Privatized correctional

Allows the governor to contract for private sector operation of
correctional facilities.  Establishes criteria necessary for an
acceptable contract for privatized operation of a correctional

HOUSE OF REPRESENTATIVES                H.B. NO.           2741
TWENTIETH LEGISLATURE, 2000                                H.D.1
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that privatized
 2 correctional facilities present an opportunity to attempt a bold,
 3 new approach to corrections in the State.  This new approach will
 4 attempt to exploit the strengths of privately-operated facilities
 5 and to minimize issues that have emerged as widespread concerns
 6 throughout the rapidly growing corrections industry.
 7      This new approach will feature a shift in focus such that
 8 corrections will not be seen as the end in and of itself, but
 9 rather as the means to the new focus; a new focus on positive
10 outcomes for public safety and for those incarcerated.
11      In other jurisdictions, privately operated correctional
12 facilities provide a service often analogized to a hotel
13 operator.  This analogy is not without flaws, however it is
14 accurate insofar as the private operator is paid by the state a
15 certain rate per inmate per day.  Under this type of contractual
16 arrangement, the state and the private operator have conflicting
17 desires.  The state is interested in having as few people as
18 possible incarcerated beyond their initial eligibility for
19 parole.  Not only is this fiscally prudent for the State, as
20 incarceration is costly, but moreover it is in the larger

Page 2                                                     
                                     H.B. NO.           2741

 1 interest of the state to ensure the timely return of inmates to
 2 free society where they may assume a productive role.  The
 3 private operator, in contrast to the State's interest, enjoys
 4 profits directly proportional to the length of stay for each
 5 inmate.
 6      The legislature finds that a contract should be designed
 7 between the state and those that operate private correctional
 8 facilities to better align these motivations.  For too long, 
 9 private correctional facilities have been stagnant in the "hotel"
10 format.  A new, outcome-oriented privatized prison has the
11 potential to not only improve public safety, but also to reign in
12 the exploding need for prison space.
13      Under this regime, the financial incentive, i.e., the profit
14 motive, facing the private operator will be the effort to make
15 inmates ready to earn parole as soon as possible.  The profit
16 margin returned to the private operator for each inmate paroled
17 under this plan is much higher, thus it would no longer be in the
18 interest of the private operator to house inmates for as long as
19 possible.  Once the inmate earns parole, the private operator
20 will have another profit motive to help the parolee fulfill the
21 terms of the parole, and the private operator will have a
22 financial penalty to face if the inmate's parole is revoked.  In
23 short, the State will be able to better direct its moneys to

Page 3                                                     
                                     H.B. NO.           2741

 1 support the private operator's efforts to make inmates ready to
 2 re-enter society in a productive capacity and, once there, to
 3 help them remain productive.  The legislature finds that an
 4 outcome-oriented private correctional facility is in the best
 5 interests of public safety, fiscal responsibility, and the
 6 inmates.  The legislature believes this type of contractual
 7 agreement is is a much better idea than the more typical private
 8 prisons which have a reputation for warehousing people and for
 9 rewarding private correctional facility operators for what are
10 socially less-desirable outcomes.
11      SECTION 2.  Chapter 353, Hawaii Revised Statutes, is amended 
12 by adding ten new sections to be appropriately designated and to
13 read as follows:
14      "353-     Contracts for the operation of correctional
15 facilities by private entities.  The governor may enter into and
16 execute contracts in the name of the State with any private
17 entity to operate minimum security correctional facilities at
18 sites selected by the governor within the state for the benefit
19 of the State; provided that:
20      (1)  Contracts shall ensure around-the-clock contract
21           compliance monitoring by a state employee;
22      (2)  An individual, corporation, partnership, association,
23           or other private organization or entity may not

Page 4                                                     
                                     H.B. NO.           2741

