[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1228 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1228

  To amend title 18, United States Code, to authorize pilot projects 
  under which private companies in the United States may use Federal 
   inmate labor to produce items that would otherwise be produced by 
  foreign labor, to revise the authorities and operations of Federal 
               Prison Industries, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 24, 2001

Mr. Thurmond (for himself and Mr. Hatch) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To amend title 18, United States Code, to authorize pilot projects 
  under which private companies in the United States may use Federal 
   inmate labor to produce items that would otherwise be produced by 
  foreign labor, to revise the authorities and operations of 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 Inmate Work 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. ELIMINATION OF MANDATORY SOURCE PURCHASE REQUIREMENT.

    (a) In General.--Section 4124 of title 18, United States Code, is 
amended--
            (1) in subsection (a), by adding at the end the following: 
        ``This subsection 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 any 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) Plan for Phased Elimination of Mandatory Source.--Not later 
than 180 days after the date of the enactment of this Act, the Board of 
Directors shall submit to Congress a plan for the elimination of the 
requirement of section 4124(a) of title 18, United States Code. The 
plan shall provide for the following:
            (1) Annual reductions in the total sales that are made by 
        Federal Prison Industries under the requirement.
            (2) A prohibition on any interim significant expansion of 
        sales under the requirement above levels authorized by the 
        Board of Directors of Federal Prison Industries for such sales 
        before the date of the enactment of this Act.
            (3) A prohibition on sales under the requirement after the 
        date that is five years after the date on which the plan is 
        submitted to Congress under this section.
    (c) Public Availability of Plan.--Not later than 30 days after the 
date on which the plan is submitted to Congress under this section, 
Federal Prison Industries shall publish the plan in a commercial 
business publication with a national circulation. Federal Prison 
Industries shall make copies of the plan available to the public upon 
request.
    (d) Repeal of Mandatory Source Requirement.--Effective on the date 
that is 5 years after the date on which the plan is submitted to 
Congress under this section, section 4124 of title 18, United States 
Code, is amended--
            (1) by striking subsections (a) and (b); and
            (2) by amending subsection (d)(1)(A) to read as follows:
            ``(A) Any products.''.

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.
            ``(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.
            ``(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 the following:
``Sec. 4130. 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. 4131. Definitions
    ``In this chapter:
            ``(1) The term `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. Construction of provisions.
``4131. 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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