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PRISON INDUSTRIES ACT

Summary This Act provides for the employment of inmate labor in state correctional institutions and in the private manufacturing of certain products under specific conditions. The Act also sets forth the requirements and responsibilities of the state commission of corrections, the governor, and other officers and agencies in relation to inmate employment in correctional institutions and distribution of products and proceeds from inmate employment. Model Legislation {Title, enacting clause, etc.} Section 1. {Title.} This Act may be cited as the Prison Industries Act. As used in this Act:

Section 2. {Definitions.}

(A) “Correctional industries products” means all services provided, goods, wares, and merchandise manufactured or produced, wholly or in part, by inmates in any state correctional institution. Correctional industries products does not include a product manufactured with inmate labor in a private manufacturing enterprise established under Section 7. (B) “Security designation” means one of six levels of restrictiveness enforced at each correctional institution, as determined by the department of corrections, with security level I being the least restrictive and security level VI being the most restrictive. {Varies from state to state.} Section 3. {State responsibilities.} The commission of corrections may:

(A) construct, use, equip, and maintain buildings, machinery, and equipment as may be necessary to provide for the employment of inmate labor in state correctional institutions for the manufacture of goods, wares, and merchandise and the operation of service; (B) purchase new material to be used in the manufacture of goods, wares, merchandise, and operation of services; (C) dispose of the manufactured products or provide services in the manner provided by law; (D) recruit and employ agents and assistants through the department of civil service as may be necessary to carry out the purposes of this Act and recommend to the department of civil service classes and selection procedures that recognize the unique needs of correctional industries; (E) establish an advisory council for correctional industries that shall include representatives of organized labor, private industry, state government, and the general public; (F) enter into any agreements necessary for assigning inmates to employment in private manufacturing enterprises under Section 8; Section 4. {Revenues and expenditures.} Except as provided in Section 8, all money collected from the sale or disposition of goods, wares, and merchandise manufactured by inmate labor, or received for services provided by labor in the correctional institutions pursuant to this Act, shall be turned over to the state treasurer and credited to the correctional industries revolving fund, and shall be paid out only for the cost of doing business incurred in carrying out the purpose of this Act. Section 5. {Sale of products.)
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(A) Correctional industries products may be sold to, exchanged with, or purchased by state and federal governments, foreign governments, or any organization that is a tax exempt organization under Section 501(c)(3) of the U.S. Internal Revenue Code. (B) An agricultural product that is produced on a correctional farm, unless it is utilized within the correctional institution, or is sold to an institution, government agency, or organization as described in Subsection (A), shall be made available without charge to nonprofit charitable organizations or to the department of social services for use in food banks, bulk food distributions, or similar charitable food distribution programs. This subsection does not apply to an agricultural product that is not in a form suitable for use in the manner prescribed in this section, such as bulk grain or live cattle and hogs, which may be sold on the open market. (C) Except as provided in Subsection (D), the labor of inmates shall not be sold, hired, leased, loaned, contracted for, or otherwise used for private or corporate profit or for any purpose other than the construction, maintenance, or operation of public works, ways, or property as directed by the governor. This Act shall not be construed to prohibit the sale at retail of articles made by the inmates for the personal benefit of themselves or their dependents or the payment to inmates for personal services rendered in the correctional institutions, subject to regulations approved by the commission of corrections, or the use of inmate labor upon agricultural land that has been rented or leased by the department of corrections. (D) If more than 80 percent of a particular product sold in the United States is manufactured outside the United States and none of that product is manufactured in this state, as determined by the commission of corrections, inmate labor may be used in the manufacture of that product in a private manufacturing enterprise established under Section 7. A determination by the commission of corrections under this subsection shall be made at the time the manufacturer applies to the department of corrections for approval to produce that product pursuant to Section 7. Section 6. {Employment.} -The commission of corrections shall provide as fully as practicable for the employment of inmates in tasks consistent with the penal and rehabilitative purposes of their imprisonment and with the public economy. The types of employment may be as follows: (A) routine maintenance and operation of correctional institutions; (B) educational and rehabilitation activities, determined on the basis of individual needs and educability; (C) productive or maintenance labor in connection with the institution farms, or other land rented or leased by the department of corrections, factories, shops, or other available facilities for the production and distribution of correctional industries products and services; (D) labor assignments on state public works, ways, or properties when and as requisitioned by the governor or on public roads when duly requested by the appropriate state or governing body; (E) labor assignments in private manufacturing enterprises established under Section 7. Section 7. {Private employment.} Inmates may be assigned to work in a private manufacturing enterprise that meets all of the following requirements: (A) The enterprise is established adjacent to a correctional institution or in an industrial park that is adjacent to a correctional institution, and is suitably designed for utilization of inmate labor. (B) The enterprise manufactures products that are permitted to be manufactured using inmate labor, as determined under Section 5(D). (C) The ratio of the number of employees of the enterprise to the number of inmates assigned to work in the enterprise shall not be less than one to three.
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Only those inmates who reside in a correctional institution having a Section 8. {I nmate eligibility.} security designation of level I and who are not serving a sentence of life imprisonment are eligible to be assigned to work in a private manufacturing enterprise. Section 9. {Contracting with private manufacturers.} The contract between the department and the private manufacturing enterprise shall ensure that a wage that is not less than applicable minimum wage laws shall be paid to the department by the private manufacturing enterprise for work performed by the inmate in the private manufacturing enterprise. The department shall distribute the wages in the following order: (A) The department shall withhold any pay for the inmate’s applicable state and local income taxes and federal income, social security, and medicare taxes. (B) Of the remaining balance: (1) if the inmate has been ordered by the court to pay restitution to the victim of his or her crime, 20 percent shall be paid for that restitution on the inmate’s behalf, in accordance with the court order, until the amount of restitution is satisfied. If the restitution is satisfied, 10 percent shall be added to the escrow account under Subparagraph 4 and 10 percent shall be deposited with the state treasurer and credited to the general fund in addition to the amount in Subparagraph 5. (2) if the inmate has a spouse or children, 20 percent shall be paid to the inmate’s spouse or children for the purpose of family support. If the inmate’s spouse or children receive Aid to Families with Dependent Children (AFDC) or general assistance under the social welfare acts of this state, while the inmate is incarcerated, the 20 percent designated in this subdivision shall be deposited with the state treasurer and credited to the general fund as repayment of that aid or assistance, until that amount of aid or assistance is repaid. (3) Ten percent shall be paid to the inmate for his or her personal use while incarcerated. (4) Ten percent shall be held by the department in an escrow account for the inmate, and shall be returned to the inmate upon his or her release. (5) the balance remaining after the deductions specified in Subparagraphs (1) and (4) shall be deposited with the state treasurer and credited to the general fund, as partial reimbursement to the state for the cost of the inmate’s imprisonment and care. Section 10. {Contracting with private manufacturers.} The contract between the department and the private manufacturing enterprise shall provide that the department shall pay any applicable payroll taxes. Section 11. In addition to the amounts paid under Section 9 and Section 10, the contract between the department and the private manufacturing enterprise shall require the enterprise to pay the department an annual administrative fee equal to 1 percent of the total amounts paid annually to the department by the private manufacturing enterprise under Section 9 and Section 10. Section 12. The commission of corrections may adopt a schedule of payments or allowances to inmates or to their dependents from the funds as may be provided for the payment. This section does not apply to payment of wages to inmates assigned to work in private manufacturing enterprises under Section 8. Section 13. {Severability clause.}

Section 14. {Repealer clause.} Section 15. {Effective date.}

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