BILL NUMBER:  SB 1978
  VETOED	DATE: 09/30/2000




SEP 30 2000

To the Members of the Senate:

I am returning Senate Bill 1978 without my signature.

This bill requires any contracts to provide telephone service to
state prison inmates and CYA wards to be negotiated without providing
a commission to the State. This would result in a $30 million loss
in revenue.

During the budget process, I reached an agreement with the
legislative leadership to extend the current payphone contract,
cancel the current procurement solicitation, and direct the
California Department of Corrections and the Youth Authority, in
conjunction with the Department of General Services, to identify
other viable alternatives to offer secure and reliable payphone
services to inmates.  I am directing these departments to conduct a
procurement which provides an appropriate, yet lower r ate structure.
  Revenues would continue to be shared between the vendor and the
State.  However, this approach will allow the State to control the
phone rates charged to inmates rather than rely on market forces.

Sincerely,





GRAY DAVIS