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Bill

A 4077

Imposes various taxes and fees on correctional service businesses to offset social costs of incarceration.*

2026-2027 Regular Session Introduced by Joe Danielsen and 8 co-sponsors

The KARIM Act taxes private prisons via an 8% contract fee, $15/day inmate detention, and a 3% surtax to fund legal services and community programs.

Passed by the Assembly (57-22-0)
0
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Bill Summary · A 4077

Summary of Assembly Bill No. 4077 (Session 222) – New Jersey

Purpose and intent

  • Establishes the Knowledge, Accountability, and Rights in Incarceration Markets Act (the KARIM Act).
  • Creates new funding streams and a private-prison tax framework to offset social costs associated with incarceration and to support related legal and community programs.

Key provisions

  1. Private prison contract fee

    • Applies to private prison operators that have contracts with public entities to provide correctional services.
    • Fee amount: 8% of the consideration paid (or due to be paid) by the public entity to the private operator.
    • Revenue use: Credited to the Detention and Deportation Defense Initiative Support Fund, a nonlapsing General Fund account.
    • Purpose of fund: Support the provision of legal services by accredited institutions of higher education through the Detention and Deportation Defense Initiative or successor programs.

  2. Inmate daily detention fee

    • Imposed monthly on taxpayers for inmates detained at private correctional facilities.
    • Fee rate: $15 per inmate per day for each day of detention within a given month.
    • Revenue use: Credited to the Private Prison Societal Rehabilitation Support Fund, a nonlapsing General Fund account.
    • Purpose of fund: Support community-based programs in areas such as food security, housing, recreation, job training, and youth mentorship.

  3. Private prison corporate surtax

    • Imposes a 3% surtax on a private prison operator’s allocated taxable net income for any privilege period during which it operates a private facility in New Jersey.
    • Relationship to existing taxes: In addition to the existing Corporation Business Tax Act liability.
    • Revenue use: Generally credited to the Private Prison Societal Rehabilitation Support Fund.
    • Allocation of a portion: 3% of surtax revenues must be appropriated to three entities (each 1%) to support programs in:
      • State government
      • The county where the private facility is located
      • The municipality where the private facility is located

Administrative and operational notes

  • Revenue from the contract fee and inmate detention fee goes into dedicated, nonlapsing funds within the General Fund for specified social and legal supports.
  • The surtax revenue is mostly for the Private Prison Societal Rehabilitation Support Fund, with targeted distribution to state, county, and municipal levels to support public safety and local programs.

Committee amendments

  • Clarify the portion of the 3% surtax that is allocated to municipalities to support police and fire services.
  • Implement additional clarifying and technical changes to ensure proper administration.

Who is affected

  • Private prison operators with state public contracts.
  • Taxpayers whose inmates are detained in private facilities (through the per-day fee).
  • Corporate taxpayers operating private prisons in New Jersey.
  • State, county, and municipal governments that oversee public safety and local services.
  • Accredited institutions of higher education providing legal services under the Detention and Deportation Defense Initiative.

Timeline and process

  • Bill introduction and committee passage in early 2026.
  • Final enactment would depend on movement through the Appropriations Committee and full Legislature, followed by the governor’s approval or veto.

Overall, the KARIM Act seeks to shift some financial burdens associated with private incarceration onto operators and to fund legal services and community programs addressing social costs stemming from incarceration.

Compiled from official sources — confirm details with the bill’s official record.

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