[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2754 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2754
To amend title 18, United States Code, to reform Federal Prison
Industries, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 2, 2001
Mr. Green of Wisconsin (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 ``Federal Prison Industries Reform Act
of 2001''.
SEC. 2. AUTHORITY TO CARRY OUT PILOT PROJECTS USING FEDERAL INMATE
LABOR TO REPLACE FOREIGN LABOR.
(a) Foreign Labor Substitute Pilot Projects Authorized.--Chapter 85
of title 18, United States Code, is amended in section 1761--
(1) in subsection (b), by striking ``This chapter'' and
inserting ``This section'';
(2) in subsection (c), by striking ``this chapter'' and
inserting ``this section'';
(3) by redesignating subsection (d) as subsection (f); and
(4) by adding after subsection (c) the following new
subsections:
``(d) This section shall not apply to goods, wares, or merchandise
manufactured, produced, or mined by convicts or prisoners who are
participating in industrial operations of Federal Prison Industries.
``(e) This section shall not apply to goods, wares, or merchandise
manufactured, produced, or mined by convicts or prisoners who are
participating in any pilot project approved as a foreign labor
substitute by the Foreign Labor Substitute Panel established under
section 1762.''.
(b) Foreign Labor Substitute Panel.--
(1) Section 1762 of such chapter is amended to read as
follows:
``Sec. 1762. Foreign labor substitute panel
``(a) The Attorney General shall establish a panel to be known as
the Foreign Labor Substitute Panel (in this section referred to as the
`Panel').
``(b) The Panel shall be composed of eight members, each of whom
shall serve at the pleasure of the Attorney General, and who shall be
appointed by the Attorney General as follows:
``(1) One member who shall be an officer, employee, or
other representative of the Department of Commerce.
``(2) One member who shall be an officer, employee, or
other representative of the Department of Labor.
``(3) One member who shall be an officer, employee, or
other representative of the International Trade Commission.
``(4) One member who shall be an officer, employee, or
other representative of the Small Business Administration.
``(5) Two members, each of whom shall be an officer,
employee, or other representative of the business community.
``(6) Two members, each of whom shall be an officer,
employee, or other representative of organized labor.
``(c)(1) Members of the Panel shall not receive pay, allowances, or
benefits by reason of their service on the Panel.
``(2) Each member shall receive travel expenses, including per diem
in lieu of subsistence, in accordance with applicable provisions under
subchapter I of chapter 57 of title 5, United States Code.
``(d) The Panel shall review proposals for pilot projects submitted
to the Panel. For each proposal reviewed, the Panel shall approve the
pilot project as a foreign labor substitute if, and only if, the Panel
determines that the pilot project specified in the proposal satisfies
each of the following requirements:
``(1) The pilot project is to be carried out by one or more
private United States companies.
``(2) The goods, wares, or merchandise proposed to be
manufactured, produced, or mined wholly or in part by Federal
convicts or prisoners under the pilot project would otherwise
be manufactured, produced, or mined by foreign labor.
``(e) Any determination of the Panel under subsection (d) shall be
made available to the public upon request.''.
(2) In the table of sections at the beginning of such
chapter, the item relating to section 1762 is amended to read
as follows:
``1762. Foreign Labor Substitute Panel.''.
SEC. 3. RESTATEMENT AND IMPROVEMENT OF FEDERAL PRISON INDUSTRIES
PROGRAM.
(a) In General.--Sections 4121, 4122, and 4123 of title 18, United
States Code, are amended to read as follows:
``Sec. 4121. Federal Prison Industries: status, mission, and management
``(a) Status.--Federal Prison Industries is a Government
corporation. The headquarters of the corporation is in the District of
Columbia.
``(b) Mission.--The mission of Federal Prison Industries is to
carry out industrial operations in accordance with this chapter using
eligible inmate workers.
``(c) Board of Directors.--
``(1) Composition.--Federal Prison Industries is
administered by a board of directors composed of 12 members
appointed by the Attorney General as follows:
``(A) One member appointed from among individuals
recommended by the Speaker of the House of
Representatives.
``(B) One member appointed from among individuals
recommended by the minority leader of the House of
Representatives.
