House Bill No. 544
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act revising the regional correctional facility act to permit the department of corrections to enter into agreements with nonprofit corporations; allowing the proceeds of the long-range building program general obligation bonds to be used to contribute to the state's portion of construction costs; allowing the nonprofit corporation an option to purchase a facility owned by the state; allowing a local governmental entity to enter into long-term contracts and to incur indebtedness to acquire a facility through a lease or lease-purchase option; and amending sections 53-30-503, 53-30-504, 53-30-506, and 53-30-507, MCA."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 53-30-503, MCA, is amended to read:
"53-30-503. Definitions. As used in this part, the following definitions apply:
(1) "Department" means the department of corrections.
(2) "Interlocal cooperation commission" means a commission established in accordance with Title 7, chapter 11, part 2.
(3) "Local governmental entity" means:
(a) a local governmental unit;
(b) a multijurisdictional service district; or
(c) an interlocal cooperation commission.
(4) "Multijurisdictional service district" means a district established in accordance with Title 7, chapter 11, part 11.
(5) "Nonprofit corporation" means an organization organized and existing pursuant to Title 35, chapter 2, and approved or designated by a local governmental entity.
(5)(6) "Regional correctional facility" means a correctional facility, except the Montana state prison, the women's
correctional system, or the Swan River boot camp, designed, constructed, or operated under this part by a local
governmental entity, a nonprofit corporation, or the department, or both any combination of a local governmental entity, a
nonprofit corporation, and the department , for the housing of convicted felons."
Section 2. Section 53-30-504, MCA, is amended to read:
"53-30-504. Authority to enter into contracts -- terms -- financing. (1) The department may contract with one or more
local governmental entities or nonprofit corporations for the housing of and provision of services to inmates sentenced to
the department or the department's correctional institutions at a regional correctional facility designed, financed,
constructed, or operated by a local governmental entity, a nonprofit corporation, the department, or
both any combination
of a local governmental entity, a nonprofit corporation, and the department.
(2) The contract must be authorized and approved by the governor, the department, and the governing body of the local governmental entity or the nonprofit corporation, whichever is party to the contract. The contract must set forth fully the purposes, powers, rights, and responsibilities of each party to the contract and address necessary and proper matters set forth in 7-11-105.
(3) A contract may include an agreement to jointly design, finance, construct, and operate a regional correctional facility.
(4) The department may not enter into a contract unless the department and the local governmental entity or nonprofit corporation has the legal authority and the ability to finance its share of the costs under the contract.
(5) A regional correctional facility may be constructed on real property that is owned by the state of Montana,
or a local
governmental entity, or a nonprofit corporation or that is jointly owned by both.
(6) The proceeds of long-range building program general obligation bonds authorized to be issued in accordance with Title 17, chapter 5, part 8, may be used, in whole or in part, to construct a regional correctional facility that may be owned and operated by a local governmental entity, whether or not the facility or any part of it is to be owned and operated by the state. If the proceeds of long-range building program general obligation bonds or other state revenue is to be used in whole or in part to construct a regional correctional facility that is to be owned and operated by a local governmental entity, the department of administration is not required to procure the design, engineering, or construction services for the facility. The contract may provide that the local governmental entity shall procure the services, but must also provide that the department of administration must be involved in the development and approval of the plans and specifications for the facility prior to the time the facility is let to bid.
(7) The proceeds of long-range building program general obligation bonds authorized to be issued in accordance with Title 17, chapter 5, part 8, may be used, in whole or in part, to contribute to the costs of constructing a portion of a regional correctional facility that may be partially owned and operated by a nonprofit organization. The bonds may be used for the portion of the facility that is owned by the state if the facility is operated under a contract for services with the state for a state purpose. The contract must provide that the department of administration must be involved in the development and approval of the plans and specifications for the facility prior to the time the facility is let to bid.
(7)(8) The department shall use the proceeds of long-range building program bonds and other state revenue appropriated
for regional correctional facilities to negotiate with local government governmental entities, nonprofit corporations, or
private providers to obtain the greatest number of beds that is consistent with program objectives for the least cost to the
Section 3. Section 53-30-506, MCA, is amended to read:
"53-30-506. Local governmental entity option to purchase facility owned by state. If, under a contract entered into under 53-30-504, the state constructs and owns a regional correctional facility, the contract may provide an option for the local governmental entity or nonprofit corporation to purchase the facility."
Section 4. Section 53-30-507, MCA, is amended to read:
"53-30-507. Rulemaking authority. The department may adopt rules to implement this part, including rules for the
determination of how sites are to be chosen for regional correctional facilities. The rules must provide that in selecting a
site the department shall consider the need for a regional correctional facility in the area, the ability and willingness of
local governmental entity or a nonprofit corporation to enter into a long-term contract with the department, and the
availability of rehabilitative services to inmates."
NEW SECTION. Section 5. Local governmental entity authorized to enter into long-term contracts and to incur indebtedness -- noncompetition clause. (1) A local governmental entity may enter into a long-term lease or agreement, not to exceed a term of 30 years, with a nonprofit corporation proposing to operate a regional detention facility under this part. The local governmental entity may agree in the long-term lease or agreement to acquire the facility from the nonprofit corporation through a lease or a lease option to purchase, subject to the limitations of Title 7, chapter 7, part 21.
(2) A contract may also contain a covenant by the local governmental entity that if the contract is terminated for nonappropriation of funds by the local governmental entity, the local governmental entity agrees not to purchase, lease, or rent property to perform the functions performed by the nonprofit corporation and agrees not to permit the functions to be performed by its own employees or by any local governmental entity for a specified period of not less than 1 year and not more than the remaining original term of the contract.
NEW SECTION. Section 6. Codification instruction. [Section 5] is intended to be codified as an integral part of Title 53, chapter 30, part 5, and the provisions of Title 53, chapter 30, part 5, apply to [section 5].