services for the commercial market through inmate labor 
on October 1, 2002, may continue to provide such com-
mercial services until—
(1) the expiration date specified in the contract 
or other agreement with a commercial partner on 
October 1, 2002, or 
(2) until September 30, 2005, if the prison 
work program is directly furnishing the services to 
the commercial market. 
(c) APPROVAL REQUIRED FOR LONG-TERM OPER-
ATION.—A prison work program operated by a correc-
tional institution operated by a State or local jurisdiction 
of a State may continue to provide inmate labor to furnish 
services for sale in the commercial market after the dates 
specified in subsection (b) if such program has been cer-
tified pursuant to section 1761(c)(1) of title 18, United 
States Code, and is in compliance with the requirements 
of such subsection and its implementing regulations. 
SEC. 8. CONFORMING AMENDMENT. 
Section 4122(a) of title 18, United States Code, is 
amended by striking ‘‘production of commodities’’ and in-
serting ‘‘production of products or furnishing of services’’.
SEC. 9. RULES OF CONSTRUCTION RELATING TO CHAPTER 
307. 
Chapter 307 of title 18, United States Code, is fur-
ther amended by adding the following: 
‘‘§ 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 In-
dustries facility; or 
‘‘(B) any particular wage, compensation, 
or benefit on demand, except as otherwise spe-
cifically provided by law or regulation; 
‘‘(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 inmate against the United States or 
any officer, employee, or contractor thereof.’’.
SEC. 10. PROVIDING ADDITIONAL REHABILITATIVE OPPOR-
TUNITIES FOR INMATES. 
(a) ADDITIONAL EDUCATIONAL, TRAINING, AND RE-
LEASE-PREPARATION OPPORTUNITIES.—
(1) PROGRAM ESTABLISHED.—There is hereby 
established the Enhanced In-Prison Educational and 
Vocational Assessment and Training Program within 
the Bureau of Prisons.
(2) COMPREHENSIVE PROGRAM.—In addition to 
such other components as the Director of the Bu-
reau of Prisons deems appropriate to reduce inmate 
idleness and better prepare inmates for a successful 
reentry into the community upon release, the pro-
gram shall provide—
(A) in-prison assessments of inmates’ 
needs and aptitudes; 
(B) a full range of educational opportuni-
ties; 
(C) vocational training and apprentice-
ships; and 
(D) comprehensive release-readiness prepa-
ration. 
(3) AUTHORIZATION OF APPROPRIATIONS.—For 
the purposes of carrying out the program established 
by paragraph (1), $75,000,000 is authorized for 
each fiscal year after fiscal year 2003, to remain 
available until expended. Funds shall be allocated 
from the gross profits within the Federal Prison In-
dustries Fund, and, to the extent such amounts are 
inadequate, from the General Treasury. 
(b) INMATE WORK OPPORTUNITIES IN SUPPORT OF 
NOT-FOR-PROFIT ENTITIES.—
(1) PROPOSALS FOR DONATION PROGRAMS.—
The Chief Operating Officer of Federal Prison In-
dustries shall develop and present to the Board of 
Directors of Federal Prison Industries proposals to 
have Federal Prison Industries donate products and 
services to eligible entities that provide goods or 
services to low-income individuals who would likely 
otherwise have difficulty purchasing such products 
or services in the commercial market. 
(2) SCHEDULE FOR SUBMISSION AND CONSID-
ERATION OF DONATION PROGRAMS.—
(A) INITIAL PROPOSALS.—The Chief Oper-
ating Officer shall submit the initial group of 
proposals for programs of the type described in 
paragraph (1) within 180 days after the date of 
the enactment of this Act. The Board of Direc-
tors of Federal Prison Industries shall consider 
such proposals from the Chief Operating Officer 
not later than the date that is 270 days after 
the date of the enactment of this Act. 
(B) 
ANNUAL
OPERATING
PLAN.—The 
Board of Directors of Federal Prison Industries 
shall consider proposals by the Chief Operating 
Officer for programs of the type described in
paragraph (1) as part of the annual operating 
plan for Federal Prison Industries. 
