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[Senate Report 115-162]
[From the U.S. Government Publishing Office]

                                                        Calendar No. 228

115th Congress}                                                { Report
                                 SENATE
 1st Session  }                                                { 115-162

_______________________________________________________________________

                            FAIR CHANCE ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 842

          TO PROHIBIT FEDERAL AGENCIES AND FEDERAL CONTRACTORS
            FROM REQUESTING THAT AN APPLICANT FOR EMPLOYMENT
          DISCLOSE CRIMINAL HISTORY RECORD INFORMATION BEFORE
 THE APPLICANT HAS RECEIVED A CONDITIONAL OFFER, AND FOR OTHER PURPOSES

               September 25, 2017.--Ordered to be printed
               
               
               
                                __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                              WASHINGTON : 2017              
               
               
               
       
       
       COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
              Rebecca N. Nuzzi, Professional Staff Member
               Margaret E. Daum, Minority Staff Director
               Stacia M. Cardille, Minority Chief Counsel
       Charles A. Moskowitz, Minority Senior Legislative Counsel
                 Katherine C. Sybenga, Minority Counsel
                     Laura W. Kilbride, Chief Clerk

                                                       Calendar No. 228

115th Congress}                                             { Report
                                 SENATE
 1st Session  }                                             { 115-162

======================================================================

 
                            FAIR CHANCE ACT

                                _______
                                

               September 25, 2017.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 842]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 842) to prohibit 
Federal agencies and Federal contractors from requesting that 
an applicant for employment disclose criminal history record 
information before the applicant has received a conditional 
offer, and for other purposes, reports favorably thereon with 
amendments and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................8
 IV. Section-by-Section Analysis......................................8
  V. Evaluation of Regulatory Impact..................................9
 VI. Congressional Budget Office Cost Estimate........................9
VII. Changes in Existing Law Made by the Bill, as Reported...........10

                         I. Purpose and Summary

    S. 842, the Fair Chance to Compete for Jobs Act of 2017, or 
the Fair Chance Act, gives formerly incarcerated individuals a 
fair chance to compete for employment in the Federal government 
and on Federal contracts by prohibiting Federal agencies and 
prime Federal contractors from requesting criminal history 
information from job applicants until after they have issued a 
conditional offer of employment. By granting individuals with a 
criminal history the opportunity to compete for Federal jobs 
without first considering their criminal history, the 
legislation seeks to improve employment prospects for these 
individuals, thereby reducing recidivism.
    S. 842 includes exceptions for certain positions for which 
access to criminal history information is required by law, jobs 
involving law enforcement and national security duties, in 
addition to other commonsense exceptions. The bill also 
requires the United States Census Bureau and the Bureau of 
Justice Statistics to issue a report on the employment of 
formerly incarcerated individuals.\1\
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    \1\On October 7, 2015, the Committee approved S. 2021, the Fair 
Chance Act. That bill is substantially similar to S. 842. Accordingly, 
this committee report is in large part a reproduction of Chairman 
Johnson's committee report for S. 2021, S. Rep. No. 114-200.
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              II. Background and the Need for Legislation

Rise in prison population

    On August 4, 2015, the Committee held a hearing titled 
Oversight of the Bureau of Prisons: First-Hand Accounts of 
Challenges Facing the Federal Prison System.\2\ The hearing 
outlined a number of problems facing the Federal prison system 
and state and local systems. The United States has the world's 
largest prison population, with approximately 190,000 people 
incarcerated in Federal facilities, and an additional 2 million 
people in state and local facilities.\3\ Since the 1980s, the 
Bureau of Prisons (BOP) has experienced rapid growth in terms 
of both the number of inmates under its jurisdiction, and its 
appropriations. Between fiscal year (FY) 1980 and FY2013, the 
Federal inmate population increased from approximately 25,000 
inmates to 219,000 inmates--a 790 percent increase.\4\ In 
FY1980, BOP appropriations were just under $330 million.\5\ By 
FY2016, the BOP's budget had risen nearly $7.1 billion--a 783 
percent increase--to its current level of $7.5 billion.\6\
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    \2\Oversight of the Bureau of Prisons: First-Hand Accounts of 
Challenges facing the Federal Prison System: Hearing Before the S. 
Comm. on Homeland Sec., and Gov't Affairs, 114th Cong. (2015).
    \3\Federal Bureau of Prisons, Federal Inmate Statistics, http://
www.bop.gov/about/statistics/population_statistics.jsp (last visited 
Aug. 2, 2017); Bureau of Justice Statistics, NCJ250229, Prisoners in 
2015 (December 2016). available at https://www.bjs.gov/
index.cfm?ty=pbdetail&iid=5869 [hereinafter BJS report].
    \4\Nathan James, Cong. Research Serv., R42486, Appropriations for 
the Bureau of Prisons (BOP): In Brief (2016).
    \5\Id. at 9 (Table A-1).
    \6\Id. at 1.
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Rise in population of formerly incarcerated individuals

