Private Prisons; Big Island

Requires the department of public safety 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 the county of Hawaii.

HOUSE OF REPRESENTATIVES                H.B. NO.1316       
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 the privatization of the State's
14 correctional facilities is a viable solution.  Privatizing prison
15 facilities has occurred in over twenty states; currently, Kansas,
16 Kentucky, New Mexico, South Dakota, and Tennessee have the
17 highest levels of competitive activity in corrections.
18 Competitively contracted correctional services implemented in
19 several states include such traditional services as alcohol and

Page 2                                                     
                                     H.B. NO.1316       

 1 drug treatment, community corrections, education and training of
 2 inmates, health and mental health care, and laboratory services.  
 3 In addition, private companies are being used for correctional
 4 facility construction, prison operations, and work release
 5 programs in a number of other states.
 6      The reasons for privatization include cost savings, speedy
 7 implementation and flexibility, lack of agency personnel, and
 8 high quality of services.  Cost savings have ranged from below
 9 five per cent to twenty per cent.  Because of the shortage of
10 correctional facilities and the revenue shortfall facing Hawaii,
11 there is a need to give the private sector the opportunity to
12 design, construct, acquire (including the acquisition of state
13 lands), own, and lease or lease back to the State, correctional
14 facilities using private funds.
15      The legislature further finds that the development of
16 privately-run correctional facilities should take place in the
17 county of Hawaii.  Last session, the legislature put in place the
18 possibility of privatizing prisons.  This Act selects a prison
19 site and sets out the parameters for privatizing the prison
20 there.  The legislature finds that the Big Island continues to
21 experience social problems at a consistently higher rate than the
22 other counties of the State.  According to studies done by the
23 Mental Health Association in Hawaii county, the University of

Page 3                                                     
                                     H.B. NO.1316       

 1 Hawaii, and the department of health of Hawaii county, as
 2 compared to the other counties in the State, the Big Island has
 3 the highest rates of confirmed child abuse and neglect, confirmed
 4 abuse of dependent adults, the issuance of temporary restraining
 5 orders against perpetrators of domestic violence, and the highest
 6 rates of alcohol and other substance abuse.  The high
 7 unemployment rate due to the recent closure of the Big Island's
 8 sugar industries has also contributed to the stress and violence
 9 on that island.  The legislature finds that the development of a
10 private prison on the Big Island will help to address the need
11 for additional prison space as well as create new job
12 opportunities for island residents.
13      The purpose of this Act is therefore to require the
14 department of public safety to develop a request for proposals
15 for competitive sealed proposals to design, construct, lease or
16 purchase, improve, operate, maintain, and manage a privately run
17 prison in the county of Hawaii.  This Act further authorizes the
18 county of Hawaii government to enter into a contract with private
19 contractors to acquire and operate the prison, requires the
20 establishment of minimum standards for contracting with those
21 private contractors, and makes the department of public safety
22 responsible for ensuring that these standards are met by private
23 contractors.

Page 4                                                     
                                     H.B. NO.1316       

 1      SECTION 2.  Definitions.  As used in this Act, unless the
 2 context requires otherwise:
 3      "American Correctional Association standards" means those
 4 standards at the time of implementation of this Act, or, if
 5 amended, the amended American Correctional Association standards,
 6 which are approved by the State.
 7      "Contractor or private contractor" means a person who has
 8 entered into a contract with the county of Hawaii government
 9 pursuant to this Act.
10      "County of Hawaii government" means the mayor and county
11 council of the county of Hawaii.
12      "Deadly force" means force that is likely to cause death or
13 serious bodily injury.
14      "Department" means department of public safety.
15      "Director" means the director of public safety.
16      "Facility" means a jail, prison, or other correctional or
17 incarceration facility constructed or operated pursuant to a
18 contract under this Act.
19      "Inmate" means an adult serving a felony sentence in the
20 state prison system, the state women's correctional facility, any
21 correctional facility honor farm or camp, or any correctional
22 facility operated pursuant to a contract under this Act.
23      "Nondeadly force" means force that normally would cause

Page 5                                                     
                                     H.B. NO.1316       

