|Committee: Judiciary||Sponsor: Ward|
|Analyst: Patrick Dean||Date: 03/14/2017|
Senate Bill 302 as introduced authorizes counties and municipalities to create authorities for the purpose of acquiring real and personal property for lease to the state as a prison facility, authorizes the Department of Corrections to enter into year-to-year leases of prison facilities with up to three authorities and provides that rent may not exceed $13.5 million per year, or the cost of the principal and interest on the bonds, whichever is less, for the constructing of each facility.
This bill also authorizes the Alabama Corrections Institution Finance Authority (Authority) to issue bonds up to $325 million for the building of one regional prison facility and for repairs and renovations to existing prison facilities, only after the Department of Corrections has entered into at least two leases with local authorities for two regional prison facilities. Further, the maximum amount of the bonds issued by the Authority will be reduced from $325 million to $100 million in the event three local authorities enter into leases with the Department of Corrections to lease three regional prison facilities. This could increase the annual debt service obligations of the Department of Corrections by an amount of up to $20 million if the full amount of the bonds are issued by the Authority.
This bill also authorizes the pledge of a portion of the one mill property tax as a second priority to secure bonds issued by the Authority, which are typically repaid from State General Fund appropriations to the DOC. This could reduce the total amount of interest the state is required to pay on such bonds if the state receives a lower interest rate on bonds by pledging a portion of the one mill property tax revenues for repayment if necessary. Additionally, if such tax revenues are utilized for repayment, this bill could reduce receipts to the Department of Human Resources and the Department of Veterans’ Affairs by an undetermined amount dependent upon the amount utilized, if any, as amounts from the one mill tax are currently distributed to these entities. However, this bill provides that the Legislature shall provide for the reimbursement of the amount used for debt service payments to the Department of Human Resources and the Veterans' Assistance Fund. The total receipts for the one mill tax in fiscal year 2016 were approximately $50 million.
This bill also authorizes the pledge of a portion of the additional spirituous and vinous liquors taxes provided under existing law, as a third priority to further secure bonds issued by the Authority. This could further reduce the total amount of interest the state is required to pay on such bonds if the state receives a lower interest rate on bonds by pledging a portion of the additional spirituous and vinous liquors tax revenues for repayment as necessary. If such tax revenues are utilized for repayment, this bill could reduce receipts to the Public Welfare Trust Fund and the Special Mental Health Trust Fund by an undetermined amount dependent upon the amount utilized as amounts from the spirituous and vinous liquor taxes currently distributed to those funds. However, this bill provides that the Legislature shall provide for the reimbursement of the amount used for debt service payments to the Public Welfare Trust Fund and the Special Mental Health Trust Fund. The total receipts from the additional spirituous and vinous liquors taxes in fiscal year 2016, which would be pledged as a third priority, were $46 million from the Public Welfare Trust Fund and $18 million from the Special Mental Health Trust Fund, for a total of $64 million.
This bill could also increase receipts to the Authority by an undetermined amount by allowing the Authority to sell, convey, or lease all or any part of real and personal property that is not being used by the DOC. This amount would be dependent upon whether any such property is sold and the amount received for such property. Proceeds would be utilized for payment of reasonable and necessary expenses for the sale and lease of such property and then for land and construction, services, good, and repairs in or about facilities, or to pay the principal of and interest on any bonds. Furthermore, this bill will increase the administrative obligations of the Authority and the DOC by an undetermined amount to implement the reporting requirements outlined in this bill.
This bill could also reduce the future obligations of the DOC by an undetermined amount by providing that upon completion of the three regional facilities, the DOC shall consolidate operations housing medium or higher custody level male inmates into not more than six facilities. This amount would be dependent upon the number of male facilities that would be utilized absent this provision and the cost of operations of such facilities. This limitation would not apply if future male population increases above 125% of design capacity.
In addition, this bill increases membership on the permanent legislative committee on the state prison system, which could increase the annual obligations of the State General Fund by an estimated $2,500 for travel expenses of the four additional members.
|Cam Ward, Chairperson|