[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2558 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2558

    To amend title 18, United States Code, to reform Federal Prison 
                  Industries, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 20, 1999

Mr. McCollum (for himself and Mr. Scott) introduced the following bill; 
          which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To amend title 18, United States Code, to reform Federal Prison 
                  Industries, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prison Industries Reform Act of 
1999''.

SEC. 2. GENERAL PROVISIONS RELATING TO THE STRUCTURE AND MISSION OF 
              FEDERAL PRISON INDUSTRIES.

    Sections 4121 through 4122 of title 18, United States Code, are 
amended to read as follows:
``Sec. 4121. Industrial operations in Federal prisons
    ``The Attorney General shall determine in what manner and to what 
extent industrial operations shall be carried on in Federal 
correctional institutions. Such operations shall be conducted so as (1) 
to provide employment for the greatest number of those inmates in the 
United States correctional institutions who are eligible to work as is 
reasonably possible, (2) generate sufficient revenues to fund the 
industrial operations, (3) generate revenue, to be returned to the 
Treasury of the United States, to defray a portion of the cost of 
confining inmates in United States correctional institutions, and (4) 
minimize any adverse impact on domestic companies or workers to the 
greatest extent possible consistent with its mission.
``Sec. 4122. Federal Prison Industries
    ``(a) Federal Prison Industries is a government corporation of the 
District of Columbia, and shall carry on such industrial operations in 
Federal correctional institutions as shall be determined by the 
Attorney General in accordance with section 4121. The corporation shall 
be governed by a board of 12 directors appointed by the Attorney 
General. In making appointments to the Board, the Attorney General 
shall appoint to the Board one person recommended by each of the 
Speaker of the House of Representatives, the minority leader of the 
House of Representatives, the majority leader of the Senate, and the 
minority leader of the Senate. The members of the Board shall serve for 
4 years and may be reappointed. The members of the Board shall serve 
without compensation. The Director of the Bureau of Prisons shall serve 
as Chief Executive Officer of the Corporation.
    ``(b) Federal Prison Industries shall endeavor, consistent with the 
priorities established in section 4121, to produce products that 
otherwise would be produced by foreign workers outside the United 
States. Federal Prisons Industries shall also endeavor, consistent with 
those priorities, to enter into contracts pursuant to section 4131 with 
private companies that employ foreign workers outside the United States 
to produce products, for the purpose of inducing such companies to 
employ inmates in a Federal Prison Industry Shop to produce such 
products.
    ``(c) The Attorney General shall appoint an Independent Review 
Panel composed of one representative from each of the Department of 
Commerce, the Department of Labor, the International Trade Commission, 
the Small Business Administration, the business community, and 
organized labor, and such other persons as the Attorney General deems 
appropriate. The Panel shall advise the Board regarding the type and 
quantity of products to be produced by Federal Prison Industries for 
sale in interstate commerce consistent with the purposes set forth in 
subsection (a). The members of the Panel shall serve without 
compensation. The Federal Advisory Committee Act shall not apply with 
respect to the Panel.''.

SEC. 3. ELIMINATION OF MANDATORY SOURCE PREFERENCE AND CREATION OF FAIR 
              COMPETITION AUTHORITY.