``(C) One member appointed from among individuals
recommended by the majority leader of the Senate.
``(D) One member appointed from among individuals
recommended by the minority leader of the Senate.
``(E) Two members who shall be representatives of
the business community.
``(F) Two members who shall be representatives of
organized labor.
``(G) One member who shall be representative of
victims of crime.
``(H) One member who shall be representative of the
prisoner rehabilitation community.
``(I) Two members whose background or expertise the
Attorney General considers appropriate.
``(2) Terms.--
``(A) Except as provided in this paragraph, each
member shall be appointed for a term of four years.
``(B) As designated by the Attorney General at the
time of appointment, of the members first appointed--
``(i) 3 members shall be appointed for
terms of 1 year;
``(ii) 3 members shall be appointed for
terms of 2 years;
``(iii) 3 members shall be appointed for
terms of 3 years; and
``(iv) 3 members shall be appointed for
terms of 4 years.
``(C) Any member appointed to fill a vacancy
occurring before the expiration of the term for which
the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor has taken office. A vacancy in the
Board shall be filled in the manner in which the
original appointment was made.
``(3) Compensation.--A member of the Board may not receive
pay, allowances, or benefits by reason of his or her service on
the Board.
``(4) Quorum.--Seven members of the Board constitutes a
quorum but a lesser number may hold hearings.
``(5) Chair.--The Chair of the Board is elected by the
members.
``Sec. 4122. Federal Prison Industries: operating objectives,
standards, and requirements
``(a) Operating Objectives.--Federal Prison Industries shall carry
out its industrial operations so as to achieve each of the following
objectives:
``(1) To increase public safety by reducing the rate of
recidivism by providing as many inmates as possible with an
opportunity to gain meaningful employment and vocational skills
and improve their chances of becoming productive and law-
abiding citizens after release from prison.
``(2) To minimize any adverse effects of the operations on
domestic companies or workers.
``(3) To provide meaningful employment and vocational
training for not less than 25 percent of eligible inmate
workers.
``(4) To provide inmate workers with a source of income
with which they may facilitate their ability to contribute to
the discharge of their financial obligations.
``(5) To generate sufficient revenue to fund those
operations.
``(6) To provide products and services that are market
quality and competitively priced.
``(b) Performance Standards.--Federal Prison Industries shall carry
out its industrial operations in compliance with the following
standards, as applicable to correctional industry programs:
``(1) United Nations standards.
``(2) International Labor Organization conventions to which
the United States is a signatory party.
``(3) Federal standards.
``(4) American Correctional Association standards.
``(c) Voluntariness.--Federal Prison Industries shall carry out its
industrial operations only with inmate workers who participate in those
operations voluntarily.
``(d) Wage Rates.--Unless otherwise provided by law, each inmate
worker participating in the industrial operations of Federal Prison
Industries shall be paid at a wage rate prescribed by the Board of
Directors of Federal Prison Industries.
``(e) Protection of Certain Information.--Federal Prison Industries
shall carry out its industrial operations so as to ensure that, in the
production of a product or the performance of a service, inmate workers
do not have access to--
``(1) personal or financial information about any citizen
of the United States without prior notice of the access being
provided to that citizen, including information relating to the
citizen's real property, however described, unless that information is
publicly available; or
``(2) information that is classified in the national
security or foreign policy interests of the United States.
``(f) Vocational Training.--At the end of each fiscal year, Federal
Prison Industries shall, if the Board of Directors determines that it
is financially feasible to do so, contribute not less than 20 percent
of its net profits for that fiscal year to provide for the vocational
training of inmates without regard to their industrial or other
assignments.
``(g) Exemption From Public Contracting and Procurement Laws.--
Federal Prison Industries is exempt from all laws and regulations
governing public contracting and the procurement of property or
services by an agency of the Federal Government.
``(h) Liability.--The sole remedy for injury, death, or loss
resulting from negligence in the design or production of a product, or
in the performance of a service, by Federal Prison Industries shall be
as follows:
``(1) In the case of a person suffering an injury, death,
or loss in the performance of duties as an employee of the
United States, chapter 81 of title 5, relating to compensation
for work-related injuries.
