For Consideration - Prototype Bill (Comments Invited)

INMATE EMPLOYMENT AND FEDERAL PRISON
INDUSTRIES ACT OF 2002

Citizens United For Rehabilitation of Errants (CURE)

May 10, 2002

This prototype bill transitions Federal Prison Industries and Federal prison inmates into the normal competitive economy. Federal Prison Industries and firms employing inmates operate by normal business rules; inmates are employed under normal labor force rules, with normal labor force protections. Employed inmates are responsible for financial obligations to victims, taxpayers, their children and families, and for themselves.

It is no longer acceptable U.S. economic or social policy to behave as if inmates, their children and families, and their victims do not exist or that taxpayers are not harmed by inmate exclusion from the legal labor force. To the contrary, significant general and specific social benefits result from offender success in the legal economy.

Arguments excluding offenders are in fact fundamentally unfair, favoring privileged firms currying economic advantage while depriving victims and taxpayers of deserved compensation, and imposing costs on the American economy, justice, and social fabric.

The practical remedy in this bill is rewarding all stakeholders and society with shared gains from improving inmate legal productivity in the American economy.

1. By 2015, traditional FPI inmate employment must decline 50 percent; mandatory source expires December 31, 2005.
2. FPI may establish unsubsidized, taxpaying entities in any market, without mandatory preference; FPI assets in entities are subject to competitive bid.
3. Inmates may be employed by FPI entities or PIE, but only under full coverage and obligations of law, such as the Fair Labor Standards Act (wages/hours) and National Labor Relations Act (right to workplace union membership), and Titles I and II of the Americans with Disabilities Act (prohibits discrimination on the basis of disability).
4. Discrimination or counseling discrimination against firms employing Federal inmates may result in loss of Federal contracts or removal of tax-exempt status.
5. Otherwise relevant other Federal agency missions include Correctional institutions and populations.

Comments are welcome at either Cure@Curenational.org or at (703) 323-5272.

Thank you.

Thomas W. Petersik, Ph.D.

Citizens United For Rehabilitation of Errants (CURE)

Proposal May 10, 2002

A BILL

"INMATE EMPLOYMENT AND FEDERAL PRISON INDUSTRIES ACT OF 2002"

To increase Federal prison inmate employment opportunities and establish equitable participation of Federal prison industries in the U.S. economy. The intent of the law is to maximize the productivity, economic contributions, income, and financial responsibility of persons incarcerated in Federal correctional facilities, while at the same time establishing terms for successful and equitable participation of Federal Prison Industries in producing goods and services for both government and open-markets. The primary tool employed by the law is extending to inmates and to Federal Prison Industries the rights and responsibilities of the normal American workplace along with reasonable workplace protections for the incarcerated labor force, extending neither special favor nor penalty to either inmates or prison industries.

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 Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Inmate Employment and Federal Prison Industries Act of 2002."

SECTION 2. INDUSTRIAL OPERATIONS IN FEDERAL PRISONS

The Attorney General shall determine in what manner and to what extent industrial operations shall be carried on in Federal correctional institutions. The Attorney General shall conduct such operations so as to maximize the productivity, legal income, and financial responsibility of every Federal corrections inmate. Within requirements of safety and security, the Attorney General shall be responsible for protecting and facilitating the economic participation rights of the incarcerated population as well as for facilitating their meeting financial responsibilities as specified in this act through successful competitive participation in the American economy. The Attorney General shall conduct operations so as to maximize the unsubsidized competitive opportunities of Federal Correctional Industries and to maximize the profit opportunities of private and non-profit firms employing Federal inmates, within the rules of the normal competitive economy and subject to the requirements of safe and secure correctional facilities.

 Federal Prison Industries is a government corporation of the District of Columbia, and shall carry on and facilitate such industrial operations in Federal correctional institutions as shall be determined by the Attorney General. The corporation shall be governed by a board of 12 directors appointed by the Attorney 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 Representatives, the minority leader of the House of Representatives, 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 members of the Board shall serve without compensation. The Director of the Bureau of Prisons shall serve as Chief Executive Officer of the Corporation.

