BILL ANALYSIS
SB 1978
Page 1
Date of Hearing: June 20, 2000
Counsel: Gregory Pagan
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Carl Washington, Chair
SB 1978 (Hayden) - As Amended: May 1, 2000
SUMMARY : Enacts legislative findings and declarations on the
availability and cost of telephone services to prison inmates
and California Youth Authority (CYA) wards, and requires that
state contracts for such services be negotiated and awarded to
provide for the lowest possible costs to wards and inmates.
Specifically, this bill :
1)Provides that any contract to provide telephone services to
CYA wards or to inmates in state prisons shall be negotiated
and awarded in a manner to provide for the lowest possible
costs to wards and inmates.
2)Requires that telephone service contracts pay for any expenses
of the California Department of Corrections (CDC) and for the
CYA, as well as for the reasonable costs of the Department of
General Services (DGS) for establishing and administering any
necessary telephone contract.
3)Provides that profits to the above departments shall not be a
basis for awarding a contract.
4)States the following findings and declarations:
a)The California prison system is comprised of 33
institutions that are often located in remote locations,
making it difficult for family and friends to visit
inmates.
b)Studies, advocates, and incarceration experts have
concluded that inmates who remain in contact with family
and loved ones are less likely to pose a threat to prison
staff or to re-offend once released.
c)Collect phone calls are often the only means by which the
more than 160,000 inmates confined in the California prison
SB 1978
Page 2
system can directly communicate with family, friends, and
loved ones.
d)The State of California contracts with vendors through a
prescribed bidding process to provide telephone service to
prisons while maximizing its economic return through
telephone concessions agreements.
e)Billing rates for collect telephone calls from prisons
include a 33% to 43% commission beyond the provider's
costs, which in 1998 generated $16 million for the General
Fund.
f)The excessive rates resulting from the state commission for
collect telephone calls made from prisons makes it
difficult, if not impossible, for inmates to remain in
regular contact with family members and loved ones.
g)Therefore, it is the Legislature's intent to assure that
affordable telephone services are available for inmates
within the custody of the CDC and CYA wards, and their
families and loved ones.
EXISTING LAW:
1)Provides that the DGS may acquire, install, equip, maintain,
and operate a new or existing communications systems and
facilities. To accomplish that purpose, it may, in the name
of the State, enter into contracts, obtain licenses, acquire
property, install necessary equipment and facilities, and do
such other acts as will provide adequate and efficient
communications systems. Any system established shall be
available to all public agencies in the state on such terms as
may be agreed upon by the agency and the department.
(Government Code Section 14931.)
2)States that the director of the CDC is vested with the
supervision, management and control of the state prisons and
is responsible for the care, custody, treatment, training,
discipline, and employment of a person confined in those
prisons. The director may prescribe rules and regulations for
the administration of the prisons. (Penal Code Sections 5054
and 5058.)
3)Creates the CYA under the direction of the director of the
SB 1978
Page 3
CYA. (Welfare and Institutions Code Sections 1700 et seq.)
4)Provides that except as otherwise provided by law, all money
belonging to the State received from any source whatever by
any state agency shall be accounted for to the Controller at
the close of each month, or more frequently if required by the
Controller or the Department of Finance, in such form as
he/she prescribes, and on the order or the Controller be paid
into the treasury and credited to the General Fund, provided
that amounts received as partial or full reimbursement for
services furnished shall be credited to the applicable
appropriation. (Government Code Section 16301.)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement . According to the author, "The problem SB
1978 attempts to address is this: A person making a 15-minute
collect phone call from a phone booth outside San Quentin
state prison to Oakland across the San Francisco Bay would
cost about $2.55. An inmate making the same call from inside
the prison would pay about $5 (Deborah Solomon, San Francisco
Chronicle , August 17, 1999). The cost charged to the inmate
goes well beyond what is necessary to provide a profit for the
service provider and for the security measures associated with
the phone call. So why are inmates, or more accurately the
inmate's family and loved ones who are billed for the collect
call, paying such a steep price?
"Why are these calls so expensive? Unlike pay phones for public
use where the caller can choose what long-distance provider to
use and has access to varying rate-reducing options, calls
from the state prison are handled exclusively by companies
contracting with the state. In California, these companies
are MCI and GTE.