``(2) In all other cases, chapter 171 of title 28, relating
to tort claims.
``(i) Deductions From Wages.--
``(1) In general.--Subject to the other provisions of this
subsection, the Board of Directors may deduct and withhold
amounts from the wages paid to a Federal Prison Industries
inmate worker and disburse those amounts for the following:
``(A) Payment of fines, special assessments,
restitution to the victim, and any other restitution
owed by the inmate worker pursuant to court order.
``(B) Allocations for support of the inmate
worker's family under law, court order, or agreement by
the inmate worker.
``(C) Reasonable charges for costs of
incarceration, as determined by the Board of Directors.
``(D) Contributions to any fund established by law
to compensate the victims of crime.
``(E) Amounts to be held on account and paid to the
inmate worker upon release from the custody of the
Bureau of Prisons.
``(2) Limitation.--The total of all amounts deducted and
withheld from the pay of an inmate worker for a pay period may
not exceed--
``(A) 80 percent of gross pay, in the case of an
inmate worker specified in section 4123(d)(2); or
``(B) 50 percent of gross pay, in the case of any
other inmate worker.
``(3) Exception.--The total specified in paragraph (2) may,
with the consent of an inmate worker, exceed the limitation in
paragraph (2)(A) or (2)(B), as applicable, if the amounts in
excess of such limitation are for the purposes described in
subparagraphs (B) or (E) of paragraph (1).
``(4) Agreement of inmate worker required.--Amounts may not
be deducted, withheld, or disbursed under this subsection
unless the inmate worker concerned has agreed in advance to the
deduction, withholding, or disbursement of those amounts.
``Sec. 4123. Federal Prison Industries: transactions authorized
``(a) Sales to Agencies and Not-For-Profits.--Federal Prison
Industries may sell products and services to government agencies and
not-for-profit organizations.
``(b) Sales of Certain Commodities.--Federal Prison Industries may
carry out a program to manufacture commodities specified in section
1761(b).
``(c) Participation in Foreign Labor Substitute Pilot Projects.--
Subject to the requirements in subsection (e), Federal Prison
Industries may make available inmate workers for participation in a
pilot project approved as a foreign labor substitute by the Foreign
Labor Substitute Panel, as referred to in section 1761(e).
``(d) Participation in BJA Pilot Projects.--
``(1) In general.--Subject to the requirements in
subsection (e), Federal Prison Industries may make available
inmate workers for participation in a pilot project designated
by the Director of the Bureau of Justice Assistance, as
referred to in section 1761(c).
``(2) Wage rate.--Each inmate worker participating in a
pilot project specified in paragraph (1) shall be paid at a
wage rate that complies with section 1761(c).
``(e) Requirements for Contracts With Private Companies.--In making
available inmate workers for participation in a pilot project under
subsection (c) or (d), Federal Prison Industries shall comply with the
following requirements:
``(1) The inmate workers shall be made available through a
contract between Federal Prison Industries and a private United
States company.
``(2) The contract shall--
``(A) require that the labor performed by the
inmate workers shall be carried out at a Federal Prison
Industries facility;
``(B) include a clause that prohibits the company
from displacing any of that company's existing domestic
workers as a direct result of the contract with Federal
Prison Industries; and
``(C) provide that any workforce reductions carried
out by the company affecting employees performing work
comparable to the work performed pursuant to the
contract shall first apply to inmate workers employed
pursuant to the contract.
``(f) Goals for Certain Businesses.--Federal Prison Industries
shall, in consultation with the Small Business Administration,
establish and strive to meet or exceed realistic goals for entering
into contracts with one or more of the following:
``(1) A business concern that meets the applicable size
standards prescribed pursuant to section 3(a) of the Small
Business Act (15 U.S.C. 632(a)).
``(2) A small business concern owned and controlled by
socially and economically disadvantaged individuals, as that
term is defined in section 8(d)(3)(C) of the Small Business Act
(15 U.S.C. 637(d)(3)(C)).
``(g) Job Opportunities for Blind and Severely Disabled
Individuals.--Federal Prison Industries shall establish business
partnerships with organizations representing domestic workers who are
blind or severely disabled, for the purpose of entering into contracts
with private United States companies that would create job
opportunities both for blind and severely disabled individuals and for
Federal inmates.