 1           construct or operate a private correctional facility
 2           unless licensed by the department.  A license shall not
 3           be transferrable;
 4      (3)  A person convicted in another state may not be confined
 5           in a private correctional facility in this state;
 6      (4)  A federal inmate may be housed in a private
 7           correctional facility only if the director of public
 8           safety so authorizes;
 9      (5)  Contracts shall follow the requirements established in
10           section 353-     regarding outcome-oriented
11           correctional facilities;
12      (6)  The correctional facility shall be designed for and
13           operated as an intensive treatment facility.  The
14           facility shall specialize in treating those inmates in
15           need of substance abuse treatment in a therapeutic
16           community.  According to each inmate's needs, the
17           facility shall also provide a wide array of culturally
18           and gender appropriate programs, mental health
19           services, group counseling, anger management programs,
20           transitional programs, cognitive restructuring,
21           remedial education, and vocational training; and

Page 5                                                     
                                     H.B. NO.           2741

 1      (7)  Contracts shall comply with the requirements
 2           established in section 353-     regarding a citizens
 3           oversight committee.
 4      (8)  Any offense which would be a crime if committed within
 5           a state or local correctional facility shall be
 6           considered a crime if it is committed in a private
 7           correctional facility.
 8      353-     Department duties and responsibilities; rulemaking
 9 authority.  (a) The department shall adopt rules pursuant to
10 chapter 91 that include the minimum applicable standards for the
11 siting, construction, operation, and physical condition of a
12 private correctional facility and for the security, safety,
13 health, treatment, and discipline of persons confined in a
14 private correctional facility.
15      (b)  The rules shall require that a private correctional
16 facility conform to applicable American Correctional Association
17 and National Commission on Correctional Health Care standards for
18 the facility and achieve accreditation from the American
19 Correctional Association and National Commission on Correctional
20 Health Care within three years from the date the facility begins
21 operation.
22      353-     Requirements of request for proposals.  (a) Prior
23 to contracting for services with a private correctional facility,

Page 6                                                     
                                     H.B. NO.           2741

 1 the department shall publish a request for proposals.  The
 2 request for proposals shall include a description of the long-
 3 range correctional needs, objectives, and goals of the department
 4 and of the state.
 5      (b)  The request for proposals shall include and identify
 6 the services requested and required and other information,
 7 including but not limited to:
 8      (1)  The physical plant, facility, and perimeter including:
 9           (A)  The facility capacity and inmate population,
10                including classification levels accepted;
11           (B)  Inmate housing; and
12           (C)  Security, safety, and emergency procedures;
13      (2)  Who is responsible for transportation of inmates:
14           (A)  Among facilities;
15           (B)  Upon an inmate's release, including discharge or
16                parole;
17           (C)  For court and administrative proceedings such as
18                parole hearings and inmate participation as a
19                witness;
20           (D)  For medical transportation; and
21           (E)  For security;
22      (3)  Administration of the facility, including but not
23           limited to:

Page 7                                                     
                                     H.B. NO.           2741

 1           (A)  The organizational structure and staffing; and
 2           (B)  A policy and procedures manual addressing:
 3                (i)  Inmate discipline;
 4               (ii)  Incident reporting;
 5              (iii)  Grievance procedures;
 6               (iv)  Searches;
 7                (v)  Drug testing;
 8               (vi)  Monitoring of facility standards; and
 9              (vii)  The retention and maintenance of inmate and
10                     facility records by the private correctional
11                     facility;
12      (4)  Staffing issues regarding:
13           (A)  Management;
14           (B)  Security;
15           (C)  Administrative personnel;
16           (D)  Qualifications and requirements;
17           (E)  Training; and
18           (F)  Staff-to-inmate ratios;
19      (5)  Inmate needs such as food, clothing, sanitation,
20           hygiene, and laundry;
21      (6)  Programs and services to be required such as vocational
22           and educational training, religious services or
23           customs, counseling, recreation, and canteen;

Page 8                                                     
                                     H.B. NO.           2741

