Prison Industries Enhancement Certification Program (PIECP)

17000 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
DEPARTMENT OF JUSTICE
Office of Justice Programs
[OJP(BJA)–1213]
RIN 1121–AA36
Prison Industry Enhancement
Certification Program Guideline
AGENCY: Office of Justice Programs,
Bureau of Justice Assistance (BJA),
Justice.
ACTION: Issuance of final guideline.
SUMMARY: The Office of Justice
Programs, Bureau of Justice Assistance
(BJA), is issuing this final revision to its
Prison Industry Enhancement
Certification Program (PIECP) Guideline
proposed for public comment on July 7,
1998, 63 FR 36710–36719. Under Title
18 U.S.C. 1761(c), BJA PIECP
certification excepts participating
agencies from certain Federal restraints
placed on the marketability of prison-
made goods by permitting the transport
of such goods in interstate commerce
and the sale of such goods to the Federal
government. This Guideline addresses
statutory amendments and reflects
administrative experience gained by
BJA since the last final PIECP Guideline
published on March 29,1985 (50 FR
12661–64).
The publication of this Final
Guideline is considered to be a Federal
action that will not significantly affect
the quality of the human environment.
Therefore, preparation of an
environmental impact statement is not
necessary.
EFFECTIVE DATE: This Guideline is
effective April 7, 1999; existing
participants will have until April 7,
2000 to achieve compliance with all of
the new requirements set forth in this
Guideline except for those relating to
the National Environmental Policy Act
(NEPA). The new requirements
implementing NEPA are effective
immediately.
FOR FURTHER INFORMATION CONTACT:
Jeffrey R. Hall, Law Enforcement
Program Manager, Bureau of Justice
Assistance, 810 Seventh Street, NW,
Washington, DC 20531. Telephone:
(202) 616–3255.
SUPPLEMENTARY INFORMATION:
Scope of Program Announcement
I. Introduction: Program Purposes and
Objectives
II. Background of the Prison Industry
Enhancement Certification Program
(PIECP)
a. The Legislative History
1. Unregulated Prison Labor
2. Prisoner Idleness and Prisoners’ Need
for Job Skills Training
b. The PIECP Program
1. Current State of the Program
2. Future Challenges
c. Discussion of Comments
c. 1–11 (see Nos. pp 821–847)
III. Program Guidance
a. PIECP Purposes
b. Definitions
c. BJA’s Initial Considerations for
Determining Propriety of Work Pilot
Project Certification
1. BJA’s Exercise of Discretionary
Authority To Define and Certify 50 Work
Pilot Projects
2. Threshold Inquiry for Determining
Applicability of PIECP Exception Status
d. Mandatory Program Criteria for PIECP
Participation
1. Eligibility
2. Inmate Wages
3. Non-Inmate Worker Displacement
4. Benefits
5. Deductions
6. Voluntary PIECP Inmate Worker
Participation
7. Consultation With Organized Labor
8. Consultation With Local Private Industry
9. Compliance With the National
Environmental Policy Act (NEPA)
IV. PIECP Administration
a. Certificate Holders
1. Project Structure
2. Application Content
3. BJA Review
4. Standard or Provisional Certification
5. Certificate Holder Designation Authority
6. Certificate Holder Monitoring
Responsibilities
b. Cost Accounting Centers’ PIECP
Exception Status
c. Compliance Reviews
1. Performance Reports
2. On-Site Monitoring Reviews
d. BJA’s PIECP Administration
e. Exception Status Suspension/
Termination
1. Notice of Possible Compliance Violation
2. Voluntary Compliance Agreements
3. Failure To Achieve Compliance and
Effect of Non-Compliance
4. PIECP Exception Status Suspension and
Termination
I. Introduction: Program Purposes and
Objectives
The Prison Industry Enhancement
Certification Program (PIECP), codified
at 18 U.S.C. 1761(c), was first
authorized by the Justice System
Improvement Act of 1979, Pub. L. No.
96–157, 93 Stat. 1215. The PIECP was
expanded from 7 to 20 pilot projects
under the Justice Assistance Act of
1984, Pub. L. 98–473 § 609k(a)(1), 98
Stat. 2077, 2102. In 1990, The Crime
Control Act of 1990, Public Law 101–
647 § 2906, 104 Stat. 4789,4914, raised
to 50 the number of PIECP projects that
may be excepted by the Bureau of
Justice Assistance (BJA) from certain
Federal restrictions on the marketability
of prisoner-made goods, including the
Ashurst-Sumners Act (18 U.S.C.
1761(a)) and the Walsh-Healey Act (41
U.S.C. 35).
Since its inception in 1979, the PIECP
program has certified 38 work pilot
projects throughout the country. Prison
administrators find PIECP participation
an effective way to address idleness
among ever-increasing prison
populations and as a cost-efficient
method for providing inmates with
marketable job skills. Taxpayers benefit
because PIECP wage deductions result
in reductions in incarceration costs.
Inmate wages benefit society, generally,
in that deducted amounts are authorized
to address victim compensation, inmate
family support needs and taxes. Lastly,
PIECP industries obtain broad market
access for their products because they
are excepted from the Ashurst-Sumners
Act prohibition against the interstate
transport of prisoner-made goods and
from the Walsh-Healey Act prohibition
against certain contract sales of
prisoner-made goods to the Federal
government.
BJA first issued a Final Guideline to
implement this program on March 29,
1985, 50 FR 12661–64. After providing
an opportunity for public comment on
the revised Guideline on July 7, 1998
(63 FR 36710–19), the agency now
publishes this Final Guideline to offer
updated program clarification. In so
doing, the legislative underpinnings of
relevant laws are examined and the
scope of their applicability is defined.
Compliance expectations are explained
as program guidance. Refined
administrative practices reflect
experience gained by BJA over the past
14 years. The background history,
guidance definitions and administrative
requirements described in this
Guideline are specific only to the PIECP
and have no bearing on or relationship
to the development, goals or
administrative practices of any other
prison industry program.
II. Background of the Prison Industry
Enhancement Certification Program
(PIECP)
a. Legislative History
1. Unregulated Prison Labor
The 19th Century evolution of
industrial capitalism and private sector
use of prisoner labor spawned a number
of conditions that adversely affected
several major segments of society. By
the turn of the 20th Century, these
segments joined in an organized appeal
to Congress and state legislatures
nationwide. They collectively asserted
that the production and distribution of
unregulated prisoner-made goods in
interstate commerce needed to be

17001	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
eliminated or, at a minimum,
controlled.
Human rights activists turned the
public’s attention to poor prison work
conditions and inmate exploitation.
Organized labor argued that the demand
for prisoner-made products, anywhere,
necessarily displaced a possible demand
for the product of free labor. Free
enterprise manufacturers at the time
were disturbed because manufacturers
of prisoner-made goods did not bear the
burden of overhead costs borne by
private industry competitors. Prisoner-
made goods were sold at below market
prices. The viability of private industry
competition was thereby undercut. In
December 1924, Secretary of Commerce
Herbert Hoover held a conference on the
subject of the ‘‘ruinous and unfair
competition between prison-made
products and free industry and labor.’’
70 Cong. Rec. S656 (1928).
Then-Secretary Hoover authorized an
advisory committee to study the
problem. This committee issued a report
to Congress in 1928 wherein Chairman
of the Advisory Committee on Prison
Industries, Arthur Davenport, submitted
the following conclusions:
(1) Certain major factors in the normal
cost of production which must be met
by all manufacturers are entirely
absent in the case of prison industries.
If anything approaching normal
efficiencies of operation can be
attained with the use of prison
facilities and labor, the total costs of
production are . . . below those of the
manufacturer who must meet large
overhead expenses as well as employ
free labor.
(2) It is the universal belief that
prisoners should be usefully occupied
whether as a part of their punishment
or as a means of rehabilitation by
teaching them the habits of industry.
To this end nearly every State . . .
provid[es] productive work for their
prisoners . . .
(3) The volume of goods produced by
prison labor is already very large in
some lines, but as more prisoners are
put to work, and the industries become
more efficient, the output of our prisons
will be greatly increased.
(4) The effect of placing on the open
market a volume of goods which have
been produced below normal costs, is to
lower prices and disorganize the market
* * * The increase in prison
production which is predicted will
exaggerate this evil and make it difficult
if not impossible for manufacturers
employing free labor to exist in trade
where the prison output becomes heavy.
(5) The solution of this problem, if
prison production is to continue * * *
would seem to be the elimination, in
one way or another, of the direct price
competition of the prison products with
so called ‘‘free products’’* * *. 70
Cong. Rec. S656 (1928).
In closing, Chairman Davenport urged
that solutions be found, ‘‘[o]therwise
either prison industries must cease and
prisoners kept in idleness or the
manufacture of products competing
with prison output will become
impossible. Either of these
developments would be disastrous
* * *.’’ See S. Rep. No. 344, 70th Cong.,
1st Sess., re-printed, Cong. Rec. S656
(Dec. 15, 1928), ‘‘Statement of Prison
Labor Problems as Shown by Report of
Senate Committee.’’
Even if a state prohibited its own
correctional institutions from producing
and marketing prisoner-made goods,
that same state had no jurisdiction to
control such goods produced in other
states, transported in interstate
commerce and sold within its
boundaries. As an initial solution to this
problem, Congress enacted the Hawes-
Cooper Act in 1929, Pub. L. 70–669, 45
Stat. 1084, recodified by Pub. L. 95–473,
92 Stat. 1449 (1978) [formerly codified
at 49 U.S.C. 11507, omitted in the
revision of Title 49 by Pub. L. 104–88,
Title I § 102(a), 109 Stat. 804 (effective
January 1, 1996); See S. Rep. No. 104–
176]. This law divested prisoner-made
products of their interstate character
upon their arrival in the state of their
destination and permitted the laws of
that state to become operative with
respect to the sale and distribution of
such products. It was described, at the
time of enactment, as an enabling act
because it did not prohibit the
transportation of prisoner-made goods
or force the enactment of state
legislation.
In 1935, Congress enacted the
Ashurst-Sumners Act, Pub. L. 74–215,
49 Stat. 494 (1935), which authorized
Federal criminal prosecutions of
violations of state laws enacted
pursuant to the Hawes-Cooper Act.
