HR 4100 IH
105th CONGRESS
2d Session
H. R. 4100
To amend title 18, United States Code, with respect to the employment of Federal prisoners, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
June 19, 1998
Mr. MCCOLLUM introduced the following bill; which was referred to the Committee on the Judiciary
A BILL
To amend title 18, United States Code, with respect to the employment of Federal prisoners, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Free Market Prison Industries Reform Act of 1998'.
SEC. 2. GENERAL PROVISIONS RELATING TO STRUCTURE AND FUNCTION OF FEDERAL PRISON INDUSTRIES.
Title 18, United States Code, is amended by striking sections 4121 through 4122 and inserting the following:
`Sec. 4121. Definitions
`(1) the term `industry' means an endeavor that utilizes incarcerated persons to produce one or more goods or provide one or more services, or both;
`(2) the term `product' includes services;
`(3) the term `prisoner contributions' means an amount which shall be used for--
`(A) payment of fines and restitution owed by the prisoner pursuant to court order;
`(B) reasonable charges for room and board, as determined under rules made by the Attorney General;
`(C) allocations for support of the inmate's family pursuant to statute, court order, or agreement by the inmate; and
`(D) contributions, of not less than 5 percent but not more than 20 percent of the fee paid on account of the inmate, to any fund established by law to compensate the victims of crime;
`(4) the term `assembled good' means a good which is the result of the assembly of fabricated goods, as such terms are defined in 19 CFR 10.11 et seq.; and
`(5) the term `foreign-made good' means a good that the Director of Bureau of Labor Statistics determines is a product of which 95% or more of the amount sold in the United States is fabricated in a foreign place.
`Sec. 4122. Administration of Federal Prison Industries
`(a)(1) Federal Prison Industries is established as a Government corporation of the District of Columbia.
`(2) Federal Prison Industries shall be administered by a board of 7 directors appointed by the President to serve at the will of the President without compensation. The President, in appointing such directors, shall consider for appointment a person recommended by each of the following:
`(A) The Speaker of the House of Representatives.
`(B) The minority leader of the House of Representatives.
`(C) The majority leader of the Senate.
`(D) The minority leader of the Senate.
`(b) Federal Prison Industries shall provide industries operated as a Limited Sales Project, Private Sector Project, or a Prison Industry Enhancement Project. The goal of such industries shall be to generate the greatest amount of prisoner contributions as is reasonably possible and provide employment for the greatest number as is reasonably possible of those inmates who are eligible to work who are--
`(1) in the custody of the Bureau of Prisons;
`(2) convicted by general courts martial and confined in any institution within the jurisdiction of any department or agency comprising the Department of Defense, to the extent and under terms and conditions agreed upon by the Secretary of Defense, the Attorney General, and Federal Prison Industries; or
`(3) confined in any penal or correctional institution of the District of Columbia to the extent and under terms and conditions agreed upon by the District of Columbia Department of Corrections, the Attorney General, and Federal Prison Industries.
`(c) Federal Prison Industries shall so conduct its operations so that it realizes annual positive net revenues.
`(d) Federal Prison Industries shall avoid capturing more than a reasonable share of the market among Federal departments, agencies, and institutions for any specific product of a Limited Sales Project.
`(e)(1) Any department or agency of the Department of Defense may, without exchange of funds, transfer to Federal Prison Industries any property or equipment suitable for use in performing the functions and duties covered by agreement entered into under subsection (b)(2).
`(2) The Department of Corrections of the District of Columbia may, without exchange of funds, transfer to the Federal Prison Industries any property or equipment suitable for use in performing the functions and duties covered by an agreement entered into under subsection (b)(3).
`(f) Nothing in this chapter shall prohibit any industry from offering for sale on the open market--
`(2) foreign-made goods.'.
`(g) Federal Prison Industries is not required to comply with the Competition in Contracting Act of 1984 or with the Federal Acquisition Regulations.
`(h) Federal Prison Industries may provide vocational training for qualified inmates without regard to their Federal Prison Industries work or other assignments.'.
SEC. 3. EXISTING INDUSTRIES.
Chapter 307 of title 18, United States Code, is amended by adding at the end the following:
`Sec. 4130. Limited Sales Projects
`(a) Any industry not operated as a Private Sector Project or a Prison Industry Enhancement Project shall be operated as a Limited Sales Project.