``(h) Donation of Products and Services.--The Board of Directors
may authorize--
``(1) the donation of a product or service of Federal
Prison Industries that is available for sale; or
``(2) the production of a new product, or the performance
of a new service, for donation.
``(i) Catalog.--Federal Prison Industries shall publish and
maintain a catalog of all products and services that it offers for sale
to government agencies and not-for-profit organizations. The catalog
shall be periodically revised as products and services are added or
deleted.''.
(b) Conforming Amendment.--Section 1761(c)(1) of such title is
amended by striking ``non-Federal''.
(c) Clerical Amendment.--The table of sections at the beginning of
chapter 307 of such title is amended by striking the items relating to
sections 4121, 4122, and 4123 and inserting the following:
``4121. Federal Prison Industries: status, mission, and management.
``4122. Federal Prison Industries: operating objectives, standards, and
requirements.
``4123. Federal Prison Industries: transactions authorized.''.
SEC. 4. AUTHORITY FOR FEDERAL AGENCIES TO PURCHASE FROM FEDERAL PRISON
INDUSTRIES AND THE AUTHORITY FOR THE ATTORNEY GENERAL TO
CREATE A PILOT PROGRAM TO TEST THE ELIMINATION OF THE
MANDATORY SOURCE PREFERENCE.
(a) In General.--Section 4124 of title 18, United States Code, is
amended--
(1) in subsection (a), by adding at the end the following:
``The mandatory source preference in this section does not
apply to services.'';
(2) by amending subsection (c) to read as follows:
``(c) Each Federal department or agency shall report purchases from
Federal Prison Industries to the Federal Procurement Data System
(referred to in section 6(d)(4) of the Office of Federal Procurement
Policy Act (41 U.S.C. 405(d)(4))) in the same manner as it reports to
such System any acquisition in an amount in excess of the simplified
acquisition threshold (as defined in section 4(11) of that Act (41
U.S.C. 403(11))).''; and
(3) by amending subsection (d) to read as follows:
``(d)(1) The head of a Federal department or agency may purchase
directly from Federal Prison Industries any of the following:
``(A) Any products with respect to which the requirement in
subsection (a) has, under any authority, been suspended,
waived, or not invoked.
``(B) Any services.
``(2) A purchase under this subsection may be made in quantity and
by any method that is determined appropriate by the head of the agency
making the purchase without regard to any provision of law or
regulation.''.
(b) Chapter 307 of title 18, United States Code, is amended by
adding at the end the following:
``Sec. 4130. Creation of pilot program to test the elimination of
mandatory source preference in Federal Prison Industries
programs
``(a) Creation of Pilot Program.--Not later than 180 days after the
enactment of this section, the Attorney General shall implement a pilot
program to test the effect of changes to the mandatory source
preference of Federal Prison Industries described in section 4124. The
pilot program shall conform to the requirements of this subsection (a).
``(1) Pilot program to cover a designated specific product
or products.--The Attorney General shall designate up to five
specific product or products, identified by Standard Industrial
Product Code (as published by the Office of Management and
Budget), each from a separate industry category, which Federal
Prison Industries, on the date of enactment of this section,
produces and sells to the several Federal departments and
agencies and other Government institutions of the United
States, pursuant to the mandatory source preference described
in section 4124. The pilot program created by this section
shall be implemented with respect to such designated Federal
Prison Industries product or products.
``(2) Elimination of mandatory source preference with
respect to designated product or products in the pilot
program.--In the pilot program created by this section, the
mandatory source preference of Federal Prison Industries
pursuant to section 4124, with respect to the designated
product or products described in paragraph (1), shall be
eliminated.
``(b) Permanent Elimination of Mandatory Source Preference Upon
Satisfaction of Certain Conditions in Pilot Program.--The Attorney
General shall review the results of the pilot program created by this
section, and shall determine whether the elimination of the mandatory
source preference of Federal Prison Industries pursuant to section
4142, with respect to the designated product or products in the pilot
program, shall be made permanent or shall be terminated, all in
accordance with this subsection (b).
