HB 625-FN-A – AS AMENDED BY THE HOUSE
5Jan2012… 2666h
2011 SESSION
04/01
HOUSE BILL 625-FN-A
AN ACT relative to New Hampshire correctional industries.
SPONSORS: Rep. Groen, Straf 1; Rep. Seidel, Hills 20; Rep. Comerford, Rock 9
COMMITTEE: Executive Departments and Administration
This bill establishes GraniteCor, a business enterprise within the state prison system. The bill exempts GraniteCor from certain competitive selling, bidding, and purchasing requirements; establishes a GraniteCor fund; allows GraniteCor to create an externally hosted e-commerce capability; establishes a line of credit for GraniteCor; prioritizes some state purchases from GraniteCor; and transfers a portion of the existing license plate manufacturing fee assessed by the department of safety to GraniteCor.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
5Jan2012… 2666h
11-0639
04/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to New Hampshire correctional industries.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subdivision; New Hampshire Correctional Industries; GraniteCor. Amend RSA 622 by inserting after section 32 the following new subdivision:
New Hampshire Correctional Industries-GraniteCor
622:32-a GraniteCor Established. In order to allow prison inmates to work and develop personal attributes and skills required for success, and in recognizing that correctional industries add significantly to prison and public safety, there is hereby established New Hampshire correctional industries which shall be known by the trade name “GraniteCor.” GraniteCor shall operate within the department of corrections governed by a board of directors described herein. GraniteCor shall implement sales and purchasing policies and procedures which are similar to small business best practices and less aligned with those of a general funded governmental agency. GraniteCor shall strive to be self-sustaining and the state shall thus strive to provide a market for GraniteCor goods and services.
622:32-b Definitions. In this subdivision:
I. “Board” means the GraniteCor board of directors.
II. “General manager” means the primary operational management position with full profit and loss responsibility for GraniteCor.
622:32-c Board of Directors Established; Duties.
I. GraniteCor shall be overseen by a board of directors consisting of:
(a) The commissioner of the department of corrections.
(b) The assistant commissioner of the department of corrections.
(c) The director of administration of the department of corrections.
(d) The commissioner of the department of safety, or designee.
(e) The commissioner of the department of administrative services, or designee
(f) The general manager of GraniteCor.
(g) One private business owner, or designee, appointed by the governor.
II. The terms of office of the members in subparagraphs I(a)-(e) shall be coterminous with their terms in office.
III. Members of the board shall serve without additional compensation.
IV. The board shall:
(a) Review and approve any business or strategic plan offered by the general manager prior to its implementation.
(b) Approve all projects proposed for GraniteCor.
(c) Remove obstacles that hinder GraniteCor from expanding or generating revenue.
622:32-d GraniteCor Fund Established.
I. There is established in the department of corrections a non-lapsing fund to be known as the GraniteCor fund which shall be kept distinct and separate from all other funds. All moneys in the fund shall be nonlapsing and continually appropriated to GraniteCor. This fund shall not be burdened by financial obligations to the general fund incurred by GraniteCor prior to July 1, 2012.
II. Upon the effective date of this subdivision, the commissioner of the department of corrections shall deposit in the GraniteCor fund all payments received by GraniteCor from the sales of GraniteCor goods and services and such other funds received under state or federal law, or donated to GraniteCor by private parties, or transferred from similar funds of other state agencies, and shall credit any interest or income earned on moneys on deposit to the fund. The GraniteCor fund shall be used for the purposes of paying GraniteCor’s direct expenses including marketing expenses and payment of staff salary and benefits accrued from July 1, 2012 as well as for replacing old or aging equipment necessary to GraniteCor’s functions, buying new equipment, and supporting growth in GraniteCor in order to expand the number of work training opportunities that tend to reduce recidivism.
622:32-e Line of Credit. Notwithstanding any provision of law to the contrary, the state shall provide GraniteCor with a line of credit in an amount equal to its approved biennial budget for equipment valued over $5,000 and individual repairs valued over $5,000 to allow GraniteCor to spread payments for equipment and repairs over a 5-year term secured by the credit of the state. Repayment of debt from line of credit shall be made according to a monthly repayment schedule that shall increase as the line of credit is used with payments commencing one month after installation of equipment and until debt is repaid.