The Attorney General shall appoint an Independent Review Panel composed of one representative from each of the Department of Commerce, the Department of Labor, the Department of Treasury, the International Trade Commission, the Small Business Administration, The Economic Development Administration, the business community, organized labor, taxpayers, crime victims, The Department of Health and Human Services Office of Child Support Enforcement, minorities overrepresented in prison populations, and at least one employed inmate nominated by inmates working in FPI, along with such other persons as the Attorney General deems appropriate. The Panel shall advise the Board regarding the type and quantity of products to be produced by Federal Prison Industries and conditions of hire and work consistent with the purposes set forth in this act. The members of the Panel shall serve without compensation. The Federal Advisory Committee Act shall not apply with respect to the Panel.

The Attorney General shall endeavor to make available to inmates who have been committed to the custody of the Bureau of Prisons opportunities--free from discrimination-- to work or be employed in a Federal Prison Industry Shop. The Attorney General may set standards regarding education and conduct for those inmates who work in a Federal Prison Industry Shop. Except where safety and security of individual inmates requires exception, the voluntary movement of inmates among classes of institutional maintenance, work, or employment shall not be inhibited.

SECTION 3. INDUSTRY CLASSES
There shall be four classes of Federal Prison Industry, Class A including traditional Federal Prison Industries, Class B permitting Federal Prison Industries to compete in open markets, Class C private industries employing inmates under equivalent extension of state Prison Industry Enhancement (PIE) to Federal Corrections, and Class D pilot employment projects.

Class A Federal Prison Industries: Class A Federal Prison Industries are those industries existing on December 31, 2000, serving Government and non profit markets, without change, except –

1. Neither the number nor the proportion of inmates working in class A industries may exceed the number or proportion of inmates working in those industries on December 31, 2000. In addition, after December 31, 2010, neither the number nor the proportion of inmates working in class A FPI industries may exceed seventy-five percent of the number or proportion working on December 31, 2000; and the number and proportion shall fall to fifty percent by December 31, 2015.
2. FPI Class A may not expand to new industries, and
3. Mandatory source provisions for class A FPI industries expire on December 31, 2005. Mandatory source may be extended for a specific facility for no more than two additional years where the Attorney General certifies that National Security or security of the facility would be endangered by loss of mandatory source. Certification includes publication of a plan for elimination of conditions necessitating mandatory source by the end of the extension period.

• Class B Federal Prison Industries: Beginning January 1, 2000, Federal Prison Industries may establish competitive entities unrelated to class A which produce goods or services for sale in government or open markets, including in interstate and international commerce, provided that each entity becomes an independent taxpaying unit subject to all opportunities and obligations affecting a similarly located private firm, in which –

1. All civilian and inmate workers are identically covered under wage and benefit plans and all Federal and applicable state and local laws covering civilian employees, including but not limited to all provisions of the Fair Labor Standards Act, the National Labor Relations Act, The Americans With Disabilities Act, and health and safety standards affecting private firms;
2. Each entity is subject to all license, permit, and tax obligations of a similarly located private firm;
3. Any FPI-owned or provided land, buildings, capital equipment, utilities, services, or staff assistance (except security) are obtained in an arms-length, open, competitive bidding process maximizing returns to taxpayers; FPI may provide no implicit or explicit subsidy to a class B entity not equivalently offered to other firms;
4. Before engaging in a business, the proposed FPI class B firm offers for competitive bid all resources, including opportunities to recruit inmate employees, to firms in the locale engaged in the proposed line of business; and
5. Mandatory preference does not apply.

Class C Federal Prison Industries: All provisions of the state Prison Industries Enhancement (PIE) program – including wage rate adjustments noted below - apply to Federal Prison Industries. Class C industries are private industries located in Federal Correctional Institutions operated under extension of PIE, except that class B industries must be used for customer model production.

