mate workers in violation of section 1761(a) of title 18, 
United States Code. A Federal contractor (or subcontractor 
at any tier) using Federal Prison Industries as a subcon-
tractor or supplier in furnishing a commercial product pur-
suant to a Federal contract shall implement appropriate 
management procedures to prevent introducing an inmate- 
produced product into the commercial market. 
(d) PROHIBITIONS ON MANDATING SUBCONTRACTING 
WITH FEDERAL PRISON INDUSTRIES.—Except as author-
ized under the Federal Acquisition Regulation, the use of 
Federal Prison Industries as a subcontractor or supplier 
of products or provider of services shall not be imposed upon 
prospective or actual Federal prime contractors or a sub-
contractors at any tier by means of— 
(1) a contract solicitation provision requiring a 
contractor to offer to make use of Federal Prison In-
dustries, its products or services; 
(2) specifications requiring the contractor to use 
specific products or services (or classes of products or 
services) offered by Federal Prison Industries in the 
performance of the contract; 
(3) any contract modification directing the use 
of Federal Prison Industries, its products or services; 
or 
(4) any other means. 
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SEC. 6. INMATE WAGES AND DEDUCTIONS. 
Section 4122(b) of title 18, United States Code (as 
amended by section 3 of this Act), is further amended by 
adding after paragraph (11) a new paragraph (12) as fol-
lows: 
‘‘(12)(A) The Board of Directors of Federal Prison In-
dustries shall prescribe the rates of hourly wages to be paid 
inmates performing work for or through Federal Prison In-
dustries. The Director of the Federal Bureau of Prisons 
shall prescribe the rates of hourly wages for other work as-
signments within the various Federal correctional institu-
tions. In the case of an inmate whose term of imprisonment 
is to expire in not more than 2 years, wages shall be earned 
at an hourly rate of not less than $2.50, but paid at the 
same rate and in the same manner as to any other inmate, 
and any amount earned but not paid shall be held in trust 
and paid only upon the actual expiration of the term of 
imprisonment. 
‘‘(B) The various inmate wage rates shall be reviewed 
and considered for increase on not less than a biannual 
basis. 
‘‘(C) The Board of Directors of Federal Prison Indus-
tries shall— 
‘‘(i) not later than September 30, 2008, increase 
the maximum wage rate for inmates performing work 
for or through Federal Prison Industries to an 
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amount equal to 50 percent of the minimum wage 
prescribed by section 6(a)(1) of the Fair Labor Stand-
ards Act of 1938 (29 U.S.C. 206(a)(1)); and 
‘‘(ii) not later than September 30, 2013, increase 
such maximum wage rate to an amount equal to such 
minimum wage. 
‘‘(D) Wages earned by an inmate worker shall be paid 
in the name of the inmate. Deductions, aggregating to not 
more than 80 percent of gross wages, shall be taken from 
the wages due for— 
‘‘(i) applicable taxes (Federal, State, and local); 
‘‘(ii) payment of fines and restitution pursuant 
to court order; 
‘‘(iii) payment of additional restitution for vic-
tims of the inmate’s crimes (at a rate not less than 
10 percent of gross wages); 
‘‘(iv) allocations for support of the inmate’s fam-
ily pursuant to statute, court order, or agreement 
with the inmate; 
‘‘(v) allocations to a fund in the inmate’s name 
to facilitate such inmate’s assimilation back into soci-
ety, payable at the conclusion of incarceration; and 
‘‘(vi) such other deductions as may be specified 
by the Director of the Bureau of Prisons. 
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‘‘(E) Each inmate worker working for Federal Prison 
Industries shall indicate in writing that such person— 
‘‘(i) is participating voluntarily; and 
‘‘(ii) understands and agrees to the wages to be 
paid and deductions to be taken from such wages.’’. 
SEC. 7. CLARIFYING AMENDMENT RELATING TO SERVICES. 
(a) IN GENERAL.—Section 1761 of title 18, United 
States Code, is amended in subsection (a) and (c) by strik-
ing ‘‘goods, wares, or merchandise manufactured, produced, 
or mined’’ each place it appears and inserting ‘‘products 
manufactured, services furnished, or minerals mined’’. 
(b) COMPLETION OF EXISTING AGREEMENTS.—Any 
prisoner work program operated by a prison or jail of a 
State or local jurisdiction of a State which is providing 
services for the commercial market through inmate labor on 
October 1, 2004, may continue to provide such commercial 
services until— 
(1) the expiration date specified in the contract 
or other agreement with a commercial partner on Oc-
tober 1, 2004, or 
(2) until September 30, 2010, if the prison work 
program is directly furnishing the services to the com-
mercial market. 
(c) APPROVAL REQUIRED
FOR LONG-TERM OPER-
ATION.—A prison work program operated by a correctional 
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