The study examined current and projected costs of operating New York's prisons from fiscal year 1986-87 through 1992, along with total numbers, characteristics, and annual commitment rates of probation eligible and second felony nonviolent offenders. A review of alternative punishments focused on the Intensive Supervision Program/Alternative Sentencing Probation (ISP/ASP) program. Deficiencies were found in the diversion process as well as the surveillance and control aspects of ISP that diminished its effectiveness as a prison alternative. The report recommends a radical restructuring of the ISP, terminating ASP, and creating a new Community Protection Program on a demonstration basis to provide a viable sentencing option for prison-bound, nonviolent offenders. The study also suggests modification of the Second Felony Offender Law to permit an alternative sentence for repeat nonviolent offenders. Long-term recommendations and cost proposals address a county-based Alternatives to Prison Initiative that would build on the planning and implementation processes already in place for jailbound offenders because of the Classification/Alternatives Law of 1984. Footnotes.