BILL ANALYSIS
AB 1771
Page 1
Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1771 (Mendoza) - As Amended: April 26, 2010
Policy Committee: Public
SafetyVote: 4 - 0
Jobs, Econ Development & the Economy 6 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill changes the provision that requires state agencies
purchase California Prison Industry Authority (PIA) products by
limiting the requirement to only those contracts or purchase
orders that exceed $25,000. Specifically, this bill:
1)Changes the requirement imposed on state agencies to purchase
PIA products to only those contracts and purchase orders over
$25,000.
2)Allows state agencies to enter into contracts or purchase
orders of $25,000 or less with certified small businesses,
microbusinesses or disabled veteran business enterprises
(DVBEs).
3)States that these contracts can only be entered into if the
price is lower than the price available from PIA.
FISCAL EFFECT
1)The California Performance Report found that a competitive bid
process could result in a 24% reduction in PIA sales. Given
the $100 million in annual revenue generated by PIA, this
legislation could result in a loss of revenue to the Prison
Industry Revolving Fund in the range of $24 million. To the
extent state departments are able to purchase less expensive
products, the loss in revenue could be partially offset by
savings in other areas of the state.
2)Providing alternative vocational training for prison inmates
AB 1771
Page 2
could result in up to $15 million in annual GF costs for the
California Department of Corrections and Rehabilitation
(CDCR).
3)PIA participants have a recidivism rate 25% lower than the
general population. To the extent a significant reduction
occurs in the PIA program there could be unknown GF costs,
likely in the millions of dollars, due to increasing
recidivism for prisoners who would have otherwise developed
skills that would help them stay out of prison.
4)PIA participants contribute 40% of their wages to paying
court-ordered restitution and fees. A significant reduction
in PIA participants would result in a decrease in restitution
payments for victims and an increase in court costs.
5)If CDCR did not provide alternate vocational training for PIA
participants, those inmates could lose sentence credits, which
reduce their sentences for participation in vocational and
educational training. Increased sentences result in unknown GF
costs to CDCR. Most inmates, however, would likely continue
receiving sentence credits if at least willing to program.
COMMENTS
1)Rationale . The state has come under fire recently for
requiring state agencies to purchase products from PIA, rather
than requiring PIA to compete with private businesses for
state contracts. This bill is an attempt to modify that
requirement so that small businesses will now be able to
compete with PIA for purchases totaling less than $25,000.
2)Prison Industry Authority . The PIA provides productive work
assignments for inmates in California's adult correctional
institutions. The PIA currently employs 5,900 inmates at 22
prisons and operates over 60 service, manufacturing, and
agricultural enterprises. The PIA is self-supporting and does
not receive an annual appropriation from the Legislature.
PIA's revenue comes from the sale of its products and services
to governmental organizations.
By law, sale of PIA products are limited to state agencies,
any political subdivision of the state (cities, counties and
special districts), and the federal government.
AB 1771
Page 3
3)Related Legislation . In 2009, SB 467 (Dutton), a
substantially similar bill was held on the Senate
Appropriations Committee Suspense File.
In 2007, AB 664 (Parra) would have provided that dairy
products produced under the auspices of PIA may only be sold,
purchased and used by food service operations in state-owned
facilities, and prohibits dairy products from being sold
directly to private persons. AB 664 was held on this
committee's Suspense File.
In 2006, SB 1734 (Cox) would have provided that dairy products
produced by the PIA within California prisons can only be
sold, purchased, and used by food service operations within
state-owned facilities, as specified. SB 1734 was held on the
Senate Appropriations Committee's Suspense File.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081