BILL ANALYSIS Ó
AB 1876
Page 1
ASSEMBLY THIRD READING
AB 1876 (Quirk)
As Amended May 15, 2014
Majority vote
LOCAL GOVERNMENT 7-0
-----------------------------------------------------------------
|Ayes:|Achadjian, Levine, | | |
| |Bradford, Gordon, Wagner, | | |
| |Mullin, Waldron | | |
-----------------------------------------------------------------
SUMMARY : Prohibits commissions in telephone service contracts
for juvenile facilities and for county, municipal or
privately-operated jails, and requires such contracts to be
negotiated and awarded to the lowest cost provider.
Specifically, this bill :
1)Requires any contract to provide telephone services to any
person detained or sentenced to a jail or juvenile facility to
be negotiated and awarded to an entity that meets the jail or
juvenile facility's technical, functional, and security
requirements for services, and that provides the lowest cost
of service to any person who pays for the telephone service.
2)Allows a county to require a telephone service provider to
cover all costs related to the installation and maintenance of
the telephone devices and services.
3)Prohibits a contract to provide telephone services to any
person detained or sentenced to a jail or juvenile facility
from including any commission or other payment to the entity
operating the jail or juvenile facility.
4)Provides the following definitions for the purposes of this
bill:
a) "Jail" means a county jail, a municipal jail, or a
privately operated jail;
b) "Juvenile facility" means any juvenile hall, camp,
ranch, or other facility where a person is detained as a
result of a petition pursuant to specified provisions of
existing law pertaining to minors who become wards of the
AB 1876
Page 2
court; and,
c) "Commission or other payment" means any payments made to
incentivize procurement of contracts, but does not include
grants and other payments that do not increase the cost of
telephone calls billed to consumers.
EXISTING LAW :
1)Imposes specified procedural and substantive content
requirements on contracts entered into by local agencies,
including cities and counties.
2)Provides that there shall be deposited in the Inmate Welfare
Fund (IWF) any money, refund, rebate, or commission received
from a telephone company or pay telephone provider when the
money, refund, rebate, or commission is attributable to the
use of pay telephones which are primarily used by inmates
while incarcerated.
3)Requires the money and property deposited in the IWF to be
expended by the sheriff primarily for the benefit, education,
and welfare of the inmates confined within the jail. Any
funds that are not needed for the welfare of the inmates may
be expended for the maintenance of county jail facilities.
Maintenance of county jail facilities may include, but is not
limited to, the salary and benefits of personnel used in the
programs to benefit the inmates, including, but not limited
to, education, drug and alcohol treatment, welfare, library,
accounting, and other programs deemed appropriate by the
sheriff.
4)Prohibits inmate welfare funds from being used to pay required
county expenses of confining inmates in a local detention
system, such as meals, clothing, housing, or medical services
or expenses, except that inmate welfare funds may be used to
augment those required county expenses as determined by the
sheriff to be in the best interests of inmates. An itemized
report of these expenditures shall be submitted annually to
the board of supervisors.
5)Allows the sheriff to expend money from the IWF to provide
indigent inmates, prior to release from the county jail or any
other adult detention facility under the jurisdiction of the
sheriff, with essential clothing and transportation expenses
AB 1876
Page 3
within the county or, at the discretion of the sheriff,
transportation to the inmate's county of residence, if the
county is within the state or within 500 miles from the county
of incarceration.
FISCAL EFFECT : None
COMMENTS :
1)Purpose of this bill. This bill prohibits concession fees in
contracts for phone services for juvenile facilities and for
county, municipal, or privately-operated jails, and requires
such contracts to be negotiated and awarded to the lowest cost
provider. This bill is sponsored by Community Initiatives for
Visiting Immigrants in Confinement (CIVIC), the California
Immigrant Policy Center, and Friends Committee on Legislation
of California.
2)Author's statement. According to the author, "The ability of
Californians who are imprisoned to stay in touch with family
members is essential for reintegration into the community and
helps to reduce recidivism. Phone calls also provide a
crucial way for inmates to communicate with attorneys and bail
agents, which are a vital component to the basic right of due
process.