 1 neither death nor serious bodily injury.
 2      "Private-company detention officer" means a private
 3 contractor's employee serving as a detention officer at a
 4 facility being operated pursuant to a contract under this Act.
 5      SECTION 3.  Authority to contract.  (a)  Pursuant to
 6 sections 353-   and 353-  , the governor may contract with
 7 private entities for the design, planning, construction, lease
 8 (as lessor or lessee), acquisition (including the acquisition of
 9 state lands, improvements, and property to construct a
10 correctional facility), improvement, or purchase of facilities
11 and services as provided in this Act for a correctional facility
12 on the Big Island.  The department of public safety shall be
13 responsible for the administration and maintenance of the
14 facility pursuant to section 26-14.6(b).
15      (b)  No contract shall be entered into or renewed unless the
16 county of Hawaii government, with the concurrence of the
17 director, determines that the contract offers demonstrable
18 benefits to the county of Hawaii and at least the same quality of
19 services provided by the State or by the county of Hawaii
20 government.
21      (c)  After receiving the consent of the director as to the
22 site, number of beds, and classifications of inmates or prisoners
23 to be housed in the facility, the governor may contract with

Page 6                                                     
                                     H.B. NO.1316       

 1 private entities for the design, construction, lease (as lessor
 2 or lessee), acquisition, improvement, operation, maintenance,
 3 purchase, or management of facilities, for the detention or
 4 incarceration of:
 5      (1)  Its own detainees;
 6      (2)  Prisoners or inmates of the State or detainees of any
 7           other county; and
 8      (3)  Any detainees, prisoners, or inmates under the
 9           jurisdiction or otherwise under the control of the
10           United States government or any of its offices,
11           departments, or agencies, or lawfully confined by any
12           jurisdiction within the United States;
13      (d)  Notwithstanding subsection (c), a minimum of         
14 per cent of the number of beds in the facility shall be reserved
15 for prisoners or inmates of the State; provided that the State
16 may house in the facility additional inmates or prisoners of the
17 state prison system or any other facility operated under the
18 control of the State.  The contract shall specify such matters as
19 are deemed relevant by the State, county of Hawaii government, or
20 the private contractor, and shall be approved as to form and
21 content by the attorney general.
22      SECTION 4.  Request for proposals; prequalification of
23 applicants.(a)  The department shall develop a request for

Page 7                                                     
                                     H.B. NO.1316       

 1 proposals for competitive sealed proposals to design, construct,
 2 lease, acquire, improve, operate, maintain, purchase, or manage a
 3 privately run correctional facility in the county of Hawaii in
 4 accordance with this Act.
 5      (b)  The request for proposals shall be calculated to
 6 generate proposals from applicants on a list who have been
 7 prequalified by the department and county of Hawaii government,
 8 and shall be applicable to any contract between the State and any
 9 private entity entered into under the authority of this Act.
10 Standards for prequalification of applicants under this section
11 shall be determined by the department before the commencement of
12 the selection process; provided that:
13      (1)  Any contract entered into under this Act for the
14           operation of a correctional facility shall, at a
15           minimum:
16           (A)  Be negotiated with the firm found most qualified.
17                The contractor shall demonstrate that it has the
18                qualifications, experience, and management
19                personnel necessary to carry out the terms of the
20                contract, the ability to expedite the siting,
21                design, and construction of correctional
22                facilities, and the ability to comply with
23                applicable laws, court orders, and national

Page 8                                                     
                                     H.B. NO.1316       

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

Page 9                                                     
                                     H.B. NO.1316       

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

Page 10                                                    
                                     H.B. NO.1316       

 1      (3)  A contract entered into under this Act does not accord
 2           third-party beneficiary status to any inmate or to any
 3           member of the general public; and
 4      (4)  Each contract entered into by the State may include any
 5           other requirements that the director considers
 6           necessary and appropriate for carrying out the purposes
 7           of this Act.
 8      SECTION 5.  Incarceration of inmates in privately operated
 9 facilities.  At the direction of the State, in the case of a
10 person sentenced to imprisonment in the state prison system or
11 the state women's correctional facility, or of a person sentenced
12 to the state prison system and serving a sentence at any prison
13 farm or camp, or at the direction of the county of Hawaii
14 government in the case of a person sentenced to imprisonment in a
15 county of Hawaii prison, the person sentenced to imprisonment may
16 be incarcerated in a facility constructed or operated by a
17 private entity pursuant to a contract under this Act.
18      SECTION 6.  Contract term and renewal.  The initial contract
19 for the operation of a facility or for the incarceration of
20 prisoners or inmates therein shall be for a period of not more
21       years and may be renewed for successive       year periods
22 thereafter.  Contracts for purchase or lease (as lessor or
23 lessee) of a facility shall not exceed a term of       years.

