I
106TH CONGRESS
1ST SESSION
H. R. 2558
To amend title 18, United States Code, to reform Federal Prison Industries,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 20, 1999
Mr. MCCOLLUM (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 ‘‘Prison Industries Re-
form Act of 1999’’.
SEC. 2. GENERAL PROVISIONS RELATING TO THE STRUC-
TURE AND MISSION OF FEDERAL PRISON
INDUSTRIES.
Sections 4121 through 4122 of title 18, United
States Code, are amended to read as follows:
‘‘§ 4121. Industrial operations in Federal prisons
‘‘The Attorney General shall determine in what man-
ner and to what extent industrial operations shall be car-
ried on in Federal correctional institutions. Such oper-
ations shall be conducted so as (1) to provide employment
for the greatest number of those inmates in the United
States correctional institutions who are eligible to work
as is reasonably possible, (2) generate sufficient revenues
to fund the industrial operations, (3) generate revenue, to
be returned to the Treasury of the United States, to de-
fray a portion of the cost of confining inmates in United
States correctional institutions, and (4) minimize any ad-
verse impact on domestic companies or workers to the
greatest extent possible consistent with its mission.
‘‘§ 4122. Federal Prison Industries
‘‘(a) Federal Prison Industries is a government cor-
poration of the District of Columbia, and shall carry on
such industrial operations in Federal correctional institu-
tions as shall be determined by the Attorney General in
accordance with section 4121. The corporation shall be
governed by a board of 12 directors appointed by the At-
torney General. In making appointments to the Board, the
Attorney General shall appoint to the Board one person
recommended by each of the Speaker of the House of Rep-
resentatives, the minority leader of the House of Rep-
resentatives, the majority leader of the Senate, and the
minority leader of the Senate. The members of the Board
shall serve for 4 years and may be reappointed. The mem-
bers of the Board shall serve without compensation. The
Director of the Bureau of Prisons shall serve as Chief Ex-
ecutive Officer of the Corporation.
‘‘(b) Federal Prison Industries shall endeavor, con-
sistent with the priorities established in section 4121, to
produce products that otherwise would be produced by for-
eign workers outside the United States. Federal Prisons
Industries shall also endeavor, consistent with those prior-
ities, to enter into contracts pursuant to section 4131 with
private companies that employ foreign workers outside the
United States to produce products, for the purpose of in-
ducing such companies to employ inmates in a Federal
Prison Industry Shop to produce such products.
‘‘(c) The Attorney General shall appoint an Inde-
pendent Review Panel composed of one representative
from each of the Department of Commerce, the Depart-
ment of Labor, the International Trade Commission, the
Small Business Administration, the business community,
and organized labor, and such other persons as the Attor-
ney General deems appropriate. The Panel shall advise the
Board regarding the type and quantity of products to be
produced by Federal Prison Industries for sale in inter-
state commerce consistent with the purposes set forth in
subsection (a). The members of the Panel shall serve with-
out compensation. The Federal Advisory Committee Act
shall not apply with respect to the Panel.’’.
SEC. 3. ELIMINATION OF MANDATORY SOURCE PREF-
ERENCE AND CREATION OF FAIR COMPETI-
TION AUTHORITY.
Chapter 307 of title 18, United States Code, is
amended by adding at the end the following:
‘‘§ 4130. Federal Prison Industry inmate labor
‘‘The Attorney General shall endeavor to make avail-
able to inmates who have been committed to the custody
of the Bureau of Prisons opportunities to work in a Fed-
eral Prison Industry Shop. The Attorney General may set
standards regarding education and conduct for those in-
mates who work in a Federal Prison Industry Shop.
‘‘§ 4131. Sale of products; contracts for the provision
of labor; inmate wages
‘‘(a) Federal Prison Industries is authorized to sell
its products generally on the open market to the public,
to departments and agencies of the United States, to a
State or municipality, and to foreign governments.
‘‘(b) Federal Prison Industries is authorized, and
shall make it a priority, to enter into contracts with one
or more private companies through which such private
company may produce products at a Federal Prison In-
dustry Shop for sale. In addition to any other provision
negotiated by the private company and Federal Prison In-
dustries, any such contract shall provide—
‘‘(1) for the amount to paid to Federal Prison
Industries by the private company;
‘‘(2) that if the private company employs any
non inmate workers, on or after a date that is 60
days prior to the execution of the contract, who re-
side within the United States, that the private com-
pany agrees to continue to employ non-inmate work-
ers who reside within the United States in at least
the same number for a period of at least 18 months
after the date of the contract or the date the private
company begins to produce products at a Federal
Prison Industry Shop, whichever is later; and
‘‘(3) that the Attorney General shall make
available to such private company under reasonable
terms and conditions such number of inmates who
have been selected to work in a prison industry car-
ried on by Federal Prison Industries as shall be
specified in the contract.
‘‘(c) Federal Prison Industries shall pay wages to all
inmates who work in a prison industry carried on by Fed-
eral Prison Industries (including those at which products
are produced by a private company pursuant to a contract
with Federal Prison Industries) at a rate not less than
the Federal minimum wage from time to time in effect.
