BILL ANALYSIS �
SB 608
Page 1
Date of Hearing: June 14, 2011
Counsel: Stella Choe
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Tom Ammiano, Chair
SB 608 (DeSaulnier) - As Amended: June 9, 2011
SUMMARY : Authorizes the Prison Industry Authority (PIA) to
offer their goods and services for sale to nonprofit
organizations. Specifically, this bill provides that the
nonprofit organizations must meet all of the following
conditions:
1)The nonprofit organization is located in California and is
exempt from taxation under specified federal tax laws.
2)The nonprofit organization has entered into a memorandum of
understanding with a local education agency, which is defined
as a school district, county office of education, state
special school, or charter school.
3)The products and services are provided to public school
students at no cost to students or their families.
EXISTING LAW :
1)Authorizes PIA to operate industrial, agricultural, and
service enterprises which will provide products and services
needed by the state, or any political subdivision thereof, or
by the federal government, or any department, agency, or
corporation thereof, or for any other public use. Products
may be purchased by state agencies to be offered for sale to
inmates of the department and to any other person under the
care of the state who resides in state-operated institutional
facilities. Fresh meat may be purchased by food service
operations in state-owned facilities and sold for onsite
consumption. �Penal Code Section 2807(a).]
2)States that all things authorized to be produced by PIA shall
be purchased by the state, or any agency thereof, and may be
purchased by any county, city, district, or political
subdivision, or any agency thereof, or by any state agency to
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offer for sale to persons residing in state-operated
institutions, at the prices fixed by PIA. State agencies
shall make maximum utilization of these products, and shall
consult with the staff of PIA to develop new products and
adapt existing products to meet their needs. �Penal Code
Section 2807(b).]
3)States that the purposes of PIA are to:
a) Develop and operate industrial, agricultural, and
service enterprises employing prisoners in institutions
under the jurisdiction of the California Department of
Corrections (CDC), which enterprises may be located either
within those institutions or elsewhere, all as may be
determined by PIA;
b) Create and maintain working conditions within the
enterprises as much like those which prevail in private
industry as possible, to assure prisoners employed therein
the opportunity to work productively, to earn funds, and to
acquire or improve effective work habits and occupational
skills; and,
c) Operate a work program for prisoners which will
ultimately be self-supporting by generating sufficient
funds from the sale of products and services to pay all the
expenses of the program, and one which will provide goods
and services which are or will be used by CDC, thereby
reducing the cost of its operation. (Penal Code Section
2801.)
4)States that notwithstanding any other provision of existing
law, products and byproducts of agricultural and animal
husbandry enterprises, except nursery stock, may be sold to
private persons, at public or private sale, under rules
prescribed by the Prison Industry Board. (Penal Code Section
2814.)
5)Provides that notwithstanding provisions of existing law, the
director of the Department of General Services or his or her
designee may procure goods from the private sector even though
the goods may be available from the PIA, when in his or her
discretion, it is cost beneficial to do so, and if the
director or his or her designee continues to include PIA in
soliciting quotations for goods. �Government Code Section
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14612(e).]
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement : According to the author, "K to College, a
non-profit based in the East Bay, provides free school
supplies to students from disadvantaged backgrounds.
Historically, K to College has used volunteers to assemble
these school supply packets. However over time, volunteers
were no longer able to meet the increasing demand for their
services. In response, in 2009, K to College worked with
Senator DeSaulnier's office to coordinate a program with PIA
workers at Folsom State Prison. The Folsom State inmates were
able to assemble 150,000 school supply packets, a project too
large in scale to be accomplished by volunteers. In order to
make this program and others like it sustainable, California
statute must be amended in order to explicitly allow
non-profits to work with PIA. This bill not only supports the
philanthropic endeavors of California non-profits, but also
supports the rehabilitative and vocational efforts of PIA.
"By 2012, K to College hopes to distribute as many as 500,000
school packets across the state. Working with PIA is the only
viable way for these packets to be assembled and reach the
students who so desperately need them."
2)Background : According to the background provided by the
author, "Nonprofits are heavily reliant on grant money,
government subsidies, and the generosity of individuals and
corporations to fund their philanthropic endeavors. In many
cases, the scarcity of funding sources significantly limits
both the scope and effectiveness of their activities. Under
current law, only government organizations may purchase goods
or services from PIA. SB 608 will allow non-profits who meet
specified criteria to purchase goods or services purveyed by
the PIA. This bill not only supports the philanthropic
endeavors of California non-profits, but also supports the
rehabilitative and vocational efforts of PIA.