Subsequent amendments to this law,
including Pub. L. 76–851, 54 Stat. 1134
(1940), strengthened Federal
enforcement authority by making any
transport of prisoner-made goods in
interstate commerce a Federal criminal
offense. As amended, 18 U.S.C. 1761(a)
now provides:
Whoever knowingly transports in interstate
commerce or from any foreign country into
the United States any goods, wares, or
merchandise manufactured, produced, or
mined, wholly or in part by convicts or
prisoners, except convicts or prisoners on
parole, supervised release, or probation, or in
any penal or reformatory institution, shall be
fined under this title or imprisoned not more
than two years, or both [herein referred to as
the Ashurst-Sumners Act].
Certain prisoner-made products were
excepted, by statute, from the Ashurst-
Sumners Act prohibition, including
‘‘agricultural commodities or parts for
the repair of farm machinery’’ as well as
‘‘commodities manufactured in a
Federal, District of Columbia or State
institution for use by the Federal
Government, or by the District of
Columbia, or by any State or Political
subdivision of a State or not-for-profit
organizations.’’ Title 18 U.S.C. 1761(b).
The Walsh-Healey Act, 49 Stat. 2036
(1936), as amended in 1979 by Pub. L.
No. 90–351, § 827(b) and codified at 41
U.S.C. 35, also controls the production
of prisoner-made goods. This statute
prohibits the use of prisoner labor to
fulfill general government contracts
which exceed $10,000. BJA certification
pursuant to § 1761(c) excepts prisoner-
made goods produced at PIECP work
pilot projects from the Walsh-Healey
Act contracting restrictions, as well as
the Ashurst-Sumners Act interstate
transportation restrictions.
2. Prisoner Idleness and Prisoners’ Need
for Job Skills Training
The PIECP exception to the Ashurst-
Sumners and the Walsh-Healey Act
restrictions was introduced into the
Senate in 1979 after the 1978 Pontiac,
Illinois prison riot. In the wake of that
uprising, Senator Charles Percy (R–Ill.)
stated:
[L]ast summer in Pontiac, Illinois, our
worst fears about the conditions in the
Nation’s prisons erupted into a nightmarish
reality. The Pontiac prison riot of 1978 ended
with three guards dead, three others seriously
wounded, and $4 million in property damage
* * *.
The shopping list of problems and
deficiencies in our prison system is long and
well known. Overcrowding, old and obsolete
facilities, lack of training or educational
programs, crime within prison walls,
frustration on the part of guards and inmates
are all a part of the dreary picture * * *.
Recidivism is now a substantial element in
our overall crime rate, and prisons are often
accurately characterized as a ‘‘school for
crime,’’ rather than a deterrent to crime
* * *. 125 Cong. Rec. S11834 (1979).
These concerns caused Congress to
take measures to encourage prison
industries, provided that they not
engage in unfair competition with
private sector business and labor.
Senator Percy’s bill, now referred to as
the Prison Industries Enhancement Act,
Section 827 of the Justice System
Improvement Act of 1979, Pub. L. 96–
157, § 827(a), 93 Stat. 1215, was enacted
on December 27, 1979. As amended, it
now offers 50 certified projects an
opportunity to participate in the

17002 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
interstate market, provided certain
safeguards to free-world labor and
industry, and to prisoner-workers
themselves, are met. See The Crime
Control Act of 1990, Pub. L. 101–647,
§ 2906, 104 Stat. at 4914.
In describing the purpose of his
introduced legislation, Senator Percy
explained (125 Cong. Rec. S11834
(1979)):
My amendment would do two basic things:
First, it would authorize the [BJA] to
encourage development of pilot
demonstration projects for prison industry at
the State level, involving private sector
industry * * *. Under this approach, prison
programs benefit from the private business,
develop access to new markets, and attract
needed capital. The goal of these pilot
projects would be to create as realistic a
working environment as possible within the
prison walls, while enabling an inmate to
become more self-sufficient to the benefit of
himself, the prison system, and the taxpayer.
Secondly, my amendment creates a partial
exemption to two Federal laws which
severely restrict the ability of State prison
industries to market their goods * * *. When
these laws were enacted decades ago, they
represented significant reforms against
exploitation of prison labor. Over the years,
however, they have developed into heavy-
handed roadblocks to growth among * * *
prison industry programs * * *.
My amendment would provide limited
exemptions to these restrictions where
inmates have been paid a wage comparable
to that paid for similar work in the private
sector in the locality * * *.
The statutory exception that was
enacted to establish PIECP is codified at
18 U.S.C. 1761(c):
* * * [the Federal marketability
prohibitions] shall also not apply to goods,
wares, or merchandise manufactured,
produced, or mined by convicts or prisoners
who—
(1) Are participating in one of not more
than 50 non-Federal prison work pilot
projects designated by the Director of the
Bureau of Justice Assistance; * * *
To become eligible for Bureau of
Justice Assistance (BJA) certification, an
applicant department of corrections
must comply with specified statutory
requirements. It must pay participating
prisoners ‘‘wages not less than that paid
for work of a similar nature in the
locality in which the work was
performed’’ and cannot take more than
80 percent in deductions from gross
wages for specified purposes including
taxes, reasonable charges for room and
board, family support and victims’
compensation. 18 U.S.C. 1761(c)(2).
Certain other conditions of
employment must also be met. An
eligible applicant cannot deprive
participating offenders, solely because
of their status as offenders, of the right
to participate in benefits made available
by the Federal or state government to
other individuals on the basis of their
employment, such as workmen’s
compensation. Title 18 U.S.C.
1761(c)(3). PIECP inmates must also
participate on a voluntary basis and
must have agreed to the specific
deductions made from gross wages
pursuant to 18 U.S.C. 1761(c)(2), and all
other financial arrangements resulting
from participation in such employment.
Title 18 U.S.C. 1761(c)(4).
The note following 18 U.S.C. 1761,
although not codified, is public law and
adds two additional PIECP requirements
on certified prison industries. The note
requires participating prison industries
to consult with local union
organizations prior to initiating any
project qualifying for a 1761(c)
exemption. Also, the qualifying
applicant must ensure that paid PIECP
inmate employment will not result in
the ‘‘displacement of employed workers,
or be applied in skills, crafts, or trades
in which there is a surplus of available
gainful labor in the locality, or impair
existing contracts for services.’’ The
Justice System Improvement Act of 1979
added these provisions which became
§ 827(c) of the Omnibus Crime Control
and Safe Streets Act of 1968. See Pub.
L. 96–157, 93 Stat. 1215, reprinted in
1979 U.S.C.C.A.N. 2471. In 1984,
§ 827(c) was redesignated § 819 of the
Omnibus Crime Control and Safe Streets
Act of 1968, as amended. See Pub. L.
98–473, 98 Stat. 2093.
If all eligibility requirements are met
and an applicant acquires BJA
certification, the agency is thereafter
authorized to operate irrespective of
Federal prohibitions on the marketing of
state prisoner-made goods. Conversely,
non-compliance with these statutory
eligibility requirements could expose an
industry to criminal prosecution under
the Ashurst-Sumners Act. Title 18
U.S.C. 1761(a).
b. The PIECP Program
1. Current State of the Program
Currently, 38 departments of
correction or umbrella authorities are
PIECP Certificate Holders. Under the
Justice System Improvement Act of
1979, Arizona, California, Idaho,
Kansas, Minnesota, Nevada and Utah
were certified. In 1984, under the Justice
Assistance Act of 1984, 13 prisons work
pilot projects were certified in: Alaska,
Belnap County (NH), Connecticut, Iowa,
Maine, Missouri, Nebraska, New
Mexico, Oklahoma, Oregon, South
Carolina, Strafford County (NH) and
Washington State. Under the Crime
Control Act of 1990, the following
additional departments of correction
were certified: Colorado, Delaware,
Florida, Hawaii, Indiana, Louisiana,
Maryland, Montana, North Carolina,
Ohio, Red River County (TX), South
Dakota, Tennessee, Texas, the Texas
Youth Commission, Vermont, Virginia,
Washington State Jail Industries Board
and Wisconsin.
About 145 private sector businesses
now work in partnership with PIECP
certified projects to employ about 2,800
inmates. Either the department of
corrections or the private sector
enterprise retains project authority to
direct and control inmate labor,
depending on the management model
used. Project implementation has
resulted in the production of myriad
products including such items as
furniture, sheet metal, video equipment,
clothing, food products, office products,
mattresses, draperies, crutches and road
signs. In addition, although service
industries were not a threat to the
private sector in 1935 and thus, were
not included within the scope of the
Ashurst-Sumners prohibition, a number
of service industries have elected to
comply with the PIECP requirements.
Between January 1979 and September
1998, PIECP projects generated
approximately $113.7 million in gross
inmate wages. Nearly half of this
amount was diverted to non-inmate
recipients: $8.9 million was deducted
for victims of crime, $25.7 million was
deducted for room and board payments,
$5.8 million was deducted for family
support and about $13.7 million was
withheld in local, State and Federal
taxes.
BJA monitors the performance of
PIECP work pilot projects to ensure that
they operate in full compliance with all
legislative and administrative program
requirements. Under a grant to the
Correctional Industries Association
(CIA), prison industry and other
professionals conduct regular, on-site
reviews of all PIECP projects. BJA
responds to matters involving possible
non-compliance by taking appropriate
remedial action such as providing
technical assistance or proposing a
corrective action plan.
2. Future Challenges
PIECP is used nationwide as a cost-
efficient way to provide inmates with
work experience and training in
marketable job skills, as well as to
reduce idleness among growing prison
populations.
Over time, the limit on the authorized
number of pilot projects has been raised
to meet the demands of interested
applicants. When Congress last
increased the project ceiling to 50, the
House took into consideration a waiting

17003	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
list of states and counties that had
wanted to participate and noted that
‘‘the demand for certification by state
and local governments indicates a need
for this amendment which will enable
the program to expand and other
jurisdictions to apply.’’ H.R. (I), 101st
Cong. 202 (1990).
