Private Prison

Requires the governor or the governor's designee to develop a
request for proposals for competitive sealed proposals to design,
construct, lease or purchase, improve, operate, maintain, and
manage a privately run prison in Hawaii.

THE SENATE                              S.B. NO.           765
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that Hawaii's correctional
 2 system is in a state of crisis.  Halawa prison's problems of
 3 overcrowding, deaths of inmates due to unsanitary conditions and
 4 inadequate, substandard medical treatment, and rampant corruption
 5 among prison management and staff are indicative of a prison
 6 system that is failing.  In addition, the sentencing of convicted
 7 criminals has been severely impacted by prison overcrowding,
 8 resulting in early release and parole or probation, thereby
 9 placing the community at an unnecessary and grave risk of further
10 crime.  The current financial crisis has exacerbated the problems
11 with the State's prisons.  The State no longer has the financial
12 resources to resolve the situation.
13      The legislature finds that providing for the private
14 construction, funding, and operation of one or more prisons in
15 Hawaii is a viable option.  Privatizing prison facilities has
16 occurred in over twenty states.  Currently, Kansas, Kentucky, New
17 Mexico, South Dakota, and Tennessee have the highest levels of
18 competitive activity in corrections.  Competitively contracted
19 correctional services implemented in several states include such

Page 2                                                     
                                     S.B. NO.           765

 1 traditional services as alcohol and drug treatment, community
 2 corrections, education and training of inmates, health and mental
 3 health care, and laboratory services.  In addition, private
 4 companies are being used for correctional facility construction,
 5 prison operations, and work release programs in a number of other
 6 states.
 7      The reasons for privatization include cost savings, speedy
 8 implementation and flexibility, lack of agency personnel, and
 9 high quality of services.  Cost savings have ranged from below
10 five per cent to twenty per cent.  Because of the shortage of
11 correctional facilities and the revenue shortfall facing Hawaii,
12 there is a need to give the private sector the opportunity to
13 design, construct, acquire (including the acquisition of state
14 lands), own, and lease or lease back to the State, correctional
15 facilities using private funds.
16      The purpose of this Act is therefore to require the governor
17 or the governor's designee to develop a request for proposals for
18 competitive sealed proposals to design, construct, lease or
19 purchase, improve, operate, maintain, and manage a privately run
20 prison in the State.  This Act further authorizes the governor or
21 the governor's designee to enter into a contract with private
22 contractors to acquire and operate the prison, and requires the
23 establishment of minimum standards for contracting with those

Page 3                                                     
                                     S.B. NO.           765

 1 private contractors.
 2      SECTION 2.  Definitions.  As used in this Act, unless the
 3 context requires otherwise:
 4      "American Correctional Association standards" means those
 5 standards at the time of implementation of this Act, or, if
 6 amended, the amended American Correctional Association standards,
 7 which are approved by the State.
 8      "Contractor or private contractor" means a person who has
 9 entered into a contract with the State pursuant to this Act.
10      "Deadly force" means force that is likely to cause death or
11 serious bodily injury.
12      "Department" means department of public safety.
13      "Director" means the director of public safety.
14      "Facility" means a jail, prison, or other correctional or
15 incarceration facility constructed or operated pursuant to a
16 contract under this Act.
17      "Inmate" means an adult serving a felony sentence in the
18 state prison system, the state women's correctional facility, any
19 correctional facility honor farm or camp, or any correctional
20 facility operated pursuant to a contract under this Act.
21      "Nondeadly force" means force that normally would cause
22 neither death nor serious bodily injury.
23      "Private-company detention officer" means a private

Page 4                                                     
                                     S.B. NO.           765

 1 contractor's employee serving as a detention officer at a
 2 facility being operated pursuant to a contract under this Act.
 3      SECTION 3.  Authority to contract.  (a)  The governor or the
 4 governor's designee may contract with private entities for the
 5 design, planning, construction, lease (as lessor or lessee),
 6 acquisition (including the acquisition of lands, improvements,
 7 and property to construct a correctional facility), improvement,
 8 operation, maintenance, purchase, or management of facilities and
 9 services as provided in this Act.  The director shall make
10 recommendations to the governor or the governor's designee as to
11 the site, number of beds, and classification of inmates or
12 prisoners to be housed in the facility.
13      (b)  No contract shall be entered into or renewed unless the
14 governor or the governor's designee determines that the contract
15 offers demonstrable benefits to the State and at least the same
16 quality of services provided by the State.
17      (c)  After receiving the recommendations of the director as
18 to the site, number of beds, and classifications of inmates or
19 prisoners to be housed in the facility, the governor or the
20 governor's designee may contract with private entities for the
21 design, construction, lease (as lessor or lessee), acquisition,
22 improvement, operation, maintenance, purchase, or management of
23 facilities, for the detention or incarceration of:

Page 5                                                     
                                     S.B. NO.           765

 1      (1)  Prisoners or inmates of the State or detainees of any
 2           county in the State; and
 3      (2)  Any detainees, prisoners, or inmates under the
 4           jurisdiction or otherwise under the control of the
 5           United States government or any of its offices,
 6           departments, or agencies, or lawfully confined by any
 7           jurisdiction within the United States.
 8      (d)  Notwithstanding subsection (c), a minimum of         
 9 per cent of the number of beds in the facility shall be reserved
10 for prisoners or inmates of the State; provided that the State
11 may contract with any other state or county government to house
12 in the facility additional inmates or prisoners of the other
13 state or county's correctional system or any other facility
14 operated under the control of that state or county.  The contract
15 shall specify such matters as are deemed relevant by the State,
16 other government entity, or the private contractor, and shall be
17 approved as to form and content by the attorney general.
18      SECTION 4.  Request for proposals; prequalification of
19 applicants.(a)  The governor or the governor's designee shall
20 develop a request for proposals for competitive sealed proposals
21 to design, construct, lease, acquire, improve, operate, maintain,
22 purchase, or manage a privately run correctional facility in the
23 State in accordance with this Act.

Page 6                                                     
                                     S.B. NO.           765

 1      (b)  The request for proposals shall be calculated to
 2 generate proposals from applicants on a list who have been
 3 prequalified by the governor or the governor's designee, and
 4 shall be applicable to any contract between the State and any
 5 private entity entered into under the authority of this Act.
 6 Standards for prequalification of applicants under this section
 7 shall be determined by the governor or the governor's designee
 8 before the commencement of the selection process; provided that:
 9      (1)  Any contract entered into under this Act for the
10           operation of a correctional facility, at a minimum,
11           shall:
12           (A)  Be negotiated with the firm found most qualified.
13                The contractor shall demonstrate that it has the
14                qualifications, experience, and management
15                personnel necessary to carry out the terms of the
16                contract, the ability to expedite the siting,
17                design, and construction of correctional
18                facilities, and the ability to comply with
19                applicable laws, court orders, and national
20                correctional standards;
21           (B)  Require that the contractor seek, obtain, and
22                maintain accreditation by the American
23                Correctional Association for the facility under

Page 7                                                     
                                     S.B. NO.           765

 1                that contract.  Compliance with amendments to the
 2                accreditation standards of the association is
 3                required upon the approval of those amendments by
 4                the State;
 5           (C)  Require that the proposed facilities and the
 6                management plans for the inmates meet applicable
 7                American Correctional Association standards and
 8                the requirements of all applicable court orders
 9                and state law;
10           (D)  Establish operations standards for correctional
11                facilities subject to the contract.  The State may
12                waive any rule, policy, or procedure of the
13                department related to the operations standards of
14                correctional facilities that are inconsistent with
15                the State's mission to establish cost-effective,
16                privately operated correctional facilities; and
17           (E)  Require the contractor to be responsible for a
18                range of dental, medical, and psychological
19                services; diet; education; and work programs at
20                least equal to comparable state facilities.  The
21                work and education programs must be designed to
22                reduce recidivism;
23      (2)  Any contract entered into for the design, construction,

Page 8                                                     
                                     S.B. NO.           765

 1           purchase, or lease of a private correctional facility
 2           shall include specific provisions:
 3           (A)  Authorizing the use of tax-exempt financing
 4                through the issuance of tax-exempt bonds,
 5                certificates of participation, lease-purchase
 6                agreements, and other tax-exempt or private
 7                conventional financing methods;
 8           (B)  Requiring the design and construction of the
 9                proposed facilities to meet the applicable
10                standards of the American Correctional Association
11                and the requirements of all applicable court
12                orders and state law;
13           (C)  Requiring the contractor to obtain the private
14                conventional financing required to acquire the
15                necessary property to design and construct the
16                private correctional facility under this Act; and
17           (D)  Stating that the State is not obligated for any
18                payments that exceed the amount of the current
19                annual appropriation;
20      (3)  A contract entered into under this Act does not accord
21           third-party beneficiary status to any inmate or to any
22           member of the general public; and
23      (4)  Each contract entered into may include any other

Page 9                                                     
                                     S.B. NO.           765