(C) OTHER
PROPOSALS.—In addition to 
proposals submitted by the Chief Operating Of-
ficer, the Board of Directors may, from time to 
time, consider proposals presented by prospec-
tive eligible entities. 
(3) DEFINITION OF ELIGIBLE ENTITIES.—For 
the purposes of this subsection, the term ‘‘eligible 
entity’’ means an entity—
(A) that is an organization described in 
section 501(c)(3) of the Internal Revenue Code 
of 1986 and exempt from taxation under sec-
tion 501(a) of such Code and that has been 
such an organization for a period of not less
than 36 months prior to inclusion in a proposal 
of the type described in paragraph (1), or 
(B) that is a religious organization de-
scribed in section 501(d) of such Code and ex-
empt from taxation under section 501(a) of 
such Code. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated $7,000,000 
for each of the fiscal years 2004 through 2008 for 
the purposes of paying the wages of inmates and
otherwise carrying out programs of the type de-
scribed in paragraph (1). 
(c) MAXIMIZING INMATE REHABILITATIVE OPPORTU-
NITIES THROUGH COGNITIVE ABILITIES ASSESSMENTS.—
(1) DEMONSTRATION PROGRAM AUTHORIZED.—
(A) IN GENERAL.—There is hereby estab-
lished within the Federal Bureau of Prisons a 
program to be known as the ‘‘Cognitive Abili-
ties Assessment Demonstration Program’’. The 
purpose of the demonstration program is to de-
termine the effectiveness of a program that as-
sesses the cognitive abilities and perceptual 
skills of Federal inmates to maximize the bene-
fits of various rehabilitative opportunities de-
signed to prepare each inmate for a successful 
return to society and reduce recidivism. The 
demonstration program shall be undertaken by 
a contractor with a demonstrated record of ena-
bling the behavioral and academic improvement 
of adults through the use of research-based sys-
tems that maximize the development of both the 
cognitive and perceptual capabilities of a par-
ticipating individual, including adults in a cor-
rectional setting.
(B) SCOPE
OF
DEMONSTRATION
PRO-
GRAM.—The demonstration program shall to 
the maximum extent practicable, be—
(i) conducted during a period of three 
consecutive fiscal years, commencing dur-
ing fiscal year 2004; 
(ii) conducted at 12 Federal correc-
tional institutions; and 
(iii) offered to 6,000 inmates, who are 
categorized as minimum security or less, 
and are within five years of release. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated $3,000,000 
in each of the three fiscal years after fiscal year 
2003, to remain available until expended, for the 
purposes of conducting the demonstration program 
authorized by subsection (a). 
(d) PRERELEASE EMPLOYMENT ASSISTANCE.—
(1) IN GENERAL.—The Director of the Bureau 
of Prisons shall, to the maximum extent practicable, 
afford to inmates opportunities to participate in pro-
grams and activities designed to help prepare such 
inmates to obtain employment upon release. 
(2) PRERELEASE
EMPLOYMENT
PLACEMENT 
ASSISTANCE.—Such prerelease employment place-
ment assistance required by subsection (a) shall in-
clude—
(A) training in the preparation of resumes 
and job applications; 
(B) training in interviewing skills; 
(C) training and assistance in job search 
techniques; 
(D) conduct of job fairs; and 
(E) such other methods deemed appro-
priate by the Director of the Bureau of Prisons. 
(3) PRIORITY PARTICIPATION.—Priority in pro-
gram participation shall be accorded to inmates who 
are participating in work opportunities afforded by 
Federal Prison Industries and are within 24 months 
of release from incarceration. 
(e) PROVIDING ADDITIONAL OPPORTUNITIES
FOR 
POST INCARCERATION VOCATIONAL AND REMEDIAL EDU-
CATIONAL OPPORTUNITIES FOR INMATES.—
(1) FEDERAL REENTRY CENTER DEMONSTRA-
TION.—
(A) AUTHORITY AND ESTABLISHMENT OF 
DEMONSTRATION PROJECT.—From funds made 
available to carry out this subsection, the Attor-
ney General, in consultation with the Director 
of the Administrative Office of the United
States Courts, shall establish the Federal Re-
entry 
Center 
Demonstration 
project. 