From the amounts paid to inmates pursuant to this sec-
tion, the Attorney General is authorized to deduct
amounts, not exceeding in their aggregate 90 percent,
for—
‘‘(1) payment of fines, special assessments, and
restitution owed by the prisoner pursuant to court
order;
‘‘(2) allocations for support of the inmate’s
family pursuant to statute, court order, or agree-
ment by the inmate;
‘‘(3) reasonable charges for room and board, as
determined by the Attorney General, but not less
than 50 percent of the total amounts deducted
under this subsection;
‘‘(4) amounts to be held on account and paid
to the inmate upon release from the custody of the
Bureau of Prisons; and
‘‘(5) contributions to any fund established by
law to compensate the victims of crime.
‘‘(d) Federal Prison Industries shall be relieved from
payment of the amount specified in subsection (c) if the
Independent Review Panel determines that the products
are—
‘‘(1) foreign-made products; or
‘‘(2) any product described in section 1761(b).
Inmates producing such products shall, instead of the
amount specified in subsection (c), be paid wages not less
than would be paid at the rate set forth in the schedule
of compensation paid to inmates working at prison indus-
tries carried on by Federal Prison Industries on the date
of enactment of the Prison Industries Reform Act of 1999.
From the wages paid to such inmates under this sub-
section, the Attorney General is authorized to deduct
amounts, not exceeding in their aggregate 50 percent of
the amount paid to an inmate, for the purposes set forth
in subsection (c).
‘‘(e) An inmate may agree to deductions in additional
to those provided for in subsections (c) and (d) if the addi-
tional deductions are used solely for the purposes de-
scribed in paragraphs (2) and (4) of subsection (c).
‘‘(f) Nothing in this section shall be construed to pro-
hibit more than one Federal Prison Industry Shop from
being located at a Federal correctional facility. A Federal
Prison Industry Shop may be located outside a correc-
tional facility if all of the inmates working at that Shop
are classified as minimum security inmates.
‘‘(g) After consultation with the Independent Review
Panel, the Attorney General may waive the requirement
of subsection (b)(2) if the Attorney General determines
that exigent circumstances exist and the private company
has taken all reasonable steps to continue to employ its
non-inmate workers who reside within the United States.
‘‘§ 4132. Elimination of mandatory source purchase
requirement
‘‘(a) Not later than 180 days after the date of enact-
ment of the Prison Industries Reform Act of 1999, the
Attorney General shall submit to Congress a plan for the
elimination of the use by Federal Prison Industries of the
mandatory source preference requirement described in sec-
tion 4124. Such plan shall provide for annual reductions
in that portion of the total sales of Federal Prison Indus-
tries made pursuant to that requirement, and shall further
provide that no sales shall be made pursuant to that re-
quirement after the date which is 7 years after the date
of enactment of such Act. The plan shall also provide that
Federal Prison Industries shall designate those products,
described by Standard Industrial Product Code (as pub-
lished by the Office of Management and Budget) as to
which it has determined to no longer sell to Federal de-
partments and agencies under the authority described in
section 4124 of this chapter. Within 30 days of such des-
ignation, Federal Prison Industries shall publish in the
Federal Register and in a commercial business publication
with a national circulation a list of those products so des-
ignated. Federal Prison Industries shall make available to
the public, on request, a list of all such products so des-
ignated. The plan shall take effect 180 days after its sub-
mission to Congress, unless Congress by law provides oth-
erwise.
‘‘(b) Federal Prison Industries shall not undertake
the production of any new product or significantly expand
the rate of production of a product for sale to any Federal
department, agency, or institution, unless the procurement
requirement for that product described in section 4124
has been eliminated in accordance with the plan described
in subsection (a).
‘‘(c) Federal agencies may purchase directly from
Federal Prison Industries those products for which the
procurement requirement has been eliminated in accord-
ance with the plan described in subsection (a) in such
quantities and by such method they deem appropriate.
‘‘§ 4133. Procurement from the private sector
‘‘For purchases from the private sector in support of
its operations, Federal Prison Industries shall be exempt
from the provisions of the Competition in Contracting Act
and the Federal Acquisition Regulation. Nothing in this
section shall be construed to modify any requirement that
any department, agency, or other institution of the Fed-
eral Government comply with the provisions of the Com-
petition in Contracting Act and the Federal Acquisition
Regulation.
‘‘§ 4134. Applicability of other law
‘‘Nothing in this chapter shall be construed to entitle
an inmate to employment in a Federal Prison Industry
Shop, to any wage, compensation, or benefit, to imply that
inmates are employees for the purposes of other laws or
programs, or to provide a cause of action by or on behalf
of any person against the United States or any officer,
employee, or contractor thereof.
‘‘§ 4135. Definitions
‘‘In this chapter—
‘‘(1) the term ‘private company’ means a cor-
poration, partnership, joint venture, or sole propri-
etorship;
‘‘(2) the term ‘product’ includes both goods and
services;
‘‘(3) the term ‘Federal Prison Industry Shop’
means a prison industry operation at which a prod-
uct is made or provided;
‘‘(4) the term ‘foreign-made product’ means a
product that would otherwise be produced by foreign
workers outside the United States.’’.