 1      (7)  Medical, dental, optical, pharmaceutical,
 2           psychological, and other medical-related care;
 3      (8)  Insurance requirements;
 4      (9)  Indemnification;
 5     (10)  A performance bond that is sufficient to protect the
 6           state from damages upon default or nonperformance and
 7           that may not exceed the biennial amount of the
 8           compensation to be paid the contractor;
 9     (11)  A requirement that proposers:
10           (A)  Provide evidence or documentation demonstrating an
11                ability to provide the services;
12           (B)  Comply with acceptable services; and
13           (C)  Comply with the rules, regulations, and contract
14                requirements;
15     (12)  A requirement that proposers provide documentation of
16           financial stability or security; and
17     (13)  Monitoring of facility operations.
18      (c)  In negotiating the terms of operation for the facility,
19 the department shall plan for and contract services designed to
20 achieve the most effective means of rehabilitating prisoners
21 through culture-based methods.  A ten per cent preference shall
22 be given to those proposals with rehabilitative programs that
23 take into account the cultural needs of the prison population.

Page 9                                                     
                                     H.B. NO.           2741

 1 Rehabilitative programs include but are not limited to those that
 2 are culture based as opposed to culturally sensitive.
 3      (d)  The department may release separate requests for
 4 proposals or contracts for specific services such as
 5 transportation of inmates, substance abuse treatment programs,
 6 vocational and educational programs, medical, dental, vision, and
 7 sick call services.  Each contract shall include a detailed
 8 explanation of the services to be provided.  The requests for
 9 proposals shall include a preference consistent with section (c),
10 where appropriate.
11      (e)  The department shall maintain a list of qualified
12 applicants and all proposal responses.  The department shall
13 retain all records related to the evaluation process and the
14 awarding of the contract.
15      353-     License; inspection.  (a)  The department shall
16 grant a license to a private correctional facility determined by
17 the department to conform to this part and rules adopted by the
18 department pursuant to chapter 91.
19      (b)  The department may not grant a license unless the
20 contractor conforms to all state, local and federal statutes,
21 codes and regulations, applicable American Correctional
22 Association and National Commission on Correctional Health Care
23 standards, rules, and other requirements as defined by rule.

Page 10                                                    
                                     H.B. NO.           2741

 1 During the initial three-year period of a contract, a private
 2 correctional facility shall not be required to be accredited by
 3 the American Correctional Association or the National Commission
 4 on Correctional Health Care to be granted a license by the
 5 department.
 6      (c)  The department may not grant a license to a private
 7 correctional facility until the owner or operator of the facility
 8 has provided the department with proof of indemnity insurance
 9 that appropriately indemnifies the State and that is acceptable
10 to the department.
11      (d)  The department may not grant a license to a private
12 correctional facility unless the facility has promulgated and
13 implemented a policy to provide access to the facility by
14 representatives of the public media.
15      (e)  The department may not grant a license to a private
16 correctional facility unless the facility has entered into an
17 agreement with local and state law enforcement authorities.  The
18 private correctional facility shall demonstrate an adequate
19 response for the mutual aid, assistance, and notification in the
20 event of an escape, riot or disturbance, natural, or human-caused
21 event, or other act that may potentially affect public safety.
22      (f)  The department may not grant a license to a private
23 correctional facility unless the legislature has appropriated

Page 11                                                    
                                     H.B. NO.           2741

 1 funds for the housing of state inmates in private correctional
 2 facilities.
 3      (g)  The department may not grant a license to a private
 4 correctional facility unless the facility has a policy in place
 5 such that employees of the private contractor may be allowed to
 6 carry firearms provided the company and employee meet all
 7 federal, state and local requirements regarding the possession
 8 and carrying of firearms.  Such employees shall be allowed to use
 9 a firearm only:
10      (1)  To prevent an inmate's escape from the facility or from
11           custody while being transported to or from a facility.
12           Escape from the facility should be strictly defined to
13           mean the act of crossing the secure perimeter of the
14           facility; and
15      (2)  To prevent an act by an inmate which would cause death
16           or serious bodily harm.
17      (h)  The department shall not grant a license to a private
18 correctional facility unless the director has certified that the
19 custody level of the facility is minimum security.
20      (i)  The department shall at least annually inspect each
21 private correctional facility to determine compliance with
22 licensure requirements and rules.  Members of the public media
23 shall be:

Page 12                                                    
                                     H.B. NO.           2741