    The rise in inmate population has seen a commensurate rise 
in the number of formerly incarcerated people living in 
communities across the country. According to the Bureau of 
Justice Statistics (BJS), 2015 marked the third consecutive 
year of decline in the Federal prisoner population.\7\ 
Population levels are at their lowest since 2005.\8\ The BJS 
found that state and Federal prisons admitted fewer new 
prisoners in 2015 than in 2014, while also releasing an 
increased number of inmates.\9\
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    \7\According to BJS, state and Federal prisons admitted 608,300 
prisoners with sentences exceeding one year in 2015, representing a 3 
percent decrease from the total admissions in 2014 (626,100). See BJS 
Report at 10.
    \8\The total Federal inmate population in 2005 was 187,618. See BJS 
report at 3, table 1. As of July 28, 2017, the total number of federal 
prisoners was 187,315. See Federal Bureau of Prisons, Statistics, 
https://www.bop.gov/about/statistics/population_statistics.jsp (last 
visited August 2, 2017).
    \9\There were 17,800 fewer new prisoners admitted into state and 
Federal prisons in 2015 than in 2014; state and Federal prisons 
released 4,700 more prisoners in 2015 than they did in 2014. See BJS 
report.
---------------------------------------------------------------------------
    In 2014, the United States Sentencing Commission (USSC) 
amended the Federal sentencing guidelines, lowering the 
statutory minimum for drug offenders.\10\ An additional 
amendment made the reduction retroactive, allowing nearly 
46,000 Federal drug offenders sentenced before the lowered drug 
guidelines went into effect to petition for reductions to their 
sentences.\11\ As a result, there are more individuals with 
criminal records being released back into communities.
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    \10\United States Sentencing Commission, Amendments to the 
Sentencing Guidelines, April 30, 2014. available at https://
www.ussc.gov/sites/default/files/pdf/amendment-process/reader-friendly-
amendments/20140430_RF_Amendments.pdf (Amendment 782).
    \11\United States Sentencing Commission, Memorandum: Summary of Key 
Data Regarding Retroactive Application of the 2014 Drug Guidelines 
Amendment. (July 25, 2014), available at: https://www.ussc.gov/sites/
default/files/pdf/research-and-publications/retroactivity-analyses/
drug-guidelines-amendment/20140725-Drug-Retro-Analysis.pdf.
---------------------------------------------------------------------------
    At the same time, the Federal Government has spent more and 
more money to maintain and operate the BOP's facilities. As of 
FY2016, the BOP's budget is just over 25 percent of the DOJ's 
discretionary budget.\12\
---------------------------------------------------------------------------
    \12\Department of Justice, FY 2018 Budget Request at a Glance (May 
23, 2017) available at: https://www.justice.gov/doj/fy-2018-budget-and-
performance-summary.
---------------------------------------------------------------------------
    Recent expenditure data from the BOP indicate that the 
overall per capita cost of incarceration for inmates in the 
Federal system is on the rise, having increased from $21,603 
per inmate in FY2000, to nearly $32,000 per inmate in FY2015--
an increase of 48 percent.\13\ Because the BOP spends 
significant resources simply housing inmates for the duration 
of their sentence, they spend fewer resources on vocational 
training. At the Committee's August 4, 2015, hearing, the BOP 
Director testified that those Federal inmates who participate 
in Federal Prison Industries, a vocational training program, 
are 24 percent less likely to recidivate than similar non-
participating inmates.\14\ However, the hearing also revealed 
that fewer than five percent of inmates are able to participate 
in the program.\15\ This highlights the need to improve 
employment prospects for those who leave the prison system.
---------------------------------------------------------------------------
    \13\Supra note 4.
    \14\Supra note 2, statement of Charles Samuels, Dr., Bureau of 
Prisons.
    \15\Id.
---------------------------------------------------------------------------
    With each inmate costing taxpayers nearly $32,000 annually, 
it is essential that those with criminal histories have the 
tools available to them upon release to seek stable employment, 
and avoid recidivating. Reducing the rate of recidivism by 
improving employment opportunities for the formerly 
incarcerated has the potential to reduce crime, reduce the 
prison population, save taxpayer dollars, and improve lives.
    The American economy pays a price for having such steep 
barriers to employment for people with criminal records. A 2016 
Center for Economic Policy and Research study on the formerly 
incarcerated and the labor market found that in 2014 alone, 
employment losses of those with criminal records cost the 
economy the equivalent of 1.7 to 1.9 million workers, and a 
loss of $78 to $87 billion in gross domestic product.\16\
---------------------------------------------------------------------------
    \16\Cherrie Bucknor & Alan Barber, The Price We Pay: Economic Costs 
of Barriers to Employment for Former Prisoners and People Convicted of 
Felonies, Center for Economic Policy and Research, (June 2016), 
available at http://cepr.net/images/stories/reports/employment-
prisoners-felonies-2016-06.pdf.
---------------------------------------------------------------------------

Barriers to employment

    Formerly incarcerated people face a number of obstacles 
upon reentry into their communities that impede rather than 
encourage their reintegration. Speaking at the August 4, 2015, 
hearing, Chairman Ron Johnson stated that he had met with a 
small group of formerly incarcerated men and that ``what [he] 
learned was that these men want to turn their lives around and 
stay out of prison'' but that there ``are many challenges that 
people face leaving the prison system.''\17\ Chief among them 
are barriers to employment and, consequently, income and 
stability.
---------------------------------------------------------------------------
    \17\Supra note 2, statement of Senator Ron Johnson, Chairman.
---------------------------------------------------------------------------
    Studies have shown that as many as two-thirds of people 
released from prison between 2005 and 2010 were arrested for a 
new crime within three years, and three-quarters were arrested 
within five years.\18\ The DOJ estimates that roughly 40 
percent of people formerly incarcerated in Federal prisons and 
over 60 percent of people formerly incarcerated in state 
prisons are re-arrested or have their supervision revoked 
within three years.\19\
---------------------------------------------------------------------------
    \18\Matthew R. Durose, Alexia D. Cooper, PhD., & Howard N. Snyder, 
PhD, Bureau of Justice Statistics, NCJ244205, Recidivism of Prisoners 
Released in 30 States in 2005: Patterns from 2005 to 2010 (Apr. 2014).
    \19\Dan Merica & Evan Perez, Eric Holder seeks to cut mandatory 
minimums, CNN (Aug. 12, 2013, 7:03 PM), http://www.cnn.com/2013/08/12/
politics/holder-mandatory-minimums/.
---------------------------------------------------------------------------
    There are many factors that increase a formerly 
incarcerated person's likelihood of being re-incarcerated and 
limited employment opportunities are one of the strongest 
predictors of recidivism. Multiple studies have shown that 
formerly incarcerated people who maintain steady, legitimate 
employment are less likely to return to criminal acts upon 
release from prison.\20\ Employment has been found to reduce 
recidivism by as much as 20 percent among non-violent 
offenders.\21\
---------------------------------------------------------------------------
    \20\Mark T. Berg & Beth M. Huebner, Reentry and the Ties that Bind: 
An Examination of Social Ties, Employment, and Recidivism, 28 Justice 
Quarterly No. 2 (Apr. 2011), available at http://www.pacific-
gateway.org/reentry,%20employment%20and%20recidivism.pdf.
    \21\Aaron Yelowitz & Christopher Bollinger, Prison-to-Work: The 
Benefits of Intensive Job-Search Assistance for Former Inmates, 
Manhattan Institute Center for State and Local Leadership, Civic Report 
No. 96, 28 (Mar. 2015), available at http://www.manhattan-
institute.org/html/prison-work-5876.html.
---------------------------------------------------------------------------
    An extensive body of research has established that a felony 
conviction or time in prison makes individuals significantly 
less employable. According to research from the Pew Charitable 
Trust, serving time reduces hourly wages for men by 
approximately 11 percent, annual employment by 9 weeks, and 
annual earnings by 40 percent.\22\ By age 48, the typical 
formerly incarcerated person will have earned $179,000 less 
than if he had never been incarcerated, not including income 
forfeited while incarcerated.\23\ Equally troubling, upon 
release from prison, incarceration depresses the total earnings 
of white males by 2 percent, of Latino males by 6 percent, and 
African American males by 9 percent.\24\
---------------------------------------------------------------------------
    \22\Pew Center on the States, ``Collateral Costs: Incarceration's 
Effect on Economic Mobility,'' The Pew Charitable Trusts 4, 11 (2010), 
available at http://www.pewtrusts.org//media/legacy/uploadedfiles/
pcs_assets/2010/collateralcosts1pdf.
    \23\Id. at 4.
    \24\Id. at 4, 12.
---------------------------------------------------------------------------
    Advancements in information technology and the Internet 
have given employers unprecedented access to criminal history 
record information. Surveys show that an estimated 87 percent 
of employers conduct criminal background checks on all job 
candidates. Therefore, a person's criminal history can have a 
profound impact on their ability to find work, at times even 
when there is no logical connection between their criminal 
history and the work they apply for.\25\
---------------------------------------------------------------------------
    \25\Society for Human Resource Management, SHRM Survey Findings: 
Background Checking--The Use of Criminal Background Checks in Hiring 
Decisions, (July 2012), available at http://www.shrm.org/research/
surveyfindings/articles/pages/criminalbackgroundcheck.aspx.
---------------------------------------------------------------------------
    Research examining the impact of a criminal record on the 
employment process found that in the initial stages of the 
hiring process, formerly incarcerated people were only one-half 
to one-third as likely as non-offenders to even be considered 
by employers.\26\ Additional research shows that a criminal 
record reduces the likelihood of a callback or job offer by 
nearly 50 percent for men, and that number increases to 60 
percent for African American men, specifically.\27\
---------------------------------------------------------------------------
    \26\Devah Pager, The Mark of a Criminal Record, 108 Am. J. of 
Sociology 937, 960 (Mar. 2003), available at http://
scholar.harvard.edu/files/pager/files/pager_ajs.pdf.
    \27\Devah Pager, Bruce Western, & Naomi Sugie, Sequencing 
Disadvantage: Barriers to Employment Facing Young Black and White Men 
with Criminal Records, 623 Annals of the American Academy of Political 
and Social Science 195 (May 2009), available at http://
scholar.harvard.edu/files/pager/files/
annals_sequencingdisadvantage.pdf?m=1392390789.
---------------------------------------------------------------------------