BJA administers PIECP with the
objective of making participation
available to as many qualified
applicants as possible, within limits
imposed by the statutory ceiling. This
Guideline provides projects with clarity
as to Federal participation requirements,
as well as programmatic flexibility to
allow for PIECP Project growth in ways
that respond to local needs. The Federal
requirements are intended to ensure that
the interests of local business and
organized labor are protected. In this
way, BJA’s administrative practices
address concerns reflected in the
legislative history pre-dating the onset
of Federal regulation of prisoner-made
goods.
Finally, this revised Guideline
addresses novel issues presented by
new PIECP participants, the private
sector prisons. These entities are unique
in that they render an essential service
traditionally undertaken by public
agencies and they do so for profit. Thus,
BJA has altered some PIECP program
requirements to insure program
implementation remains consistent with
Congressional intent. Congress enacted
PIECP to introduce public departments
of correction to private sector profit-
making enterprises. Therefore, private
prisons are invited to participate in
PIECP only as Cost Accounting Centers
(CACs) designated under the authority
of departments of correction.
c. Discussion of Comments
BJA published a proposed Guideline
in the Federal Register on July 7, 1998
for public comment. Written comments
from public and private organizations
were received. All comments have been
considered by the BJA in this
publication. This Guideline is final. The
following is a summary of substantive
comments and BJA’s response.
1. Background on PIECP
Comment: BJA should retain the
legislative history and background
section. It is informative and useful.
BJA should explain that the
background section does not accurately
describe present day political, social or
economic concerns regarding the
implementation of prison industry
programs.
Response: BJA provides the
background and legislative history
section to illustrate social, political and
economic concerns that were
predominant prior to 1940, before the
Federal government first began
regulating, as a criminal matter, the
interstate transport of prisoner-made
goods, as well as such concerns as they
existed prior to the 1979 enactment of
the PIECP exception to 18 U.S.C.
1761(a). BJA provides this background
to inform PIECP Cost Accounting
Centers about Congress’ intent when
developing the program’s statutory
requirements and exception authority.
Accordingly, no substantive change
was made in the background section of
the Guideline.
2. Program Purposes
Comment: BJA should modify its
program purposes to add, as a purpose,
introducing government to private
sector profit-making enterprises. More
specifically, BJA should endorse private
sector prison options as a specific way
to introduce state and local government
agencies to private sector profit-making
enterprises.
Response: Consistent with the
legislative history of the PIECP, BJA
exercises its administrative authority
only to endorse PIECP as a cost-efficient
means to address inmate idleness and to
provide inmates with work experience
and training in marketable job skills.
Whether private sector partnerships or
private prison contracts are suitable
prison industry options for any given
jurisdiction, is a state and or local
matter for determination. State and local
interests are uniquely poised to identify
appropriate private sector profit-making
enterprises, if any, to partner with
prison industries. Thus, as a Federal
agency, BJA is not prepared to adopt
such a program purpose.
Accordingly, no change was made in
the program purposes provision of the
Guideline.
3. Definitions
Comment: BJA should modify the
definitions so that references to
departments of corrections include
public or not-for-profit agencies
sanctioned under state law to
administer the Prison Industry
Enhancement Certification Program.
BJA should add a definition of ‘‘chief
state correctional officer,’’ as the term is
used in reference to the room and board
deduction, so that it encompasses
umbrella authorities where such models
have been certified by BJA as prison
work pilot projects.
With respect to the minimum wage
definition, BJA should state that this
PIECP program wage threshold is in no
way intended, in and of itself, to ascribe
to inmate workers ‘‘employee’’ status for
purposes of other state and Federal
laws.
BJA should re-define the locality
definition. The proposed definition,
which defers to state agencies for the
making of such determinations, is too
vague and subjective.
Response: BJA concurs with a number
of recommendations to enhance the
clarity of terms used in the Guideline.
A definition for the term ‘‘departments
of correction’’ is incorporated to clarify
that state and local government
agencies, and the instrumentalities
thereof, including not-for-profit entities
sanctioned under state law to
administer PIECP, are eligible as
potential PIECP Certificate Holders. A
definition of the term ‘‘chief state
correctional officer’’ is added to
enhance guidance with respect to model
specific implementation of the room
and board deduction. Also, the scope of
the minimum wage definition is more
specifically defined in relation to PIECP
purposes and the operation of other
laws.
The locality definition has
implications both with respect to the
inmate wage requirement and the
prohibition against private sector
employee displacement. BJA directs all
Cost Accounting Centers to obtain non-
displacement projections and prevailing
wage determinations from their
appropriate state agencies and, in so
doing, extends to the states an
opportunity to locally influence
implementation of the Federally
authorized PIECP Project. BJA expects
that by extending this opportunity, the
states will exercise their authority so as
to protect the interests of local labor
groups and private sector competition.
This approach was adopted to vest state
agencies with authority and flexibility
to respond to uniquely local economic
trends and conditions. Accordingly, no
change to the locality definition was
made.
4. Eligibility
Comment: BJA should allow private
prisons to independently qualify as
Certificate Holders. Alternatively,
restrictions affecting the designation of
private prison industries, as Cost
Accounting Centers (CAC), should be
eased.
Umbrella authorities should not be
allowed to qualify as eligible Certificate
Holders. The certification of umbrella
authorities circumvents the 50 project
limit imposed on the program by
Congress.
Response: Title 18 U.S.C. 1761(c)(1)
authorizes BJA to exercise broad
discretion in certifying PIECP prison
work pilot projects. Two significant

17004 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
considerations, however, weigh in favor
of limiting Certificate Holder eligibility
only to departments of correction and
not private prisons. First, the legislative
history of the PIECP reflects Congress’
desire to craft an inmate work vehicle to
advance state and local government
interests, and specifically their need to
gainfully occupy growing prison
populations in marketable job skills.
Second, as PIECP implementation could
impact state and local private sector
interests, BJA believes that the
protection of those interests would be
best served by reserving certification for
those agencies which, by their very
nature, are accountable to the public.
BJA will not authorize any PIECP
certified project to designate CACs
outside of its jurisdictional boundaries
because the Bureau defers to individual
state legislatures for determinations as
to whether PIECP should be authorized
within their jurisdictions. If a state
legislature decides not to authorize
PIECP implementation in public
facilities, private facilities ought not be
authorized to implement PIECP, in that
same state, through a designation
authorized by a Certificate Holder
located in another state. BJA, however,
incorporates amendments to the Final
Guideline to allow any given state
Certificate Holder to designate CACs
within private prisons operating within
that same state, even in the absence of
a contract for incarceration services
between that state and the private
prison seeking to participate in PIECP.
The BJA form used to accomplish the
designation of a CAC within a private
prison must reflect express approval of
the designation by the Chief State
Correctional Officer for the state in
which the private prison CAC is located.
See Section IV.(a)(5), infra.
CACs designated within private
prisons must also retain on-file
documentation reflecting approval of
PIECP inmate worker participation by
the state and local jurisdictions in
which the PIECP inmate workers were
convicted. In order to issue such
approvals, the remanding state and local
jurisdictions must also hold PIECP
certificates. This requirement insures
continuity of the necessary PIECP
project authorization vis-a-vis the PIECP
inmate workers, and is responsive to the
statutory project ceiling number.
If inmate workers could not
participate in PIECP within the
boundaries of the state and local
jurisdictions in which they were
convicted, they should not be allowed
to participate in PIECP in another state
or local jurisdiction through an
agreement for private prison
incarceration services. Alternatively
stated, state and local jurisdictions
cannot be allowed to participate in
PIECP indirectly through a contract with
a private prison that has a PIECP-
designated CAC, if they choose not to
participate in PIECP directly, i.e., had
they incarcerated their inmates within
their own state and local jurisdictional
boundaries.
Title 18 U.S.C. 1761(c) offers BJA
broad discretion with respect to
defining a prison work pilot project for
PIECP eligibility purposes. Umbrella
authorities may represent a mix of
agency members such as state and local
departments of correction, and youth
authorities. Any of these agency
members may, through their respective
umbrella authorities, designate CACs
within themselves or private prisons
located in their jurisdictional areas. In
order to qualify for PIECP certification,
umbrella authorities must be able to
assure BJA that a central administration
of the CACs can be accomplished to
insure project-wide compliance with the
guideline and the statute as well as
responsible exercises of designation/
undesignation authority. Since the
inception of PIECP in 1980, BJA has
certified several umbrella authorities.
During that same period of time,
Congress was advised of such projects
and consistently increased the project
ceiling. BJA interprets such action as
tacit approval of BJA’s certification of
umbrella authority models.
Accordingly, changes are made in the
eligibility provisions to ease restrictions
on Certificate Holder designation of
CACs within private prisons located
within the Certificate Holder’s
jurisdiction. Private prisons are
ineligible as independent PIECP
Certificate Holders.
5. Inmate Wages
Comment: Authors of two comments
claim that PIECP wage rates do not
equal labor costs: BJA should allow Cost
Accounting Centers (CACs) to make
adjustments in prevailing wage rates to
address the hidden, unusual costs of
doing business in a prison environment
such as the cost of transportation to
rural areas, reduced production levels
due to rapid turnover, and added
expenses of worker training and start-
up. Because these cost variables are
significant and inherent in doing
business within prisons, the PIECP wage
requirement is not necessary to ‘‘level
the playing field’’ with private sector
competition.
From the perspective of one organized
labor group, the proposed Guideline is
an improvement over the 1985 PIECP
guideline. BJA, however, is urged not
only to encourage, but to require CACs
to implement salary wage plans based
on worker competency and seniority.
Regarding the wage self-determination
option, in the proposed guideline, the
following diverse comments were
received: this option is an improvement
in that it allows for CAC
implementation in instances where state
agencies are non-responsive to requests
for prevailing wage determinations; this
option imposes too great of an
administrative burden on CACs; this
option provides participants with an
opportunity to avoid obtaining state
agency wage determinations.
In instances where a private sector
partner has both a non-inmate operation
and a PIECP CAC in the same locality,
the partner should be permitted to
bypass a state agency’s wage
determination and use relevant non-
inmate wage scales with respect to
PIECP inmate workers performing the
same job function.