 1      (1)  Given notification of these inspections;
 2      (2)  Allowed to accompany the inspectors; and
 3      (3)  Allowed to report on the inspection.
 4      353-      Contracts with owners or operators of private
 5 correctional facilities.  (a)  Upon request of the legislature,
 6 the state procurement office, under the administration of the
 7 department of accounting and general services, shall review each
 8 contract prior to execution to determine if the contract includes
 9 the requirements provided in this chapter.
10      (b)  A contract shall specify the type and level of services
11 to be provided by the contractor.  The contract shall provide
12 that a private contractor shall not:
13      (1)  Choose the correctional facility to which an inmate is
14           initially or subsequently assigned.  A contractor may
15           request the department to transfer an inmate to another
16           correctional facility;
17      (2)  Develop or adopt disciplinary rules that differ from
18           the disciplinary rules, penalties, and policies of the
19           department;
20      (3)  Make a decision that affects the sentence imposed on an
21           inmate or the time served by an inmate;
22      (4)  Make recommendations to the Hawaii paroling authority
23           with respect to the denial or granting of parole or

Page 13                                                    
                                     H.B. NO.           2741

 1           release, except to submit reports to the Hawaii
 2           paroling authority and to respond to requests by the
 3           department or the Hawaii paroling authority;
 4      (5)  Develop or implement requirements that inmates engage
 5           in any type of work, except to the extent that those
 6           requirements are accepted by the department;
 7      (6)  Determine inmate eligibility for any form of release
 8           from a correctional facility; or
 9      (7)  Use an inmate classification system unless it is
10           approved by the department.
11      (c)  The contract shall specify that employees of a private
12 correctional facility shall be allowed to use force and exercise
13 their powers and authority only while on the grounds of an
14 institution operated in whole or in part by their employer or
15 while transporting inmates.
16      (d)  The contract shall specify that the contractor shall
17 provide training for all of its employees authorized to use force
18 on inmates.  Such training shall be approved by the department.
19 Only employees who complete the training satisfactorily shall be
20 authorized to use force on inmates.
21      (e)  Contracts may not exceed a term of thirty years and
22 shall contain provisions for renegotiation after five years.

Page 14                                                    
                                     H.B. NO.           2741

 1      (f)  The contract shall specify that the private
 2 correctional facility shall grant access to the auditor or a
 3 person contracting with the auditor for compliance auditing.  The
 4 contractor shall provide access to all areas of the facility and
 5 to all records maintained onsite or offsite that pertain to all
 6 aspects of the facility, including but not limited to operation,
 7 financial, and inmate records.
 8      353-     Contractor costs responsibility.  (a)  The
 9 contractor shall be responsible for costs incurred by the State
10 or any political subdivision of the State for legal costs
11 relating to escapes, riots or disturbances, or other natural or
12 other human-caused events that occur at the facility because of
13 the contractor's negligence, errors, omissions, intentional acts,
14 or failure to comply with the terms of the contract.
15      (b)  The contractor shall be responsible for all reasonable
16 costs and expenses incurred by the State or a political
17 subdivision of the State for defense of causes of action brought
18 by or on behalf of an inmate that accrue while an inmate is
19 incarcerated at a private correctional facility.
20      (c)  This chapter shall not be intended to create a private
21 or public cause of action for any person, partnership,
22 corporation, or other entity, including any inmate housed within

Page 15                                                    
                                     H.B. NO.           2741

 1 any private correctional facility or any inmate housed within the
 2 State of Hawaii.
 3      353-     Restrictions on inmate movements.  An inmate may
 4 not leave the secure premises of a private correctional facility
 5 without the express written approval of the department.  Any
 6 movement of an inmate outside of the secure premises of the
 7 private correctional facility must be in compliance with approved
 8 policies and procedures established by the department.  Any
 9 movement by an inmate other than what is specified in this
10 section shall be considered to be an escape under Section 710-
11 1020, Hawaii Revised Statutes.   The only exceptions shall be:
12      (1)  To comply with a court order;
13      (2)  To receive medical care that is not available at the
14           private correctional facility; or
15      (3)  As part of a work program,
16      353-     Failure to comply with law; action by department.
17 (a)  A contractor shall remain in strict compliance with this
18 part, established applicable American Correctional Association
19 and National Commission on Correctional Health Care standards,
20 and contract requirements.
21      (b)  If the department determines at any time that a private
22 correctional facility does not conform to this part, applicable
23 American Correctional Association and National Commission on