``Banning the Box''

    Recognizing the impact employment has on reducing 
recidivism among persons with felony convictions, criminal 
justice reform advocates have begun encouraging states and 
private companies to consider adopting ``ban the box'' hiring 
policies, which remove or delay the criminal history inquiry on 
job applications.\28\ This relatively simple change has been 
shown to have had benefits for employers and felons alike. When 
an employer sees that an applicant has checked the ``box'' 
indicating their criminal record, they are more likely to 
dismiss the applicant. This not only hurts the applicant, it 
also hurts businesses by artificially reducing the pool of 
qualified candidates.
---------------------------------------------------------------------------
    \28\Michelle Natividad Rodriquez and Beth Avery, NELP, Ban the Box: 
U.S. Cities, Counties, and States Adopt Fair Hiring Policies (June 5, 
2017), available at http://www.nelp.org/publication/ban-the-box-fair-
chance-hiring-state-and-local-guide/.
---------------------------------------------------------------------------
    Recent studies examining hiring trends before and after the 
introduction of ban the box policies have questioned their 
efficacy and cautioned policymakers to consider the unintended 
consequences such reforms might have on overall employment 
prospects among certain populations.\29\ The authors argue 
that, in the absence of upfront access to criminal background 
information, employers relied on other factors such as race to 
determine the likelihood of a candidate having a criminal 
history.\30\ As a result, entire demographic groups experienced 
disproportionately fewer callbacks and lowered hiring 
prospects--even those with no prior record.\31\
---------------------------------------------------------------------------
    \29\Jennifer L. Doleac & Benjamin Hansen, Does `Ban the Box' Help 
or Hurt Low-Skilled Workers? Statistical Discrimination and Employment 
Outcomes when Criminal Histories Are Hidden (Jan. 1, 2017), available 
at https://ssrn.com/abstract=2812811; see also Amanda Y. Agan & Sonja 
B. Starr, Ban the Box, Criminal Records, and Statistical 
Discrimination: A Field Experiment (June 14, 2016), available at 
https://ssrn.com/abstract=2795795.
    \30\Agan and Starr found no that black applicants without criminal 
records saw a substantial drop in callback rates after BTB policies 
were implemented, while white applicants with criminal records 
experienced significantly increased callback rates. Amanda Y. Agan & 
Sonja B. Starr, Ban the Box, Criminal Records, and Statistical 
Discrimination: A Field Experiment, 40 (June 14, 2016), available at 
https://ssrn.com/abstract=2795795.
    \31\Id. at 24; see also Doleac, & Hansen, supra note 29, at 4.
---------------------------------------------------------------------------
    These studies do not expose any significant flaws in ban 
the box policies. On the contrary, the data gathered confirms 
that individuals with criminal records experience higher call 
back and employment rates after the introduction of fair chance 
hiring practices, which is precisely the intended outcome.\32\ 
The more concerning revelation for policymakers to consider is 
the continued role race and implicit bias play in the hiring 
process.
---------------------------------------------------------------------------
    \32\Agan & Starr, supra note 30.
---------------------------------------------------------------------------
    Ban the box policies were never meant to solve the problems 
of racism or discrimination in the hiring process.\33\ Rather, 
they represent one part of a larger reform effort to 
destigmatize the mark of a criminal record, reduce employment 
barriers, and grant the formerly incarcerated the chance to be 
assessed by their merit and not their mistakes.\34\
---------------------------------------------------------------------------
    \33\Maurice Emsellem and Beth Avery, Racial Profiling in Hiring: A 
Critique of New ``Ban the Box'' Studies, National Employment Law 
Project 6 (Aug. 2016), available at http://www.nelp.org/content/
uploads/Policy-Brief-Racial-Profiling-in-Hiring-Critique-New-Ban-the-
Box-Studies.pdf.
    \34\Id. at 6.
---------------------------------------------------------------------------

