I
107TH CONGRESS
1ST SESSION
H. R. 1535
To amend title 18, United States Code, to authorize pilot projects under
which private companies in the United States may use Federal inmate
labor to produce items that would otherwise be produced by foreign
labor, to revise the authorities and operations of Federal Prison Indus-
tries, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 4, 2001
Mr. WOLF introduced the following bill; which was referred to the Committee
on the Judiciary
A BILL
To amend title 18, United States Code, to authorize pilot
projects under which private companies in the United
States may use Federal inmate labor to produce items
that would otherwise be produced by foreign labor, to
revise the authorities and operations of 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 Inmate Work
Act of 2001’’.
‘‘§ 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.
‘‘(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.’’.
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.
‘‘(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—
‘‘(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.
‘‘§ 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-
pliance with the following standards, as applicable to cor-
rectional industry programs:
‘‘(1) United Nations standards.
‘‘(2) International Labor Organization conven-
tions to which the United States is a signatory
party.
‘‘(3) Federal standards.
‘‘(4) American Correctional Association stand-
ards.
‘‘(c) VOLUNTARINESS.—Federal Prison Industries
shall carry out its industrial operations only with inmate
workers who participate in those operations voluntarily.
‘‘(d) WAGE RATES.—Unless otherwise provided by
law, each inmate worker participating in the industrial op-
erations of Federal Prison Industries shall be paid at a
wage rate prescribed by the Board of Directors of Federal
Prison Industries.
‘‘(e) PROTECTION OF CERTAIN INFORMATION.—Fed-
eral Prison Industries shall carry out its industrial oper-
ations so as to ensure that, in the production of a product
or the performance of a service, inmate workers do not
have access to—
‘‘(1) personal or financial information about
any citizen of the United States without prior notice
of the access being provided to that citizen, includ-
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-
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.
‘‘(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.
‘‘(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
(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:
‘‘(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
that it offers for sale to government agencies and not-for-
profit organizations. The catalog shall be periodically re-
vised as products and services are added or deleted.’’.
(b) CONFORMING AMENDMENT.—Section 1761(c)(1)
of such title is amended by striking ‘‘non-Federal’’.
(c) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 307 of such title is amended
by striking the items relating to sections 4121, 4122, and
4123 and inserting the following:
‘‘4121. Federal Prison Industries: status, mission, and management.
‘‘4122. Federal Prison Industries: operating objectives, standards, and require-
ments.
‘‘4123. Federal Prison Industries: transactions authorized.’’.
SEC. 4. ELIMINATION OF MANDATORY SOURCE PURCHASE
REQUIREMENT.
(a) IN GENERAL.—Section 4124 of title 18, United
States Code, is amended—
(1) in subsection (a), by adding at the end the
following: ‘‘This subsection does not apply to serv-
ices.’’;
(2) by amending subsection (c) to read as fol-
lows:
‘‘(c) Each Federal department or agency shall report
purchases from Federal Prison Industries to the Federal
Procurement Data System (referred to in section 6(d)(4)
of the Office of Federal Procurement Policy Act (41
U.S.C. 405(d)(4))) in the same manner as it reports to
such System any acquisition in an amount in excess of
the simplified acquisition threshold (as defined in section
4(11) of that Act (41 U.S.C. 403(11))).’’; and
(3) by amending subsection (d) to read as fol-
lows:
‘‘(d)(1) The head of a Federal department or agency
may purchase directly from Federal Prison Industries any
of the following:
‘‘(A) Any products with respect to which the re-
quirement in subsection (a) has, under any author-
ity, been suspended, waived, or not invoked.
‘‘(B) Any services.
‘‘(2) A purchase under this subsection may be made
in any quantity and by any method that is determined ap-
propriate by the head of the agency making the purchase
without regard to any provision of law or regulation.’’.
(b) PLAN FOR PHASED ELIMINATION OF MANDA-
TORY SOURCE.—Not later than 180 days after the date
of the enactment of this Act, the Board of Directors shall
submit to Congress a plan for the elimination of the re-
quirement of section 4124(a) of title 18, United States
Code. The plan shall provide for the following:
(1) Annual reductions in the total sales that are
made by Federal Prison Industries under the re-
quirement.
(2) A prohibition on any interim significant ex-
pansion of sales under the requirement above levels
authorized by the Board of Directors of Federal
Prison Industries for such sales before the date of
the enactment of this Act.
(3) A prohibition on sales under the require-
ment after the date that is five years after the date
on which the plan is submitted to Congress under
this section.
(c) PUBLIC AVAILABILITY OF PLAN.—Not later than
30 days after the date on which the plan is submitted to
Congress under this section, Federal Prison Industries
shall publish the plan in a commercial business publication
with a national circulation. Federal Prison Industries shall
make copies of the plan available to the public upon re-
quest.
(d) REPEAL
OF MANDATORY SOURCE REQUIRE-
MENT.—Effective on the date that is five years after the
date on which the plan is submitted to Congress under
this section, section 4124 of title 18, United States Code,
is amended—
(1) by striking subsections (a) and (b); and
(2) by amending subsection (d)(1)(A) to read
as follows:
‘‘(A) Any products.’’.
SEC. 5. PERIODIC EVALUATION AND REPORTS.
(a) IN GENERAL.—Section 4127 of title 18, United
States Code, is amended to read as follows:
‘‘§ 4127. Periodic evaluation and reports
‘‘(a) EVALUATION BY GAO.—
‘‘(1) MATTERS EVALUATED.—The Comptroller
General shall provide for an independent evaluation
of the operations of Federal Prison Industries to be
carried out each year. The matters evaluated shall
include the following:
‘‘(A) The overall success of the operations.