BJA should clarify the meaning of the
term of ‘‘notable tasks,’’ as it is used in
the Guideline with respect to
identifying which inmate workers
should be paid a PIECP wage.
Response: Title 18 U.S.C. 1761(c)(1)
expressly states that PIECP wages must
be paid at a rate which ‘‘is not less than
that paid for work of a similar nature in
the locality in which the work is
performed.’’ PIECP wage determinations
must be based only on comparable non-
inmate worker wages for performing
work of a similar nature. Gross wages
earned by PIECP inmate workers may be
reduced only through an application of
the four authorized wage deductions
specified in 18 U.S.C. 1761(c)(2). Thus,
the plain language of the PIECP
exception statute provides BJA with no
authority to allow wage deductions in
addition to those set forth in 18 U.S.C.
1761(c)(2) and for the purpose of
addressing the unusual costs of doing
business in a prison environment,
however meritorious such proposed
adjustments might be.
The language of 18 U.S.C. 1761(c)(3)
requires PIECP projects to pay wages
based only on private sector wage
amounts for performing similar work
and it does not, as a matter of law,
require the implementation of salary
plans. BJA added this policy-based
encouragement to advance program
objectives.
The self-determination option, as
reflected in the proposed guideline, was
presented to address a recurring
challenge confronting many PIECP Cost
Accounting Centers (CACs). On
occasion and through no fault of their
own, CACs are unable to obtain timely,
state agency responses to requests for
wage determinations. The self-

17005	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
determination option, which is available
only when state non-responsiveness
occurs, assists CACs to achieve
compliance without relying on a
determination by a third party. The
method presented requires only the
minimum amount of data collection and
analysis necessary to yield a defensible,
rationally-based wage determination.
Availability of the self-determination
option prevents CACs from paying a
Federal minimum wage—the lowest
possible PIECP wage, indefinitely, when
payment of such a wage rate is
unwarranted and the state remains non-
responsive to wage determinations
requests.
To ease the impact of PIECP
implementation on any given locality’s
ecomony and labor force, BJA reserves
two opportunities for states to affect the
implementation of the Federal PIECP
program within state boundaries. The
requirement that proposed CACs must
obtain wage rates from the relevant state
agencies, is one of those opportunities.
BJA reserves this opportunity for state
participation in the program, without
exception, to insure CACs respond to
relevant, locally-based input from an
objective source.
BJA introduces the Guideline concept
of ‘‘notable tasks’’ as a way to assist
CACs in identifying inmate workers to
whom a PIECP prevailing wage should
be paid. Questions arise as to whether
inmates performing support functions,
such as janitorial and maintenance
services, necessary to CAC operations
must be paid a PIECP wage. A more
specific definition, in this regard, is not
possible without compromising
flexibility in the application. The
Guideline offers specific administrative
direction by identifying relevant
considerations for determining whether
a given task is ‘‘notable.’’
Accordingly, no change was made in
the wage payment provisions of the
Guideline.
6. Non-Inmate Worker Displacement
Comment: One representative from
organized labor claimed that prisoner
labor should never be allowed to
compete with free-world labor because
it undermines the private sector labor
force and inmate rehabilitation. Another
representative of organized labor
generally endorsed the Guideline and
the revised non-inmate worker
displacement requirement, stating that it
is an improvement over that which was
issued in 1985.
The presumption of non-compliance,
applicable when a private sector partner
employs non-inmate and inmate
workers in the same locality, is too
vague and too restrictive on private
sector partners.
The general language of this
requirement makes it difficult to
measure displacement in instances
where other non-employee, non-inmate
workers perform similar jobs or skills in
the same locality. Any PIECP operation
is likely to affect the private sector
marketplace and, consequently, private
sector jobs. The requirement ought not
be construed in such a way so as to
prohibit PIECP companies from
engaging in normal business operations
such as bidding for contracts on the
open market after they have been
designated as participating in a PIECP
project. Also, BJA should not impede or
discourage successful PIECP operations,
already designated, from continuing
operations even when there is a
subsequent general downturn in the
economy and, arguably, de facto
displacement of non-inmate workers
performing similar work in the locality.
This requirement is too restrictive in
that it prohibits PIECP partners from
outsourcing entry level jobs and
redirecting their current private sector
workforce toward higher skill level jobs.
The Guideline encourages potential
Cost Accounting Centers to develop new
jobs in a locality; this should not be
implemented so as to adversely affect a
CAC which decides not to follow the
encouragement.
Response: Congress directs BJA to
implement the PIECP program, a prison
industry program that places prison
made goods in competition with the
private sector. BJA has no discretion to
exercise in determining whether or not
to implement this program.
One BJA purpose in revising the
Guideline is to improve the program’s
responsiveness to organized labor’s
concerns. The agency is pleased that a
segment of the labor community views
its interests as better served through the
re-issuance of the PIECP Guideline.
BJA acknowledges that implementing
the non-inmate worker displacement
prohibition may appear to work at cross
purposes with encouraging the
commercial success of PIECP Cost
Accounting Centers (CACs). The agency
must respond to a broad statutory
mandate to insure that PIECP does not
impair or displace private sector
workers and is not applied in skills in
which there is a surplus of available
gainful labor. However, BJA cannot
accomplish PIECP implementation if
CAC’s are prevented from attaining
commercial success by engaging in
typical competitive market practices. To
address this concern, the guidance
language is modified to reflect BJA’s
expectation that PIECP CACs will
engage in typical business operations,
such as bidding for contracts on the
open market after project initiation.
While compliance is a continuing
CAC responsibility, a violation of the
non-displacement requirement is more
likely to occur and is more discernable
just prior to and immediately following
CAC implementation than thereafter.
For this reason, BJA will scrutinize CAC
compliance with this provision just
prior to and within one year following
CAC implementation.
The agency devised a presumption of
displacement which may be applicable
in instances where a private sector
partner retains non-inmate workers in
the same locality. This presumption is
modified in this Final Guideline to
provide partners with a degree of
flexibility to reallocate resources to their
optimum use. Specifically, the
presumption may be overcome if the
private sector partner can demonstrate
that non-inmate workers have been
retained by the private sector partner in
jobs at pay rates equal to or greater than
that received in the previous position,
that non-inmate employees have been
provided an adequate opportunity for
effective training in any new job skills
and that the subject non-inmate
employees are being retained by the
private sector partner under reasonably
similar or improved employment
conditions.
BJA policy encouragement regarding
the creation of new PIECP jobs is not a
mandate. CACs which do not bring new
jobs to their localities will not be
penalized. For obvious reasons,
however, CACs generating new jobs are
easier for BJA to evaluate and are less
likely to be the subject of local criticism.
Accordingly, changes are made in the
non-inmate worker displacement
provision to clarify the scope of the
prohibition and to not unduly impede
business decisions that lend themselves
to effective commercial management
and success of PIECP Cost Accounting
Centers.
7. Benefits Requirement
Comment: A resolution of
inconsistent Social Security
requirements imposed on PIECP models
should be accomplished at the Federal
level between BJA, the Social Security
Administration and the Internal
Revenue Service. The disparate
treatment of customer and employer
models is arbitrary. Both models should
be treated the same way for purposes of
requiring projects to provide inmates
with Social Security coverage.
BJA should clarify its position with
respect to imposing the Federal

17006 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
Unemployment Tax Act on PIECP
models as a benefits requirement.
Response: The benefits requirement,
as outlined in the proposed Guideline,
elicited the greatest number of
comments. Several Federal laws apply
to wages earned by inmates in penal
institutions. BJA, therefore, sought a
Guideline review from both the Social
Security Administration (SSA) and the
Internal Revenue Service (IRS) to
ascertain whether the PIECP benefits
requirement, as proposed, was
consistent with comparable laws
administered by those Federal agencies.
Both the IRS and the SSA concluded
that BJA’s benefits requirement is
consistent with comparable laws set
forth in the Social Security Act, 42
U.S.C. 410(a)(7) and 418(c)(6)(B), and
the Internal Revenue Code. Services
performed in an institution by an
inmate in the employ of a State, a
political subdivision, or a wholly-
owned instrumentality are excepted
from Social Security employment by 26
U.S.C. 3121(b)(7). Section
3121(u)(2)(B)(ii)(II) also provides that
such services are not subject to the
Medicare tax.
In contrast to those inmate services
performed in the employ of a state or
governmental entity, there is no IRS or
SSA exception for services of inmates
performing services in the employ of a
non-governmental entity (for example, a
private corporation operating a prison or
a private corporation operating under
the PIECP employer model). PIECP
Employer models must generally
provide inmates with Social Security
coverage.
BJA retains the customer and
employer models to implement the
PIECP benefits provision, 18 U.S.C.
1761(c)(3), in a manner consistent with
other Federal laws addressing inmate
wages. Specifically, the models are
necessary in order to accord states and
other governmental entities the Social
Security employment or coverage
exception status, as recognized by the
IRS and the SSA. BJA will monitor and
evaluate Cost Accounting Centers
(CACs) in accordance with the guidance
set forth in this Guideline, but will defer
to the expertise of both the IRS and SSA
should either of those agencies reach
another conclusion with respect to the
appropriate benefits treatment of inmate
wages earned at any given CAC.
In the case of services performed by
PIECP inmates, regardless of whether
services are being performed under the
customer or employer model, Federal
Unemployment Tax Act taxes do not
apply to such services. See Section 26
U.S.C. 3306(c)(21) which excepts from
employment ‘‘service performed by a
person committed to a penal
institution.’’
Accordingly, no changes are made in
the benefits requirement of the
Guideline.
8. Deductions
Comment: BJA ought to expressly
authorize the use of room and board
deduction funds for the purpose of
lowering costs otherwise incurred to
maintain and operate a PIECP program.
The term ‘‘Chief State Correction
Officer’’ should be amended to also
include ‘‘responsible umbrella
authorities.’’
Private prisons managing PIECP Cost
Accounting Centers (CACs) should be
required to demonstrate that any benefit
derived through the taking of room and
board deductions is passed on to states
which provide public funds to cover
such costs.
The authorized deduction for victims
compensation ought to be made
available to address a PIECP inmate’s
legal obligations to pay victim
restitution.
