Amends TCA Title 8; Title 9; Title 12 and Title 41.

Under the Private Prison Contracting Act of 1986, the commissioner of correction is authorized to enter into contracts for "correctional services," which is defined as the following functions, services, and activities, when provided within a prison or otherwise: (1) Education, training, and jobs programs; (2) Recreational, religious, and other activities; (3) Development and implementation assistance for classification, management information systems, or other information systems or services; (4) Food services, commissary, medical services, transportation, sanitation, or other ancillary services; (5) Counseling, special treatment programs, or other programs for special needs; (6) Operation of facilities other than transitional facilities, including management, custody of inmates, security, and other associated services and activities; and (7) Operation of transitional facilities. Contracts for correctional services may be entered into subject to the requirements and procedures of law. A contract for correctional services is authorized only for one medium security or minimum security facility opened after July 1, 1991, and only according to the requirements and procedures specified. No contract must be authorized for a facility intended primarily to serve special needs inmates. Any inmate sentenced to confinement in the department must be legally eligible to be incarcerated in a facility in which a prison contractor is providing correctional services pursuant to this chapter. Contracts for correctional services may include incentives or disincentives; provided, that the incentives or disincentives are based on quantifiable measurements of performance that are described in the request for proposal and contract. The total of all incentive payments must not exceed 5 percent of the total contract price per annum. This must not be construed to prohibit or restrict the use of liquidated damages as a remedy for a contractor's breach of contract. This bill deletes these provisions regarding contracts with providers for correctional services in their entirety. Instead, the commissioner or a state or local governmental entity is prohibited from entering into, modifying, or renewing a contract with a prison contractor for correctional services or for housing inmates on or after the effective date of this bill. It is required that upon expiration of each contract with a prison contractor, inmates housed within the facility previously operated by the prison contractor must be transferred by the department or local governmental entity to a suitable correctional facility or jail. This bill requires the commissioner to prescribe rules to facilitate the winding down of the present provisions of law, including rules regarding: (1) The transfer of inmates and prisoners; (2) The transfer of records; and (3) The manner in which to utilize funds that may become available as the result of the termination of contracts pursuant to this section to improve the correctional system at both the state and local levels. This bill requires that upon the expiration of the last contract with a prison contractor, the Private Prison Contracting Act of 1986 be repealed, removing all authority for the state or local governmental entity to enter into a contract for prison services from a private provider. The commissioner is required to inform the secretary of the Tennessee Code Commission of the expiration of the last contract.