LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 10, 2001
TO: Honorable Kenneth Armbrister, Chair, Senate Committee on
Criminal Justice
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1617 by Allen (Relating to the expansion of prison
industries programs.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1617, As Engrossed: negative impact of $(1,071,816) through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(535,908) *
* 2003 (535,908) *
* 2004 (535,908) *
* 2005 (535,908) *
* 2006 (285,825) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Probable Probable Revenue *
* Year Gain/(Loss) from Savings/(Cost) from Gain/(Loss) from *
* General Revenue Fund General Revenue Fund Private Sector *
* 0001 0001 Prison Industries *
* Expansion Account *
* 2002 $(35,742) $(500,166) $500,166 *
* 2003 (35,742) (500,166) 500,166 *
* 2004 (35,742) (500,166) 500,166 *
* 2005 (35,742) (500,166) 500,166 *
* 2006 (35,742) (250,083) 250,083 *
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Fiscal Analysis
The bill would eliminate the requirement that private sector prison
industries programs in the Prison Industry Enhancement program make
annual payments to the Private Sector Prison Industries Oversight
Authority equal to the amount of money the program would have paid for
unemployment insurance if the employees of the program were engaged in
non-prison employment. The bill would create the private sector prison
industry expansion account in the general revenue fund. Funds collected
by requiring a participant to contribute a percentage of their wages
(Government Code, Section 497.0581) would be deposited in the general
revenue fund. Upon certification of the deposit, the comptroller would
transfer an equivalent amount from the general revenue fund to the
private sector prison industry expansion account. Upon reaching a
balance of $2.0 million, only half of the amount deposited in the
general revenue fund would be transferred to the private sector prison
industry expansion account. The bill would also create the private
sector prison industry crime victims assistance account in the general
revenue fund. Money in the account could only be used for the purpose
of aiding victims of crime. The bill would also establish the goal that
the private sector prison industries program have at least 1,800
participants by January 1, 2006. The bill would partially implement
recommendation PSC-1 from the Comptroller's e-Texas report. The bill
would take effect September 1, 2001.
Methodology
The Comptroller of Public Accounts estimates that the average
unemployment insurance equivalent payment equals $161 per participant in
the Prison Industry Enhancement program. With 222 current participants,
the revenue lost from the elimination of employer unemployment insurance
equivalent payments would equal $35,742 per year. It is estimated that
the average participant room and board contribution equals $2,253 per
year ($5.15 per hour x 35 hours per week x 50 weeks per year x 25% to
room and board). Amounts equal to the participant's room and board
contributions, deposited in the general revenue fund, would be
transferred to the private sector prison industries expansion account.
With 222 current participants, it is estimated that the transfer between
the two funds would equal $500,166 per year. Since the transfers would
exceed $2.0 million by the end of the fourth year, transfers for fiscal
year 2006 are reduced to 50 percent of the estimated amount of the
deposits. Elimination of the unemployment equivalency payment and
establishment of a fund for the construction of work facilities and the
recruitment of additional programs may assist in attracting new programs
to the state. Potential additional revenue from increased program
participation have not been included in the fiscal estimate.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 696 Texas Department of Criminal Justice, 305
General Land Office, 304 Comptroller of Public
Accounts
LBB Staff: JK, JC, JN, VS