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State bond sale to fund prison construction finalized despite legal challenges

The state’s $509 million bond sale to fund the construction of two new men’s prisons was finalized Tuesday morning, despite lawsuits.

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The state’s $509 million bond sale to fund the construction of two new men’s prisons was finalized Tuesday morning, despite lawsuits filed the previous day challenging the prison construction plan, a spokesperson for the state finance department said Tuesday.

In a statement released Tuesday, a spokesperson for the Alabama Department of Finance said the closure of the state’s bond sale “marks a significant step by the state to address the decades-old challenges facing the correctional system.”

On Monday, two lawsuits filed against the U.S. Treasury Department in the Middle District of Alabama Northern Division on behalf of dozens of incarcerated individuals in Alabama’s correctional system challenged the use of federal American Rescue Plan aid to fund the prison construction and alleged that the Alabama Department of Corrections failed to “meaningfully consider the environmental impacts” of the new correctional facilities, and in so doing, violated federal environmental protection requirements.

The plaintiffs argue that the percentage of federal funds used, approximately 31 percent of the total cost of the prison construction according to one lawsuit, makes the prison construction project a major federal action because the federal funds are “essential to its completion.” The plaintiffs argue that an environmental impact analysis on the proposed site is required per the National Environmental Policy Act of 1969.

“To be abundantly clear: The state continues to move towards closing its bond issue to finance these facilities,” state officials said in a statement sent to underwriters and bondholders obtained by APR on Tuesday. “No eleventh-hour lawsuits by inmates or activists will halt these efforts, and the state intends to move to dismiss the lawsuits and to vigorously defend against the claims as being without merit. The state is absolutely resolute in its goals of building safe and secure facilities and will always stand behind its obligations to bondholders.”

In late June, the sale of approximately $750 million in state bonds took place, with the sale generating approximately $509 million in funds for the prison construction project–, around $200 million short of the initial value.

The Alabama State Legislature passed the original $1.3 billion prison construction package in October of last year, which approved the construction of two 3,000 to 4,000-bed facilities in Elmore and Escambia counties. $400 million in American Rescue Act funds was appropriated for the construction of the new facilities.

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State officials signed a $623 million contract with Montgomery-based Caddell Construction to build the 4,000-bed men’s facility in Elmore County on April. 15.

John is a reporter at the Alabama Political Reporter. You can contact him at [email protected] or via Twitter.

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