costs of supervision;]

6-29                 [(2)  restitution to the victim or victims of the

6-30     resident; and]

6-31                 [(3)  savings to be retained for the resident in a

6-32     designated account for the resident's benefit and receipt on

6-33     release.]

6-34           [(b)  This subchapter does not restore in whole or in part

6-35     the civil rights of a work program resident.]

6-36           [(c)  A work program resident employed under this subchapter

6-37     is not subject to workers' compensation laws, and the resident and

6-38     the resident's beneficiaries may not receive compensation under

6-39     those laws, except that a private industry may provide workers'

6-40     compensation benefits to a resident and a resident's beneficiaries

6-41     as necessary to certify a work program operated by the industry as

6-42     a work pilot project described in 18 U.S.C. Section 1761].

6-43           SECTION 3.  Section 497.091, Government Code, is amended by

6-44     adding Subsection (d) to read as follows:

6-45           (d)  The department may contract with nonprofit organizations

6-46     that provide services to the general public and enhance social

6-47     welfare and the general well-being of the community to provide

6-48     inmate labor to those organizations.

6-49           SECTION 4.  Subchapter F, Chapter 497, Government Code, is

6-50     amended by adding Section 497.113 to read as follows:

6-51           Sec. 497.113.  SURPLUS AGRICULTURAL PROPERTY AND PRODUCTS.

6-52     (a)  The board may authorize the sale or disposal of surplus

6-53     agricultural products and personal property owned by the

6-54     department, other than products or property produced for sale by

6-55     the department.

6-56           (b)  Products and property described by Subsection (a) shall

6-57     be sold under rules adopted by the board and at prices and terms

6-58     set pursuant to those rules.

6-59           (c)  The department may use surplus agricultural capacity to

6-60     provide agricultural products to a nonprofit organization at no

6-61     profit to the department.

6-62           SECTION 5.  Section 38.111(a), Penal Code, is amended to read

6-63     as follows:

6-64           (a)  An inmate of the institutional division or a person

6-65     confined in a state jail felony facility commits an offense if with

6-66     intent to obtain a benefit or with intent to harm or defraud

6-67     another the inmate or person possesses, discloses, or uses personal

6-68     information about another that the inmate or person has access to

6-69     by means of participation in a work program operated by or for the

 7-1     institutional division or state jail division.

 7-2           SECTION 6.  Section 496.051, Government Code, and Section 1,

 7-3     Chapter 86, Acts of the 47th Legislature, Regular Session, 1941

 7-4     (Article 9007, Vernon's Texas Civil Statutes), are repealed.

 7-5           SECTION 7.  (a)  The changes in law made by this Act to

 7-6     Section 497.010, Government Code, and Section 38.111, Penal Code,

 7-7     apply  only to an offense committed on or after the effective date

 7-8     of this Act.  For purposes of this section, an offense is committed

 7-9     before the effective date of this Act if any element of the offense

7-10     occurs before the effective date.

7-11           (b)  An offense committed before the effective date of this

7-12     Act is covered by the law in effect when the offense was committed,

7-13     and the former law is continued in effect for that purpose.

7-14           SECTION 8.  This Act takes effect September 1, 1997.

7-15           SECTION 9.  The importance of this legislation and the

7-16     crowded condition of the calendars in both houses create an

7-17     emergency and an imperative public necessity that the

7-18     constitutional rule requiring bills to be read on three several

7-19     days in each house be suspended, and this rule is hereby suspended.

7-20                                  * * * * *