The Fair Chance Act

    Barriers to employment increase the likelihood of 
recidivism, hurt the economy, and damage communities. It is 
therefore unsurprising that 28 states, the District of 
Columbia, and over 150 cities and counties have adopted some 
variation of a policy to ``ban the box'' on job applications to 
ensure that people with felony records have a fair shot at 
putting their lives back on track.
    Consistent with these state efforts, the Fair Chance Act 
removes one of those barriers by leveling the playing field for 
individuals with a criminal history to find employment in the 
Federal government. The bill moves the criminal history inquiry 
in most cases from the beginning of the hiring process, when 
differential treatment has been found most likely to occur,\35\ 
to later in the hiring process, when a conditional offer of 
employment has been made.
---------------------------------------------------------------------------
    \35\Supra note 26.
---------------------------------------------------------------------------
    According to the Office of Personnel Management (OPM), 
agencies generally do not currently ask about an applicant's 
criminal history at the outset of the hiring process, so the 
legislation should not be a significant change in the process 
in most cases and its implementation would be relatively 
smooth. In addition, unlike some state and local ban-the-box 
policies that affect private employers broadly, the Fair Chance 
Act is more limited in scope since it only covers hiring in the 
Federal government and hiring by prime Federal contractors.
    The Fair Chance Act applies to the entire Federal 
Government, including Congress and the Federal Judiciary. It 
also applies to some Federal civilian and defense contractors. 
The legislation is narrowly crafted, however, to only apply to 
prime contractors and only to those employees doing work for 
the Federal Government on a Federal contract. While a great 
deal of government work is performed by subcontractors, it 
would be exceedingly burdensome for large prime contractors to 
monitor the hiring practices of every single one of their 
subcontractors. Most agencies maintain a goal that one-fourth 
to one-third of all subcontracting dollars must flow to small 
businesses.\36\ These smaller entities are less likely to have 
sophisticated human resources offices and have more basic 
hiring practices.\37\
---------------------------------------------------------------------------
    \36\These goals vary from agency to agency. The General Services 
Administration's model plan calls for a goal of 30 percent of all 
subcontracting dollars. General Services Administration Acquisition 
Manual, Appendix 519A--Small Business Subcontracting Plan Outline 
(Model), available at https://www.acquisition.gov/sites/default/files/
current/gsam/html/Part519AppA.html.
    \37\Diane Arthur, Managing Human Resources in Small and Mid-Sized 
Companies 29 (2nd ed. 2005).
---------------------------------------------------------------------------
    The legislation also provides commonsense exceptions for 
jobs where it would clearly undermine government efficiency, 
place at risk our national security, or risk harm to vulnerable 
populations if a person with a criminal history held the 
position. For agencies hiring for sensitive national security 
positions, the bill provides an exception that would allow the 
agency to inquire about a criminal history at any stage of the 
process. It also provides an exception for positions that would 
allow for unsupervised access to children. The Department of 
Defense, for example, operates schools and childcare centers on 
military bases around the world,\38\ and it is appropriate to 
inquire about the criminal history of applicants for positions 
at those schools earlier in the hiring process.
---------------------------------------------------------------------------
    \38\See generally, U.S. Department of Defense Education Activity, 
http://www.dodea.edu/.
---------------------------------------------------------------------------
    The legislation also has a broad exception for positions 
where an employer is otherwise required by law to inquire about 
a criminal history prior to the conditional offer. This 
exception is modeled after the ``ban the box'' executive order 
instituted by the Commonwealth of Virginia.\39\ There are a 
variety of state, local, and even some Federal laws that 
require employers to collect information about criminal 
history, such as for teaching positions and positions that have 
access to personally identifiable information.
---------------------------------------------------------------------------
    \39\Exec. Order No. 41 (Commonwealth of Virginia) (2015).
---------------------------------------------------------------------------
    Finally, rather than attempt to identify every type of 
position that should require an exception, the legislation 
provides broad authority for OPM, the General Services 
Administration, and the Department of Defense to establish 
additional exceptions for positions with the Federal 
Government, on civilian contracts, and on defense contracts.
    Even where an exception does not exist, the Federal agency 
or contractor is still able under this legislation to decide at 
the end of the process that the individual's criminal history 
disqualifies them from a particular position. The purpose of 
the Fair Chance Act is not to remove access to criminal history 
information about an applicant for government employment; 
rather, the purpose is to move that information to the end of 
the process to give those with a criminal history a fair chance 
to compete for the Federal job.
    The legislation also does not prohibit employers from 
conducting outside research into job candidates, nor does it 
prohibit candidates from voluntarily disclosing their criminal 
history earlier before the conditional offer stage.
    The legislation is silent on the issue of background and 
credit checks for employment. Under existing law, any employers 
must request consent to conduct a background or credit check on 
an applicant for employment. Under the Fair Chance Act, an 
agency or contractor may still request that a job candidate 
sign a release to allow the Federal employer to conduct these 
checks. The legislation does not change the application of 
existing law and guidance on the use of information resulting 
from a background or credit check.
    The legislation simply addresses the timing of a Federal 
agency or contractor's inquiry into the criminal history of an 
applicant, and prohibits an employer from asking a candidate 
either in the application or interview whether they have a 
criminal history. The bill creates an administrative process to 
deal with Federal employees and contractors who ask an 
applicant about their criminal history earlier in the process. 
The legislation specifically states that this administrative 
process is the only avenue to deal with those who violate its 
provisions, and in no way creates a private right of action for 
any individual or entity to file any legal action based on a 
violation or alleged violation. For Federal employees, the 
legislation creates a process by which the employee is warned 
about the conduct and, after notice and appeal, may be fined if 
the conduct is repetitive. For civilian and defense 
contractors, the bill creates a process whereby the contractor 
is warned not to repeat the violation. It creates a permissive 
process for the contract manager to work with the contractor to 
achieve compliance.
    This approach balances the need for an enforcement 
mechanism with the overall goal of encouraging federal agencies 
and government contractors to consider hiring individuals with 
a criminal history when they are otherwise qualified for the 
position.

                        III. Legislative History

    S. 842, the Fair Chance Act, was introduced on April 5, 
2017, by Senators Cory Booker, Ron Johnson, Tammy Baldwin, Joni 
Ernst, Sherrod Brown, and Rob Portman. Senators Patrick Leahy 
and Gary Peters later joined as cosponsors. The bill was 
referred to the Committee on Homeland Security and Governmental 
Affairs.
    The Committee considered S. 842 at a business meeting on 
May 17, 2017. The bill passed by voice vote, with Senators 
Johnson, McCain, Portman, Paul, Lankford, Enzi, Hoeven, Daines, 
McCaskill, Tester, Heitkamp, Peters, Hassan, and Harris 
present. Consistent with Committee Rule 11, the Committee 
reports the bill with a technical amendment by mutual agreement 
of the Chairman and Ranking Member.

        IV. Section-by-Section Analysis of the Bill, as Reported

Section 1. Short title

    This section establishes the short title of the bill as the 
``Fair Chance to Compete for Jobs Act of 2017'' or the ``Fair 
Chance Act''.

