Inmate Cooperative Program.

Assembly Member McKinnor's proposal to establish worker cooperatives within California state prisons introduces a new pathway for incarcerated individuals to develop business skills and build financial resources. The Inmate Cooperative Program would enable groups of inmates to form and operate worker-owned businesses inside prison facilities, with support from external nonprofit partners and oversight from prison administrators.

Under the program, inmates could apply to create cooperatives by submitting detailed operational plans to facility wardens. These plans must include draft bylaws, business strategies focused on sustainable industries, and safety protocols. Approved cooperatives would incorporate formally and operate under contracts with the Department of Corrections and Rehabilitation, which would provide access to necessary equipment and workspace while maintaining security requirements.

The initiative includes specific financial structures to support both individual savings and broader community impact. Cooperatives would deduct 40% of inmate wages for deposit into a Green Cooperative Reentry Reserve, managed by a designated financial institution to fund grants and loans for environmentally sustainable projects benefiting system-impacted individuals. Additional wage deductions would go toward taxes, restitution, and individual trust and savings accounts. The California Employee Ownership Hub would select a cooperative institution to provide technical assistance and oversee program implementation.

To maintain program integrity, the legislation prohibits Department of Corrections employees from holding positions or financial interests in the cooperatives. While cooperatives must meet labor and safety standards, they would be exempt from certain restrictions on selling inmate-produced goods and services. The program requires annual reporting on the use of reserve funds and measurable outcomes of funded initiatives.