"Currently, the long-distance calling rate for collect calls is
about $0.50 per minute with a $3 surcharge. Local calls can
range from $0.15 to $0.30 per minute with a $2.65 surcharge.
Rates are the same regardless of the day or time the call is
placed. The rates are inflated, in large part, because of a
commission the state collects from the phone service providers
MCI and GTE. For each dollar MCI collects from prison calls,
it pays the state $0.40. GTE pays $0.30 (Deborah Soloman, San
SB 1978
Page 4
Francisco Chronicle , August 17, 1999).
"There are more than 160,00 inmates in California's prison
system with institutions from the Mexican to Oregon Borders.
For many prisoners so far removed from their families, the
phone is often their only direct means of personal
communication. With the state raking in commissions up to 43%
for each call, it doesn't take a CPA to figure out this is a
real moneymaker.
According to the Family Council (Family Members and Friends of
State Prisoners), the state made $16 million last year from
prison calls. The money went into the General Fund. Prison
calls are expected to generate even more this year.
"Studies have repeatedly shown that inmates who remain in
contact with their families and loved ones are less likely to
re-offend. The State of California has an interest in
encouraging communications between its prisoners and their
families as a matter of public safety. SB 1978 is an attempt
to remove an economic barrier to communication."
2)History of Inmate Phone Contracts . The history of revenues
from inmate phone call contracts began over a decade ago. At
the same time, the State began to collect revenues from such
phone services, counties began to do much the same in jails.
Historically, telephone companies enjoying a monopolistic
concession to provide services to CDC inmates return a
commission as a percentage of revenues to the CDC. Those
commissions were traditionally deposited in the Inmate Welfare
Fund to provide educational and recreational services to
prisoners. In 1990, as a result of budget deliberations, a
portion of the proceeds was diverted to the General Fund.
Subsequent budgetary decisions resulted in all of the revenues
from the state inmate phone contract being deposited in the
General Fund. The DGS has traditionally dealt with the
inmate/ward phone contract as similar to any other concession
contract where the state attempts to maximize its receipts
from vendors who provide services on state property.
Last year, the Legislative Analyst's Office informed the Senate
Public Safety Committee staff that DGS indicated that CDC
payphone revenues were $18.1 million in 1997-98. Projections
for 1998-99 and 1999-00 were $19.6 million each year. An
SB 1978
Page 5
additional increment, but much smaller amount, is received
from the CYA ward phones and the same contract also includes
public phones at other state facilities, such as state parks.
The current contracts with MCI and GTE have expired. Those
contracts have been extended. The current DGS Request for
Proposal (RFP) - RFP MSA-8003 - for the inmate phone system
has been revised the objectives by deleting, "to maximize the
return to the state and participating agencies from this pay
telephone commission arrangement". The RFP now states that
the objectives are: (a) to ensure the provision of high
quality service at competitive prices; (b) to make the
benefits of new, but proven technology from the public
communications industry available to its pay telephone users,
clients and consumers; and, (c) to provide secure and reliable
inmate/ward telephone services throughout the state
correctional facilities.
3)Arguments in Support . The Concerned Family and Friends state,
"Under the current phone contract, families and friends of
prisoners are required to pay as much as three times more than
other Californians for a 15-minute phone call so we can stay
in contact with our loved ones inside prison. Why? There are
two reasons: (a) the current contract mandates that all calls
made by incarcerated person must be collect and only through
the state designated carrier; and (b) the carrier passes on to
us, families, the cost of the $16 million annual commission it
currently pays to the state's general fund in order to hold
the contract."
4)Arguments in Opposition . The California Correctional Peace
Officers state,"We believe these funds should remain, but
should be earmarked for use directly within the CDC and the
CYA for the inmate welfare fund, victim services, and
additional correctional officer training. Just such a
proposal was passed by the Legislature, but was vetoed by the
former Governor Pete Wilson in 1991."
REGISTERED SUPPORT / OPPOSITION :
Support
California Catholic Conference
Concerned Families and Friends
SB 1978
Page 6
Opposition
California Correctional Peace Officers
State of California Department of Finance
Analysis Prepared by : Gregory Pagan / PUB. S. / (916)319-3744