``(1) Attorney general's determination regarding employment
of eligible inmates.--As of the date that is five years after
the date of enactment of this section, the Attorney General
shall determine how many eligible inmates are in fact employed
by Federal Prison Industries in the manufacture or sale of the
designated product or products in the pilot program created by
this section.
``(2) Effect of determination that pilot program has
maintained or increased inmate employment.--If the Attorney
General determines pursuant to paragraph (1) that an equal or
greater number of the eligible inmates described in paragraph
(1) are employed in the manufacture and sale of the designated
product or products than were so employed on the date of
enactment of this section, then the elimination of the
mandatory source preference of Federal Prison Industries
pursuant to section 4124, with respect to the designated
product or products in the pilot program, shall be made
permanent with respect to such product or products. In this
event, the Attorney General shall submit a report to the
Congress, containing recommendations for continuation of the
pilot program to additional periods as described in section
4130(a)(1).
``(3) Effect of determination that pilot program has
reduced inmate employment.--If the Attorney General determines
pursuant to paragraph (1) that a lesser number of the eligible
inmates described in paragraph (1) are employed in the
manufacture and sale of the designated product or products than
were so employed on the date of enactment of this section, then
the pilot program created by this section may, at the
discretion of the Attorney General, be terminated with respect
to such product or products. In the event of such termination,
the mandatory source preference of Federal Prison Industries
pursuant to section 4124 shall be re-implemented with respect to the
designated product or products. In this event, the Attorney General
shall submit a report to the Congress, within 180 days after such
determination, advising the Congress of the termination of the pilot
program, and containing recommendations for continuation of the pilot
program to additional products and for additional periods as described
in section 4130(a)(1).
``(4) Utilization of other reports.--In preparing the
reports described in paragraphs (2) and (3), the Attorney
General shall pay due regard to any reports prepared during the
existence of the pilot program by the Comptroller General and
by the board of directors of Federal Prison Industries pursuant
to section 4127.
``(c) Authority for Early Suspension or Termination.--
Notwithstanding subsection (b), the Attorney General may suspend or
terminate the pilot program created by this section at any time, in
whole or in part, if the Attorney General determines that such pilot
program threatens the stability or security of any Federal correctional
facility.
``(d) No Effect on Existing Contracts of Federal Prison
Industries.-- Nothing in this section shall be construed to amend or
impair any contract between Federal Prison Industries and any private
person or company in effect at the time of commencement of the pilot
program created by this section.''
SEC. 5. PERIODIC EVALUATION AND REPORTS.
(a) In General.--Section 4127 of title 18, United States Code, is
amended to read as follows:
``Sec. 4127. Periodic evaluation and reports
``(a) Evaluation by GAO.--
``(1) Matters evaluated.--The Comptroller General shall
provide for an independent evaluation of the operations of
Federal Prison Industries to be carried out each year. The
matters evaluated shall include the following:
``(A) The overall success of the operations.
``(B) The effects that any reduction in the
purchases made under section 4124(a) has on the
viability of Federal Prison Industries.
``(C) The extent to which Federal Prison Industries
can successfully contract with private companies
without adversely affecting domestic companies or
workers.
``(D) The current status and effects of the pilot
program or programs described in section 4130.
``(2) Views included.--The Comptroller General shall ensure
that, in the development of appropriate methodologies for the
evaluation under paragraph (1), the views of the Foreign Labor
Substitute Panel, private industry, organized labor, the Board
of Directors of Federal Prison Industries, and the public are
solicited.
``(3) Report.--Not later than March 31 of each fiscal year,
the Comptroller General shall submit to Congress a report on
the evaluation of the operations of Federal Prison Industries
that was carried out under paragraph (1) for the preceding
fiscal year. The report for a fiscal year shall, at a minimum,
include the following:
``(A) The evaluation.
``(B) Any concerns raised about any adverse effects
on domestic companies or workers, together with any
actions taken in regard to the concerns.
``(C) The extent to which Federal Prison Industries
maintained at least a 25 percent employment rate for
eligible inmate workers.
``(D) The extent to which Federal Prison Industries
conducted its operations on a financially self-
sustaining basis.