"For inmates in county jails, there is no alternative way of
communicating with family, friends, support groups, attorneys
or bail agents. There is little incentive for contracting
with phone companies who guarantee great service and low
prices. The Federal Communications Commission (FCC) recently
announced that 'some correctional facilities may base their
selection of a contractor largely on the amount of cash and/or
in-kind inducement offered rather than being driven by
proposals focused on high quality service at the most
affordable rates for consumers.'
"There are three main reasons why the cost of making a call
from a county jail is extremely expensive: (1) each county
enters into an exclusive contract with a phone company;
(2) companies are contractually obligated to pay commissions
to the county for services rendered; and (3) in order to
collect revenue to make up the money lost to commissions,
telephone companies add hefty charges and extra fees."
AB 1876
Page 4
3)Background. According to a December 2013 article in Prison
Legal News, "The billion-dollar prison phone industry is
comprised of companies that provide phone services for
prisoners and detainees held in state, federal and
privately-operated prisons, county and municipal jails,
juvenile facilities, immigration detention centers and other
correctional facilities. Such services are commonly referred
to as Inmate Calling Services (ICS). Five companies, known as
ICS providers, dominate the prison phone market: Global
Tel*Link (GTL), Securus Technologies, CenturyLink, Telmate and
ICSolutions provide phone services for 49 of the 50 state
Departments of Corrections. A number of other companies, such
as Pay-Tel, NCIC, Legacy and EagleTel, provide ICS services
primarily to jails.
"When prisoners make phone calls they typically have three
payment options - collect, prepaid or debit. Collect calls
are paid by the call recipient, prepaid calls are paid from a
pre-funded account established by the call recipient and debit
calls are funded from a prisoner's institutional debit
account. Prisoners can usually call only a small number of
people on a specified list, and calls are frequently limited
to 15 or 20 minutes per call.
"There are three types of phone calls within the
telecommunications industry - local, intrastate and
interstate. Local calls are made to numbers within a local
calling area, such as the same city or county. Intrastate
calls are made within the boundaries of a state?Interstate
(long distance) calls are made across state lines and are
generally the most expensive. Prisoners' family members and
friends pay for the vast majority of ICS calls, either by
accepting collect calls, establishing prepaid accounts or
sending money to their incarcerated loved ones to place on
their debit phone accounts.
"ICS rates are much higher than non-prison rates, in large
part because prison phone companies pay 'commission' kickbacks
to the corrections agencies with which they contract. Such
commissions are usually based on a percentage of the revenue
generated from prisoners' calls and have nothing to do with
the actual cost of providing the phone service. Because ICS
providers factor commission payments - which currently average
47.79% for state Departments of Corrections (DOCs) - into the
phone rates they charge, the rates are artificially inflated.
AB 1876
Page 5
Absent commission kickbacks, which are received by 42 state
DOCs, the rates could be considerably lower. ICS providers
paid at least $123.3 million to state prison systems in 2012."
4)California concessions. According to a 2004 article in USA
Today, telephone companies and California counties made
hundreds of millions of dollars through high, unregulated
phone rates for calls from local jails. The average
California county jail inmate's local call home cost more than
seven times as much as a $0.50 pay phone call, totaling more
than $120 million a year in phone bills for families and
friends of county inmates statewide. The inflated rates made
service contracts with jails so lucrative that carriers
offered counties signing bonuses, nearly $17 million in the
case of Los Angeles County. California counties received more
than $303 million in revenue from collect calls, calling cards
and signing bonuses over five years.
In 2007, the Legislature approved SB 81 (Budget and Fiscal
Review Committee), Chapter 175, Statutes of 2007. Among its
many provisions, SB 81 directed a four-year phase out of
concession fees in phone service contracts for state
correctional facilities.
According to information provided by the author, after the
full enactment of SB 81, California prison phone rates
decreased drastically. Today, a 15 minute long-distance call
from a California state prison costs $1.44. In comparison,
according to a sample chart provided by the author, the same
15 minute call from a local correctional facility can cost in
the range of $4.39 to $6.75 for a local call, and $9.80 to
$12.75 for a long-distance call. Commissions range from 57%
to 72% of gross revenue, with some contracts containing
minimum annual guarantees and/or bonus payments for contract
extensions.