Response: Consistent with the
statutory mandate addressing the room
and board deduction, BJA defers to state
determinations—as reflected in
regulations issued by Chief State
Correctional Officers—with respect to
determining the amounts of such
deductions as well as identifying the
specific needs to which such deducted
amounts may be directed. BJA has
authority to review room and board
deductions to insure the amounts
deducted are reasonable and are used to
defray the costs of inmate incarceration.
Specific amount determinations and
budget line item uses are issues more
appropriately determined at the state
and local level.
In instances where the Certificate
Holder is an umbrella authority,
possibly composed of diverse state as
well as local agencies, the umbrella
authority may itself issue policy on this
matter to guide its multijurisdictional
membership. A definition of ‘‘Chief
State Correctional Officer’’ is added to
accommodate the administration of this
deduction by such models.
The room and board deduction was
authorized by Congress to lower
incarceration costs otherwise borne by
the public. Since private prison PIECP
inmates’ room and board expenses
might otherwise be addressed in
contracts for incarceration services
between private prisons and public
agencies, BJA requires private prison
CACs to obtain written approval from
their respective public agency clients
before taking the room and board
deduction. In devising this requirement,
BJA insures notice of this possible
revenue source is received by
appropriate public agencies without
unduly burdening contractual relations
to which it is not a party.
BJA broadens its interpretation of the
victims compensation authorized
deduction to also include deductions
deposited in funds established by law to
facilitate victim restitution.
Compensation and restitution serve
substantially the same purpose in
providing victims with financial redress
for expenses incurred as a result of
crime.
Although the statutory PIECP
authorization, 18 U.S.C. 1761(c), does
not require CACs to make tax
deductions, the Internal Revenue Code
requires federal income tax withholding
if payments of wages are made to
employees. BJA encourages all CACs to
take whatever deductions, which may
be necessary to comply with all Federal
laws, including the Internal Revenue
Code. As with the PIECP benefits
provision, BJA defers to the IRS as the
final authority with respect to making
CAC tax withholding determinations.
Accordingly, changes are made in the
deductions provision to clarify that the
victims deduction may, in some
instances, be used to address a PIECP
worker’s restitution obligations.
Guidance regarding room and board
deduction is simplified because of the
inclusion of a definition for the term
‘‘Chief State Correctional Officer.’’
Clarification is also provided with
respect to tax deductions which may be
necessary to facilitate CAC compliance
with the Internal Revenue Code.
9. Voluntary Inmate Participation
Comment: BJA should accept inmate
signatures on deduction notices as
evidence of voluntary inmate
participation. BJA should not require
the execution of new inmate voluntary
participation agreements each time the
deductions affecting inmate wages are
changed.
Response: The 18 U.S.C. 1761(c)
expressly requires not only voluntary
inmate employment, but also inmate
agreement, in advance, of all deductions
and financial arrangements affecting
gross wages. While an inmate’s
signature on a notice form may signify
receipt of notice, it does not necessarily
reflect inmate agreement. Thus, the
proposal is inadequate to insure
compliance with the statutory
requirement.
Accordingly, no change is made to the
voluntary participation provision.

17007	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
10. Consultation With Local Labor and
Business
Comment: The consulation
requirements reflected in the guideline
exceed BJA’s statutory authority. The
requirements are overly burdensome
and should not be implemented so as to
compromise the competitive capablity
of the Cost Accounting Centers (CACs).
BJA should accept as compliance with
the labor consultation requirement, the
presence of an organized labor
representative on the board of an
umbrella authority PIECP project.
With respect to consulation with
organized labor, BJA should routinely
require CAC consultation with both
state and local union representatives.
CACs should also be required to
maintain documentation of such
consultation, on file.
Response: BJA’s labor consultation
requirement is consistent with the
mandate reflected in the statutory note
to 18 U.S.C. 1761(c). The provision
requiring notice to local business, is
consistent with a provision reflected in
the 1985 guideline as well as the
legislative history of the program
exception. In this revised Guideline,
BJA provides specific guidance on the
minimum amount of information
necessary to insure provision of
adequate consultation; it includes
general information on the scope and
nature of the proposed Cost Accounting
Center, the proposed initiation date as
well as notice of the requirement and an
invitation to comment. Implementation
of the consultation requirements is not
intended to compromise the market
competitiveness of a CAC, but to advise
local economic interests which may be
impacted by the project.
Labor consultation cannot
automatically be achieved through labor
participation on the board of a PIECP
project. Such representation does not
necessarily insure notice of the
proposed CAC activities to the relevant
local union representative in the locality
to be affected.
While BJA issues this guidance to
insure provision of consultation to a
labor organization (i.e., notice to a state
labor organization, in the event a local
organization cannot be identified or
does not exist), BJA has no statutory
authority to require notice to both state
and local labor organizations on a
routine basis.
Accordingly, no change is made to the
consultation provisions.
11. Compliance With the National
Environmental Policy Act (NEPA)
BJA should allow PIECP projects to
defer to state environmental
requirements and not impose a new
national requirement.
BJA should provide Cost Accounting
Centers (CACs) with technical
assistance to facilitate compliance with
this program requirement.
Response: BJA has no authority to
allow CAC applicants to defer to state
environmental requirements as a
substitute for implementing the
provisions of the National
Environmental Policy Act (NEPA), 42
U.S.C. 4321–4347 (NEPA). BJA
decisions on proposed PIECP
certifications and designations consitute
‘‘Federal actions’’ as defined by 40
C.F.R. 1508.18 of the Council on
Environmental Quality’s (CEQ)
regulations for implementing NEPA. As
such, BJA has a federal obligation to
insure that prior to decisions being
made on requested certifications and
designations, BJA implements the
appropriate provisions of the CEQ
regulations. These Federal
implementation responsibilities, which
can be shared with but cannot be
delegated to Federal program
applicants, have existed since the
enactment of NEPA.
The technical assistance needs of
CACs will be addressed through BJA,
itself, as well as its contractor, the
Correctional Industries Association.
Accordingly, no change was made to
the proposed PIECP provision
implementing the NEPA.
As a result of public review and
comment, the final ‘‘Prison Industry
Enhancement Certification Program’’
Guideline is revised to read as follows:
III. Program Guidance
a. PIECP Purposes
• To provide a cost-efficient means to
address inmate idleness and to provide
inmates with work experience and
training in marketable job skills. BJA
encourages private sector PIECP
partners to consider post-incarceration
employment to PIECP inmate workers.
• Through inmate wage deductions,
to increase advantages to the public by
providing departments of correction
with a means for collecting taxes and
partially recovering inmate room and
board costs, by providing crime victims
with a greater opportunity to obtain
compensation, as well as by promoting
inmate family support.
• Through PIECP participation
conditions, to prevent unfair
competition between prisoner-made
goods and private sector goods.
• To prevent the exploitation of
prisoner labor.
b. Definitions
Benefits refers to inmate benefit
coverage required by 18 U.S.C.
1761(c)(3). PIECP projects must provide
inmate workers appropriate benefits
comparable to those made available by
the Federal or state government to
private sector employees. The scope of
appropriate benefits coverage is
impacted by whether the Cost
Accounting Center is structured as an
employer or customer model and
whether the inmate labor work force is
controlled by a public agency or the
private sector.
BJA refers to the Bureau of Justice
Assistance within the Office of Justice
Programs, U.S. Department of Justice.
Certificate Holder refers to a
department of corrections, or an
alternate umbrella authority, which is
approved by BJA for PIECP Project
certification. Certificate Holders assume
monitoring and designation
responsibilities with respect to their
designated Cost Accounting Centers. All
PIECP prisoner-made goods are
produced within Cost Accounting
Centers that a Certificate Holder
designates within itself, private prisons
located in the same state or jurisdiction
or, in the case or an umbrella authority,
within its membership agencies.
Certification refers to an exercise of
BJA’s discretionary authority to
designate a Prison Work Pilot Project
pursuant to Title 18 U.S.C. 1761(c). BJA
may issue either standard or provisional
certifications to applicant projects. BJA
certified projects are excepted from
certain Federal marketability restraints
on the transport of prisoner-made goods
in interstate commerce, as provided in
18 U.S.C. 1761(a), and sales to the
Federal government in excess of
$10,000, 41 U.S.C. 35.
Chief State Correctional Officer refers
either to the highest correctional officer
for the jurisdiction in which the
certified work pilot project is located or,
with respect to umbrella authorities that
control PIECP CACs within a mix of
state and local jurisdictions, the
authorities themselves.
Cost Accounting Center (CAC) refers
to a distinct PIECP goods production
unit of the industries system that is
managed as a separate accounting entity
under the authority of a Certificate
Holder. All PIECP production activities
are conducted within the context of a
designated CAC which, generally, is
structured either as a customer or
employer model for purposes of
determining PIECP inmate benefits. All
CACs must operate in compliance with
the provisions set forth in 18 U.S.C.
§ 1761(c) and this Guideline.

17008 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
Customer Model is a form of a PIECP
Cost Accounting Center management
structure. In this model, the private
sector is engaged in a CAC enterprise
only to the extent that it purchases all
or a significant portion of the output of
a prison-based business owned and
operated by a governmental entity,
political subdivision or an
instrumentality thereof. A customer
model private sector partner assumes no
major role in industry operations, does
not direct production and has no control
over inmate labor. These functions are
performed, rather, by a department of
corrections.
Deductions. CACs may elect to take
deductions from a PIECP inmate
worker’s wages for certain authorized
items. Deductions from PIECP inmate
gross wages, if taken, may be made only
for those items specified in 18 U.S.C.
1761(c)(2), including: payment of taxes,
reasonable charges for room and board,
allocations for family support and
contributions to any funds established
by law to compensate victims of crime
(no less than 5 percent and no more
than 20 percent). In no event may a
PIECP inmate worker’s total deductions
exceed 80 percent of gross wages and
each and every PIECP inmate worker
must agree, in advance, to all
deductions from gross wages.
Department of Corrections refers to
state or local governmental entity or a
political subdivision or instrumentality
thereof, including not-for-profit entities,
that are legally sanctioned by state
legislatures to administer prison
industries.