Section 2. Prohibition on criminal history inquiries prior to 
        conditional offer for Federal employment

    This section prohibits inquiries into the criminal history 
of an applicant for Federal employment, including the 
Legislative Branch, Executive Branch, and the Federal Judiciary 
until that applicant has received a conditional offer of 
employment. It establishes a process for those who are asked 
about their criminal history to report the violation, as well 
as adverse actions against Federal employees who violate the 
prohibition. It provides for exceptions to the prohibition, 
such as applications for sensitive positions, positions that 
are prohibited under law from being filled by an individual 
with a criminal history, positions with access to minors, and 
other such positions as regulated by OPM. It also requires that 
such exceptions be consistent with existing civil rights laws.

Section 3. Prohibition on criminal history inquiries by contractors 
        prior to conditional offer

    This section prohibits inquiries into the criminal history 
of an applicant for employment for work under a Federal 
contract until that applicant has received a conditional offer 
of employment. It establishes a process for those who are asked 
about their criminal history to report the violation, as well 
as adverse actions against contractors that violate the 
prohibition.
    It provides for exceptions to the prohibition, such as for 
sensitive positions, positions that are prohibited under law 
from being filled by an individual with a criminal history, 
positions with access to minors, and other such positions as 
regulated by the General Services Administration and the 
Department of Defense. It also requires that such exceptions be 
consistent with existing civil rights laws.

Section 4. Report on employment of individuals formerly incarcerated in 
        Federal prisons

    This section requires a joint study and report by the 
Bureau of the Census and Bureau of Justice Statistics regarding 
the employment of individuals following their release from 
Federal prison.
    This report must be issued no later than two years after 
the date of enactment of the legislation, and every five years 
thereafter, and should exclude personally identifiable 
information. These reports are to be submitted to the Committee 
on Homeland Security and Governmental Affairs of the Senate, 
the Committee on Health, Education, Labor, and Pensions of the 
Senate, the Committee on Oversight and Government Reform of the 
House of Representatives, and the Committee on Education and 
the Workforce of the House of Representatives.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                      May 26, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 842, the Fair Chance 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 842--Fair Chance Act

    S. 842 would amend federal law to prevent federal employers 
and contractors from asking about a job applicant's criminal 
history until after the applicant has received a conditional 
job offer. The bill also would direct the Bureau of Justice 
Statistics within the Department of Justice to issue reports to 
the Congress on the employment of former federal prisoners.
    There is no general prohibition against hiring ex-
offenders; however, regulations do prevent their employment in 
certain positions. Most of the provisions of the bill would 
codify a recently promulgated regulation that delays inquiries 
into the criminal history of potential employees until later in 
the hiring process. Thus, CBO estimates that enacting S. 842 
would cost less than $500,000 annually to prepare the required 
reports; such spending would be subject to the availability of 
appropriated funds.
    Enacting S. 842 could affect direct spending by some 
agencies (such as the Tennessee Valley Authority) because they 
are authorized to use receipts from the sale of goods, fees, 
and other collections to cover their operating costs. 
Therefore, pay-as-you-go procedures apply. Because most of 
those agencies can make adjustments to the amounts collected as 
operating costs change, CBO estimates that any net changes in 
direct spending by those agencies would not be significant.
    Further, enacting S. 842 could increase the collection of 
civil and criminal fines from federal employees who fail to 
follow federal hiring procedures. Those fines are recorded in 
the budget as revenues. Criminal fines are available to be 
spent without future appropriation action. Therefore, enacting 
the legislation could increase federal revenues and associated 
direct spending, but CBO estimates that such increases would 
not be significant in any year.
    CBO estimates that enacting S. 842 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    S. 842 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman):

CONGRESSIONAL ACCOUNTABILITY ACT OF 1995

           *       *       *       *       *       *       *

SEC. 1. SHORT TITLE AND TABLE OF CONTENTS

    (a) * * *
    (b) * * *

              TITLE II--EXTENSION OF RIGHTS AND PROTECTIONS

Sec. 201. * * *
* * *
Sec. 207. Rights and protections relating to criminal history inquiries.
[207] 208. Prohibition of intimidation or reprisal.
     * * * * * * *

SEC. 102. APPLICATION OF LAWS

    (a) * * *
          (1) * * *

           *       *       *       *       *       *       *

          (12) Section 9202 of title 5, United States Code.

           *       *       *       *       *       *       *

SEC. 207. RIGHTS AND PROTECTIONS RELATING TO CRIMINAL HISTORY INQUIRIES

    (a) Definitions.--In this section, the terms `agency', 
`criminal history and record information', and `suspension' 
have the meanings given the terms in section 9201 of title 5, 
United States Code, except as otherwise modified by this 
section.
    (b) Restrictions on Criminal History Inquiries.--
          (1) In general.--
                  (A) In general.--Except as provided in 
                subparagraph (B), an employee of an employing 
                office may not request that an applicant for 
                employment as a covered employee disclose 
                criminal history record information if the 
                request would be prohibited under section 9202 
                of title 5, United States Code, if made by an 
                employee of an agency.
                  (B) Conditional offer.--For purposes of 
                applying that section 9202 under subparagraph 
                (A), a reference in that section 9202 to a 
                conditional offer shall be considered to be an 
                offer of employment as a covered employee that 
                is conditioned upon the results of a criminal 
                history inquiry.
          (2) Rules of construction.--The provisions of section 
        9206 of title 5, United States Code, shall apply to 
        employing offices, consistent with regulations issued 
        under subsection (d).
    (c) Remedy.--
          (1) In general.--The remedy for a violation of 
        subsection (b)(1) shall be such remedy as would be 
        appropriate if awarded under section 9204 of title 5, 
        United States Code, if the violation had been committed 
        by an employee of an agency, consistent with 
        regulations issued under subsection (d), except that 
        the reference in that section to a suspension shall be 
        considered to be a suspension with the level of 
        compensation provided for a covered employee who is 
        taking unpaid leave under section 202.
          (2) Process for obtaining relief.--An applicant for 
        employment as a covered employee who alleges a 
        violation of subsection (b)(1) may rely on the 
        provisions of title IV (other than sections 404(2), 
        407, and 408), consistent with regulations issued under 
        subsection (d).
    (d) Regulations To Implement Section.--
          (1) In general.--Not later than 18 months after the 
        date of enactment of the Fair Chance to Compete for 
        Jobs Act of 2015, the Board shall, pursuant to section 
        304, issue regulations to implement this section.
          (2) Parallel with agency regulations.--The 
        regulations issued under paragraph (1) shall be the 
        same as substantive regulations issued by the director 
        of the Office of Personnel management under section 
        2(b)(1) of the Fair Chance to Compete for Jobs Act of 
        2015 to implement the statutory provisions referred to 
        in subsections (a) through (c) except to the extent 
        that the Board may determine, for good cause shown and 
        stated together with the regulation, that a 
        modification of such regulations would be more 
        effective for the implementation of the rights and 
        protections under this section.
    (e) Effective Date.--Section 102(a)(12) and subsections (a) 
through (c) shall take effect on the date on which section 9202 
of title 5, United States Code, applies with respect to 
agencies.

