I
107TH CONGRESS
1ST SESSION
H. R. 2754
To amend title 18, United States Code, to reform Federal Prison Industries,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 2001
Mr. GREEN of Wisconsin (for himself and Mr. SCOTT) introduced the
following bill; which was referred to the Committee on the Judiciary
A BILL
To amend title 18, United States Code, to reform Federal
Prison Industries, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Federal Prison Indus-
tries Reform Act of 2001’’.
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SEC. 2. AUTHORITY TO CARRY OUT PILOT PROJECTS USING
FEDERAL INMATE LABOR TO REPLACE FOR-
EIGN 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 chap-
ter’’ and inserting ‘‘This section’’;
(2) in subsection (c), by striking ‘‘this chapter’’
and inserting ‘‘this section’’;
(3) by redesignating subsection (d) as sub-
section (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 con-
victs or prisoners who are participating in industrial oper-
ations of Federal Prison Industries.
‘‘(e) This section shall not apply to goods, wares, or
merchandise manufactured, produced, or mined by con-
victs 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:
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‘‘§ 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 Gen-
eral as follows:
‘‘(1) One member who shall be an officer, em-
ployee, or other representative of the Department of
Commerce.
‘‘(2) One member who shall be an officer, em-
ployee, or other representative of the Department of
Labor.
‘‘(3) One member who shall be an officer, em-
ployee, or other representative of the International
Trade Commission.
‘‘(4) One member who shall be an officer, em-
ployee, or other representative of the Small Business
Administration.
‘‘(5) Two members, each of whom shall be an
officer, employee, or other representative of the busi-
ness community.
‘‘(6) Two members, each of whom shall be an
officer, employee, or other representative of orga-
nized labor.
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‘‘(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, in-
cluding 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 re-
viewed, the Panel shall approve the pilot project as a for-
eign 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 pro-
posed to be manufactured, produced, or mined whol-
ly 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.’’.
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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:
‘‘§ 4121. Federal Prison Industries: status, mission,
and management
‘‘(a) STATUS.—Federal Prison Industries is a Gov-
ernment corporation. The headquarters of the corporation
is in the District of Columbia.
‘‘(b) MISSION.—The mission of Federal Prison In-
dustries 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.
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‘‘(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 represent-
atives of the business community.
‘‘(F) Two members who shall be represent-
atives of organized labor.
‘‘(G) One member who shall be representa-
tive of victims of crime.
‘‘(H) One member who shall be representa-
tive of the prisoner rehabilitation community.
‘‘(I) Two members whose background or
expertise the Attorney General considers appro-
priate.
‘‘(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 Gen-
eral at the time of appointment, of the members
first appointed—
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‘‘(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 va-
cancy occurring before the expiration of the
term for which the member’s predecessor was
appointed shall be appointed only for the re-
mainder 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 rea-
son 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.
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‘‘§ 4122. Federal Prison Industries: operating objec-
tives, standards, and requirements
‘‘(a) OPERATING OBJECTIVES.—Federal Prison In-
dustries 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 em-
ployment and vocational skills and improve their
chances of becoming productive and law-abiding citi-
zens after release from prison.
‘‘(2) To minimize any adverse effects of the op-
erations on domestic companies or workers.
‘‘(3) To provide meaningful employment and
vocational training for not less than 25 percent of el-
igible 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 obli-
gations.
‘‘(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 com-
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ing information relating to the citizen’s real prop-
erty, however described, unless that information is
publicly available; or
‘‘(2) information that is classified in the na-
tional security or foreign policy interests of the
United States.
‘‘(f) VOCATIONAL TRAINING.—At the end of each fis-
cal 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 as-
signments.
‘‘(g) EXEMPTION FROM PUBLIC CONTRACTING AND
PROCUREMENT LAWS.—Federal Prison Industries is ex-
empt from all laws and regulations governing public con-
tracting 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 produc-
tion 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 em-
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ployee of the United States, chapter 81 of title 5, re-
lating 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 provi-
sions 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 assess-
ments, 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 incar-
ceration, as determined by the Board of Direc-
tors.
‘‘(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.
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‘‘(2) LIMITATION.—The total of all amounts de-
ducted 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 para-
graph (2) may, with the consent of an inmate work-
er, 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
RE-
QUIRED.—Amounts may not be deducted, withheld,
or disbursed under this subsection unless the inmate
worker concerned has agreed in advance to the de-
duction, withholding, or disbursement of those
amounts.
‘‘§ 4123. Federal Prison Industries: transactions au-
thorized
‘‘(a) SALES TO AGENCIES AND NOT-FOR-PROFITS.—
Federal Prison Industries may sell products and services
to government agencies and not-for-profit organizations.
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‘‘(b) SALES
OF CERTAIN COMMODITIES.—Federal
Prison Industries may carry out a program to manufac-
ture commodities specified in section 1761(b).
‘‘(c) PARTICIPATION
IN
FOREIGN
LABOR
SUB-
STITUTE 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 For-
eign Labor Substitute Panel, as referred to in section
1761(e).
‘‘(d) PARTICIPATION IN BJA PILOT PROJECTS.—
‘‘(1) IN
GENERAL.—Subject to the require-
ments 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 sec-
tion 1761(c).
‘‘(2) WAGE RATE.—Each inmate worker par-
ticipating 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 PRI-
VATE COMPANIES.—In making available inmate workers
for participation in a pilot project under subsection (c) or
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(d), Federal Prison Industries shall comply with the fol-
lowing requirements:
‘‘(1) The inmate workers shall be made avail-
able through a contract between Federal Prison In-
dustries 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 per-
formed 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:
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‘‘(1) A business concern that meets the applica-
ble 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 con-
trolled 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 SE-
VERELY DISABLED INDIVIDUALS.—Federal Prison Indus-
tries shall establish business partnerships with organiza-
tions representing domestic workers who are blind or se-
verely disabled, for the purpose of entering into contracts
with private United States companies that would create
job opportunities both for blind and severely disabled indi-
viduals 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 pub-
lish and maintain a catalog of all products and services