Designation is an exercise of a
Certificate Holder’s discretionary
authority to bring a CAC within its
certified PIECP Project. This exercise of
authority results in an extension of
PIECP exception status and an
imposition of compliance requirements
on an identified CAC operating within
the certified PIECP Project.
Employer Model is a form of a PIECP
management structure. In this model,
the private sector owns and operates the
CAC by controlling the hiring, firing,
training, supervision, and payment of
the inmate work force. The department
of corrections assumes no major role in
industry operations, does not direct
production, and exercises minimum
control over inmate labor performance.
These functions are performed, rather,
by the private sector.
Goods include tangible items, wares,
and merchandise.
Locality means the geographic area
impacted by the presence of a PIECP
CAC operation. For PIECP CACs, it is
relevant with regard to: determining
inmate wages, providing consultation to
appropriate labor and private sector
organizations, and determining whether
a PIECP CAC operation will displace the
private sector labor force. All locality
determinations must be documented as
part of a Notice of Designation. As used
in the calculation of CAC wage rates,
locality is usually a matter for definition
by the appropriate state agency which
normally determines wage rates (i.e., the
State Department of Economic Security).
Minimum wage refers to the Federal
minimum wage which is the lowest
possible wage that can be paid to private
sector employees under the Fair Labor
Standards Act, 29 U.S.C. 206. Any
special wage program, excepted by law
from the minimum wage requirement in
the private sector, may be used by a
PIECP CAC as long as the CAC meets
the same program participation
conditions as private sector participants.
The requisite payment of at least a
minimum wage, by a CAC, is in no way
intended by BJA to imply that PIECP
inmate workers are employees for
purposes of the PIECP statute or any
other Federal law.
Monitoring refers to the process of
examining Prison Work Pilot Project
activities to ensure continuing
compliance with 18 U.S.C. 1761(c) and
this Guideline. It includes, at a
minimum, BJA’s receipt and analysis of
performance reports and on-site CAC
monitoring visits by BJA, BJA
contractors and Certificate Holders.
NEPA means the National
Environmental Policy Act, Pub. L. 91–
190, 83 Stat. 852 (1970) (codified as
amended at 42 U.S.C. 4321–4347;
implemented under 40 C.F.R. pt. 1500).
Participation means engaging in the
activities and operations of an 18 U.S.C.
1761(c) excepted PIECP Project.
PIECP means the Prison Industry
Enhancement Certification Program as
authorized by 18 U.S.C. 1761(c).
PIECP Exception Status. Any PIECP
Project which produces prisoner-made
goods pursuant to 18 U.S.C. 1761(c) is
excepted from certain Federal restraints
imposed on the marketability of
prisoner-made goods, including 18
U.S.C. 1761(a) and 41 U.S.C. 35.
PIECP Inmate Worker is a convict or
prisoner who performs notable tasks
necessary to produce or transport goods
in interstate commerce and for a Prison
Work Pilot Project certified under 18
U.S.C. 1761(c). The PIECP Inmate
Worker benefits from PIECP by
receiving training and work experience.
Prevailing wage is a wage rate which
is not less than that paid for work of a
similar nature in the locality in which
the work is to be performed, 18 U.S.C.
1761(c)(2).
Prison Industry means an organized
utilization of inmate labor to produce
goods or render services.
Prison Work Pilot Project (PIECP
Project) refers to one of 50 non-Federal
prison work pilot projects which may be
designated by the Director of BJA under
18 U.S.C. 1761(c). This term
encompasses the operations of the
Certificate Holder’s designated Cost
Accounting Centers (CACs). Any Prison
Work Pilot Project may consist of one or
more CACs.
Prisoner includes prison and jail
inmates, convicts and incarcerated
juvenile offenders, and does not include
prisoners on parole, probation, or
supervised release. Title 18 U.S.C.
1761(a) does not regulate the transport
of goods produced by prisoners on
parole, supervised release, or probation.
Prisoner-made goods include all
goods, wares, and merchandise
manufactured, produced, or mined,
wholly or in part, by convicts or
prisoners (except convicts or prisoners
on parole or probation).
Production is the forming anew or
transforming of marketable goods. The
term includes mining and manufacture
and excludes services.
Provisional Certification is issued by
BJA in instances where an applicant has
not yet come into full compliance with
all PIECP requirements, but such
compliance appears imminent. It
entitles the holder to PIECP exception
status for an identified period of time,
may be made contingent upon the
occurrence of identified conditions, and
may or may not be renewed by BJA.
Statutory Exception Status refers to a
prison industry which meets the
statutory requirements set forth in 18
U.S.C. 1761(b), and is thereby entitled to
an exception from the prohibition set
forth in 18 U.S.C. 1761(a).
Supervised Release. 18 U.S.C. 1761(a)
states that the Ashurst-Sumners Act
prohibition does not apply to ‘‘convicts
on parole, supervised release, or
probation.’’ The reference to
‘‘supervised release’’ was added to
1761(a) in 1984, Pub. L. 98–473, 223,
and is responsive to changes made at
that same time in state and Federal
Sentencing Guidelines. Policy
statements issued by the U.S.
Sentencing Commission explain that
supervised release is a ‘‘new form of
post-imprisonment supervision created
by the Sentencing Reform Act.’’ See
Federal Sentencing Guidelines, 18
U.S.C.A. ch. 7, pt. A (1997).
Umbrella Authority refers to a type of
Certificate Holder which is authorized
by law to administer a PIECP Project
and which consists of state and/or local
departments of correction located

17009	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
within the same state. A certified
umbrella authority may designate CACs
within its membership agencies, as well
as within members’ private prisons, and
assumes responsibility for monitoring
CAC compliance.
c. BJA’s Initial Considerations for
Determining Propriety of Work Pilot
Project Certification
1. BJA’s Exercise of Discretionary
Authority To Define and Certify 50
Work Pilot Projects
(A) BJA may exercise discretionary
authority to designate up to 50 non-
Federal work pilot projects, 18
U.S.C. 1761(c).
(B) BJA may define PIECP eligibility
qualifications and, in accordance
with its own definitions, may
exercise agency discretion to extend
or withdraw certification privileges,
as it deems appropriate.
2. Threshold Inquiry for Determining
Applicability of PIECP Exception Status
Appropriate PIECP participants
include prison industries whose
activities would likely violate the 18
U.S.C. 1761(a) prohibition and would
likely not fit within an 18 U.S.C. 1761(b)
exception. BJA has devised an
administrative approach for identifying
such industries. This approach
incorporates relevant sections 1761 (a)
and (b) considerations, including
whether a given prisoner-made item
qualifies as an excepted agricultural
product, whether a given prison
industry activity qualifies as an
unregulated service, and whether a
product distribution activity qualifies as
an intrastate distribution of goods.
These considerations are reflected in the
following threshold inquiry, which BJA
will use to determine whether a prison
industry should be encouraged to apply
for PIECP exception status:
(A) Is a statutory exception applicable
under 18 U.S.C. 1761(b)? The
following prisoner-made items are
excepted from the prohibition set
forth in section 1761(a):
• Parts for the repair of farm
machinery; or
• Commodities manufactured in a
Federal, District of Columbia, or state
institution for use by the Federal
Government, or by the District of
Columbia or by any state or political
subdivision of a state or not-for-profit
organizations. This exception is
intended to inure to the benefit of the
public; or
• Agricultural commodities grown or
cultivated on a farm which retain
continuing substantial identity through
processing stages, if any. In making the
determination as to whether a
processing stage changes a product from
an agricultural commodity to a
manufactured commodity, a relevant
consideration is whether the processing
is incidental or ancillary to agricultural
commodity growth and or cultivation. If
the processing is incidental or ancillary
in nature and is commonly undertaken
by agricultural enterprises, then it
would likely fall within the scope of the
statutory exception.
(B) Could the contemplated activity
trigger 18 U.S.C. 1761(a) by
resulting in a production of goods
by inmates in any penal or
reformatory institution? The
production of goods, which is
regulated by 18 U.S.C. 1761(a),
must be distinguished from inmate
services which are not regulated by
the criminal prohibition. The
following factors are relevant in
determining whether a given
activity results in the production of
prison-made goods:
• Has a tangible item been produced,
manufactured or mined?
• Has a tangible item been formed or
transformed?
• Has the activity resulted in the
creation of property or in a new,
marketable item?
(C) Could the contemplated activity
trigger 18 U.S.C. 1761(a) by
resulting in a post-production,
interstate transportation of prisoner-
made goods?
• Will there be transportation of
prisoner-made goods into the flow of
interstate commerce, i.e., across state
lines or from a foreign country into the
United States?
• Is there a commercial economic
enterprise present?
BJA will use this preliminary
threshold inquiry to instill greater
consistency in PIECP eligibility
decision-making. If a prison industry
activity falls within the scope of the
§ 1761(b) statutory exception, the
involved industry need not seek
§ 1761(c) exception status to avoid
§ 1761(a) criminal sanctions.
Additionally, if a prison industry
activity would not result in the
production of goods, interstate transport
of prisoner-made goods, or does not in
any other way trigger § 1761(a), the
involved industry need not seek
compliance with the requirements set
forth in § 1761(c) or this Guideline.
This threshold inquiry was devised
only for 18 U.S.C. 1761(c) programmatic
purposes and does not reflect the
Department of Justice’s 18 U.S.C.
1761(a) prosecution guidelines. Thus,
reliance on this Guideline, or any BJA
determination based thereon, is not a
complete defense to any civil or
criminal action, but would depend on
other factors as well.
d. Mandatory Program Criteria for
PIECP Participation
1. Eligibility
All departments of correction and
juvenile justice agencies authorized by
law to administer prison industry
programs are eligible to apply for PIECP
certification; such governmental
agencies are also eligible members of
umbrella authorities, authorized by law
to administer prison industry programs,
that are seeking certification. PIECP
Certificate Holders may designate CACs
within themselves, as well as within
private prisons located in the same
state. A private prison industry may
participate in PIECP only as designated
CAC of the certified PIECP Project in its
respective state and upon the approval
of the Chief State Correctional Officer of
that same state. CACs designated within
private prisons must also retain on-file
documentation reflecting approval of
PIECP inmate worker participation by
the state and local jurisdictions in
which the PIECP inmate workers were
convicted. In order to issue such
approvals, the remanding state and local
jurisdictions must also hold PIECP
certificates. Non-compliance by any one
designated CAC may result in PIECP
exception status suspension and/or
termination as to that CAC, and if
warranted, its respective Certificate
Holder. Also, within a reasonable period
of time after certification, each
Certificate Holder must have at least one
CAC producing goods and operating
under its authority or risk losing
certification.