Page 11                                                    
                                     H.B. NO.1316       

 1 However, the State is not obligated for any payments to the
 2 contractor beyond current annual appropriations.
 3      SECTION 7.  Standards of operation.  (a)  All facilities and
 4 management plans for the inmates governed by this Act shall be
 5 designed, constructed, and at times maintained and operated in
 6 accordance with the American Correctional Association standards
 7 enforced at the time of contracting and in accordance with
 8 sections 26-14.6, 353-  , 353-  , and 353-  , Hawaii Revised
 9 Statutes.  The facility shall meet the percentage of standards
10 required for accreditation by the American Correctional
11 Association, except where the contract requires compliance with a
12 higher percentage of non-mandatory standards.  The contract may
13 allow the contractor an extension of time in which to meet a
14 lower percentage of non-mandatory standards only when the
15 contract is for the renovation of an existing facility, in which
16 case the contractor shall have not longer than two years to meet
17 those standards that are applicable to the physical plant.
18      (b)  Facilities and management plans for inmates governed by
19 this Act shall comply with all federal and state constitutional
20 standards, state and county laws, and all court orders.
21      SECTION 8.  Private company detention officers.  (a)  No
22 person shall be employed as a private company detention officer
23 unless the person has been trained in the use of force and the
24 use of firearms in accordance with American Correctional

Page 12                                                    
                                     H.B. NO.1316       

 1 Association standards, and, at the contractor's expense, has
 2 satisfactorily completed the basic training program approved by
 3 the State.  If the training is provided under contract with the
 4 State, the costs of a basic training program shall not be greater
 5 than the costs of peace officer training at the state law
 6 enforcement academy.
 7      (b)  A private company detention officer may use force only
 8 while on the grounds of the facility or while transporting
 9 inmates.  Nondeadly force and deadly force shall be used by a
10 private company detention officer only as provided in this
11 section.
12      (c)  A private company detention officer may use only such
13 nondeadly force as the circumstances require in the following
14 situations:
15      (1)  To prevent the commission of a felony or misdemeanor,
16           including escape;
17      (2)  To defend the officer or others against physical
18           assault;
19      (3)  To prevent serious damage to property;
20      (4)  To enforce institutional regulations and orders; and
21      (5)  To prevent or quell a riot.
22      (d)  A private detention officer who is trained pursuant to
23 this section shall have a right to carry and use firearms and

Page 13                                                    
                                     H.B. NO.1316       

 1 shall exercise such authority and use deadly force only as a last
 2 resort when reasonably necessary to prevent the commission of a
 3 felony under chapter 707 or section 709-906, Hawaii Revised
 4 Statutes, to prevent the escape of a convicted felon from
 5 custody, or to defend the officer or any other person from
 6 imminent danger of death or serious bodily injury.
 7      (e)  Within two days following an incident involving the use
 8 of force against an inmate or another, the employee shall file a
 9 written report describing the incident with the administrative
10 staff of the facility and with the contract monitor pursuant to
11 this Act.
12      (f)  A private contractor shall have the same standing,
13 authority, rights, and responsibilities as the county of Hawaii
14 government in any agreement, formal or informal, with local law
15 enforcement agencies concerning the latter's obligations in the
16 event of a riot, escape, or other emergency situation.
17      SECTION 9.  Employee training requirements.  All employees
18 of a contractor or facility operated by a private contractor
19 pursuant to this Act shall receive, at a minimum, the same
20 quality and quantity of training as that required for employees
21 of state operated facilities.  If any or all of the applicable
22 American Correctional Association standards relating to training
23 are more stringent than are governmental standards, training

Page 14                                                    
                                     H.B. NO.1316       

 1 shall be provided in accordance with the more stringent
 2 standards.  All training expenses shall be the responsibility of
 3 the private contractor.
 4      SECTION 10.  Powers and duties not delegable to contractor.
 5 A contract entered into under this Act does not authorize, allow,
 6 or imply a delegation of authority to the contractor to:
 7      (1)  Classify inmates or place inmates in less restrictive
 8           or more restrictive custody;
 9      (2)  Transfer an inmate, although the contractor may request
10           in writing that the department either transfer the
11           inmate or provide in writing to the department valid
12           reasons for the failure to do so.  The department shall
13           formulate guidelines for the transfer of inmates
14           between public and private correctional facilities for
15           disciplinary reasons;
16      (3)  Formulate rules of inmate behavior, violations of which
17           may subject inmates to sanctions, except to the extent
18           that those rules are accepted by the department;
19      (4)  Take any disciplinary action against an inmate;
20      (5)  Grant, deny, or revoke sentence credits;
21      (6)  Recommend that the Hawaii paroling authority either
22           deny or grant parole; however, the contractor may
23           submit to the Hawaii paroling authority written reports

