CONFERENCE COMMITTEE REPORT NO.126

                            Honolulu, Hawaii
                                            , 2000

                            RE:   S.B. No. 2433
                                  S.D. 2
                                  H.D. 2
                                  C.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
Senate to the amendments proposed by the House of Representatives
in S.B. No. 2433, S.D. 2, H.D. 2, entitled:  

     "A BILL FOR AN ACT RELATING TO PRISONS," 

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this bill, as received by your Committee, is
to provide for privatized correctional facilities in the State.
More specifically, this bill authorizes the Governor to:

     (1)  Enter into and execute contracts in the name of the
          State with any private entity to operate correctional
          facilities at sites within the State and selected by
          the Governor; and

     (2)  Negotiate with any person for the development of a
          private correctional facility capable of housing both
          minimum and medium security inmates to be situated on

 
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          lands identified as a portion of TMK 1-6-001-025 and 1-
          6-001-002.

     Your Committee on Conference notes that under existing law,
the Governor and the Director of Public Safety have the authority
to act to reduce prison overcrowding.  For example, the law
provides that the Governor may negotiate with private entities
for the development and construction of out-of-state correctional
facilities, which the State or a private entity may own.
However, your Committee recognizes that similar authorization has
not been enacted to permit the Governor or the Director of Public
Safety to negotiate with a private entity for the management and
operation of in-state correctional facilities.

     In Konno v. County of Hawaii, 85 Haw. 69 (1997), the Supreme
Court concluded that absent legislative authorization for non-
civil servants to perform services customarily and historically
performed by civil servants, such services must be performed by
civil servants.  Within the State of Hawaii, correctional
facilities have been customarily and historically staffed by
state employees who are civil servants.  If in-state correctional
facilities, particularly those developed by private entities to
relieve prison overcrowding, are to be staffed by persons other
than civil servants, express authority for implementing such a
staffing plan must be conferred by the legislature.  Thus, it is
your Committee's intent that this measure overrule the Supreme
Court's decision in Konno, with respect to staffing of the
correctional facilities.

     Your Committee on Conference further believes that the
management and operation of a newly constructed correctional
facility would be a good pilot project for the managed
competition process.  The process is designed to encourage in-
house efforts to improve the Department of Public Safety's
operation first, and to permit the Department to contract for the
new correctional facility's operation without violating civil
service, collective bargaining, and procurements laws, only if a
contractor is willing and able to operate the new facility at
less cost than an in-house effort is able to realize.  The
process is premised on the assumption that efficiencies and
economies are more likely to be realized when the public and
private sectors are given the opportunity to compete with each
other.

     After careful consideration, your Committee on Conference
has amended this measure by:

     (1)  Changing the legislative findings and purpose section
          to reflect the amendments made to the bill;

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     (2)  Authorizing the Director of Public Safety, with the
          approval of the Governor, to use a managed competition
          process for the operation of in-state correctional
          facilities constructed after the effective date of this
          Act;

     (3)  Providing that if the contract for operation of the new
          correctional facility is awarded to a private
          contractor, the Director of Public Safety shall appoint
          a state monitor to oversee all aspects of the operation
          of the facility;

     (4)  Providing that any contract executed between the State
          and a private contractor for the operation of the new
          correctional facility shall include specific
          contractual provisions to insure the safety and well-
          being of the inmates, the employees, and the general
          public;

     (5)  Providing that the requirements for the managed
          competition process as set forth in the bill supercede
          inconsistent provisions of civil service, state
          employee compensation, collective bargaining, and
          procurement laws;

     (6)  Repealing section 353-16.3, Hawaii Revised Statutes
          (HRS), that grants the governor the authority to
          negotiate with an out-of-state jurisdiction to develop
          a Hawaii correctional facility in that other
          jurisdiction;

     (7)  Repealing section 353-16.36, HRS, which is reenacted in
          the new subsections of section 353-16.35;

     (8)  Making conforming amendments to section 96-1, HRS, by
          amending the definition of "agency";

     (9)  Correcting site identification numbers from  "TMK 1-6-
          001-025" to "TMK 3-1-6-001-025" and "TMK 1-6-001-002"
          to "TMK 3-1-6-001-002";

     (10) Expanding the scope of possible designated construction
          sites to also include any other appropriate sites
          within the State; 

     (11) Deleting the section appropriating funds for the
          preparation of an environmental impact statement for
          the development of a private correctional facility;


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     (12) Providing that the developer of the facility shall be
          responsible for the preparation of an environmental
          impact statement for the development of a private
          correctional facility; and

     (13) Making technical, non-substantive changes for the
          purposes of clarity and style.

     As affirmed by the record of votes of the managers of your
Committee on Conference that is attached to this report, your
Committee on Conference is in accord with the intent and purpose
of S.B. No. 2433, S.D. 2, H.D. 2, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as S.B. No. 2433, S.D. 2, H.D. 2, C.D. 1.


 
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                                   Respectfully submitted on
                                   behalf of the managers:

  ON THE PART OF THE HOUSE           ON THE PART OF THE SENATE




_____________________________     _______________________________
Rep. NESTOR GARCIA                Sen. AVERY B. CHUMBLEY
Co-Chair                          Co-Chair



_____________________________     _______________________________
Rep. TERRY NUI YOSHINAGA          Sen. MATTHEW M. MATSUNAGA
Co-Chair                          Co-Chair



_____________________________     _______________________________
Rep. DWIGHT TAKAMINE              Sen. BOB NAKATA
Co-Chair                          Co-Chair



                                  _______________________________
                                  Sen. CAROL FUKUNAGA
                                  Co-Chair



                                  _______________________________
                                  Sen. ANDREW LEVIN
                                  Co-Chair

 
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