3)The PIA, also Referred to as CALPIA : According to the PIA's
Web site, "The California Prison Industry Authority (CALPIA)
is a state-operated organization that was created by Chapter
1549, Statutes of 1982 (California Penal Code Section 2800),
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to provide productive work assignments for inmates in
California's adult correctional institutions. CALPIA provides
work assignments for approximately 5,900 inmates and operates
over 60 service, manufacturing, and agricultural industries at
22 prisons throughout California. CALPIA is self-supporting
and does not receive an annual appropriation from the
Legislature. CALPIA's revenue comes from the sale of its
products and services to governmental organizations.
"CALPIA's industries produce over 1,400 goods and services
including: office furniture, clothing, food products, shoes,
printing services, signs, binders, eye wear, gloves, license
plates, cell equipment, and much more. CALPIA products and
services are available to government entities, including
federal, state, and local governmental agencies. The
California Penal Code prohibits CALPIA from selling its
products and services to the general public.
"Up to 50 percent of an inmate's wages is deducted for
court-ordered restitution/fines and is transferred to the
Crime Victims' Restitution Fund. In FY 2005-06, over $700,000
of CALPIA inmates' earnings was deposited. Since FY 1992-93,
$6.5 million has been deposited to the Fund. Inmates receive
wages of $0.30 to $0.95 per hour before deductions.
"In 2000, CALPIA began the development of the Inmate
Employability Program to enhance the ability of inmates to
obtain private sector jobs upon their release from prison.
The program documents and certifies an inmate's skills, work
experience, and positive work habits acquired while assigned
to CALPIA's enterprises.
"CALPIA's job assignments are voluntary - inmates are not
required to work; however, inmates are generally eager to
participate, as waiting lists are common for many PIA
assignments. The CALPIA work assignments can help inmates
learn work skills and habits to become productive members of
society.
"The CALPIA factories operate within Federal and State health,
safety, and occupational regulations.
"CALPIA programs assist inmates in learning the value of work.
Many CALPIA inmate workers have never held a job or learned
the value of work. CALPIA staff expect inmates to learn
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appropriate behavior on the job, do quality work, report to
work on time, and follow occupational health and safety rules.
"The Prison Industry Board (PIB) was established to oversee the
operations of CALPIA, much like a corporate board of
directors. The 11-member PIB sets general policy for PIA,
oversees the performance of existing PIA industries,
determines which new industries shall be established, approves
its annual plan, and appoints and monitors the performance of
the General Manager. The PIB also serves as a public hearing
body charged with ensuring that PIA enterprises do not create
a substantial adverse impact on California industry." �Fast
Facts, < http://www.pia.ca.gov/About_PIA/FastFacts.html> (as
of June 6, 2011).]
4)The Use of Prison Labor : The law of prison work and wages
starts with the Thirteenth Amendment, which allows slavery and
involuntary servitude as punishment for crimes: "Neither
slavery nor involuntary servitude, except as a punishment for
crime whereof the party shall have been duly convicted, shall
exist within the United States, or any place subject to their
jurisdiction." (United States Constitution, Amendment XIII,
1.) However, once convicted, prisoners can be required to
work, even pending appeal. �See Tourscher v. McCullough (3d
Cir. 1999) 184 F.3d 236, 240; Plaisance v. Phelps (5th Cir.
1988) 845 F.2d 107, 108; Omasta v. Wainwright (11th Cir. 1983)
696 F.2d 1304, 1305; Stiltner v. Rhay (9th Cir. 1963) 322 F.2d
314, 315.]
The Fair Labor Standards Act (FLSA) generally requires that
workers be paid a minimum wage, but is silent as to coverage
of state prison labor. (See 29 USCS 201-219.) Prisoners have
no constitutional right to be paid at all for the work they
are forced to perform. �See generally Murray v. Miss. Dep't
of Corrs. (5th Cir. 1990) 911 F.2d 1167 (per curiam):
"Compelling an inmate to work without pay is not
unconstitutional. The thirteenth amendment specifically
allows involuntary servitude as punishment after conviction of
a crime, see United States Constitution, Amendment XIII, 1,
and this Court has held that 'compensating prisoners for work
is not a constitutional requirement but, rather, is by the
grace of the state'."]
Thus, prisoners producing goods and services used by state
prisons have not been considered employees under the FLSA.
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�See Tourscher 184 F.3d at p. 243; Hale v. Arizona (9th Cir.
1993) 993 F.2d 1387, 1392-98 (en banc).] One court decision
illustrates why prisoners are not paid minimum wages:
"Forced prison labor for the prison is not subject to the FLSA.
