REPORT TITLE:
Private Prison


DESCRIPTION:
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                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO CORRECTIONAL FACILITIES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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:
 

 
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                                     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.
 

 
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                                     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
 

 
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                                     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,
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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.
 

 
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                                     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.
 

 
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 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:
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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
 

 
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                                     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.
 
13 
 
14                           INTRODUCED BY:_________________________