Within 180 days of passage of this legislation, the Federal Bureau of Prisons will publish standards for private industries competing for location within Federal Correctional Facilities and employing inmates, and will revise standards whenever necessary thereafter. Standards will be designed to maximize private and nonprofit firms opportunities to compete for efficient operations in Federal correctional facilities while maintaining necessary security. Any private or nonprofit firm meeting the requirements of the publish standards may compete for inmate employment in a Federal correctional facility so long as security is not compromised. Specifically, inmates may establish class C proprietorships, partnerships, and corporations for the purpose of conducting business within Federal correctional institutions and any inmate may invest in a class C business so long as (a) normal conditions of law are met, (b) the business or investment poses no significant threat to the safety or security of the institution, and (c) inmate entrepreneurs and managers exercise no notable control or influence over employed inmates outside the workplace.

Class D Federal Prison Industries are pilot entities testing inmate employment and prison industries reform. So long as (1) inmate participation is voluntary, (2) all health and safety regulations are kept, (3) the program can be justified to the Attorney General as safe, fair, and devised to increase inmate economic well-being, (4) it is a legitimate test preliminary to wider application or proposal for change in law, and (5) the pilot is adequately supported by public oversight and independent evaluation, then FPI may establish as many as 20 separate test entities, in total employing no more than a cumulative total of 1000 inmates over the life of the program. Class D programs are exempt from all other requirements of class A, B, and C. Class D shall expire on December 31, 2010.

SECTION 4: INMATE WAGE RATES
Within the requirements of safe and secure confinement, the Attorney General will modify correctional practices to improve the attractiveness and business efficiency of Federal Correctional facilities to ensure maximum employment of inmates at prevailing wages.

Federal inmates engaged in class B employment and Federal, state, and local inmates engaged in class C PIE employment shall be paid at wages not less than the prevailing wage in the locality, except –

1. to the degree the productivity of individual inmates or subgroups of inmates can be reasonably demonstrated to lag that of civilian workers in the locality, and then only for the period during which their productivity lags, as demonstrated on an annual basis and certified by the Department of Employment Services in the host state, or
2. to the degree unavoidable inefficiencies or risks of operating in a correctional setting deter a facility’s hiring inmates at prevailing wages, as evidenced by its inability to attract enough firms to employ 50 inmates at prevailing wages, provided that (1) the reduction in any inmate’s wage is no more than 50 percent of the difference between the Federal minimum wage and the determined prevailing wage, (2) the full value of the reduction – to the limit of the prescribed deduction - is credited to the inmate in lieu of deductions for board and room, (3) the inefficiencies, efforts to mitigate them, and justifications for their persistence are documented and published, and (4) the inefficiency is certified annually by the U.S. or state attorney general, or
3. during the first twenty-four months of a new firm or new class B entity’s operation in a correctional facility.

In all instances justifying sub-prevailing wages because of reduced productivity, the host correctional facility will have in place reasonable measures, including, but not limited to, access to education and appropriate training, to increase the productivity of the affected inmates.

No facility may contract with or establish a firm employing inmates at less than prevailing wages unless it has first by public notice in the Federal Register and by other effective means offered opportunities to all firms to compete for employment of inmates at the facility.

SECTION 5: NON DISCRIMINATION IN FEDERAL CONTRACTS
Beginning January 1, 2003, no Federal agency may contract for the supply of any good or any service from a firm that the Attorney General finds does any of the following:

1. Discriminates in the employment of inmates as a class
2. Discriminates in the purchase of goods or services produced by inmates
3. Advocates discrimination against employing inmates as a class
4. Advocates discrimination against the products or services of firms employing inmates.

Further, beginning January 1, 2003, the Internal Revenue may upon finding remove the tax-exempt status of any labor union or trade organization that does any of same.