The relationship is not one of employment; prisoners are taken
out of the national economy; prison work is often designed to
train and rehabilitate; prisoners' living standards are
determined by what the prison provides; and most such labor
does not compete with private employers . . . . As a result,
no Court of Appeals has ever questioned the power of a
correctional institution to compel inmates to perform services
for the institution without paying the minimum wage.
Prisoners may thus be ordered to cook, staff the library,
perform janitorial services, work in the laundry, or carry out
numerous other tasks that serve various institutional missions
of the prison, such as recreation, care and maintenance of the
facility, or rehabilitation. Such work occupies prisoners'
time that might otherwise be filled by mischief; it trains
prisoners in the discipline and skills of work; and it is a
method of seeing that prisoners bear a cost of their
incarceration." �Danneskjold v. Hausrath (2d Cir. 1996) 82
F.3d 37, 43.]
5)Efficacy of the PIA : According to a recent report by the
Bureau of State Audits, although the PIA could improve its
mechanisms for tracking parolees' post-release employment and
the accuracy of its price analyses, the report found that the
PIA provides savings to state agencies and has a positive
impact on recidivism levels. Specifically, the report found
that the parolee recidivism rates presented by the PIA are
lower than that of the California Department of Corrections
and Rehabilitation's general-population parolees, the PIA is
overall self-sustaining, and state agencies saved an estimated
$3.1 million during the fiscal year 2009-10 by purchasing
products and services from the PIA. �California State
Auditor, California Prison Industry Authority, Report 2010-118
(May 2011).]
According to an article in the Sacramento Bee summarizing the
efficacy of the PIA:
"PIA officials say their prices are competitive and that savings
also should be measured by success in reducing prison violence
and keeping paroled felons from re-offending and being
re-incarcerated at a cost of about $50,000 per year. 'There
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are lots of benefits beyond just, 'Can we go out and buy this
stuff more cheaply?', said Barry Krisberg former president of
the National Council on Crime and Delinquency. �Sanders,
Prison Industries Maintain Monopoly even in Tough Times (April
13, 2010) Sacramento Bee found at
.]
6)Arguments in Support : According to Crime Victims Action
Alliance , "Authorizing non-profit organizations to utilize the
services of the CALPIA will result in a win-win situation for
all those involved. As you are well aware as our economy has
weakened over the past several years there has been a
significant reduction in donations to non-profit
organizations. Due to this decrease in revenue many programs
that provide much needed services to some of the most
vulnerable residents of our state have been significantly
reduced and in some cases eliminated due to lack of funding.
Having the ability to utilize the services of the CALPIA will
help non-profits maximize their limited resources, while also
providing job training and experience for the CALPIA
participants. The more job training and experience a CALPIA
participant can obtain while in custody will increase their
ability to find lawful employment upon release."
7)Prior Legislation :
a) SB 1130 (Aanestad), of the 2009-10 Legislative Session,
would have allowed state agencies to enter into contracts
with private entities or other public agencies for locally
produced perishable goods provided at a lower price than
the price available from the PIA, provided that the
contract is to provide these goods to a facility that is
located in a county with a population of 50,000 or less.
SB 1130 was held on the Appropriation Committee's Suspense
File.
b) SB 467 (Dutton), of the 2009-10 Legislative Session,
would have authorized state agencies and departments to
award contracts of $25,000 or less for goods or services by
California certified small businesses, microbusinesses, or
disabled veteran business enterprises for products provided
at a lower price than the price available from the PIA. SB
467 was held on the Senate Appropriations Committee's
Suspense File.
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c) AB 1771 (Mendoza), of the 2009-10 Legislative Session,
would have authorized state agencies to enter into
contracts or purchase orders of $25,000 or less with
California certified small businesses, microbusinesses, or
disabled veteran business enterprises for products provided
at a lower price than the price available from the PIA. AB
1771 was held on the Appropriation Committee's Suspense
File.
d) SB 1397 (Negrete McLeod), of the 2007-08 Legislative
Session, would have required the Prison Industry Board, in
procuring raw materials, component parts, and goods and
services, to comply with specified provisions of law that
give preference to small businesses and disabled veteran
business enterprises in awarding contracts. SB 1397 failed
passage in the Senate Public Safety Committee.
e) AB 664 (Parra), of the 2007-08 Legislative Session,
would have provided that dairy products produced under the
hospices 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 the Appropriation
Committee's Suspense File.
f) SB 1734 (Cox), of the 2005-06 Legislative Session, 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.
REGISTERED SUPPORT / OPPOSITION :
Support
K to College (Sponsor)
California Correctional Peace Officers Association
California Prison Industry Authority
Crime Victims Action Alliance
Opposition
None
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Analysis Prepared by : Stella Choe / PUB. S. / (916) 319-3744