Page 16                                                    
                                     H.B. NO.           2741

 1 Correctional Health Care standards, rules, and contract
 2 requirements, the department shall notify the chief executive
 3 officer and the owner or operator, or both the owner and the
 4 operator, of the private correctional facility.  The notice shall
 5 state the deficiencies and order that they be remedied within a
 6 specified period of time not to exceed one year.  If the
 7 deficiencies are not remedied within that time, the department
 8 may hold a contested case hearing under chapter 91, and if the
 9 department finds that suspension or revocation is warranted by
10 nonconformance with this part, applicable American Correctional
11 Association and National Commission on Correctional Health Care
12 standards, rules, and contract requirements, the department may
13 suspend or revoke the facility's license.
14      (c)  If a private correctional facility fails to comply with
15 this part, applicable American Correctional Association and
16 National Commission on Correctional Health Care standards, rules,
17 or contract requirements within the specified time period, the
18 state may assume control of the facility for the purpose of
19 protecting the inmates, facility staff, or the public.  If the
20 state assumes control of the facility, the department shall
21 suspend payment for any services, and the department assumes the
22 costs of assuming control.

Page 17                                                    
                                     H.B. NO.           2741

 1      (d)  The department may assume emergency control of a
 2 private correctional facility if substantial violations exist
 3 that affect the life, health, or safety of the inmates, facility
 4 employees, or the public, or that otherwise substantially impact
 5 the security of the private correctional facility.
 6      (e)  In the event that a contractor fails to comply with
 7 this chapter, applicable American Correctional Association and
 8 National Commission on Correctional Health Care standards, rules,
 9 or contract requirements, the state may retain the option of
10 purchasing or leasing the facility.
11      (f)  If either the state or the contractor fails to renew a
12 contract, the state may retain the option of purchasing or
13 leasing the facility.
14      353-     Outcome-oriented private correctional facilities.
15 The private operator of a correctional facility shall be paid a
16 per diem rate for each sentenced offender; provided that:
17      (1)  The regular per diem rate charged for an inmate shall
18           be equal to the inmate's prorated portion of daily
19           operating expenses, reasonable administrative costs,
20           plus a mutually agreed profit margin;
21      (2)  When that inmate meets requirements for parole and is
22           paroled, the per diem rate paid to the private operator
23           shall continue at that regular rate until such time as

Page 18                                                    
                                     H.B. NO.           2741

 1           the inmate is discharged from parole or the inmate's
 2           parole is revoked;
 3      (3)  If an inmate's parole is revoked and the inmate is
 4           directed to return to the private facility, then the
 5           private operator shall resume custody of that inmate
 6           and shall be paid a per diem rate equal to the inmate's
 7           prorated portion of operating expenses, minus a
 8           mutually agreed daily penalty.  This penalty rate will
 9           remain in force throughout any subsequent release to
10           parole;
11      (4)  If an inmate's parole is revoked and the inmate is
12           directed to return to another state-operated or state-
13           contracted facility not operated by the private
14           operator, then the private operator shall pay to the
15           state an amount equal to that inmate's regular per diem
16           rate at the directed facility; and
17      (5)  When an inmate earns discharge from parole or is
18           pardoned, a bonus may be paid to the private operator
19           if discharge is earned before the end of the inmate's
20           maximum term.  The amount of the bonus paid to the
21           private operator shall be determined according to a
22           mutually agreed formula that allows for proportionally

Page 19                                                    
                                     H.B. NO.           2741