    Chapter 307 of title 18, United States Code, is amended by adding 
at the end the following:
``Sec. 4130. Federal Prison Industry inmate labor
    ``The Attorney General shall endeavor to make available to inmates 
who have been committed to the custody of the Bureau of Prisons 
opportunities to work in a Federal Prison Industry Shop. The Attorney 
General may set standards regarding education and conduct for those 
inmates who work in a Federal Prison Industry Shop.
``Sec. 4131. Sale of products; contracts for the provision of labor; 
              inmate wages
    ``(a) Federal Prison Industries is authorized to sell its products 
generally on the open market to the public, to departments and agencies 
of the United States, to a State or municipality, and to foreign 
governments.
    ``(b) Federal Prison Industries is authorized, and shall make it a 
priority, to enter into contracts with one or more private companies 
through which such private company may produce products at a Federal 
Prison Industry Shop for sale. In addition to any other provision 
negotiated by the private company and Federal Prison Industries, any 
such contract shall provide--
            ``(1) for the amount to paid to Federal Prison Industries 
        by the private company;
            ``(2) that if the private company employs any non inmate 
        workers, on or after a date that is 60 days prior to the 
        execution of the contract, who reside within the United States, 
        that the private company agrees to continue to employ non-
        inmate workers who reside within the United States in at least 
        the same number for a period of at least 18 months after the 
        date of the contract or the date the private company begins to 
        produce products at a Federal Prison Industry Shop, whichever 
        is later; and
            ``(3) that the Attorney General shall make available to 
        such private company under reasonable terms and conditions such 
        number of inmates who have been selected to work in a prison 
        industry carried on by Federal Prison Industries as shall be 
        specified in the contract.
    ``(c) Federal Prison Industries shall pay wages to all inmates who 
work in a prison industry carried on by Federal Prison Industries 
(including those at which products are produced by a private company 
pursuant to a contract with Federal Prison Industries) at a rate not 
less than the Federal minimum wage from time to time in effect. From 
the amounts paid to inmates pursuant to this section, the Attorney 
General is authorized to deduct amounts, not exceeding in their 
aggregate 90 percent, for--
            ``(1) payment of fines, special assessments, and 
        restitution owed by the prisoner pursuant to court order;
            ``(2) allocations for support of the inmate's family 
        pursuant to statute, court order, or agreement by the inmate;
            ``(3) reasonable charges for room and board, as determined 
        by the Attorney General, but not less than 50 percent of the 
        total amounts deducted under this subsection;
            ``(4) amounts to be held on account and paid to the inmate 
        upon release from the custody of the Bureau of Prisons; and
            ``(5) contributions to any fund established by law to 
        compensate the victims of crime.
    ``(d) Federal Prison Industries shall be relieved from payment of 
the amount specified in subsection (c) if the Independent Review Panel 
determines that the products are--
            ``(1) foreign-made products; or
            ``(2) any product described in section 1761(b).
Inmates producing such products shall, instead of the amount specified 
in subsection (c), be paid wages not less than would be paid at the 
rate set forth in the schedule of compensation paid to inmates working 
at prison industries carried on by Federal Prison Industries on the 
date of enactment of the Prison Industries Reform Act of 1999. From the 
wages paid to such inmates under this subsection, the Attorney General 
is authorized to deduct amounts, not exceeding in their aggregate 50 
percent of the amount paid to an inmate, for the purposes set forth in 
subsection (c).
    ``(e) An inmate may agree to deductions in additional to those 
provided for in subsections (c) and (d) if the additional deductions 
are used solely for the purposes described in paragraphs (2) and (4) of 
subsection (c).
    ``(f) Nothing in this section shall be construed to prohibit more 
than one Federal Prison Industry Shop from being located at a Federal 
correctional facility. A Federal Prison Industry Shop may be located 
outside a correctional facility if all of the inmates working at that 
Shop are classified as minimum security inmates.
    ``(g) After consultation with the Independent Review Panel, the 
Attorney General may waive the requirement of subsection (b)(2) if the 
Attorney General determines that exigent circumstances exist and the 
private company has taken all reasonable steps to continue to employ 
its non-inmate workers who reside within the United States.
``Sec. 4132. Elimination of mandatory source purchase requirement
    ``(a) Not later than 180 days after the date of enactment of the 
Prison Industries Reform Act of 1999, the Attorney General shall submit 
to Congress a plan for the elimination of the use by Federal Prison 
Industries of the mandatory source preference requirement described in 
section 4124. Such plan shall provide for annual reductions in that 
portion of the total sales of Federal Prison Industries made pursuant 
to that requirement, and shall further provide that no sales shall be 
made pursuant to that requirement after the date which is 7 years after 
the date of enactment of such Act. The plan shall also provide that 
Federal Prison Industries shall designate those products, described by 
Standard Industrial Product Code (as published by the Office of 
Management and Budget) as to which it has determined to no longer sell 
to Federal departments and agencies under the authority described in 
section 4124 of this chapter. Within 30 days of such designation, 
Federal Prison Industries shall publish in the Federal Register and in 
a commercial business publication with a national circulation a list of 
those products so designated. Federal Prison Industries shall make 
available to the public, on request, a list of all such products so 
designated. The plan shall take effect 180 days after its submission to 
Congress, unless Congress by law provides otherwise.
    ``(b) Federal Prison Industries shall not undertake the production 
of any new product or significantly expand the rate of production of a 
product for sale to any Federal department, agency, or institution, 
unless the procurement requirement for that product described in 
section 4124 has been eliminated in accordance with the plan described 
in subsection (a).
    ``(c) Federal agencies may purchase directly from Federal Prison 
Industries those products for which the procurement requirement has 
been eliminated in accordance with the plan described in subsection (a) 
in such quantities and by such method they deem appropriate.
``Sec. 4133. Procurement from the private sector
    ``For purchases from the private sector in support of its 
operations, Federal Prison Industries shall be exempt from the 
provisions of the Competition in Contracting Act and the Federal 
Acquisition Regulation. Nothing in this section shall be construed to 
modify any requirement that any department, agency, or other 
institution of the Federal Government comply with the provisions of the 
Competition in Contracting Act and the Federal Acquisition Regulation.
``Sec. 4134. Applicability of other law
    ``Nothing in this chapter shall be construed to entitle an inmate 
to employment in a Federal Prison Industry Shop, to any wage, 
compensation, or benefit, to imply that inmates are employees for the 
purposes of other laws or programs, or to provide a cause of action by 
or on behalf of any person against the United States or any officer, 
employee, or contractor thereof.
``Sec. 4135. Definitions
    ``In this chapter--
            ``(1) the term `private company' means a corporation, 
        partnership, joint venture, or sole proprietorship;
            ``(2) the term `product' includes both goods and services;
            ``(3) the term `Federal Prison Industry Shop' means a 
        prison industry operation at which a product is made or 
        provided;
            ``(4) the term `foreign-made product' means a product that 
        would otherwise be produced by foreign workers outside the 
        United States.''.