Nothing in this section should be interpreted to prevent an employer from refusing employment to any individual whose criminal past can be reasonably interpreted to endanger employees or customers of the firm or other persons or to invite fraud or undermine the quality of the product of the firm. Nothing in this section should be interpreted to prevent an employer from refusing employment to inmates whose productivity is below that of other applicants or from refusing to purchase noncompetitive goods or services produced by specific firms employing inmates.

SECTION 6: INCENTIVES TO TRADE ORGANIZATIONS AND NON-PROFITS
To encourage investment and innovation in bringing inmates into successful open market employment, Congress is authorized to expend up to $200,000 per year for up to five years for each of three classes, including (1) business trade organizations, (2) labor organizations, and (3) human rights and non-profit organizations and foundations, for matching grants attracting firms and creating business entities in Federal and state correctional settings. At least 20 percent of all monies so expended shall be dedicated to research and evaluation.

SECTION 7: INMATE FINANCIAL RESPONSIBILITIES
The Attorney General shall facilitate inmates’ success meeting reasonably proportioned financial obligations to victims, inmates’ children and families, to taxpayers, and for themselves. In particular, the Attorney General will coordinate with working inmates and courts, family services, and Offices of Child Support Enforcement to ensure victim compensation, establishment of paternity and reasonable child support orders, payment toward any other court-ordered obligations, to contribute toward the costs of incarceration, as well as for reasonable actions to encourage inmates’ prudent purchases, saving, and investment.

Deductions from inmate earnings in Class B industries occur only for taxes and normal payroll deductions, court-ordered deductions for any purpose, victim compensation, child and family support, and contributions to costs of incarceration. Deductions may not, in total, exceed 80 percent of gross pay; no deduction from any inmate’s earnings for costs of incarceration or victim compensation can exceed the aggregate average rate of deductions for child support. The Attorney General may require and monitor savings, and FPI shall encourage prudent interest-earning savings; inmates shall have full access to Federal Prisons credit union savings or investment accounts on terms identical to those offered civilian employees for all required savings. Although savings may be required from the 20 percent of gross income remaining for the inmate, at least half of the remainder will be held exempt from any FPI or court-ordered deduction and will accrue solely to the discretion of the inmate wage earner.

Records of all deductions will be maintained by category and compiled annually for public release.

Deductions in Class C industries follow PIE guidelines.

SECTION 8: SUPPORT BY OTHER FEDERAL AGENCIES
The Attorney General shall facilitate other Federal, state, and other agencies increasing the education, skills, and economic productivity of the Federal inmate population and in assisting inmates in meeting financial obligations. No Federal inmate and no Federal Prison Industry in any class (unless explicitly exempted in a class D pilot) shall be prohibited from services of a Federal agency for which he/she is otherwise qualified, so long as institutional safety and security are preserved. The missions of other Federal agencies include Federal Correctional Institutions and their inmate populations.

Federal correctional institutions individually, in groups, or as a class are eligible for consideration in competition to become empowerment zones or empowerment communities. Similarly, state or local correctional facilities or groups of facilities, are eligible for consideration to become such zones or communities.

An expenditure of $50,000 each is authorized for each of fiscal years 2001-2010 for each of the Departments of Commerce, Education, Justice, Health and Human Services, Labor, and Treasury to identify and begin to effect linkages between Departmental programs and services serving Federal, state, and local inmates and correctional industries.

SECTION 9: INMATE WORKER AND BUSINESS COUNCILS
The Attorney General shall establish inmate worker councils in each Federal Correctional Institution including all inmates working in class A, B, C, and D Federal Prison Industries, for the purposes of (a) increasing productivity, quality, and income opportunity, including recruiting new firms, (b) representing common workplace interests of inmate employees, including in negotiation with FPI and firm management, and (c) intersite and public communication representing inmate workers. Councils will be designed to encourage open communication about workplace issues within the bounds of safe and secure confinement. Every employed inmate will have a right to participate in inmate council, and inmates will choose local and National leadership of such councils in a free and democratic manner. Corrections issues whose primary impact is other than the workplace shall not be considered in inmate worker councils.