2. Inmate Wages
PIECP inmate workers must receive
wages at a rate which is not less than
that paid for work of a similar nature in
the locality in which the work is to be
performed. This requirement benefits
society by allowing for the development
of prison industries while protecting the
private sector labor force and business
from unfair competition that could
otherwise stem from the flow of low-
cost, prisoner-made goods into the
marketplace. PIECP participants must,
therefore, implement the prevailing
wage requirements under like
conditions experienced by private sector
competition. Toward this end, the
following requirements are applicable:
(A) Section 1761(c) requires that the
PIECP wage amount be set
exclusively in relation to the
amount of pay received by similarly

17010 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
situated non-inmate workers. In
deriving the appropriate PIECP
wage, 18 U.S.C. 1761(c)(2) does not
allow other cost variables to be
taken into consideration, such as
unique expenses incurred as a
result of undertaking production
within the prison environment.
(B) Prevailing wage verification must be
obtained by the appropriate state
agency which determines wage
rates (usually the Department of
Economic Security).
(C) When making PIECP prevailing wage
verifications and annual re-
verifications, the responsible state
agency should recommend the
utilization of a non-inmate wage
scale which will not result in the
displacement of non-inmate
workers performing similar work in
the relevant locality.
(D) The PIECP prevailing wage must be
received by those inmate workers
performing notable tasks necessary
to produce and/or transport goods
in interstate commerce. If a
similarly situated, private sector
company is paying wages to obtain
services that are necessary to
production, e.g. refuse pickup, then
the PIECP CAC must also pay such
wages to the inmate provider of like
services. In determining which
tasks are covered, the following
considerations are relevant: the
amount of inmate time involved,
effort and skill necessary to
accomplish the task, the regularity
of task performance, and whether
the task would have been
performed by the inmate absent
PIECP production.
(E) The prevailing wage must be verified
prior to the initiation of PIECP
participation. Annually, thereafter,
the PIECP participant must re-verify
the adopted wage to ensure that it
continues to be comparable to
wages paid for work of a similar
nature in the locality in which the
project is located.
(F) If no such verification can be
obtained from the State Department
of Economic Security, or other
similar department, the PIECP
participant is responsible for
establishing a reasonable prevailing
wage. In such instances, the
participant should retain on file, for
BJA’s review:
(1) relevant wage data from a
sufficient number of competitors in
the locality;
(2) data analyses for determining a
reasonable prevailing wage result;
and
(3) if possible, a written assessment of
the reasonableness of the resulting
prevailing wage determination by
an appropriate state agency which
normally determines wage rates.
(G) The PIECP prevailing wage can not
be set below the Federal minimum
wage, as defined in the Fair Labor
Standards Act (FLSA), 29 U.S.C.
201 et seq. Payment of the Federal
minimum wage, however, does not
automatically achieve compliance
with the prevailing wage
requirement unless the prevailing
wage for the comparable private
sector industries is, in fact, the
Federal minimum wage.
(H) Overtime, at one and a half times the
rate of regular or prevailing wage,
must be paid for prisoner hours
worked in excess of 40 hours per
week. See 29 U.S.C. 207(a) (a
payment standard imposed on
private sector competition).
(I) If a CAC pays a wage based on piece
work, the project must apply a
calculation to convert regular wages
paid into a comparable hourly
wage. The calculation should be
used as a routine check to ensure
that inmate workers, paid according
to piece rate work, do not receive
less than the Federal minimum
wage. In instances where the CAC
is paying Federal minimum wage
and such a wage is less than the
industry standard for the prevailing
wage, the CAC must be able to
identify inmate worker performance
variances as justification for the
wage rate.
(J) BJA strongly encourages the use of
wage plans that take into
consideration a PIECP worker’s
experience, seniority, and
performance.
3. Non-Inmate Worker Displacement.
PIECP CAC operations must not result
in displacement of employed workers;
be applied in skills, crafts, or trades in
which there is a surplus of available
gainful labor in the locality; or
significantly impair existing contracts.
The term ‘‘displacement,’’ as used in
this provision, includes all such
prohibited activities, as well as the
inappropriate transfer of private sector
job functions to PIECP inmates. This
prohibition is intended to protect the
private sector partner’s non-inmate
employees, as well as all other non-
inmate workers who perform work of a
similar nature in the same locality in
which the CAC is located. This
prohibition is not, however, intended to
prohibit PIECP CACs from engaging in
typical business operations, such as
competing for business or bidding on
contracts on the open market after their
designation as Cost Accounting Centers.
(A) Regarding the possibility of
displacement among non-inmate
employees of private sector partners
in the same locality as the CAC:
(1) BJA will presume non-compliance
where there is a non-inmate
worker’s job function replacement
by a PIECP inmate worker or where
a non-inmate worker’s job function
is eliminated or adversely
impacted, to a significant degree,
and there is a concomitant
assumption of a similar job function
by a PIECP inmate worker. This
presumption may be overcome if it
can be demonstrated that the non-
inmate workers have been retained
by the private sector partner in jobs
at pay rates equal to or greater than
that received in previous positions,
that non-inmate employees have
been provided an adequate
opportunity for effective training in
any new job skills and that the
subject non-inmate employees are
being retained by the private sector
partner under reasonably similar or
improved employment conditions.
When making this compliance
evaluation, BJA will not consider
the private sector partner’s intent or
economic viability.
(2) Prior to CAC initiation, the CAC
applicant must provide BJA with
written documentation reflecting
the private sector partner’s
agreement not to displace its non-
inmate employees with PIECP
inmate labor in violation of the 18
U.S.C. 1761(c) statutory note.
(B) Prior to project initiation, all CAC
applicants must show through written
verification by the State Department of
Economic Security (or other appropriate
state agency) that the PIECP project will
not result in displacement of non-
inmate workers performing the same
work, regardless of wage rate. In cases
where an appropriate state agency
cannot provide this service, the
applicant CAC should propose to and
confer with BJA as to alternative
measures to address this requirement.
(C) While compliance is a continuing
CAC obligation, BJA will scrutinize
CAC compliance with the non-
displacement requirement just prior
to and within one year after the
initiation date of CAC operations.
(D) In instances where BJA finds that
CAC implementation results in
private sector worker displacement,
the CAC must either cease its
operations or comply with a BJA-
approved corrective action plan, if
BJA proposes such a plan under
Section IV. f. of this Guideline,
infra.

17011	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
(E) BJA strongly recommends that CAC
job development be oriented toward
the creation of new jobs within the
locality.
4. Benefits.
PIECP projects must provide inmate
workers appropriate benefits
comparable to those made available by
the Federal or State Government to
private sector employees, including
workers’ compensation and, under
certain circumstances, Social Security.
(A) By statute, in some states, inmates
are not eligible to participate in
workers’ compensation programs.
Provision of comparable workers’
compensation benefits is acceptable
as long as the CAC can demonstrate
comparability of such benefits with
those secured by the Federal or
state Government for private sector
employees.
(B) The PIECP CAC management model
impacts whether the CAC must
provide Social Security benefits to
PIECP inmate workers. Where the
employer model is utilized and the
private sector directs and controls
the PIECP inmate worker, the PIECP
participant must provide PIECP
inmate workers with Social
Security benefits. Where a customer
model is utilized and a
governmental, or instrumentality
thereof, directs or controls the
PIECP inmate worker, BJA
recognizes the applicability of other
provisions of Federal law which
may operate to preclude the
provision of PIECP inmates with
certain benefits, including Social
Security.
5. Deductions.
Participating CACs are not required
under 18 U.S.C. 1761(c) to take
deductions from PIECP inmate wages.
Deductions, however, may be required
under other Federal statutes, such as the
Internal Revenue Code. If a CAC elects
to take deductions from a PIECP
inmates’ gross wages, such deductions
can be taken only under the following
conditions:
(A) Deductions from gross wages, if
made, may be withheld only for the
following authorized purposes:
(1) taxes (Federal, state, local);
(2) in the case of a state prisoner,
reasonable charges for room and
board as determined by regulations
issued by the Chief State
Correctional Officer;
(3) allocations for support of family
pursuant to state statute, court
order, or agreement by the offender;
and
(4) contributions of not more than 20
percent, but not less than 5 percent
of gross wages to any fund
established by law to compensate
the victims of crime.
Such deductions, in aggregate, cannot
exceed 80 percent of gross wages.
(B) PIECP inmate workers must be paid,
credited with, or otherwise benefit
legally from, the 20 percent gross
remainder. In this regard, the CAC
may direct the 20 percent gross
remainder to a PIECP inmate
worker’s expense accounts, savings
accounts, or toward the settling of
the worker’s legal obligations,
including the payment of fines and
restitution.
(C) Each Certificate Holder, through its
respective Chief State Correctional
Officer, retains flexibility in
determining appropriate room and
board charges that may be deducted
from PIECP inmate workers’ gross
wages. Except as to CACs within
private prisons, the applicable
regulations for determining this
deduction are those issued by the
Chief State Correctional Officer of
the state in which the PIECP inmate
is incarcerated.
(D) The legislative history of 18 U.S.C.
1761(c) reflects a Congressional
intent to permit the use of the room
and board deduction to lower costs
otherwise incurred by the public for
inmate incarceration. Thus, prior to
making room and board deductions,
private prison CACs must obtain
written approval of any such
proposed deductions from the Chief
State Correctional Officers for those
states from which the PIECP inmate
workers were remanded.
(E) A PIECP inmate’s gross wages may
be subjected to a deduction for the
purpose compensating crime
victims if the deducted amount is
deposited into a fund established by
law for the purpose of providing
crime victim compensation. State
crime victim compensation funds
typically qualify as authorized
recipients of such deducted
amounts.