622:32-f Exemptions from State Contract Requirements. Notwithstanding any provision of law to the contrary:
I. GraniteCor’s purchases and contracting shall be exempt from the competitive bidding requirements set forth in RSA 21-I:11.
II. GraniteCor shall have discretion regarding purchasing or not purchasing from state contracts and shall not be required to process purchases through the department of administrative services, division of plant and property management as set forth in RSA 21-I:11.
III. GraniteCor may establish open purchase orders at any time during the fiscal year and shall not be bound by state-imposed deadlines if those purchases are paid out of GraniteCor’s nonlapsing fund.
IV. GraniteCor shall have a variable budget for raw materials purchased out of its nonlapsing fund. A report identifying the ratio of raw materials to sales through 6 months and 9 months will be submitted to the commissioner of the department of administrative services in January and April, respectively.
V. GraniteCor may, once it is operating out of its nonlapsing GraniteCor fund, use any inventory and job tracking and accounting software developed in-house or purchased, in lieu of the state’s accounting software geared for managing the general fund and may exclusively send out invoices directly from this software.
VI. Emergency repairs or replacement of GraniteCor equipment shall be permitted and shall be exempt from the competitive bidding requirements and purchasing requirements of the department of administrative services, division of plant and property management as set forth in RSA 21-I:11, if the board determines production and related revenues would be interrupted due to equipment failure.
VII. GraniteCor may supply state agencies with goods and services and state agencies, departments, offices, and institutions may purchase from GraniteCor any goods or services which GraniteCor offers without having to solicit bids or price quotes from any other source of said products or services, and may choose to purchase from GraniteCor or an existing state contract. All state contracts shall contain such language. Counties, cities, towns, school districts, and nonprofit organizations may purchase from GraniteCor unless otherwise restricted by their own rules, laws, or ordinances. GraniteCor prices shall be market driven and not cost or cost plus based except where specifically identified in paragraph XIII pertaining to license plates.
VIII. Products made, in whole or in part, by private businesses where GraniteCor repackages, partially manufactures, distributes, or otherwise physically handles such products shall be considered GraniteCor goods and services. Products manufactured by New Hampshire inmate labor employed by private companies under contract with GraniteCor shall be considered GraniteCor’s products when sold to state agencies, departments, offices, and institutions if GraniteCor receives a commission under said contract.
IX. GraniteCor may use off-the-shelf, e-commerce, commercially-hosted web technology if GraniteCor finds it acceptable, and may do so without having to comply with state formats which address requirements inapplicable to typical e-commerce formats or seek bids or proposals if the department of information technology agrees on the acceptability of product. GraniteCor Internet technology applications shall meet or exceed the state’s security standards.
X. GraniteCor and the department of administrative services, division of plant and property management, bureau of graphic services shall be the primary internally supplied printers for the state and that internally supplied printing shall be divided between them as determined by the commissioner of the department of administrative services and which serves the best interests of the state. The state’s print outsourcing function may continue to reside within the department of administrative services and may continue to be funded with general funds. State agencies may continue to operate specialty printing functions such as blue lines, etc.
XI. GraniteCor’s sign shop shall be the only revenue producing sign shop operated by a state agency, shall be the first option of producing standard signs 48 inches wide or narrower.
XII. Governmental entities shall purchase validation stickers, registration tags, and registration decals from GraniteCor at market prices whenever GraniteCor has the capability for making those items.
XIII. Governmental entities shall purchase license plates from GraniteCor and all governmental entities shall design plates manufacturable by GraniteCor.
(a) GraniteCor shall charge and agencies shall pay to GraniteCor a manufacturing fee of $1.50 per plate for the first 300,000 plates and $1.00 per plate for any additional plates manufactured during the fiscal year plus materials at cost unless materials are provided by ordering entity to manufacture plates and where applicable, that fee shall be paid out of the existing plate manufacturing fee collected by department of safety pursuant to RSA 228:25. At no time shall the per plate cost associated with the manufacture of license plates exceed the per plate manufacturing fee established in RSA 228:25.
(b) Plate making equipment owned by other state agencies shall be transferred to GraniteCor at no cost and maintained thereafter by GraniteCor. Equipment provided by materials providers as part of the cost of materials shall be assigned to GraniteCor without cost regardless of the entity purchasing the materials. In instances where vendors include within their materials prices, equipment to manufacture products using their materials, a clause in all plate and sticker materials purchase agreements shall be included that gives GraniteCor the option of owning the equipment outright after a period of time after sufficient payments have been made.