`(b) An industry operated as a Limited Sales Project shall--
`(A) sell its products only to--
`(i) the Federal Government;
`(ii) State and local governmental entities; or
`(iii) outside the United States;
`(B) be operated directly by Federal Prison Industries; and
`(C) be located in a facility provided by the Bureau of Prisons.
SEC. 4. NEW INDUSTRIES.
(a) IN GENERAL- Chapter 307 of title 18, United States Code, is amended by adding at the end the following:
`Sec. 4131. Private Sector Projects
`(a) Except as provided in subsection (g), each industry located at a facility activated by the Attorney General on or after the date which is one year after the date of the enactment of the Prison Industries Reform Act of 1998 shall be operated as a Private Sector Project. Each industry located at a facility that was activated before that date may be operated as a Private Sector Project.
`(b) An industry operated as a Private Sector Project shall--
`(1) sell its products generally on the open market;
`(2) be operated by a private person under a contract with Federal Prison Industries for the use of prison labor; and
`(3) be located in a facility operated by the Bureau of Prisons or a private person under a contract with the Attorney General, or elsewhere as may be determined by the Attorney General.
`(c) Except as otherwise provided in this section, Federal Prison Industries shall enter into a contract with a private person to operate the Private Sector Project on terms beneficial to the mission of Federal Prison Industries. The contract shall include a provision for payment of a fee for the use of the services of the inmates working in that Project.
`(d) Before entering into a contract with a private person under subsection (c), Federal Prison Industries shall prepare and make public a notice soliciting private
persons to submit bids for the contract. Federal Prison Industries shall submit that notice to the committees on the judiciary of the House of Representatives and the Senate on or before the date such notice is made public.
`(e) When reviewing bids submitted by a private person to operate and manage a Private Sector Project, Federal Prison Industries shall give preferences to private persons who propose to use the Private Sector Project for operations that otherwise would be located in a foreign place, unless Federal Prison Industries determines that other bids are of greater benefit to the mission of Federal Prison Industries.
`(f) The Attorney General may determine the portion of any compensation paid by the private person pursuant to a contract under subsection (c) that will be distributed as wages to inmates who work in the industry. The remainder of such compensation shall be retained by Federal Prison Industries and distributed as prisoner contributions in accordance with section 4133.
`(g) If Federal Prison Industries is unable to enter into a contract with a private person with respect to a Private Sector Project within 18 months after the latter of the date on which notice is given pursuant to subsection (d) or on which the Attorney General activates the facility at which the industry is to be located, Federal Prison Industries may operate that industry as a Prison Industry Enhancement Project.
`Sec. 4132. Prison Industry Enhancement Projects
`(a) Each industry that is in operation on the day which is one year after the date of the enactment of the Prison Industries Reform Act of 1998 and located at a facility activated before such day may be operated as a Prison Industry Enhancement Project. Any industry described in section 4131(g) and which Federal Prison Industries determines will not be operated as a Private Sector Project shall be operated as a Prison Industry Enhancement Project.
`(b) An industry operated as a Prison Industry Enhancement Project' shall--
`(1) sell its products generally on the open market;
`(2) be operated by Federal Prison Industries; and
`(3) be located in a facility operated by the Bureau of Prisons or a private person under a contract with the Attorney General.
`(c) The Attorney General may determine the portion of the net revenues of the Prison Enhancement Project to be distributed as wages to inmates who work in the industry. The remainder of such revenue shall be retained by Federal Prison Industries and distributed as prisoner contributions in accordance with section 4133.
`(d) Not later than 2 years after the date of the enactment of the Prison Industries Reform Act of 1998, Federal Prison Industries shall operate not less than 5 industries existing on such date as Private Sector Projects or Prison Industry Enhancement Projects. Not later than 3 years after such date, Federal Prison Industries shall operate not less than 20 such industries as Private Sector Projects or Prison Industry Enhancement Projects.'.
(b) ELIMINATION OF OLD PROVISION RESPECTING NEW INDUSTRIES- Title 18, United States Code, is amended by striking section 4123.
SEC. 5. CONFORMING AMENDMENTS.