Page 15                                                    
                                     H.B. NO.1316       

 1           that have been prepared in the ordinary course of
 2           business and shall respond to any written requests for
 3           information received from the Hawaii paroling
 4           authority;
 5      (7)  Develop and implement procedures for calculating
 6           sentence credits or inmate release and parole
 7           eligibility dates;
 8      (8)  Develop and implement requirements that inmates engage
 9           in any type of work, except to the extent that those
10           requirements are accepted by the State; or
11      (9)  Determine inmate eligibility for any form of
12           conditional, temporary, or permanent release from a
13           correctional facility.
14      SECTION 11.  Monitoring; right to access.  (a)  The
15 department, at the contractor's expense, shall employ an
16 individual to be responsible for monitoring all aspects of the
17 private contractor's performance under a contract for the
18 operation of a facility pursuant to this Act.  The individual
19 employed as contract monitor shall be qualified to perform this
20 function by reason of education, training, and experience as
21 determined by the director.  At a minimum, the contract monitor
22 shall have completed at least the same training required by this
23 Act for detention officers and shall have served a minimum of

Page 16                                                    
                                     H.B. NO.1316       

 1 three years as a detention officer.  The monitor, with the
 2 approval of the contracting governmental entity, shall appoint
 3 staff as necessary to assist in monitoring at the facility, which
 4 staff shall be at the contractor's expense and shall be solely
 5 responsible to the contract monitor.  The monitor or the
 6 monitor's designee shall be provided an on-site work area by the
 7 contractor, shall be on-site on a daily basis, and shall have
 8 access to all areas of the facility and to inmates and staff at
 9 all times.  The contractor shall provide any and all data,
10 reports, and other materials that the monitor determines are
11 necessary to carry out monitoring responsibilities under this
12 section.
13      (b)  The monitor shall be responsible to and report to the
14 county of Hawaii government at least monthly, and more often as
15 necessary to ensure proper operation of the facility, concerning
16 the contractor's performance.
17      (c)  Members of the public shall have the same right of
18 access to facilities operated by a private contractor pursuant to
19 this Act as they do to state-operated facilities.
20      SECTION 12.  Liability and sovereign immunity.  (a)  The
21 contractor shall assume all liability arising under a contract
22 entered into pursuant to this Act.
23      (b)  Neither the sovereign immunity of the State nor the

Page 17                                                    
                                     H.B. NO.1316       

 1 sovereign immunity applicable to the county of Hawaii government
 2 shall extend to the contractor.  Neither the contractor nor the
 3 insurer of the contractor may plead the defense of sovereign
 4 immunity in any action arising out of the performance of the
 5 contract, or as a defense in tort, or any other application, with
 6 respect to the care and custody of inmates under the contractor's
 7 supervision.
 8      SECTION 13.  Insurance.  (a)  The contractor shall indemnify
 9 the State and the county of Hawaii government, including their
10 officials and agents, against any and all liability, including,
11 but not limited to civil rights liability.  Proof of satisfactory
12 insurance is required in an amount to be determined by the
13 insurance commissioner.  The attorney general shall determine the
14 amount and manner of the indemnification.
15      (b)  Subject to subsection (a), the contractor shall provide
16 an adequate plan of insurance, specifically including insurance
17 for civil rights claims, as determined by the insurance
18 commissioner.  In determining the adequacy of the plan, the firm
19 shall determine whether the insurance is adequate to:
20      (1)  Fully indemnify the county of Hawaii government and the
21           State from actions by third parties against the
22           contractor, the county of Hawaii government, or the
23           State as a result of the contract;

Page 18                                                    
                                     H.B. NO.1316       

 1      (2)  Assure the contractor's ability to fulfill its contract
 2           with the county of Hawaii government in all respects
 3           and to assure that the contractor is not limited in
 4           this ability due to financial liability that results
 5           from judgments;
 6      (3)  Protect the county of Hawaii government and the State
 7           against claims arising as the result of any occurrence
 8           during the term of the contract on an occurrence basis;
 9           and
10      (4)  Satisfy other requirements specified by the State.
11      SECTION 14.  Capacity requirements.  The department shall
12 transfer and assign prisoners, at a rate to be determined by the
13 department, to each private correctional facility opened pursuant
14 to this Act in an amount not less than       per cent or more
15 than       per cent of the capacity of the facility pursuant to
16 the contract.  The prisoners transferred by the department shall
17 represent a cross section of the general inmate population, based
18 on the grade of custody or the offense of conviction, at the most
19 comparable facility operated by the department.
20      SECTION 15.  Termination of contract and resumption of
21 control.  (a)  The county of Hawaii government, upon
22 demonstration that a breach of contract has occurred and that
23 after the passage of a reasonable period of time the breach has

