ENGROSSED HOUSE
BILL NO. 3213	By:	Hickman of the House

				and

		Schulz of the Senate

An Act relating to prisons and reformatories; amending 57 O.S. 2011, Section 561.1, as amended by Section 256, Chapter 304, O.S.L. 2012 (57 O.S. Supp. 2013, Section 561.1), which relates to private prison contractors; directing the Department of Corrections to seek additional request for proposals under certain circumstances; providing an exception; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     57 O.S. 2011, Section 561.1, as amended by Section 256, Chapter 304, O.S.L. 2012 (57 O.S. Supp. 2013, Section 561.1), is amended to read as follows:
Section 561.1  A.  Except as otherwise provided by subsection K of this section, prior to entering into a contract with any private prison contractor for construction or operation, or both, of a correctional facility, the Department of Corrections shall establish a process for requesting proposals or negotiated contracts from such contractors.  The Department of Corrections shall develop criteria for the process by which a contractor for the construction or operation, or both, of a private prison is to be awarded a contract.  The criteria shall be subject to approval by the State Board of Corrections.  The criteria for selection of a site for a proposed facility to be constructed or operated, or both, by a private contractor shall include, but shall not be limited to, the availability of medical services, support services, transportation services and the availability of potential employees who would be qualified to perform required functions at a state correctional facility.
B.  Any contract between the Department of Corrections and a private prison contractor, whereby the contractor provides for the housing, care, and control of inmates in a nondepartmental facility operated by the contractor, shall contain, in addition to other provisions, terms and conditions:
1.  Requiring the contractor to provide said services in a facility which meets accreditation standards established by the American Correctional Association;
2.  Requiring the contractor to receive accreditation for said facility from the American Correctional Association, within three (3) years of commencement of operations of the facility;
3.  Requiring the contractor to obtain written authorization from the governing board of any municipality in which the facility is to be located, or if the facility is not to be located within a municipality, written authorization from the board of county commissioners of the county in which the facility is to be located; and
4.  Granting the Department the option at the beginning of each fiscal year pursuant to an agreement, to purchase any such facility, with or without inventory or other personal property, at a predetermined price, which shall be negotiated and included in a schedule or a formula to be contained in the original agreement.  Such agreements relating to a correctional facility, the construction of which was financed or is to be financed by obligations issued from a local governmental entity the repayment of which is to be made in whole or in part from rentals from the State of Oklahoma or the Department of Corrections, shall be submitted to the Council on Bond Oversight as provided in subsection I of this section.
C.  A contractor proposing to enter a contract with the Department of Corrections for construction or operation, or both, of a correctional facility pursuant to this section must demonstrate:
1.  The qualifications and the operations and management experience to carry out the terms of the contract; and
2.  The ability to comply with the standards of the American Correctional Association and with specific court orders.
D.  In addition to meeting the requirements specified in the requests for proposals, a proposal for the construction and operation of a correctional facility must:
1.  Provide for regular, on-site monitoring by the Department of Corrections;
2.  Acknowledge that payment by the state is subject to the availability of appropriations;
3.  Provide for payment of a maximum amount per fiscal year;
4.  Demonstrate a cost benefit to the State of Oklahoma when compared to the level and quality of programs provided by state-operated facilities that have similar types of inmates at an operational cost not more than the cost of housing inmates in similar facilities and providing similar programs to those types of inmates in state-operated facilities.  The Department of Corrections shall be responsible for determining the cost/benefit of the proposal;
5.  Permit the state to terminate the contract for cause;
6.  Contain a proposed per diem operational cost per inmate for the initial year and subsequent years of operations;
7.  Subject to appropriations, provide that cost adjustments may be made only once each fiscal year, to take effect at the beginning of the next fiscal year using as the maximum percentage increase, if any, an increase not to exceed the previous year's Consumer Price Index for All Urban Consumers (CPI-U) as prepared by the United States Bureau of Labor Statistics, except as otherwise provided by subsection K of this section;
8.  Have an initial contract term of not more than one (1) year, with an option to renew for additional periods not to exceed twenty (20) years;
9.  If the proposal includes construction of a facility, contain a performance bond approved by the Department that is adequate and appropriate for the proposed contract;
10.  Provide for assumption of liability by the private vendor for all claims arising from the services performed under the contract by the private vendor;
11.  Provide for an adequate plan of insurance for the private vendor and its officers, employees, and agents against all claims, including claims based on violations of civil rights arising from the services performed under the contract by the private vendor;
12.  Provide for an adequate plan of insurance to protect the state against all claims arising from the services performed under the contract by the private vendor and to protect the state from actions by a third party against the private vendor, its officers, employees, and agents as a result of the contract;
13.  Provide plans for the purchase and assumption of operations by the state in the event of the bankruptcy of the private vendor; and
14.  Contain comprehensive standards for conditions of confinement.
E.  At the beginning of each fiscal year, the Department of Corrections shall determine the budgeted average daily cost per inmate.  There shall be a separate computation of budgeted average daily cost for maximum security, medium security, minimum security, and community facilities.  This information shall be presented to the State Board of Corrections for informational purposes only. After the close of each fiscal year, the Department shall determine the actual average daily cost per inmate for the operational costs at each major category of correctional facility.  There shall be a separate computation of the average daily rate for maximum security, medium security, minimum security, and community facilities.  The Department shall present to the State Board of Corrections at its January meeting comparative data on budgeted daily cost versus actual daily cost, and, after appropriate review and analysis, the Board shall adopt as a final action of the Board an average daily cost per inmate by facility category for the immediately preceding fiscal year.