 1           larger bonus payments according to how much time
 2           remains before the maximum term expires.
 3      353-     Citizens oversight committee.  (a)  For each
 4 proposed new correctional facility within the state of Hawaii,
 5 regardless of whether public or private in nature, there shall be
 6 a committee known as the citizens oversight committee.  This
 7 oversight committee shall be consulted during site selection and
 8 facility design.  If the proposed facility is not built, the
 9 committee shall be dissolved.  If the new correctional facility
10 begins operation, the committee shall meet at least quarterly to
11 be informed of (or report on) progress or problems at the
12 facility.  The committee shall be allowed full access to the
13 facility for inspections as deemed necessary by the committee.
14      (b)  The oversight committee shall consist of eight members.
15 One member shall be the chief of police, or the chief's designee,
16 for the county in which the facility is located.  Two members
17 shall be appointed by the governor, two members shall be
18 appointed by the county council of the county hosting the
19 facility, one member shall be appointed by the governor selected
20 from a list of social service professionals nominated by the
21 public, and the house speaker and the senate president shall each
22 appoint one member selected from a list of concerned community
23 residents nominated by the public.  Each member shall serve two

Page 20                                                    
                                     H.B. NO.           2741

 1 years.  The co-chairs of the committee shall be the community
 2 residents.  The members shall serve without compensation but
 3 shall be reimbursed for expenses, including travel expenses that
 4 are necessary for the performance of their duties.
 5      (c)  The department or, if applicable, the contractor shall
 6 respond to the written comments and suggestions of the committee
 7 within thirty days.  These communications shall be available for
 8 public inspection upon request to the department."
 9      SECTION 3.  Chapter 103, Hawaii Revised Statutes, is amended 
10 by adding a new section to be appropriately designated and to
11 read as follows:
12      "103-     Contract with private provider for correctional
13 facility operation.  Nothing in chapters 76 and 77, and section
14 46-33, including the merit principles, the classification system,
15 or historical past practices, shall be deemed to prevent,
16 restrict, diminish, condition, limit, or otherwise qualify the
17 authority of a department or agency of the State or a county to
18 enter into a contract with a private provider in accordance with
19 chapter 353 to operate a correctional facility including
20 contracts:
21      (1)  To disburse appropriations for grants, subsidies, or
22           purchases of service as those terms are defined in
23           chapters 42D, 42F, and 103F, pursuant to chapters 42D,

Page 21                                                    
                                     H.B. NO.           2741

 1           42F, and 103F or any other law, charter, or ordinance
 2           authorizing grants, subsidies, or purchases of service,
 3           as those terms are defined in chapters 42D, 42F, and
 4           103F;
 5      (2)  For goods and real property or for construction entered
 6           into pursuant to this chapter or chapter 103D or 107,
 7           or any other law, charter, or ordinance where services
 8           are provided incidentally to the acquisition of the
 9           goods or real property, or for construction; and
10      (3)  For services which the department or agency is
11           otherwise authorized by statute, charter, or ordinance
12           to obtain or provide without regard to the provisions
13           of chapter 76 or 77, or section 46-33."
14      SECTION 5.  Section 96-1, Hawaii Revised Statutes, is
15 amended to read as follows:
16      "96-1 Definitions.  (a)  "Agency" includes any permanent
17 governmental entity, department, organization, [or] institution,
18 or any corporation, partnership, business, firm, governmental
19 entity, or person who is providing privatized correctional
20 services under contract with the state and any officer, employee,
21 or member thereof acting or purporting to act in the exercise of
22 the officer's, employee's, or member's official duties, except:

Page 22                                                    
                                     H.B. NO.           2741

 1      (1)  The judiciary and its staff;
 2      (2)  The legislature, its committees, and its staff;
 3      (3)  An entity of the federal government;
 4      (4)  A multistate governmental entity;
 5      (5)  The governor and the governor's personal staff;
 6      (6)  The lieutenant governor and the lieutenant governor's
 7           personal staff;
 8      (7)  The mayors of the various counties; and
 9      (8)  The councils of the various counties.
10      (b)  "Administrative act" includes any action, omission,
11 decision, recommendation, practice, or procedure, but does not
12 include the preparation or presentation of legislation. [L 1967,
13 c 306, 2; HRS 96-1; am L 1974, c 46, 1; gen ch 1985]"
14      SECTION 6.  Statutory material to be repealed is bracketed.
15 New statutory material is underscored.
16      SECTION 7.  This Act shall take effect upon its approval.