Prison Industry Bill Clears Nevada’s Senate Judiciary Committee

Senators move quickly to rein in runaway prison program

By Bob Sloan

On Wednesday a proposed bill amending Nevada’s Prison Industries was debated before the state Senate Judiciary Committee.  The bill, SB 478 was sponsored by the Senate Finance Committee, which is chaired by former Assemblywoman and now Senator Debbie Smith (D-13).  Senator Smith explained the bill to the Committee and why a revision to NRS 209.461 is needed to protect workers, private businesses and taxpayers from being unfairly compromised by prison industry operations.

Attending the hearing in support of the legislation, former U.S. Senator (and Nevada Governor) Richard Bryan outlined a proposal he’d submitted to the Board of Prison Commissioners last month that would help protect Nevada’s businesses and workers.  Proposed revisions to NRS 209 within SB 478 language would serve that purpose.

Sen BryanSuggested language includes requirements that the NDOC provide adequate notice and consult with private businesses and unions prior to entering into new contracts or developing new prison industries.  This would help protect Nevada’s workers from displacement and private businesses from unfair competition arising from the use of prison labor by private companies or state sponsored industry programs.

These requirements are already mandatory and annunciated under federal guidelines controlling prison-made products introduced into interstate commerce.  This is to protect workers and businesses in states receiving such goods.

Senator Bryan explained the reason such policy changes were necessary to first protect Nevada’s business and workers.  He stated that these protections were at the core of the proposal made to the BPC in March.

SB 478 includes a requirement that any private company applying to participate in prison industrial programs be required to provide a guarantee that operational expenses will be paid to the NDOC.  This provision requires the posting of a surety bond or personal guarantee:

“7. Before entering into any contract with a private employer for the employment of offenders pursuant to subsection
1, the Director shall obtain from the private employer:
   (a) A personal guarantee, surety bond in the sum of $1,000,000 made payable to the State of Nevada or security
agreement to secure any debt, obligation or other liability of the private employer under the contract including, without limitation, lease payments, wages earned by offenders and compensation earned by personnel of the Department.”

This clause seemed to draw the most concern and discussion from the Committee as they attempted to ascertain whether such a high bond was necessary.

Danny Thompsonsb 478 hearing conway

Other revisions require the NDOC Director to secure documentation pertaining to the impact upon private industry and labor in Nevada.  Before submitting such projects or new industries to the Interim Finance Committee’s Committee on Industrial Programs for recommendations or Board of Prison Commissioners for approval, these studies must be completed.

Also speaking in support of SB 478’s changes to policy requiring notice and consultation with labor, was Nevada’s AFLCIO Executive Secretary Treasurer, Danny Thompson and Robbie Conway of Ironworkers Local 433.

The Union Representatives spoke on behalf of unemployed union workers being displaced or unable to find employment because of prisoners used by Alpine Steel, LLC.  Alpine has been accused of using cheap prison labor to reduce labor costs and secure bids on projects, reducing the ability of other companies to compete fairly for the same jobs. One of those projects is the high profile construction of the Sky Vue Ferris Wheel on the Las Vegas strip.

SkyVue pic

Thompson raised issues of public safety due to using inmate labor to fabricate steel components used in building a public bridge over I-15 and the Wet ‘N’ Wild theme park in Summerlin. Thompson mentioned he’d made repeated requests for proof of required certification of the prison shop and inmate welders but Alpine and NDOC continues to withhold those documents.

Time for discussion opposing SB 478 was consumed by Alpine Steel owner, Randy Bulloch.  He vehemently opposed any requirement of posting a surety bond or consulting with unions, labor or competing businesses before starting up new prison industries.  He advised his company had been using inmates as a workforce for seven years before the operation was stopped early this year.

His argument was that requiring a bond would be cost prohibitive and “catastrophic” to prison industry operations.  Bulloch also claimed that noticing and consulting with unions and competing businesses and requiring approval of both would be impossible, “they’ll never agree to such projects.”  Presumably Bulloch’s persistent advocacy on behalf of prison industries demonstrates a desire to reopen the prison industry’s metal shop to Alpine Steel and regain access to that less costly workforce.

The proposed revisions do not include a requirement of “approval” by unions or competing businesses.  It only requires notice and an opportunity to participate in any discussion prior to submission of proposed new industries for approval. In addition until Bulloch repays nearly half a million dollars owed to the state it is unlikely authorities will consider allowing his company back onto prison property.

It’s interesting that Mr. Bulloch’s company was at the root of a controversy that ultimately resulted in the necessity of this legislative review of prison industries.  Actions of Bulloch and Alpine Steel placed the entire program in jeopardy by his refusing to pay incurred operational expenses owed to the NDOC.

Rather than open discussions of new industry operations to transparency, Bulloch seems intent upon keeping any new or proposed contracts shrouded in secrecy, and decisions regarding use of inmate labor made outside the view of obviously interested parties.

Alpine ran up a huge bill with the prison industries by failing to pay inmate and NDOC staff wages, utility costs, workers compensation or lease payments for nearly four years, accumulating a debt of $438,000 to the state.  After the story broke in the media is when officials closed Alpine’s operation at High Desert State Prison and forced Bulloch to agree to repay the state over the next four years.  Though Bulloch no longer has any inmates working for him in the prison shop and the facilities are closed to him, he continues to be the lone voice advocating for operating Nevada’s prison industries without any policy changes to ensure other companies are not able to operate with taxpayers footing the bill.

Competing steel companies protested lost business through unfair practices exercised by Alpine to secure contracts due to low-paid prison wages.  They also voiced concern that the state was unfairly subsidizing Alpine’s operations through a sweetheart lease agreement for prison facilities and a failure to collect the debts owed.  Both gave Alpine Steel a substantial advantage over all competitors in the steel industry there in Nevada.

NDOC Director Cox and Deputy Director Connett were present and stated they and the department was “neutral” on the legislation and will be submitting written statements to that effect.  Several former inmates attempted to speak in opposition, but time was short due to Bulloch’s lengthy statements in opposition and their discussion limited.

The following day, the Judiciary Committee voted unanimously to move the bill to the full Senate for discussion and vote.  It is unknown at this time how much support this legislation will get from the Nevada Assembly and full Senate.