F.  If a request for proposal process is utilized and no proposals conform to the established criteria, the Department shall prepare an additional request for proposals.  The Department of Corrections shall evaluate the proposals within thirty (30) days of receipt from the prospective contractor.  The Department of Corrections shall specifically determine whether a proposal meets the requirements of paragraph 4 of subsection D of this section by comparing the daily rate for housing and care of inmates pursuant to any proposed contract with a private contractor to the daily rate for housing and care of inmates at the comparable type of facility operated by the Department of Corrections using the information provided pursuant to paragraph 6 of subsection D of this section.  The Department shall evaluate proposals taking into account any direct or indirect costs that would continue to be paid by the Department of Corrections including, but not limited to, transportation, records management, discipline, general administration, management of inmate trust funds, and major medical coverage.  Such costs shall be added to the proposed per diem of the private vendor when comparing the total per diem costs of the state operating facilities.
G.  If the Department of Corrections proposes to enter into a contract for the construction or the operation, or both, of a private prison, the Department shall compare both the capital costs and the operating costs for the facility to the imputed capital costs and the projected operating costs of a comparable facility constructed and operated by the Department of Corrections.
H.  The Department of Corrections shall deliver to the State Board of Corrections the top three qualified prospective private prison contractors identified pursuant to this section and pursuant to Section 561 of this title together with the information reviewed and analyzed by the Department of Corrections during analysis of the proposals as required by this section.  The Board of Corrections shall evaluate the information provided and shall make a final decision selecting the contractor within fifteen (15) days of receipt of the information.
I.  Any contract subject to the provisions of this section entered into by the Board of Corrections shall be subject to the approval of the Council on Bond Oversight in the same manner as provided by law for the review of issuance of obligations by State Governmental Entities as prescribed by Section 695.8 of Title 62 of the Oklahoma Statutes.
J.  Before submission of the proposed contract to the Council on Bond Oversight, and prior to the date as of which the proposed contract is executed by the Board of Corrections, the Attorney General and the Director of the Office of Management and Enterprise Services shall review the proposed final version of the contract.  The Attorney General and the Director of the Office of Management and Enterprise Services shall have a period of fifteen (15) days from receipt of the proposed final version of the contract to approve the contract and execute the document.  If either the Attorney General or the Director of the Office of Management and Enterprise Services has objections to the proposed contract, the objections shall be communicated in writing to the Department of Corrections.  The Department of Corrections shall take appropriate action regarding the objections and shall resubmit the proposed contract for additional review.  The Attorney General and the Office of Management and Enterprise Services shall have an additional fifteen-day period to approve the proposed contract and to execute the document.  Failure of the Attorney General or the Director of the Office of Management and Enterprise Services, respectively, to act within the fifteen-day period shall constitute approval of the respective official to the proposed final version of the contract.  The contract shall contain a separate signature block or line for signature by the Attorney General and the Office of Management and Enterprise Services.  The contract shall contain a statement to be executed by the Attorney General and the Director of the Office of Management and Enterprise Services that each one of them, respectively, has reviewed the proposed contract for compliance with the provisions of this section and Section 561 of this title, and all other applicable provisions of law and that the contract conforms with those requirements.  Neither the private prison contractor nor the State Board of Corrections shall execute the contract until the document has been executed by the Attorney General and the Director of the Office of Management and Enterprise Services as required by this subsection unless the approval of the respective official has been made as a result of failure to take action within the fifteen-day period prescribed by this subsection.
K.  The State Board of Corrections may renew a private prison contract which is in effect for any time period during the fiscal year ending June 30, 2009, if the Board determines that the renewal of such contract will result in a reduced per diem in the fiscal year ending June 30, 2010.  If the State Board of Corrections makes such determination, the contract shall not be subject to the restrictions of paragraph 7 of subsection D of this section and the Board shall negotiate the contract based upon such terms as the Board deems to be in the best interest of operational efficiency, including the inmate population, per inmate cost, public safety and such other terms as the State Board of Corrections determines to be relevant to such contract.  The State Board of Corrections shall have the authority to negotiate the term of any contract executed pursuant to the provisions of this subsection subject to the availability of appropriations to the Department of Corrections each year.
L.  When the Department of Corrections is seeking additional space for housing inmates not currently available through existing contract, the Department shall prepare an additional request for proposals; provided, however, a request for proposals shall not be required if an existing contract with a private prison contractor can be amended to provide for additional housing in a private prison facility where inmates in the custody of the Department of Corrections are presently being held.
SECTION 2.  This act shall become effective November 1, 2014.
Passed the House of Representatives the 11th day of March, 2014.

	
	Presiding Officer of the House
	of Representatives

Passed the Senate the ___ day of __________, 2014.

	
	Presiding Officer of the Senate