(c) Governmental entities, should it be determined to be more economically and operationally feasible, may order plates and decals directly from GraniteCor and GraniteCor may deliver or ship plates and decals directly to issuing entities. Governmental entities may order plates and decals through GraniteCor’s e-commerce web site if agreed to by issuing entity and as appropriate, a system shall be put into place that accurately reports to issuing entities such as the department of safety all plates and decals made and where they were shipped if ordered directly from GraniteCor. GraniteCor may charge for these services and where applicable may be paid out of the plate manufacturing fee collected by the department of safety pursuant to RSA 228:25.
(d) Revenues from sales of plates may be commingled with other GraniteCor revenues.
(e) GraniteCor and the department of safety, division of motor vehicles shall work together to find where GraniteCor can best be integrated into the processing and delivery of plate and validation sticker orders.
622:32-g Sales to Private Sector; Prison Industry Enhancement Certification Program.
I. GraniteCor shall be able to sell to the private sector, individuals, non-profits, and governmental agencies.
II. GraniteCor may participate in the Prison Industry Enhancement Certification Program (PIECP) administered by United States Department of Justice and may implement some or all of the requirements of the program, and any amendments to the program, as GraniteCor may deem necessary. GraniteCor shall be reimbursed for hard and soft costs involved in managing, expanding, and administering PIECP from funds withdrawn from inmates pay that participate in PIECP that are typically withdrawn for costs of incarceration.
2 Sales of Prison Products. Amend RSA 622:26 to read as follows:
622:26 Sales of Prison Products.
[I. The commissioner of corrections may contract for the sale or lease of goods and products which are produced at the state prisons on the open market at competitive prices, when, in his opinion, such sale or lease is in the best interests of the inmates and of the prisons and does not conflict unduly with the availability of prison manufactured goods to state and public institutions as provided for in RSA 622:5, VI and RSA 622:28, and results in the best utilization of the prison production capacity.
II.] The commissioner of corrections shall not, nor shall any other authority, make any contract by which the labor or time of any prisoner in the state prisons or in any reformatory, penitentiary, or jail in the state shall be farmed out, given or sold to any person.
3 Provision of Products for State Agencies. Amend RSA 622:28 to read as follows:
622:28 Provision of Products for State Agencies. No articles or supplies, except printing, such as are manufactured [at the state prisons or for the state prisons] by GraniteCor or for GraniteCor in accordance with arrangements with other prison systems shall be purchased from any other source for the state or its departments or institutions if the director of plant and property management determines that such purchases may be made at fair market value. The commissioner of corrections will advise the director of plant and property management as to what articles or supplies are available for purchase from GraniteCor and their current prices.
4 New Subparagraph; Application of Receipts; GraniteCor Fund. Amend RSA 6:12, I(b) by inserting after subparagraph 307 the following new subparagraph:
(308) Moneys deposited into the GraniteCor fund established in RSA 622:32-d.
5 Transfer of Funds; Reduced Per Plate Fee. On July 1, 2012, the commissioner of the department of safety shall transfer $500,000 from the inventory fund established in RSA 228:25 to the GraniteCor fund established in RSA 622:32-d. On the effective date of this act, GraniteCor shall charge a reduced per plate fee of $1.32 for the first 300,000 plates and $.88 for any additional plates until such time as the difference between the payments based on the per plate fee established in RSA 622:32-f, XIII(a) and the reduced per plate fee established in this section total $200,000, after which GraniteCor shall charge the per plate fee established in RSA 622:32-f, XIII(a).
6 Repeal. The following are repealed:
I. RSA 622:5, V, relative to the power of the commissioner of the department of corrections to provide for the sale of articles manufactured in the prisons.
II. RSA 622:28-a, relative to the prison industries inventory account.
7 Effective Date. This act shall take effect upon its passage.
LBAO
11-0639
01/18/11
HB 625-FN-A - FISCAL NOTE
AN ACT relative to New Hampshire correctional industries.
FISCAL IMPACT:
Due to time constraints, the Office of Legislative Budget Assistant is unable to provide a fiscal note for this bill at this time. When completed, the fiscal note will be forwarded to the House Clerk's Office.