The 
project shall involve appropriate prisoners from 
the Federal prison population and shall utilize 
community corrections facilities, home confine-
ment, and a coordinated response by Federal 
agencies to assist participating prisoners in pre-
paring for and adjusting to reentry into the 
community. 
(B) PROJECT ELEMENTS.—The project au-
thorized by subparagraph (A) shall include the 
following core elements: 
(i) A Reentry Review Team for each 
prisoner, consisting of representative from 
the Bureau of Prisons, the United States 
Probation System, the United States Pa-
role Commission, and the relevant commu-
nity corrections facility, who shall initially 
meet with the prisoner to develop a reentry 
plan tailored to the needs of the prisoner. 
(ii) A system of graduated levels of 
supervision within the community correc-
tions facility to promote community safety, 
provide incentives for prisoners to complete 
the reentry plan, including victim restitu-
tion, and provide a reasonable method for 
imposing sanctions for a prisoner’s viola-
tion of the conditions of participation in 
the project. 
(iii) Substance abuse treatment and 
aftercare, mental and medical health treat-
ment and aftercare, vocational and edu-
cational training, life skills instruction, 
conflict resolution skills training, batterer 
intervention programs, assistance obtaining 
suitable affordable housing, and other pro-
gramming to promote effective reintegra-
tion into the community as needed. 
(C) PROBATION
OFFICERS.—From funds 
made available to carry out this subsection, the
Director of the Administrative Office of the 
United States Courts shall assign one or more 
probation officers from each participating judi-
cial district to the Reentry Demonstration 
project. Such officers shall be assigned to and 
stationed at the community corrections facility 
and shall serve on the Reentry Review Teams. 
(D) PROJECT
DURATION.—The Reentry 
Center Demonstration project shall begin not 
later than 6 months following the availability of
funds to carry out this subsection, and shall 
last 3 years. 
(2) DEFINITIONS.—For the purposes of this 
subsection, the term ‘‘appropriate prisoner’’ shall 
mean a person who is considered by prison authori-
ties—
(A) to pose a medium to high risk of com-
mitting a criminal act upon reentering the com-
munity; and 
(B) to lack the skills and family support 
network that facilitate successful reintegration 
into the community. 
(3) AUTHORIZATION OF APPROPRIATIONS.—To 
carry out this subsection, there are authorized to be 
appropriated, to remain available until expended—
(A) to the Federal Bureau of Prisons—
(i) $1,375,000 for fiscal year 2004; 
(ii) $1,110,000 for fiscal year 2005; 
(iii) $1,130,000 for fiscal year 2006; 
(iv) $1,155,000 for fiscal year 2007; 
and 
(v) $1,230,000 for fiscal year 2008; 
and 
(B) to the Federal Judiciary—
(i) $3,380,000 for fiscal year 2004;
(ii) $3,540,000 for fiscal year 2005; 
(iii) $3,720,000 for fiscal year 2006; 
(iv) $3,910,000 for fiscal year 2007; 
and 
(v) $4,100,000 for fiscal year 2008.
SEC. 11. RESTRUCTURING THE BOARD OF DIRECTORS. 
Section 4121 of title 18, United States Code, is 
amended to read as follows:
‘‘§ 4121. Federal Prison Industries; Board of Direc-
tors: executive management 
‘‘(a) Federal Prison Industries is a government cor-
poration of the District of Columbia organized to carry 
on such industrial operations in Federal correctional insti-
tutions as authorized by its Board of Directors. The man-
ner and extent to which such industrial operations are car-
ried on in the various Federal correctional institutions 
shall be determined by the Attorney General. 
‘‘(b)(1) The corporation shall be governed by a board 
of 11 directors appointed by the President. 
‘‘(2) In making appointments to the Board, the 
President shall assure that 3 members represent the busi-
ness community, 3 members represent organized labor, 1 
member shall have special expertise in inmate rehabilita-
tion techniques, 1 member represents victims of crime, 1 
member represents the interests of Federal inmate work-
ers, and 2 additional members whose background and ex-
pertise the President deems appropriate. The members of 
the Board representing the business community shall in-
clude, to the maximum extent practicable, representation 
of firms furnishing services as well as firms producing 
products, especially from those industry categories from 
which Federal Prison Industries derives substantial sales. 
