00 HOUSE BILL NO. 55 01 "An Act expressing legislative intent regarding privately operated correctional facility 02 space and services; relating to the development and financing of privately operated 03 correctional facility space and services; authorizing the Department of Corrections to 04 enter into an agreement for the confinement and care of prisoners in privately operated 05 correctional facility space; authorizing the Department of Corrections to enter into 06 agreements with municipalities to expand existing correctional facilities; and providing 07 for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 10 to read: 11 LEGISLATIVE INTENT. It is the intent of the legislature in secs. 2 and 3 of this Act 12 to secure additional correctional facility space and services through a privately operated 13 correctional facility in Alaska. The legislature expects the Department of Corrections to 01 contract with the City of Whittier for privately operated correctional facility space and 02 services similar to those currently acquired for medium-custody and close-custody Alaska 03 prisoners in a privately operated prison outside the state. The legislature anticipates a 04 privately operated correctional facility will bring competitive management styles and 05 operations to Alaska. The legislature expects that the initial per diem cost at a privately 06 operated facility (excluding costs related to major medical, prescription medication, and 07 transportation of prisoners and other services excluded in contracts for Alaska prisoner care 08 and custody in privately operated facilities outside the state, but including the capital costs for 09 construction of the facility, including debt service) will be 18 - 20 percent less that the current 10 average per diem rate for all state facilities as reported to the federal government for 11 reimbursement purposes and should be approximately $91 to $94 in current dollars. 12  * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 AUTHORIZATION TO CONTRACT FOR CORRECTIONAL FACILITY SPACE 15 AND SERVICES WITH THIRD-PARTY CONTRACTOR FOR OPERATION. (a) The 16 Department of Corrections is authorized to enter into an agreement with the City of Whittier 17 for the purpose of acquiring correctional facility space and services for a minimum of 25 18 years for persons who are committed to the custody of the commissioner of corrections. 19 (b) The agreement entered into under this section is predicated on and must provide 20 for an agreement between the City of Whittier and one or more private third-party contractors 21 under which private, for profit or nonprofit third-party contractors construct and operate the 22 facility by providing for custody, care, and discipline services for persons committed to the 23 custody of the commissioner of corrections under authority of state law. In the agreement 24 with the City of Whittier, the commissioner of corrections shall require that the city procure 25 one or more private third-party operators through a competitive bid process. The procurement 26 requirements of this subsection are satisfied if the City of Whittier, in exercise of its powers 27 under AS 29.35.010(15) for procurement of land, design, construction, and operation of a 28 facility, follows its municipal ordinances and resolutions and procurement procedures. 29 (c) The authorization given by (a) of this section is subject to the following 30 conditions: 31 (1) the agreement must cover a minimum of 1,200 prison beds, and, subject to 01 (2) of this subsection, the payments by the Department of Corrections must be sufficient to 02 cover 03 (A) a capital component consisting of the cost for the development and 04 construction of the facility, including all debt service; and 05 (B) an operating component consisting of the operating costs based on 06 per diem operating charges for a minimum 1,200 prison beds; for a period of five 07 years from initial operation of the facility, the operating component must include a 08 reasonable adjustment for costs not incurred until full occupancy; 09 (2) the agreement must provide that the obligation of the Department of 10 Corrections to make payments under the agreement is subject to annual appropriation of funds 11 by the legislature; 12 (3) the agreement must contain terms providing that the commissioner of 13 corrections may direct the City of Whittier, after notice and reasonable opportunity to cure, to 14 terminate its contract with a private third-party contractor operating the facility in accordance 15 with the provisions of (b) of this section, and to procure a replacement third-party contractor 16 if the commissioner finds that the private third-party contractor has failed to provide or cause 17 to be provided the degree of custody, care, and discipline required by terms of the agreement 18 and that the private third-party contractor has been given notice and reasonable opportunity to 19 cure as provided in the third-party contractor's agreement with the City of Whittier; 20 (4) the commissioner's authority to enter into the agreement is subject to the 21 condition that the contract between the city and the operator requires the operator to provide 22 culturally relevant reformation services to incarcerated Alaska Natives. 23 (d) Nothing in secs. 2 and 3 of this Act is intended to prevent the City of Whittier 24 from issuing bonds as permitted for municipalities under state law, including AS 29.47.390, 25 to finance construction of the facility. The bonds may be secured by and payable from 26 revenues of the facility, including those described in (c) of this section. Revenues of the 27 facility are not revenues of the City of Whittier for purposes of AS 29.47.390. 28  * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 AUTHORIZATION TO LEASE CORRECTIONAL FACILITY SPACE WITH 31 MUNICIPALITIES. (a) To relieve overcrowding of existing correctional facilities in the 01 state, the Department of Corrections may enter into agreements with the following 02 municipalities for expanded correctional facilities: 03 (1) Fairbanks North Star Borough - expansion of the existing Fairbanks 04 Correctional Center by up to 100 beds; 05 (2) Matanuska-Susitna Borough - expansion of the existing Mat-Su Pre-trial 06 Facility by up to 107 beds; 07 (3) Bethel - expansion of the existing Yukon Kuskokwim Correctional Center 08 by up to 96 beds; 09 (4) Seward - expansion of the existing Spring Creek Correctional Center by up 10 to 150 beds. 11 (b) The authorizations given by (a) of this section are subject to the following 12 conditions: 13 (1) the average capital costs for all beds may not exceed $155,000 a bed, 14 adjusted for inflation at the rate of three percent a year from the effective date of this Act; 15 (2) if expansion of an existing facility is authorized, the state shall enter into a 16 joint ownership agreement with the municipality of the expanded facility, enter onto a long- 17 term lease not to exceed 25 years of the municipality's interest in the facility, and operate the 18 facility; payments under the lease may not exceed $16,700 a bed. 19  * Sec. 4. Sections 1 - 3, ch. 32, SLA 2001, are repealed. 20  * Sec. 5. This Act takes effect July 1, 2003.