LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 11, 1997
TO: Honorable Allen Hightower, Chair IN RE: House Bill No. 1301
Committee on Corrections By: Allen
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1301 ( Relating
to the oversight of the private sector prison industries program.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1301-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $1,094,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would partially implement Texas Performance Review
(TPR) recommendation PSC5 in Gaining Ground: A Report from
the Texas Performance Review (1994).
The bill would amend
certain portions of the Government Code relating to the private
sector prison industries program. The bill would create the
Private Sector Prison Industries Oversight Authority to approve,
certify, and oversee the operations of private prison industries
programs in the Texas Department of Criminal Justice (TDCJ).
The programs would remain in compliance with federal law relating
to state industry prison enhancement certification programs.
To operate a federal Prison Industry Enhancement Program, a
prison agency must obtain certification from the U.S. Department
of Justice's Bureau of Justice Assistance.
The executive
director of TDCJ would be required to provide the authority
with the necessary clerical and technical support to perform
the duties imposed by the bill.
The authority would consist
of nine members appointed by the Governor. Authority members
would not be entitled to compensation but would be entitled
to reimbursement for travel expenses as provided in the General
Appropriations Act.
The bill would require a private sector
prison industries program to make an annual payment to the authority
in an amount equal to the amount of money the program would
have paid during a year for unemployment insurance if employees
of the program had been engaged in non-prison employment. The
authority would be required to adopt a method to determine the
amount owed by industry and a payment schedule. The authority
would be required to remit the fees collected to the Comptroller's
Office for deposit to the credit of a new, dedicated Private
Sector Prison Industries Oversight Account in the General Revenue
Fund. The Legislature could appropriate funds from this account
only for the purpose of paying the costs incurred by the authority
and TDCJ to implement the terms of the bill. At the end of
each fiscal year, the Comptroller would be required to transfer
any excess funds in the account to the credit of the dedicated
Compensation to Victims of Crime Account in the General Revenue
Fund.
The authority would require inmate employees at each
private sector prison industries program to be paid no less
than the prevailing wage, as computed by the authority. Employers
would be permitted to pay only the minimum wage for the first
two months of employment. The authority would be prohibited
from granting an initial certification of a program if the authority
determined that the operation of the program would result in
the loss of existing jobs provided by the employer in this state.
The authority would be required to ensure that program employers
meet or exceed all federal requirements for providing compensation
to inmates injured while working.
The authority, with the
cooperation of the Criminal Justice Policy Council, would be
required to gather data to determine the impact of a private
sector prison industries program on reducing recidivism. The
authority would be permitted to certify any number of programs
that met or exceeded federal law and the rules of the authority,
but in no event could more than 3,000 inmates participate in
the program at any one time.
This bill would take effect
on September 1, 1997. TDCJ's power, duties, and obligations
to oversee the program would be transferred to the authority
on January 1, 1998, as would any funds appropriated to TDCJ
for oversight of the program.
Methodolgy
The estimate for the annual payment that employers would be
required to make to the authority is based on information from
the Texas Workforce Commission. Unemployment insurance is paid
on the first $9,000 of wages, and the rate ranges from 0.27
percent to more that 6 percent, depending on an employer's experience
rating. The statewide average rate in 1996 was 1.47 percent
and is projected to be 1.36 percent in 1997.
Under the federal
Prison Industry Enhancement Program guidelines, the state may
make various deductions from an inmate's wages, including victim
compensation and reimbursement to the state for a portion of
the costs of incarceration. Victim compensation and offender
reimbursements per fiscal year are estimated.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable Revenue Probable Revenue Probable Change in Number
Gain/(Loss) from Gain/(Loss) from Gain/(Loss) from Savings/(Cost) of State
General Revenue Compensation to New GR-Dedicated from New Employees from
Fund Victims of Crime Account - GR-Dedicated FY 1997
Account/ Account -
GR-Dedicated
0001 0469 8021 8021
1998 $156,000 $178,000 $30,000 ($30,000) 3.0
1998 938,000 713,000 92,000 (92,000) 3.0
2000 1,900,000 1,474,000 153,000 (104,000) 3.0
2001 3,090,000 2,457,000 245,000 (104,000) 3.0
2002 4,750,000 3,825,000 367,000 (104,000) 3.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $156,000
1999 938,000
2000 1,900,000
2001 3,090,000
2002 4,750,000
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 665 Juvenile Probation Commission
410 Criminal Justice Policy Council
696 Department of Criminal Justice
304 Comptroller of Public Accounts
320 Texas Workforce Commission
LBB Staff: JK ,CB ,JN