5)Inmate Welfare Fund (IWF). Current law requires any money,
refund, rebate, or commission received from a telephone
company providing inmate phone services to be deposited into
the IWF. The use of those funds is restricted to the benefit,
education, and welfare of the inmates confined within the
jail. However, funds that are not needed for the welfare of
the inmates may be expended to maintain county jail
facilities, which can include the salary and benefits of
personnel used in the programs to benefit the inmates such as
AB 1876
Page 6
education, drug and alcohol treatment, welfare, library,
accounting, and other programs deemed appropriate by the
sheriff.
According to the author, "?there is disagreement over how much
actually goes to direct services for inmates and how much is
used to subsidize salary or building retrofits which should be
paid from a different fund. For example, in 2005, Santa Clara
County was sued for how it handled the IWF. When it was
settled in 2007, the County agreed to abide by certain
conditions and limitations, including the creation of a
committee to oversee the IWF. Additionally, not all annual
reports contain specific information on what the expenditures
were, but rather opt for using broad and general categories."
6)Federal Communications Commission (FCC) rate cap. In August
of 2013, the FCC approved a cap on the cost of interstate
phone calls at rates that are "just and reasonable."
Effective February 11, 2014, the following caps apply:
a) $0.25 per minute for collect calls (with a $3.75 cap for
a 15-minute call); and,
b) $0.21 per minute for debit or pre-paid calls (with a
$3.15 cap for a 15-minute call).
These rate caps do not apply to intrastate calls. The FCC
also put out a request for comments on a proposal to cap rates
for calls within states, but has not yet taken further action.
7)Previous legislation. SB 81 among many provisions directed a
four-year phase out of concession fees in contracts that
provide telephone services to wards and inmates in state
correctional facilities.
AB 230 (Leno) of 2003 would have required any contracts to
provide phone service to state prison inmates and California
Youth Authority (CYA) wards to be negotiated to provide the
lowest possible costs to wards and inmates, with a proviso
that service contracts cover state expenses and provide a
reasonable profit margin for the vendor. The bill also
specified that state profits must not be a basis for awarding
a contract. AB 230 was held in the Assembly Appropriations
Committee.
AB 1876
Page 7
8)Arguments in support. Supporters state, "The high cost of
phone calls prevents incarcerated people from staying in touch
with family and friends. This is a disservice to society, as
studies show that the ability of incarcerated people to stay
in touch with their families aids rehabilitation and reduces
recidivism. While the revenue generated from county jail
telephone contracts must, by law, be placed in an Inmate
Welfare Fund and spent on behalf of inmates, funding education
and rehabilitation programs at the expense of family contact
undermines this intention.
"For many Californians in county jails, phone calls are the
only way to stay connected with their families, loved ones,
and attorneys. Such communication is integral to the basic
right to due process, as it is vital for Californians facing
court or immigration proceedings to consult regularly with
their legal representatives as the process advances.
Moreover, for those with convictions, regular contact with
loved ones is vital to successful rehabilitation and reentry."
9)Arguments in opposition. The California State Sheriff's
Association, in opposition, states that "precluding a provider
from paying a commission or other payment to the facility
operator will only hurt inmates, the very people this bill
ostensibly seeks to aid. Existing law requires any money,
refund, rebate, or commission received from a provider of
inmate phone services to be deposited in the inmate welfare
fund (IWF). Statute specifies what may be paid for by the
IWF, and as a practical matter, IWFs typically pay for inmate
education, religious materials, vocational training,
recreational equipment, and clothing and hygiene supplies for
indigent inmates. Additionally, and separate from
commissions, providers often pay for facility upgrades to
accommodate phone systems, but this savings to the county
would be eliminated by AB 1876?this bill will likely result in
a lower level of phone service and will cause a reduction in
the meaningful programs and provisions that are funded by the
IWF. Elimination of this funding source will ultimately harm
inmates and the public safety."
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
FN: 0003465
AB 1876
Page 8