‘‘(B) The effects that any reduction in the
purchases made under section 4124(a) has on
the viability of Federal Prison Industries.
‘‘(C) The extent to which Federal Prison
Industries can successfully contract with private
companies without adversely affecting domestic
companies or workers.
‘‘(2) VIEWS INCLUDED.—The Comptroller Gen-
eral shall ensure that, in the development of appro-
priate methodologies for the evaluation under para-
graph (1), the views of the Foreign Labor Substitute
Panel, private industry, organized labor, the Board
of Directors of Federal Prison Industries, and the
public are solicited.
‘‘(3) REPORT.—Not later than March 31 of
each fiscal year, the Comptroller General shall sub-
mit to Congress a report on the evaluation of the op-
erations of Federal Prison Industries that was car-
ried out under paragraph (1) for the preceding fiscal
year. The report for a fiscal year shall, at a min-
imum, include the following:
‘‘(A) The evaluation.
‘‘(B) Any concerns raised about any ad-
verse effects on domestic companies or workers,
together with any actions taken in regard to the
concerns.
‘‘(C) The extent to which Federal Prison
Industries maintained at least a 25 percent em-
ployment rate for eligible inmate workers.
‘‘(D) The extent to which Federal Prison
Industries conducted its operations on a finan-
cially self-sustaining basis.
‘‘(E) Any recommended legislation to im-
prove the administration of this chapter or the
effects of the administration of this chapter, in-
cluding any recommended legislation necessary
to authorize remedial actions regarding—
‘‘(i) any conduct of the operations of
Federal Prison Industries in a manner
that adversely affects domestic companies
or workers (excluding the effects of normal
competitive business practices);
‘‘(ii) any failure of Federal Prison In-
dustries to maintain at least a 25 percent
employment rate for eligible inmate work-
ers; or
‘‘(iii) any failure of Federal Prison In-
dustries to conduct its operations on a fi-
nancially self-sustaining basis.
‘‘(b) ANNUAL REPORT BY BOARD OF DIRECTORS.—
‘‘(1) IN GENERAL.—The Board of Directors of
Federal Prison Industries shall, each year, report
under section 9106 of title 31 on the conduct of the
business of Federal Prison Industries and the condi-
tion of its funds during the preceding fiscal year.
‘‘(2) MATTERS INCLUDED.—In addition to the
matters required by section 9106 of title 31, and
such other matters as the Board considers appro-
priate, each report for a fiscal year under paragraph
(1) shall include the following:
‘‘(A) A statement of the amount of obliga-
tions issued under section 4129(a)(1) of this
title during that fiscal year.
‘‘(B) An estimate of the amount of obliga-
tions that will be issued under that section dur-
ing the following fiscal year.
‘‘(C) An analysis of—
‘‘(i) the total sales by Federal Prison
Industries for each product and service
sold to Federal agencies and to private
United States companies;
‘‘(ii) the total purchases by each Fed-
eral agency of each product and service;
and
‘‘(iii) The Federal Prison Industries
share of the total Federal Government pur-
chases by product and service.
‘‘(D) An analysis of the inmate workforce,
including—
‘‘(i) the number of inmates employed;
‘‘(ii) the number of inmates used to
produce products or perform services sold
to private United States companies;
‘‘(iii) the number and percentage of
employed inmates, categorized by term of
incarceration; and
‘‘(iv) the various hourly wages paid to
inmates engaged in the production of the
various products and the performance of
services authorized for production and sale
to Federal agencies and to private United
States companies.
‘‘(E) Information concerning any employ-
ment obtained by former inmates upon release
that is useful in determining whether the em-
ployment provided by Federal Prison Industries
during incarceration provided those former in-
mates with knowledge and skill in a trade or oc-
cupation that enabled them to earn a livelihood
upon release.
‘‘(3) AVAILABILITY TO PUBLIC.—The Board of
Directors shall make available to the public each re-
port under this subsection.’’.
(b) CLERICAL AMENDMENT.—In the table of sections
at the beginning of chapter 307 of such title, the item
relating to section 4127 is amended to read as follows:
‘‘4127. Periodic evaluation and reports.’’.
SEC. 6. RULES OF CONSTRUCTION AND DEFINITIONS.
(a) IN GENERAL.—Chapter 307 of title 18, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 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;
‘‘(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 person against the United States or
any officer, employee, or contractor thereof.
‘‘§ 4131. Definitions
‘‘In this chapter:
‘‘(1) The term ‘eligible inmate worker’ means a
person who—
‘‘(A) is committed to the custody of the
Bureau of Prisons pursuant to section 3621 of
this title;
‘‘(B) is designated to a low, medium, or
high security facility operated by the Bureau of
Prisons; and
‘‘(C) is physically and mentally able to
work.
‘‘(2) The term ‘private United States company’
means a corporation, partnership, joint venture, or
sole proprietorship with a principal place of business
in the United States.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 307 of such title is amended
by adding at the end the following new items:
‘‘4130. Construction of provisions.
‘‘4131. Definitions.’’.
SEC. 7. CONFORMING AMENDMENT.
Section 436 of title 18, United States Code, is
amended by striking ‘‘Whoever,’’ and inserting ‘‘Except
as otherwise provided in this title, whoever,’’.
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