The Attorney General will ensure that workplace issues raised by any inmate through worker councils, whose reasonable consequences are legal, are exempt from correctional disciplinary action, workplace retaliation, or loss of any right or privilege.

Reasonable Council expenses will be funded from that portion of deductions from inmate gross wages for board and room.

The Attorney General shall facilitate creation of councils of class B, C, and D firms operating in Federal Correctional Institutions for the purposes of improving efficiency, competitiveness, employment, and profitability of such firms, improving working relationships with Federal institutions and the Federal Bureau of Prisons, as well as for improving safety, security, and public understanding of Federal prison industry programs. Such councils will exclusively address issues affecting workplace efficiency and success; corrections issues whose primary impact is other than the workplace or business efficiency shall not be considered in business councils.

SECTION 10: WORKPLACE DISCIPLINE AND WORKPLACE ISSUES
The provisions of this law apply solely to workplace operations in correctional facilities regarding the production of goods and services for agencies or open markets other than the operation of the specific correctional facility. They do not apply to work in institutional maintenance. Nor do the provisions of this law apply to correctional matters of any sort beyond the workplace.

Except where a specific workplace action can be shown to directly threaten or harm correctional safety or security, workplace issues involving inmates in all work classes will be addressed solely in the workplace with no correctional consequence. Correctional disciplinary procedures and transfers will not be used to address inmate workplace issues, including issues raised in an otherwise legal collective bargaining process.

SECTION 11: CORRECTIONAL INSTITUTION LOCATIONS
In locating new correctional institutions, the Attorney General will favorably consider locations that increase or maximize Federal inmates’ opportunities for successful open-market employment and competitive participation in the U.S. economy, along with opportunities for education and training.

SECTION 12: RESEARCH AND PILOT PROGRAM SUPPORT
To assist the Federal Bureau of Prisons in transitioning to successful open-market participation for inmates and industries, Congress is authorized to expend up to $2 million each year for up to ten years for (a) external expertise in designing and effecting class B, C, and D programs, (b) research and followup support, (c) staffing support to initiate programs, and (d) outreach support.

SECTION 13: ANNUAL PUBLIC REPORTS
On or before June 30 subsequent to each calendar year, the Attorney General will publish a report covering each of all four classes of Federal Prison Industries, including numbers of working inmates by industry and occupation, distributions of hours worked and hourly and annual incomes, deductions by class of deduction, annual value of product, injuries and workers compensation claims, and any other statistics necessary for a public accounting of inmate work. With the exception of inmate wage disclosure, the attorney general shall not require private firms employing inmates to publish information which would both (a) not otherwise be required, and (b) could reasonably be construed to harm the firm’s competitive position.

Concurrently the Attorney General will publish annually a report summarizing major events and progress in all four employment classes. The report will identify all significant events and decisions affecting inmate work opportunity, conditions of work, pay and benefits, and events affecting inmate participation in the workplace. The report will include an annual National report prepared by inmate worker and business councils including whatever material is deemed relevant by the inmate worker and business councils without interference.

SECTION 13: ENHANCING PUBLIC SAFETY AND SECURITY IN THE DUTIES OF THE BUREAU OF PRISONS
To allow the Federal Bureau of Prisons to contract with private entities for services relating to the operation of correctional facilities for the incarceration of nonviolent inmates.

Any penal or correctional facility or institution except for community correctional confinement such as halfway houses, confining any person convicted of violent offenses against the United States, shall be under the direction of the director of the Bureau of Prisons and shall be managed and maintained by employees of the United States as defined in section 2105 of title 5. The housing, safeguarding, care, subsistence, protection, instructing, and disciplining of any person charged with or convicted of any violent offense against the United States, except such persons in community correctional confinement such as halfway houses, in every institution will be provided primarily by individuals who are employees of the United States as defined in section 2105 of title 5. Contract services may be utilized to provide ancillary services separate from facility management, security, or inmate discipline.

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