``(E) Any recommended legislation to improve the
administration of this chapter or the effects of the
administration of this chapter, including any
recommended legislation necessary to authorize remedial
actions regarding--
``(i) any conduct of the operations of
Federal Prison Industries in a manner that
adversely affects domestic companies or workers
(excluding the effects of normal competitive
business practices);
``(ii) any failure of Federal Prison
Industries to maintain at least a 25 percent
employment rate for eligible inmate workers; or
``(iii) any failure of Federal Prison
Industries to conduct its operations on a
financially self-sustaining basis.
``(b) Annual Report by Board of Directors.--
``(1) In general.--The Board of Directors of Federal Prison
Industries shall, each year, report under section 9106 of title
31 on the conduct of the business of Federal Prison Industries
and the condition of its funds during the preceding fiscal
year.
``(2) Matters included.--In addition to the matters
required by section 9106 of title 31, and such other matters as
the Board considers appropriate, each report for a fiscal year
under paragraph (1) shall include the following:
``(A) A statement of the amount of obligations
issued under section 4129(a)(1) of this title during
that fiscal year.
``(B) An estimate of the amount of obligations that
will be issued under that section during the following
fiscal year.
``(C) An analysis of--
``(i) the total sales by Federal Prison
Industries for each product and service sold to
Federal agencies and to private United States
companies;
``(ii) the total purchases by each Federal
agency of each product and service; and
``(iii) the Federal Prison Industries share
of the total Federal Government purchases by
product and service.
``(D) An analysis of the inmate workforce,
including--
``(i) the number of inmates employed;
``(ii) the number of inmates used to
produce products or perform services sold to
private United States companies;
``(iii) the number and percentage of
employed inmates, categorized by term of
incarceration; and
``(iv) the various hourly wages paid to
inmates engaged in the production of the
various products and the performance of
services authorized for production and sale to
Federal agencies and to private United States
companies.
``(E) Information concerning any employment
obtained by former inmates upon release that is useful
in determining whether the employment provided by
Federal Prison Industries during incarceration provided
those former inmates with knowledge and skill in a
trade or occupation that enabled them to earn a
livelihood upon release.
``(F) Information on the current status of the
pilot program or programs described in section 4130.
``(3) Availability to public.--The Board of Directors shall
make available to the public each report under this
subsection.''.
``(b) Clerical Amendment.--In the table of sections at the
beginning of chapter 307 of such title, the item relating to section
4127 is amended to read as follows:
``4127. Periodic evaluation and reports.''.
SEC. 6. RULES OF CONSTRUCTION AND DEFINITIONS.
``(a) In General.--Chapter 307 of title 18, United States Code, is
amended by adding at the end (following the addition of section 4130 of
such title, as added by subsection (b) of section 4 of this Act) the
following:
``Sec. 4131. Construction of provisions
``Nothing in this chapter shall be construed--
``(1) to establish an entitlement of any inmate to--
``(A) employment in a Federal Prison Industries
facility; or
``(B) any particular wage, compensation, or benefit
on demand;
``(2) to establish that inmates are employees for the
purposes of any law or program; or
``(3) to establish any cause of action by or on behalf of
any person against the United States or any officer, employee,
or contractor thereof.
``Sec. 4132. Definitions
``In this chapter:
``(1) The term `eligible inmate' or `eligible inmate
worker' means a person who--
``(A) is committed to the custody of the Bureau of
Prisons pursuant to section 3621 of this title;
``(B) is designated to a low, medium, or high
security facility operated by the Bureau of Prisons;
and
``(C) is physically and mentally able to work.
``(2) The term `private United States company' means a
corporation, partnership, joint venture, or sole proprietorship
with a principal place of business in the United States.''.
``(b) Clerical amendment.--The table of sections at the beginning
of chapter 307 of such title is amended by adding at the end the
following new items:
``4130. Creation of pilot program to test elimination of mandatory
source preference in Federal Prison
Industries programs.
``4131. Construction of provisions.
``4132. Definitions.''.
SEC. 7. CONFORMING AMENDMENT.
``Section 436 of title 18, United States Code, is amended by
striking ``Whoever,'' and inserting ``Except as otherwise provided in
this title, whoever,''.
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