SEC. 4. REVIVAL OF OLD LAW UPON FAILURE OF CONDITIONS.

    (a) In General.--
            (1) Determination.--On the date that is--
                    (A) 3 years after the date of the enactment of this 
                Act; and
                    (B) 5 years after the date of the enactment of this 
                Act;
the Attorney General shall determine what percentage of the total 
eligible inmates are employed by Federal Prison Industries.
            (2) Notice to Congress.--If the Attorney General determines 
        under paragraph (1) that less than 25 percent of the total 
        number of eligible inmates are employed by the Federal Prison 
        Industries, the Attorney General may, not later than 180 days 
        after that determination, provide notice of that determination 
        to Congress.
            (3) Effect of Notice.--If the Attorney General provides 
        notice to Congress under paragraph (2) the amendments made by 
        this Act shall cease to have any further effect 60 days after 
        that notice is so provided.
    (b) Definition.--As used in this section, the term ``eligible 
inmate'' means a person--
            (1) committed to the custody of the Bureau of Prisons 
        pursuant to section 3621 of this title;
            (2) designated to a low, medium, or high security facility 
        operated by the Bureau of Prisons; and
            (3) who is physically and mentally able to work.

SEC. 5. STATE PRISON INDUSTRY SALES AUTHORITY.

    Section 1761 of title 18, United States Code, is amended by adding 
at the end the following:
    ``(e)(1) In addition to the exceptions set forth in subsections (b) 
and (c), this chapter does not apply to goods, wares, or merchandise 
manufactured, produced, or mined by convicts or prisoners if--
            ``(A)(i) in connection with that manufacture, production, 
        or mining, such convicts or prisoners receive wages at a rate 
        equal to the Federal minimum wage from time to time in effect; 
        or
            ``(ii) such goods, wares, or merchandise, would otherwise 
        be produced by foreign workers outside the United States; and
            ``(B) on or before any such sales commence, the State 
        adopts a plan to eliminate, not later than 7 years after the 
        date on which such sales commence, any requirement that 
        departments or agencies of that State purchase the goods, 
        merchandise, or wares manufactured, produced, or mined by 
        convicts or prisoners incarcerated in that State.
    ``(2) Nothing in this subsection shall prohibit a State or 
municipality deducting from any wages paid under this subsection 
amounts for--
            ``(A) payment of fines and restitution owed by the prisoner 
        pursuant to court order;
            ``(B) reasonable charges for room and board;
            ``(C) allocations for support of the inmate's family 
        pursuant to statute, court order, or agreement by the inmate;
            ``(D) contributions to be held on account and paid out to 
        the inmate upon release; and
            ``(E) contributions to any fund established by law to 
        compensate the victims of crime.''.

SEC. 6. CONFORMING AMENDMENTS.

    (a) Section 1761.--Section 1761 of title 18, United States Code, is 
amended by adding at the end the following:
    ``(f) This section does not apply to sales of products made 
pursuant to section 4131.''.
    (b) Section 1762.--Title 18, United States Code, is amended by 
striking section 1762.
    (c) Section 4123.--Title 18, United States Code, is amended by 
striking section 4123.
    (d) Clerical Amendments.--
            (1) Chapter 307.--The table of sections at the beginning of 
        chapter 307 of title 18, United States Code, is amended--
                    (A) so that the items relating to sections 4121 
                through 4122 read as follows:

``4121. Industrial operations in Federal prisons.
``4122. Federal Prison Industries.'';
                    (B) by striking the item relating to section 4123; 
                and
                    (C) by adding at the end the following new items:

``4130. Federal Prison Industry inmate labor.
``4131. Sale of products; contracts for the provision of labor; inmate 
                            wages.
``4132. Elimination of mandatory source purchase requirement.
``4133. Procurement from the private sector.
``4134. Applicability of other law.
``4135. Definitions.''.
            (2) Chapter 85.--The table of sections at the beginning of 
        chapter 85 of title 18, United States Code, is amended by 
        striking the item relating to section 1762.
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