The members of the Board representing organized labor 
shall, to the maximum practicable, include representation 
from labor unions whose members are likely to be most 
affected by the sales of Federal Prison Industries. 
‘‘(3) Each member shall be appointed for a term of 
5 years, except that of members first appointed—
‘‘(A) 2 members representing the business com-
munity shall be appointed for a term of 3 years; 
‘‘(B) 2 members representing labor shall be ap-
pointed for a term of 3 years; 
‘‘(C) 2 members whose background and exper-
tise the President deems appropriate for a term of 
3 years; 
‘‘(D) 1 member representing victims of crime 
shall be appointed for a term of 3 years; 
‘‘(E) 1 member representing the interests of 
Federal inmate workers shall be appointed for a 
term of 3 years;
‘‘(F) 1 member representing the business com-
munity shall be appointed for a term of 4 years; 
‘‘(G) 1 member representing the business com-
munity shall be appointed for a term of 4 years; and 
‘‘(H) the members having special expertise in 
inmate rehabilitation techniques shall be appointed 
for a term of 5 years. 
‘‘(4) The President shall designate 1 member of the 
Board as Chairperson. The Chairperson may designate a 
Vice Chairperson. 
‘‘(5) Members of the Board may be reappointed. 
‘‘(6) Any vacancy on the Board shall be filled in the 
same manner as the original appointment. Any member 
appointed to fill a vacancy occurring before the expiration 
of the term for which the member’s predecessor was ap-
pointed shall be appointed for the remainder of that term. 
‘‘(7) The members of the Board shall serve without 
compensation. The members of the Board shall be allowed 
travel expenses, including per diem in lieu of subsistence, 
at rates authorized for employees of agencies under sub-
chapter I of chapter 57 of title 5, United States Code, 
to attend meetings of the Board and, with the advance 
approval of the Chairperson of the Board, while otherwise 
away from their homes or regular places of business for 
purposes of duties as a member of the Board.
‘‘(8)(A) The Chairperson of the Board may appoint 
and terminate any personnel that may be necessary to en-
able the Board to perform its duties.
‘‘(B) Upon request of the Chairperson of the Board, 
a Federal agency may detail a Federal Government em-
ployee to the Board without reimbursement. Such detail 
shall be without interruption or loss of civil service status 
or privilege. 
‘‘(9) The Chairperson of the Board may procure tem-
porary and intermittent services under section 3109(b) of 
title 5, United States Code. 
‘‘(c) The Director of the Bureau of Prisons shall 
serve as Chief Executive Officer of the Corporation. The
Director shall designate a person to serve as Chief Oper-
ating Officer of the Corporation.’’. 
SEC. 12. PROVIDING ADDITIONAL MANAGEMENT FLEXI-
BILITY TO FEDERAL PRISON INDUSTRY OP-
ERATIONS. 
Section 4122(b)(3) of title 18, United States Code, 
is amended—
(1) by striking ‘‘(3)’’ and inserting ‘‘(3)(A)’’; 
and 
(2) by adding at the end the following new 
paragraphs:
‘‘(B) Federal Prison Industries may locate more than 
one workshop at a Federal correctional facility. 
‘‘(C) Federal Prison Industries may operate a work-
shop outside of a correctional facility if all of the inmates 
working in such workshop are classified as minimum secu-
rity inmates.’’. 
SEC. 13. TRANSITIONAL PERSONNEL MANAGEMENT AU-
THORITY. 
Any correctional officer or other employee of Federal 
Prison Industries being paid with nonappropriated funds 
who would be separated from service because of a reduc-
tion in the net income of Federal Prison Industries during 
any fiscal year specified in section 4(e)(1) shall be—
(1) eligible for appointment (or reappointment) 
in the competitive service pursuant to title 5, United 
States Code; 
(2) registered on a Bureau of Prisons reemploy-
ment priority list; and 
(3) given priority for any other position within 
the Bureau of Prisons for which such employee is 
qualified.
SEC. 14. FEDERAL PRISON INDUSTRIES REPORT TO CON-
GRESS. 