Page 19                                                    
                                     H.B. NO.1316       

 1 not been cured, and without penalty to the county of Hawaii
 2 government, may cancel a contract for the private operation of a
 3 facility at any time on giving a six-month written notice.
 4      (b)  Notwithstanding any other provision in this Act to the
 5 contrary, prior to entering into a contract for the private
 6 operation of a facility, a plan shall be developed by the
 7 contractor and approved by the county of Hawaii government
 8 establishing the method by which the State or the county of
 9 Hawaii government will resume control of the facility or the
10 inmates incarcerated in a leased facility upon contract
11 termination.
12      (c)  Any contract entered into under this Act for the
13 private operation of a facility shall provide that upon
14 declaration by the State or the county of Hawaii government of
15 any material breach of contract on the part of the private
16 contractor, the State or county of Hawaii government may, if
17 necessary, assume immediate temporary control of the operation of
18 the facility pending transfer of inmates to another facility.
19      SECTION 16.  Rulemaking authority.  The department shall
20 adopt rules pursuant to chapter 91, Hawaii Revised Statutes, as
21 may be necessary to carry out this Act.
22      SECTION 17.  Applicability of Act to other provisions of
23 law.  (a)  Any offense that if committed at a state correctional

Page 20                                                    
                                     H.B. NO.1316       

 1 facility would be a crime shall be a crime if committed by or
 2 with regard to inmates at a private correctional facility
 3 operated pursuant to a contract entered into under this Act.
 4      (b)  All laws relating to commutation of sentences, release
 5 and parole eligibility, and the award of sentence credits shall
 6 apply to inmates incarcerated in a private correctional facility
 7 operated pursuant to a contract entered into under this Act.
 8      SECTION 18.  Evaluation of costs and benefits of contracts.
 9 The auditor shall evaluate the costs and benefits of any contract
10 entered into under this Act.  The evaluation shall include a
11 comparison of the costs and benefits of constructing and
12 operating prisons by the State versus by private contractors.
13 The auditor shall also evaluate the performance of the private
14 contractor at the end of the term of each management contract and
15 make recommendations to the speaker of the house of
16 representatives and the president of the senate on whether to
17 continue the contract.
18      SECTION 19.  Prohibition.  A bidder or potential bidder
19 shall not have any contract with any member or employee of or
20 consultant to any governmental entity responsible for awarding
21 any contract under this Act from the time a request for proposals
22 for a private correctional facility is issued until the time a
23 contract for that facility is awarded, except if that contract is

Page 21                                                    
                                     H.B. NO.1316       

 1 in writing or in a meeting for which notice was given as
 2 prescribed by law.
 3      SECTION 20.  Inmates.  For purposes of this Act:
 4      (1)  A male inmate incarcerated in a correctional facility
 5           operated by a private entity pursuant to this Act shall
 6           be deemed to be an inmate of the state prison system;
 7           and
 8      (2)  A female incarcerated in a correctional facility
 9           operated by a private entity pursuant to this Act shall
10           be deemed to be an inmate of the state women's
11           correctional facility.
12      SECTION 21.  Tax privileges and exemptions.  Any
13 correctional facility operating pursuant to this Act shall come
14 under the same tax classifications as the state prisons, the
15 state women's correctional facility, or any prison farms or
16 camps.
17      SECTION 22.  Severability.  If any provision of this Act, or
18 the application thereof to any person or circumstance is held
19 invalid, the invalidity does not affect other provisions or
20 applications of the Act which can be given effect without the
21 invalid provision or application, and to this end the provisions
22 of this Act are severable.
23      SECTION 23.  This Act does not affect rights and duties that

Page 22                                                    
                                     H.B. NO.1316       

 1 matured, penalties that were incurred, and proceedings that were
 2 begun, before its effective date.
 3      SECTION 24.  This Act shall take effect upon its approval.
 5                           INTRODUCED BY:_________________________
 7                                         _________________________
 9                                         _________________________
11                                         _________________________
13                                         _________________________
15                                         _________________________
17                                         _________________________
19                                         _________________________
21                                         _________________________
23                                         _________________________

Page 23                                                    
                                     H.B. NO.1316       

 2                                         _________________________
 4                                         _________________________