[SEC. 207] SEC. 208 PROHIBITION OF INTIMIDATION OR REPRISAL

           *       *       *       *       *       *       *

TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

           *       *       *       *       *       *       *

PART III--EMPLOYEES

           *       *       *       *       *       *       *

Subpart H--Access to Criminal History Record Information

           *       *       *       *       *       *       *

    CHAPTER 92--PROHIBITION ON CRIMINAL HISTORY INQUIRIES PRIOR TO 
                           CONDITIONAL OFFER

Sec.
9201. Definitions
9202. Limitations on requests for criminal history information.
9203. Agency policies; whistleblower complaint procedures.
9204. Adverse action.
9205. Procedures.
9206. Rules of construction.

SEC. 9201. DEFINITIONS

    In this chapter--
          (1) the term `agency' means `Executive agency' as 
        such term is defined in section 105 and includes--
                  (A) the United States Postal Service and the 
                Postal Regulatory Commission; and
                  (B) the Executive Office of the President;
          (2) the term `appointing authority' means an employee 
        in the executive branch of the Government of the United 
        States that has authority to make appointments to 
        positions in the civil service;
          (3) the term `conditional offer' means an offer of 
        employment in a position in the civil service that is 
        conditioned upon the results of a criminal history 
        inquiry;
          (4) the term `criminal history record information'--
                  (A) except as provided in subparagraph (B), 
                has the meaning given the term in section 
                9101(a);
                  (B) includes any information described in the 
                first section of section 9101(a)(2) that has 
                been sealed or expunged pursuant to law; and
                  (C) includes information collected by a 
                criminal justice agency, relating to an act or 
                alleged act of juvenile delinquency, that is 
                analogous to criminal history record 
                information (including such information that 
                has been sealed or expunged pursuant to law); 
                and
          (5) the term `suspension' has the meaning given the 
        term in section 7501.

SEC. 9202. LIMITATIONS ON REQUESTS FOR CRIMINAL HISTORY RECORD 
                    INFORMATION

    (a) Inquiries Prior to Conditional Offer.--Except as 
provided in subsections (b) and (c), an employee of an agency 
may not request, in oral or written form (including through the 
Declaration for Federal Employment (Office of Personnel 
Management Optional Form 306), or any similar successor form), 
including through the USAJOBS Internet Web site or any other 
electronic means, that an applicant for an appointment to a 
position in the civil service disclose criminal history record 
information regarding the applicant before the appointing 
authority extends a conditional offer to the applicant.
    (b) Otherwise Required by Law.--The prohibition under 
subsection (a) shall not apply with respect to an applicant for 
a position in the civil service if consideration of criminal 
history record information prior to a conditional offer with 
respect to the position is otherwise required by law.
    (c) Exception for Certain Positions.--
          (1) In general.--The prohibition under subsection (a) 
        shall not apply with respect to an applicant for an 
        appointment to a position--
                  (A) that requires a determination of 
                eligibility described in subparagraph (A), (B), 
                or (C) of section 9101(b)(1);
                  (B) as a Federal law enforcement officer (as 
                defined in section 115(c) of title 18); or
                  (C) identified by the Director of the Office 
                of Personnel Management in the regulations 
                issued under paragraph (2).
          (2) Regulations.--
                  (A) Issuance.--The Director of the Office of 
                Personnel Management shall issue regulations 
                identifying additional positions with respect 
                to which the prohibition under subsection (a) 
                shall not apply, giving due consideration to 
                positions that involve interaction with minors, 
                access to sensitive information, or managing 
                financial transactions.
                  (B) Compliance with civil rights laws.--The 
                regulations issued under subparagraph (A) 
                shall--
                          (i) be consistent with, and in no way 
                        supersede, restrict, or limit the 
                        application of title VII of the Civil 
                        Rights Act of 1964 (42 U.S.C. 2000e et 
                        seq.) or other relevant Federal civil 
                        rights laws; and
                          (ii) ensure that all hiring 
                        activities conducted pursuant to the 
                        regulations are conducted in a manner 
                        consistent with relevant Federal civil 
                        rights laws.

SEC. 9203. AGENCY POLICIES; COMPLAINT PROCEDURES

    The Director of the Office of Personnel Management shall--
          (1) develop, implement, and publish a policy to 
        assist employees of agencies in complying with section 
        9202 and the regulations issued pursuant to such 
        section; and
          (2) establish and publish procedures under which an 
        applicant for an appointment to a position in the civil 
        service may submit a complaint, or any other 
        information, relating to compliance by an employee of 
        an agency with section 9202.

SEC. 9204. ADVERSE ACTION

    (a) First Violation.--If the Director of the Office of 
Personnel Management determines, after notice and an 
opportunity for a hearing on the record, that an employee of an 
agency has violated section 9202, the Director shall--
          (1) issue to the employee a written warning that 
        includes a description of the violation and the 
        additional penalties that may apply for subsequent 
        violations; and
          (2) file such warning in the employee's official 
        personnel record file.
    (b) Subsequent Violations.--If the Director of the Office 
of Personnel Management determines, after notice and 
opportunity for a hearing on the record, that an employee was 
subject to subsection (a) has committed a subsequent violation 
of section 9202, the Director may take the following action:
          (1) For a second violation, suspension of the 
        employee for a period of not more than 7 days.
          (2) For a third violation, suspension of the employee 
        for a period of more than 7 days.
          (3) For a fourth violation--
                  (A) suspension of the employee for a period 
                of more than 7 days; and
                  (B) a civil penalty against the employee in 
                an amount that is not more than $250.
          (4) For a fifth violation--
                  (A) suspension of the employee for a period 
                of more than 7 days; and
                  (B) a civil penalty against the employee in 
                an amount that is not more than $500.
          (5) For any subsequent violation--
                  (A) suspension of the employee for a period 
                of more than seven days; and
                  (B) a civil penalty against the employee in 
                an amount that is not more than $1,000.