 1           requirements that the governor or the governor's
 2           designee considers necessary and appropriate for
 3           carrying out the purposes of this Act.
 4      SECTION 5.  Incarceration of inmates in privately operated
 5 facilities.  At the direction of the State, in the case of a
 6 person sentenced to imprisonment in the state prison system or
 7 the state women's correctional facility, or of a person sentenced
 8 to the state prison system and serving a sentence at any prison
 9 farm or camp, the person sentenced to imprisonment may be
10 incarcerated in a facility constructed or operated by a private
11 entity pursuant to a contract under this Act.
12      SECTION 6.  Contract term and renewal.  The initial contract
13 for the operation of a facility or for the incarceration of
14 prisoners or inmates therein shall be for a period of not more
15       years and may be renewed for successive       year periods
16 thereafter.  Contracts for purchase or lease (as lessor or
17 lessee) of a facility shall not exceed a term of       years;
18 provided that the State is not obligated for any payments to the
19 contractor beyond current annual appropriations.
20      SECTION 7.  Standards of operation.  (a)  All facilities and
21 management plans for the inmates governed by this Act shall be
22 designed, constructed, and at all times maintained and operated
23 in accordance with the American Correctional Association

Page 10                                                    
                                     S.B. NO.           765

 1 standards enforced at the time of contracting.  The facility
 2 shall meet the percentage of standards required for accreditation
 3 by the American Correctional Association, except where the
 4 contract requires compliance with a higher percentage of non-
 5 mandatory standards.  The contract may allow the contractor an
 6 extension of time in which to meet a lower percentage of non-
 7 mandatory standards only when the contract is for the renovation
 8 of an existing facility, in which case the contractor shall have
 9 not longer than two years to meet those standards that are
10 applicable to the physical plant.
11      (b)  Facilities and management plans for inmates governed by
12 this Act shall comply with all federal and state constitutional
13 standards, state and county laws, and all court orders.
14      SECTION 8.  Private company detention officers.  (a)  No
15 person shall be employed as a private company detention officer
16 unless the person has been trained in the use of force and the
17 use of firearms in accordance with American Correctional
18 Association standards, and, at the contractor's expense, has
19 satisfactorily completed the basic training program approved by
20 the State.  If the training is provided under contract with the
21 State, the costs of a basic training program shall not be greater
22 than the costs of peace officer training at the state law
23 enforcement academy.

Page 11                                                    
                                     S.B. NO.           765

 1      (b)  A private company detention officer may use force only
 2 while on the grounds of the facility or while transporting
 3 inmates.  Nondeadly force and deadly force shall be used by a
 4 private company detention officer only as provided in this
 5 section.
 6      (c)  A private company detention officer may use only such
 7 nondeadly force as the circumstances require in the following
 8 situations:
 9      (1)  To prevent the commission of a felony or misdemeanor,
10           including escape;
11      (2)  To defend the officer or others against physical
12           assault;
13      (3)  To prevent serious damage to property;
14      (4)  To enforce institutional regulations and orders; and
15      (5)  To prevent or quell a riot.
16      (d)  A private detention officer who is trained pursuant to
17 this section shall have a right to carry and use firearms and
18 shall exercise such authority and use deadly force only as a last
19 resort when reasonably necessary to prevent the commission of a
20 felony under chapter 707 or section 709-906, Hawaii Revised
21 Statutes, to prevent the escape of a convicted felon from
22 custody, or to defend the officer or any other person from
23 imminent danger of death or serious bodily injury.

Page 12                                                    
                                     S.B. NO.           765

 1      (e)  Within two days following an incident involving the use
 2 of force against an inmate or another, the employee shall file a
 3 written report describing the incident with the administrative
 4 staff of the facility and with the contract monitor pursuant to
 5 this Act.
 6      (f)  A private contractor shall have the same standing,
 7 authority, rights, and responsibilities as the State government
 8 in any agreement, formal or informal, with local law enforcement
 9 agencies concerning the latter's obligations in the event of a
10 riot, escape, or other emergency situation.
11      SECTION 9.  Employee training requirements.  All employees
12 of a contractor or facility operated by a private contractor
13 pursuant to this Act shall receive, at a minimum, the same
14 quality and quantity of training as that required for employees
15 of state operated facilities.  If any or all of the applicable
16 American Correctional Association standards relating to training
17 are more stringent than are governmental standards, training
18 shall be provided in accordance with the more stringent
19 standards.  All training expenses shall be the responsibility of
20 the private contractor.
21      SECTION 10.  Powers and duties not delegable to contractor.
22 A contract entered into under this Act does not authorize, allow,
23 or imply a delegation of authority to the contractor to:

Page 13                                                    
                                     S.B. NO.           765

 1      (1)  Classify inmates or place inmates in less restrictive
 2           or more restrictive custody;
 3      (2)  Transfer an inmate, although the contractor may request
 4           in writing that the department either transfer the
 5           inmate or provide in writing to the department valid
 6           reasons for the failure to do so.  The department shall
 7           formulate guidelines for the transfer of inmates
 8           between public and private correctional facilities for
 9           disciplinary reasons;
10      (3)  Formulate rules of inmate behavior, violations of which
11           may subject inmates to sanctions, except to the extent
12           that those rules are accepted by the department;
13      (4)  Take any disciplinary action against an inmate;
14      (5)  Grant, deny, or revoke sentence credits;
15      (6)  Recommend that the Hawaii paroling authority either
16           deny or grant parole; however, the contractor may
17           submit to the Hawaii paroling authority written reports
18           that have been prepared in the ordinary course of
19           business and shall respond to any written requests for
20           information received from the Hawaii paroling
21           authority;
22      (7)  Develop and implement procedures for calculating
23           sentence credits or inmate release and parole

Page 14                                                    
                                     S.B. NO.           765

 1           eligibility dates;
 2      (8)  Develop and implement requirements that inmates engage
 3           in any type of work, except to the extent that those
 4           requirements are accepted by the State; or
 5      (9)  Determine inmate eligibility for any form of
 6           conditional, temporary, or permanent release from a
 7           correctional facility.
 8      SECTION 11.  Monitoring; right to access.  (a)  The State,
 9 at the contractor's expense, shall employ an individual to be
10 responsible for monitoring all aspects of the private
11 contractor's performance under a contract for the operation of a
12 facility pursuant to this Act.  The individual employed as
13 contract monitor shall be qualified to perform this function by
14 reason of education, training, and experience as determined by
15 the governor or the governor's designee.  At a minimum, the
16 contract monitor shall have completed at least the same training
17 required by this Act for detention officers and shall have served
18 a minimum of three years as a detention officer.  The monitor,
19 with the approval of the contracting governmental entity, shall
20 appoint staff as necessary to assist in monitoring at the
21 facility, which staff shall be at the contractor's expense and
22 shall be solely responsible to the contract monitor.  The monitor
23 or the monitor's designee shall be provided an on-site work area

Page 15                                                    
                                     S.B. NO.           765

 1 by the contractor, shall be on-site on a daily basis, and shall
 2 have access to all areas of the facility and to inmates and staff
 3 at all times.  The contractor shall provide any and all data,
 4 reports, and other materials that the monitor determines are
 5 necessary to carry out monitoring responsibilities under this
 6 section.
 7      (b)  The monitor shall be responsible to and report to the
 8 governor or the governor's designee at least monthly, and more
 9 often as necessary to ensure proper operation of the facility,
10 concerning the contractor's performance.
11      (c)  Members of the public shall have the same right of
12 access to facilities operated by a private contractor pursuant to
13 this Act as they do to state-operated facilities.
14      SECTION 12.  Liability and sovereign immunity.  (a)  The
15 contractor shall assume all liability arising under a contract
16 entered into pursuant to this Act.
17      (b)  The sovereign immunity of the State shall not extend to
18 the contractor.  Neither the contractor nor the insurer of the
19 contractor may plead the defense of sovereign immunity in any
20 action arising out of the performance of the contract, or as a
21 defense in tort, or any other application, with respect to the
22 care and custody of inmates under the contractor's supervision.
23      SECTION 13.  Insurance.  (a)  The contractor shall indemnify

Page 16                                                    
                                     S.B. NO.           765

 1 the State, including its officials and agents, against any and
 2 all liability, including civil rights liability.  Proof of
 3 satisfactory insurance is required in an amount to be determined
 4 by the insurance commissioner.  The attorney general shall
 5 determine the amount and manner of the indemnification.
 6      (b)  Subject to subsection (a), the contractor shall provide
 7 an adequate plan of insurance, specifically including insurance
 8 for civil rights claims, as determined by the insurance
 9 commissioner.  In determining the adequacy of the plan, the firm
10 shall determine whether the insurance is adequate to:
11      (1)  Fully indemnify the State from actions by third parties
12           against the contractor or the State as a result of the
13           contract;
14      (2)  Assure the contractor's ability to fulfill its contract
15           with the State in all respects and to assure that the
16           contractor is not limited in this ability due to
17           financial liability that results from judgments;
18      (3)  Protect the State against claims arising as the result
19           of any occurrence during the term of the contract on an
20           occurrence basis; and
21      (4)  Satisfy other requirements specified by the State.
22      SECTION 14.  Capacity requirements.  The department shall
23 transfer and assign prisoners, at a rate to be determined by the