Section 4127 of title 18, United States Code, is 
amended to read as follows:
‘‘§ 4127. Federal Prison Industries report to Congress 
‘‘(a) IN GENERAL.—Pursuant to chapter 91 of title 
31, the board of directors of Federal Prison Industries 
shall submit an annual report to Congress on the conduct 
of the business of the corporation during each fiscal year 
and the condition of its funds during the fiscal year. 
‘‘(b) CONTENTS OF REPORT.—In addition to the 
matters required by section 9106 of title 31, and such 
other matters as the board considers appropriate, a report 
under subsection (a) shall include—
‘‘(1) a statement of the amount of obligations 
issued under section 4129(a)(1) of this title during 
the fiscal year; 
‘‘(2) an estimate of the amount of obligations 
that will be issued in the following fiscal year; 
‘‘(3) an analysis of—
‘‘(A) the corporation’s total sales for each 
specific product and type of service sold to the 
Federal agencies and the commercial market; 
‘‘(B) the total purchases by each Federal 
agency of each specific product and type of 
service; 
‘‘(C) the corporation’s share of such total 
Federal Government purchases by specific prod-
uct and type of service; and
‘‘(D) the number and disposition of dis-
putes submitted to the heads of the Federal de-
partments and agencies pursuant to section 
4124(e) of this title; 
‘‘(4) an analysis of the inmate workforce that 
includes—
‘‘(A) the number of inmates employed; 
‘‘(B) the number of inmates utilized to 
produce products or furnish services sold in the 
commercial market; 
‘‘(C) the number and percentage of em-
ployed inmates by the term of their incarcer-
ation; and 
‘‘(D) the various hourly wages paid to in-
mates employed with respect to the production 
of the various specific products and types of 
services authorized for production and sale to 
Federal agencies and in the commercial market; 
and 
‘‘(5) data concerning employment obtained by 
former inmates upon release to determine whether 
the employment provided by Federal Prison Indus-
tries during incarceration provided such inmates 
with knowledge and skill in a trade or occupation
that enabled such former inmate to earn a livelihood 
upon release. 
‘‘(c) PUBLIC AVAILABILITY.—Copies of an annual re-
port under subsection (a) shall be made available to the 
public at a price not exceeding the cost of printing the 
report.’’.
SEC. 15. INDEPENDENT STUDY TO DETERMINE THE EF-
FECTS OF ELIMINATING THE FEDERAL PRIS-
ON INDUSTRIES MANDATORY SOURCE AU-
THORITY. 
(a) STUDY REQUIRED.—The Comptroller General 
shall undertake to have an independent study conducted 
on the effects of eliminating the Federal Prison Industries 
mandatory source authority. 
(b) SOLICITATION OF VIEWS.—The Comptroller Gen-
eral shall ensure that in developing the statement of work 
and the methodology for the study, the views and input 
of private industry, organized labor groups, Members and 
staff of the relevant Congressional committees, officials of 
the executive branch, and the public are solicited. 
(c) SUBMISSION.—Not later than January 31, 2005, 
the Comptroller General shall submit the results of the 
study to Congress, including any recommendations for leg-
islation.
SEC. 16. DEFINITIONS. 
Chapter 307 of title 18, United States Code, is 
amended by adding at the end the following new section: 
‘‘§ 4131. Definitions
‘‘As used in this chapter—
‘‘(1) the term ‘assembly’ means the process of 
uniting or combining articles or components (includ-
ing ancillary finished components or assemblies) so 
as to produce a significant change in form or utility, 
without necessarily changing or altering the compo-
nent parts; 
‘‘(2) the term ‘current market price’ means, 
with respect to a specific product, the fair market 
price of the product within the meaning of section 
15(a) of the Small Business Act (15 U.S.C. 644(a)),
at the time that the contract is to be awarded, 
verified through appropriate price analysis or cost 
analysis, including any costs relating to transpor-
tation or the furnishing of any ancillary services; 
‘‘(3) the term ‘import-sensitive product’ means 
a product which, according to Department of Com-
merce data, has experienced competition from im-
ports at an import to domestic production ratio of 
25 percent or greater; 
‘‘(4) the term ‘labor-intensive manufacture’ 
means a manufacturing activity in which the value