The proposed bill, known as the Knowledge, Accountability, and Rights in Incarceration Markets Act (KARIM Act), aims to impose various taxes and fees on operators of private prisons in New Jersey to address the social costs associated with incarceration. Specifically, private prison operators that have contracts with public entities for correctional services will be required to pay a fee equal to eight percent of the contract's value. This revenue will be allocated to the Detention and Deportation Defense Initiative Support Fund, which supports legal services provided by accredited institutions of higher education. Additionally, a monthly fee of $15 per inmate will be charged for each day an inmate is detained, with the proceeds directed to the Private Prison Societal Rehabilitation Support Fund to support community-based programs.

Furthermore, the bill introduces a private prison surtax of three percent on the allocated taxable net income of corporate operators of private prisons, which will be assessed in addition to existing corporate tax liabilities. The revenues from this surtax will also contribute to the Private Prison Societal Rehabilitation Support Fund, with specific allocations designated for state, county, and municipal programs. The bill mandates that the Director of the Division of Taxation adopt necessary regulations for implementation and is set to take effect immediately, applying to taxable years and privilege periods beginning the following January after enactment.