ASSEMBLY PUBLIC SAFETY AND PREPAREDNESS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 4077

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 19, 2026

      The Assembly Public Safety and Preparedness Committee reports favorably and with committee amendments Assembly Bill No. 4077.

      As amended and reported by the committee, this bill establishes the “Knowledge, Accountability, and Rights in Incarceration Markets Act,” or the “KARIM Act,” which imposes additional taxes and fees on the operators of private prisons. 

     Under the bill, a private prison operator who has entered into a contract with a public entity for the provision of correctional services is subject to a fee based on the value of the contract.  The amount of the fee is equal to eight percent of the consideration given, or contracted to be given, by the public entity to the taxpayer for the provision of correctional services.  The revenues collected from this fee are credited to a special, nonlapsing account within the General Fund, to be known as the “Detention and Deportation Defense Initiative Support Fund,” and dedicated to the Department of Human Services to support the provision of legal services by accredited institutions of higher education through the Detention and Deportation Defense Initiative or any successor initiative or program.

     The bill also imposes a monthly fee based on the number of inmates who are detained at a taxpayer’s private correctional facility.  The amount of the fee is $15 per inmate per day for each month an inmate is detained at the taxpayer’s private correctional facility.  The revenues collected from the inmate fee are credited to a special, nonlapsing account within the General Fund, to be known as the “Private Prison Societal Rehabilitation Support Fund,” and dedicated to supporting community-based programs related to food security, housing, recreation, job training, and youth mentorship.

      Finally, the bill imposes a private prison surtax on corporate operators of private prisons.  This surtax is imposed in addition to the corporation’s tax liability under the State’s Corporation Business Tax Act, P.L.1945, c.162 (C.54:10A-1 et seq.), in an amount equal to three percent of the corporation’s allocated taxable net income for any privilege period in which it operates a private correctional facility in the State.  The revenues collected from the surtax are generally credited to the “Private Prison Societal Rehabilitation Support Fund” in support of the fund’s purposes, except that three percent of these revenues are required to be appropriated, one percent to each entity, to support programs provided by the: 1) State, 2) county in which the private correctional facility of the taxpayer is located, and 3) municipality in which the private correctional facility of the taxpayer is located.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

      1)   clarify that the percentage of the prison surtax appropriated to each municipality is to support the municipality’s police and fire services; and

      2)   make other clarifying and technical changes.