SEC. 9205. PROCEDURES

    (a) Appeals.--The Director of the Office of Personnel 
Management shall by rule establish procedures providing for an 
appeal from any adverse action taken under section 9204 by not 
later than 30 days after the date of the action.
    (b) Applicability of Other Laws.--An adverse action taken 
under section 9204 (including a determination in an appeal from 
such an action under subsection (a) of this section) shall not 
be subject to--
          (1) the procedures under chapter 75; or
          (2) except as provided in subsection (a) of this 
        section, appeal or judicial review.

SEC. 9206. RULES OF CONSTRUCTION

    Nothing in this chapter may be construed to--
          (1) authorize any officer or employee of an agency to 
        request the disclosure of information described under 
        subparagraphs (B) and (C) of section 9201(4); or
          (2) create a private right of action for any person.

TITLE 10--ARMED FORCES

           *       *       *       *       *       *       *

Subtitle A--General Military Law

           *       *       *       *       *       *       *

PART IV--SERVICE, SUPPLY, AND PROCUREMENT

           *       *       *       *       *       *       *

CHAPTER 137--PROCUREMENT GENERALLY

           *       *       *       *       *       *       *

SEC. 2338. PROHIBITION ON CRIMINAL HISTORY INQUIRIES BY CONTRACTORS 
                    PRIOR TO CONDITIONAL OFFER

    (a) Limitation on Criminal History Inquiries.--
          (1) In general.--Except as provided in paragraphs (2) 
        and (3), the head of an agency--
                  (A) may not require that an individual or 
                sole proprietor who submits a bid for a 
                contract to disclose criminal history record 
                information regarding that individual or sole 
                proprietor before determining the apparent 
                awardee; and
                  (B) shall require as a condition of receiving 
                a Federal contract and receiving payments under 
                such contract that the contractor may not 
                verbally or through written form request the 
                disclosure of criminal history record 
                information regarding an applicant for a 
                position related to work under such contract 
                before such contractor extends a conditional 
                offer to the applicant.
          (2) Otherwise required by law.--The prohibition under 
        paragraph (1) does not apply with respect to a contract 
        if consideration of criminal history record information 
        prior to a conditional offer with respect to the 
        position is otherwise required by law.
          (3) Exception for certain positions.--
                  (A) In general.--The prohibition under 
                paragraph (1) does not apply with respect to--
                          (i) a contract that requires an 
                        individual hired under the contract to 
                        access classified information or to 
                        have sensitive law enforcement or 
                        national security duties; or
                          (ii) a position that the Secretary of 
                        Defense identifies under the 
                        regulations issued under subparagraph 
                        (B).
                  (B) Regulations.--
                          (i) Issuance.--Not later than 16 
                        months after the date of enactment of 
                        the Fair Chance to Compete for Jobs Act 
                        of 2015, the Secretary of Defense, in 
                        consultation with the Administer of 
                        General Services, shall issue 
                        regulations identifying additional 
                        positions with respect to which the 
                        prohibition under paragraph (1) shall 
                        not apply, giving due consideration to 
                        positions that involve interaction with 
                        minors, access to sensitive 
                        information, or managing financial 
                        transactions.
                          (ii) Compliance with civil rights 
                        laws.--The regulations issued under 
                        clause (i) shall--
                                  (I) be consistent with, and 
                                in no way supersede, restrict, 
                                or limit the application of 
                                title VII of the Civil Rights 
                                Act of 1964 (42 U.S.C. 2000e et 
                                seq.) or other relevant Federal 
                                civil rights laws; and
                                  (II) ensure that all hiring 
                                activities conducted pursuant 
                                to the regulations are 
                                conducted in a manner 
                                consistent with relevant 
                                Federal civil rights laws.
    (b) Complaint Procedures.--The Secretary of Defense shall 
establish and publish procedures under which an applicant for a 
position with a Federal contractor may submit to the 
Administrator a complaint, or any other information, relating 
to compliance by the contractor with subsection (a)(1)(B).
    (c) Action for Violations of Prohibition on Criminal 
History Inquiries.--
          (1) First violation.--If the Secretary of Defense 
        determines that a contractor has violated subsection 
        (a)(1)(B), the Secretary shall--
                  (A) notify the contractor;
                  (B) provide 30 days after such notification 
                for the contractor to appeal the determination; 
                and
                  (C) issue a written warning to the contractor 
                that includes a description of the violation 
                and the additional remedies that may apply for 
                subsequent violations.
          (2) Subsequent violations.--If the Secretary of 
        Defense determines that a contractor that was subject 
        to paragraph (1) has committed a subsequent violation 
        of subsection (a)(1)(B), the Secretary shall notify the 
        contractor, shall provide 30 days after such 
        notification for the contractor to appeal the 
        determination, and, in consultation with the relevant 
        Federal agencies, may take actions, depending on the 
        severity of the infraction and the contractor's history 
        of violations, including--
                  (A) providing written guidance to the 
                contractor that the contractor's eligibility 
                for contracts requires compliance with this 
                section;
                  (B) requiring that the contractor respond 
                within 30 days affirming that the contractor is 
                taking steps to comply with this section.
                  (C) suspending payment under the contract for 
                which the applicant was being considered until 
                the contractor demonstrates compliance with 
                this section.
    (d) Definitions.--In this section:
          (1) Conditional offer.--The term `conditional offer' 
        means an offer of employment for a position related to 
        work under a contract that is conditioned upon the 
        results of a criminal history inquiry.
          (2) Criminal history record information.--The term 
        `criminal history record information' has the meaning 
        given that term in section 9201 of title 5.

TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE

           *       *       *       *       *       *       *

PART III--COURT OFFICERS AND EMPLOYEES

           *       *       *       *       *       *       *

CHAPTER 41--ADMINISTRATIVE OFFICE OF UNITED STATES COURTS

           *       *       *       *       *       *       *

SEC. 604. DUTIES OF DIRECTOR GENERALLY

    (a) * * *

           *       *       *       *       *       *       *

    (i) Restrictions on Criminal History Inquiries.--
          (1) Definitions.--In this subsection--
                  (A) the terms `agency' and `criminal history 
                record information' have the meanings given 
                those terms in section 9201 of title 5;
                  (B) the term `covered employee' means an 
                employee of the judicial branch of the United 
                States Government, other than--
                          (i) any judge or justice who is 
                        entitled to hold office during good 
                        behavior;
                          (ii) a United States magistrate 
                        judge; or
                          (iii) a bankruptcy judge; and
                  (C) the term `employing office' means any 
                office or entity of the judicial branch of the 
                United States Government that employs covered 
                employees.
          (2) Restriction.--A covered employee may not request 
        that an applicant for employment as a covered employee 
        disclose criminal history record information if the 
        request would be prohibited under section 9202 of title 
        5 if made by an employee of an agency.
          (3) Employing office policies; complaint procedure.--
        The provisions of sections 9203 and 9206 of title 5 
        shall apply to employing offices and to applicants for 
        employment as covered employees, consistent with 
        regulations issued by the Director to implement this 
        subsection.
          (4) Adverse action.--
                  (A) Adverse action.--The Director may take 
                such adverse action with respect to a covered 
                employee who violates paragraph (2) as would be 
                appropriate under section 9204 of title 5 if 
                the violation had been committed by an employee 
                of an agency.
                  (B) Appeals.--The Director shall by rule 
                establish procedures providing for an appeal 
                from any adverse action taken under 
                subparagraph (A) by not later than 30 days 
                after the date of the action.
                  (C) Applicability of other laws.--Except as 
                provided in subparagraph (B), an adverse action 
                taken under subparagraph (A) (including a 
                determination in an appeal from such an action 
                under subparagraph (B)) shall not be subject to 
                appeal or judicial review.
          (5) Regulations to be issued.--
                  (A) In general.--Not later than 18 months 
                after the date of enactment of the Fair Chance 
                to Compete for Jobs Act of 2015, the Director 
                shall issue regulations to implement this 
                subsection.
                  (B) Parallel with agency regulations.--The 
                regulations issued under subparagraph (A) shall 
                be the same as substantive regulations 
                promulgated by the Director of the Office of 
                Personnel Management under section 2(b)(1) of 
                the Fair Chance to Compete for Jobs Act of 2015 
                except to the extent that the Director of the 
                Administrative Office of the United States 
                Courts may determine, for good cause shown and 
                stated together with the regulation, that a 
                modification of such regulations would be more 
                effective for the implementation of the rights 
                and protections under this subsection.
          (6) Effective date.--Paragraphs (1) through (4) shall 
        take effect on the date on which section 9202 of title 
        5 applies with respect to agencies.

TITLE 41--PUBLIC CONTRACTS

           *       *       *       *       *       *       *

Subtitle I--Federal Procurement Policy

           *       *       *       *       *       *       *

CHAPTER 47--MISCELLANEOUS

           *       *       *       *       *       *       *

SEC. 4713--PROHIBITION ON CRIMINAL HISTORY INQUIRIES BY CONTRACTORS 
                    PRIOR TO CONDITIONAL OFFER

    (a) Limitation on Criminal History Inquiries.--
          (1) In general.--Except as provided in paragraphs (2) 
        and (3), an executive agency--
                  (A) may not require that an individual or 
                sole proprietor who submits a bid for a 
                contract to disclose criminal history record 
                information regarding that individual or sole 
                proprietor before determining the apparent 
                awardee; and
                  (B) shall require, as a condition of 
                receiving a Federal contract and receiving 
                payments under such contract that the 
                contractor may not verbally, or through written 
                form, request the disclosure of criminal 
                history record information regarding an 
                applicant for a position related to work under 
                such contract before the contractor extends a 
                conditional offer to the applicant.
          (2) Otherwise required by law.--The prohibition under 
        paragraph (1) does not apply with respect to a contract 
        if consideration of criminal history record information 
        prior to a conditional offer with respect to the 
        position is otherwise required by law.
          (3) Exception for certain positions.--
                  (A) In general.--The prohibition under 
                paragraph (1) does not apply with respect to--
                          (i) a contract that requires an 
                        individual hired under the contract to 
                        access classified information or to 
                        have sensitive law enforcement or 
                        national security duties; or
                          (ii) a position that the 
                        Administrator of General Services 
                        identifies under the regulations issued 
                        under subparagraph (B).
                  (B) Regulations.--
                          (i) Issuance.--Not later than 16 
                        months after the date of enactment of 
                        the Fair Chance to Compete for Jobs Act 
                        of 2015, the Administrator of General 
                        Services, in consultation with the 
                        Secretary of Defense, shall issue 
                        regulations identifying additional 
                        positions with respect to which the 
                        prohibition under paragraph (1) shall 
                        not apply, giving due consideration to 
                        positions that involve interaction with 
                        minors, access to sensitive 
                        information, or managing financial 
                        transactions.
                          (ii) Compliance with civil rights 
                        laws.--The regulations issued under 
                        clause (i) shall--
                                  (I) be consistent with, and 
                                in no way supersede, restrict, 
                                or limit the application of 
                                title VII of the Civil Rights 
                                Act of 1964 (42 U.S.C. 2000e et 
                                seq.) or other relevant Federal 
                                civil rights laws; and
                                  (II) ensure that all hiring 
                                activities conducted pursuant 
                                to the regulations are 
                                conducted in a manner 
                                consistent with relevant 
                                Federal civil rights laws.
    (b) Complaint Procedures.--The Administrator of the General 
Services shall establish and publish procedures under which an 
applicant for a position with a Federal contractor may submit 
to the Administrator a complaint, or any other information, 
relating to compliance by the contractor with subsection 
(a)(1)(B).
    (c) Action for Violations of Prohibition on Criminal 
History Inquiries.--
          (1) First violation.--If the head of an executive 
        agency determines that a contractor has violated 
        subsection (a)(1)(B), such head shall--
                  (A) notify the contractor;
                  (B) provide 30 days after such notification 
                for the contractor to appeal the determination; 
                and
                  (C) issue a written warning to the contractor 
                that includes a description of the violation 
                and the additional remedies that may apply for 
                subsequent violations.
          (2) Subsequent violation.--If the head of an 
        executive agency determines that a contractor that was 
        subject to paragraph (1) has committed a subsequent 
        violation of subsection (a)(1)(B), such head shall 
        notify the contractor, shall provide 30 days after such 
        notification for the contractor to appeal the 
        determination, and, in consultation with the relevant 
        Federal agencies, may take actions, depending on the 
        severity of the infraction and the contractor's history 
        of violations, including--
                  (A) providing written guidance to the 
                contractor that the contractor's eligibility 
                for contracts requires compliance with this 
                section;
                  (B) requiring that the contractor respond 
                within 30 days affirming that the contractor is 
                taking steps to comply with this section.
                  (C) suspending payment under the contract for 
                which the applicant was being considered until 
                the contractor demonstrates compliance with 
                this section.
    (d) Definitions.--In this section:
          (1) Conditional offer.--The term `conditional offer' 
        means an offer of employment for a position related to 
        work under a contract that is conditioned upon the 
        results of a criminal history inquiry.
          (2) Criminal history record information.--The term 
        `criminal history record information' has the meaning 
        given that term in section 9201 of title 5.

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