(a) MANDATORY SOURCE REQUIREMENT- Section 4124 of title 18, United States Code, is amended--
(A) by striking `The' and inserting `Except as otherwise provided by law, the';
(B) by inserting `(in each of the executive, legislative, and judicial branches)' after `United States'; and
(C) by striking `the industries' and inserting `Limited Sales Projects';
(2) in subsection (d), by striking `products and services' and inserting `products of Limited Sales Projects'; and
(3) by adding at the end the following:
`(e)(1) Subsection (a) does not require the purchase by Federal entities of any assembled goods.
`(2) Subsection (a) does not require the purchase by Federal entities of any foreign-made goods. '.
(b) PRISON INDUSTRIES FUND- Section 4126(c) of title 18, United States Code, is amended--
(1) by inserting `(in an amount not greater than that provided in chapter 81 of title 5)' after `operations, and compensation';
(2) by striking the period at the end of paragraph (4) and inserting a semicolon;
(3) by striking the matter in subsection (c) that follows paragraph (4) and inserting the following:
`(5) in paying, under rules and regulations promulgated by the Attorney General, prisoner contributions.'.
SEC. 6 CLERICAL AMENDMENTS.
The table of sections for chapter 307 of title 18, United States Code, is amended--
(1) so that the item relating to section 4121 reads as follows:
(2) by striking the item relating to section 4123; and
(3) by inserting after the item relating to section 4129 the following new items:
`4130. Limited Sales Projects.
`4131. Private Sector Projects.
`4132. Prison Industry Enhancement Projects.'.
SEC. 7. MODIFICATION OF PROHIBITION ON SALES OF PRISONER-MADE PRODUCTS.
Section 1761 of title 18, United States Code, is amended by striking subsections (b) through (d) and inserting the following:
`(b)(1) This section does not apply to good, wares, or merchandise manufactured or produced, or services provided, by inmates at an industry--
`(A) provided by Federal Prison Industries; or
`(B) provided by a State, unless--
`(i) the industry is operated by a person other than the State; and
`(ii) after September 30, 2008, the State does not have in effect any requirement that the departments and agencies of the State purchase a portion of their requirements for products produced by any industry provided by that State.
`(2) As used in this subsection, the term `State' means a State of the United States and any commonwealth, territory, or possession of the United States.'.
SEC. 8. STUDY OF FOREIGN-MADE GOODS.
The Director of the Bureau of Labor Statistics shall make a initial determination of those goods (described by Standard Industrial Product Code published by the Office of Management and Budget) of which 95 percent or more of the amount sold in the United States are fabricated in a foreign place. The Director shall report that determination to Congress, not later than 180 days after the date of the enactment of the Prison Industries Reform Act of 1998.
SEC. 9. RESTRUCTURING.
(a) PLAN- The Attorney General shall, not later than one year after the date of the enactment of this Act, develop and submit to Congress a plan, together with any recommendations for any necessary implementing legislation, for restructuring Federal Prison Industries. The plan shall provide--
(1) for the reduction in the use of Limited Sales Projects measured as a percentage of the total sales of Federal Prison Industries (or any successor) by 40 percent before the end of the 5-year period beginning on the date of the enactment of this Act;
(2) except as provided in subsection (b)--
(A) for the phase out of the use of Limited Sales Projects by September 30, 2008; and
(B) for the phase out of the use of Prison Industry Enhancement Projects by September 30, 2013;
(3) the creation of a non-governmental entity to succeed to the rights and obligations of Federal Prison Industries;
(b) ALTERNATE PROVISIONS OF PLAN-
(1) GENERALLY- The plan may provide that if the number of inmates employed in industries provided by Federal Prison Industries 3 years after the submission date is less than the number of inmates so employed on the submission date, then--
(A) the 40 percent reduction described in subsection (a)(1) is not required and Limited Sales Projects may also be used to provide industries after September 30, 2008, but to no greater extent (measured as a percentage of the total sales of Federal Prison Industries (or any successor)) than used on the submission date; and
(B) Prison Industry Enhancement Projects may also be used to provide industries after September 30, 2013.
(2) DEFINITION- as used in this subsection, the term `submission date' is the date the plan is submitted to Congress under subsection (a).
(c) IMPLEMENTATION OF PLAN- To the extent the plan may be implemented without the enactment of legislation, the plan shall go into effect 180 days after the date of its submission to Congress, unless Congress shall by law otherwise provide.
END