Page 17                                                    
                                     S.B. NO.           765

 1 governor or the governor's designee, to each private correctional
 2 facility opened pursuant to this Act in an amount not less than
 3       per cent or more than       per cent of the capacity of the
 4 facility pursuant to the contract.  The prisoners transferred
 5 shall represent a cross section of the general inmate population,
 6 based on the grade of custody or the offense of conviction, at
 7 the most comparable facility operated by the department.
 8      SECTION 15.  Termination of contract and resumption of
 9 control.  (a)  The State, upon demonstration that a breach of
10 contract has occurred and that after the passage of a reasonable
11 period of time the breach has not been cured, and without penalty
12 to the State, may cancel a contract for the private operation of
13 a facility at any time on giving a six-month written notice.
14      (b)  Notwithstanding any other provision in this Act to the
15 contrary, prior to entering into a contract for the private
16 operation of a facility, a plan shall be developed by the
17 contractor and approved by the State establishing the method by
18 which the State will resume control of the facility or the
19 inmates incarcerated in a leased facility upon contract
20 termination.
21      (c)  Any contract entered into under this Act for the
22 private operation of a facility shall provide that upon
23 declaration by the State of any material breach of contract on

Page 18                                                    
                                     S.B. NO.           765

 1 the part of the private contractor, the State, if necessary, may
 2 assume immediate temporary control of the operation of the
 3 facility pending transfer of inmates to another facility.
 4      SECTION 16.  Rulemaking authority.  The governor or the
 5 governor's designee shall adopt rules pursuant to chapter 91,
 6 Hawaii Revised Statutes, as may be necessary to carry out this
 7 Act.
 8      SECTION 17.  Applicability of Act to other provisions of
 9 law.  (a)  Any offense that if committed at a state correctional
10 facility would be a crime shall be a crime if committed by or
11 with regard to inmates at a private correctional facility
12 operated pursuant to a contract entered into under this Act.
13      (b)  All laws relating to commutation of sentences, release
14 and parole eligibility, and the award of sentence credits shall
15 apply to inmates incarcerated in a private correctional facility
16 operated pursuant to a contract entered into under this Act.
17      SECTION 18.  Evaluation of costs and benefits of contracts.
18 The auditor shall evaluate the costs and benefits of any contract
19 entered into under this Act.  The evaluation shall include a
20 comparison of the costs and benefits of constructing and
21 operating prisons by the State versus by private contractors.
22 The auditor shall also evaluate the performance of the private
23 contractor at the end of the term of each management contract and

Page 19                                                    
                                     S.B. NO.           765

 1 make recommendations to the speaker of the house of
 2 representatives and the president of the senate on whether to
 3 continue the contract.
 4      SECTION 19.  Prohibition.  A bidder or potential bidder
 5 shall not have any contract with any member or employee of or
 6 consultant to any governmental entity responsible for awarding
 7 any contract under this Act from the time a request for proposals
 8 for a private correctional facility is issued until the time a
 9 contract for that facility is awarded, except if that contract is
10 in writing or in a meeting for which notice was given as
11 prescribed by law.
12      SECTION 20.  Inmates.  For purposes of this Act:
13      (1)  A male inmate incarcerated in a correctional facility
14           operated by a private entity pursuant to this Act shall
15           be deemed to be an inmate of the state prison system;
16           and
17      (2)  A female incarcerated in a correctional facility
18           operated by a private entity pursuant to this Act shall
19           be deemed to be an inmate of the state women's
20           correctional facility.
21      SECTION 21.  Tax privileges and exemptions.  Any
22 correctional facility operating pursuant to this Act shall come
23 under the same tax classifications as the state prisons, the

Page 20                                                    
                                     S.B. NO.           765

 1 state women's correctional facility, or any prison farms or
 2 camps.
 3      SECTION 22.  Severability.  If any provision of this Act, or
 4 the application thereof to any person or circumstance is held
 5 invalid, the invalidity does not affect other provisions or
 6 applications of the Act which can be given effect without the
 7 invalid provision or application, and to this end the provisions
 8 of this Act are severable.
 9      SECTION 23.  This Act does not affect rights and duties that
10 matured, penalties that were incurred, and proceedings that were
11 begun, before its effective date.
12      SECTION 24.  This Act shall take effect upon its approval.
14                           INTRODUCED BY:_________________________