The victims compensation deduction
may also be used to address victim
restitution as long as the deducted
amounts are deposited into a fund
established by law to address such
victim interests. Amounts deducted by
private prison CACs should be
deposited in those crime victim
compensation or restitution funds in
states from which the PIECP inmates
were remanded.
6. Voluntary PIECP Inmate Worker
Participation
The Inmate Worker must indicate, in
writing, that he or she:
(A) agrees voluntarily to participate in
the PIECP project, and
(B) agrees voluntarily, and in advance,
to specific deductions made from
gross wages, as well as all other
financial arrangements made as to
earned PIECP wages.
7. Consultation With Organized Labor
PIECP CACs must:
(A) consult with representatives of local
union central bodies or similar
labor union organizations prior to
the initiation of any certified or
designated CAC project. CACs
should consult with as many of
such organizations as may have an
interest in the trade or skill to be
performed by the PIECP inmates. If
there are no local union bodies or
labor organizations, consultation
must be made with the state union
bodies or similar state-wide labor
organizations.
(B) provide adequate information about
the contemplated PIECP
participation such as, at a
minimum, an identification of the
scope of the intended CAC and
projected initiation date, as well as
an explanation of the fact that
statutory consultation is required
and comments are invited. CACs
should retain documentation
reflecting provision of adequate
consultation.
8. Consultation With Local Private
Industry
PIECP CACs must:
(A) consult with representatives of local
business that may be economically
impacted by CAC production prior
to beginning operations, and
(B) provide adequate information about
the contemplated PIECP
participation such as, at a
minimum, an identification of the
scope of the intended CAC and
projected initiation date as well as
an explanation of the fact that
consultation is required and
comments are invited. CACs should
retain documentation reflecting
provision of adequate consultation.
9. Compliance With the National
Environmental Policy Act (NEPA)
The review and approval of PIECP
certification applications as well as the
designation of PIECP CACs must
comply with NEPA and other related
Federal environmental review
requirements. See NEPA, 42 U.S.C.

17012 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
4321–4347 and 40 CFR pt. 1500. See
also 28 CFR pt. 61 (Department of
Justice procedures for implementing
NEPA); 28 CFR pt. 61 App. D
(procedures specific to Federal actions
undertaken by the Office of Justice
Programs).
(A) A BJA PIECP certification, or a CAC
designation under an issued
certification, constitutes a ‘‘Federal
action,’’ as defined by 40 CFR
1508.18 of the Council on
Environmental Quality’s (CEQ)
regulations for implementing
NEPA. Consistent with CEQ
regulations, PIECP applicants and
CACs are required to submit for BJA
review environmental data and
information regarding their
proposed activities and, if
necessary, environmental
assessments. Applicants and CACs
must also assist BJA in the
preparation of any required
environmental impact statements.
(B) Title 28 CFR Part 61 App. D
provides NEPA compliance
guidance to PIECP applicants and
CACs, including the following:
(1) Actions entailing minor renovation
projects or remodeling do not
normally require an environment
impact statement or an
environmental assessment, unless,
for example the actions would be
located in or potentially affect a
floodplain; a wetland; a listed
species or critical habitat for an
endangered species; or a property
that is listed on or may be eligible
for listing on the National Register
of Historic Places.
(2) Actions that normally require an
environmental assessment, but not
necessarily an environmental
impact statement, include:
renovations and expansions that
change the basic prior use of a
facility or substantially change its
size; change in use of an existing
facility that results in the increased
production of liquid, gaseous, or
solid wastes; new construction;
research and technology whose
anticipated and future application
could be expected to have an effect
on the environment; and new
operations involving the use of
hazardous, toxic, radioactive, or
odorous materials. Assessments of
such activities which result in BJA
‘‘findings of significant impact’’
will necessitate the preparation of
environmental impact statements in
compliance with NEPA and its
implementing regulations.
(3) Additionally, no certification will
be approved nor can any
designation be provided or
maintained if the application or
designation includes a facility in
non-compliance with any Federal,
state, or local environmental law or
regulation.
IV. PIECP Administration
a. Certificate Holders
BJA may exercise its discretionary
authority to certify up to 50 Non-Federal
PIECP Projects. Eligible applicants may
seek certification by submitting an
application to BJA in accordance with
the requirements set forth in BJA’s
PIECP Certification Application, which
will be provided upon request, and
subpart IV.a.2, infra. BJA’s review of
submitted applications will be
conducted as outlined in subparts IV.a.3
and a.4, infra. Once a certificate is
issued, the holder assumes the authority
and responsibilities set forth in subparts
IV.a.5 and a.6, infra.
1. Project Structure
All departments of correction,
authorized by law to administer prison
industry programs, are eligible to apply
for BJA certification. Certified
applicants may designate one or a
number of Cost Accounting Centers
(CACs) under their authority. Certificate
Holders may also under certain
conditions designate CACs within
private prisons located in their
respective states or jurisdictions. BJA
will consider alternative program
structures suggested by certification
applicants, including, but not limited to,
applicant umbrella authorities, as
described in subpart III. d.1, supra.
2. Application Content
All applications for PIECP Project
Certification shall include the following:
(A) Assurances of Authority. The
Certificate Holder must provide
written assurance to BJA that it has
in place appropriate statutory and
administrative authority to meet all
mandatory program criteria and, in
particular, to monitor CAC
compliance throughout the
proposed PIECP Project.
(B) Documentation to Show Compliance
With Mandatory Program Criteria.
The applicant must submit all
documentation necessary to show
CAC compliance with the nine
mandatory program criteria
outlined in Section III. d., supra.
(C) Project Description. The applicant
must describe key project elements,
including the process to be used to
designate and monitor compliance
of CACs with 18 U.S.C. 1761(c) and
this Guideline.
3. BJA Review
PIECP applications will be reviewed
by BJA on a first-come, first-served
basis. Awards of certification are
discretionary exercises of authority by
BJA under 18 U.S.C. 1761(c). No
certification will be awarded, however,
unless there is a determination that the
applicant has met the mandatory
participation criteria outlined in this
Guideline. Applicants will be notified
in writing of BJA’s award or denial of
certification. The hearing and appeal
procedures set forth in 28 C.F.R. Part 18
do not apply to denied PIECP
applicants. Certified applicants will be
informed of the effective date of BJA’s
certification.
4. Standard or Provisional Certification
A standard certification may be issued
by BJA to an approved Certificate
Holder applicant when all mandatory
program criteria have been met. When
one or more mandatory program criteria
have not been met, but when steps have
been taken to ensure that those criteria
will be met within a reasonable period
of time, then a provisional certification
may be issued by BJA in instances
where the withholding of certification
would significantly impair the
applicant’s ability to further develop its
project. The terms of the provisional
certification will be made specific to the
nature of the unmet mandatory criteria
and may be made contingent upon the
occurrence of identified conditions.
Provisional certifications may be issued
for no longer than one year from the
date of issuance and may be subject to
renewal, at BJA’s discretion.
5. Certificate Holder Designation
Authority
(A) The Certificate Holder may exercise
CAC designation authority with
respect to department of correction
prison industries operating under
its jurisdiction, including in private
prisons which are located in its
respective state or jurisdiction.
CACs designated within private
prisons must also retain on-file
documentation reflecting approval
of PIECP inmate worker
participation by the state and local
jurisdictions in which PIECP
inmate workers were convicted. In
order to issue such approvals, the
remanding state and local
jurisdictions must also hold PIECP
certificates.
To exercise this authority, a Certificate
Holder must first determine that a
proposed CAC has complied with
the requirements set forth in this
Guideline and in 18 U.S.C. 1761(c).

17013	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
Whenever the Certificate Holder
elects to exercise this authority after
certification application approval, it
must submit a Notice of Designation
Form to BJA that provides the
following information and
documentation:
(1) Cost Accounting Center Name and
Location;
(2) Proposed number of workers;
(3) Item(s) to be produced;
(4) Proposed consumer market
(including anticipated geographic
distribution);
(5) Description of private sector
involvement, including models that
will be used in working with
private enterprise;
(6) Locality determination, and
supporting justification;
(7) Description of inmate
compensation plans;
(8) Documentation of prevailing wage
verification;
(9) Identification of deductions and
percentage of each to be taken from
PIECP inmates’ gross wages;
(10) Documentation of private sector
partner’s agreement not to displace
its non-inmate employees in the
same locality with PIECP inmate
labor, if applicable;
(11) Documentation of non-
displacement verification; and
(12) As to any CACs within private
prisons, written approval from
remanding jurisdiction of any
proposed room and board
deduction, in compliance with
Section III.d.5.(E)of this Guideline,
supra;
(13) As to any CACs within private
prisons, written approval of the
designation by the Chief State
Correctional Officer for the
jurisdiction in which the CAC is
located; and
(14) Documentation of the
environmental impacts of the CAC’s
existing and proposed activities.
(B) The Certificate Holder may, in its
own discretion, undesignate any
previously designated CAC. In such
instances, the Certificate Holder
must submit to BJA an
Undesignation Form providing the
following information:
(1) Cost Accounting Center Name and
Location;
(2) Reasons for Undesignation; and
(3) Effective Date of Undesignation.
(C) BJA may, at any time deemed
necessary to resolve compliance
concerns and upon the issuance of
written notice, suspend a Certificate
Holder’s authority to designate
additional Cost Accounting Centers.
6. Certificate Holder Monitoring
Responsibilities
As to all designated CACs, the
Certificate Holder must assume the
following monitoring responsibilities:
(A) Undertake all reporting and
evaluation activities deemed
necessary to ensure continuing
designated CAC compliance; and
(B) Respond to all BJA requests for
information and cooperation aimed
at ensuring Project compliance.
b. Cost Accounting Centers’ PIECP
Exception Status
A CAC is entitled to operate under
PIECP exception status.
1. To retain this status, the CAC must
comply with all PIECP participation
obligations to its Certificate Holder and
to BJA, including:
(A) Maintaining continuous
compliance with the requirements
set forth in 18 U.S.C. 1761(c) and in
III.d), supra, of this Guideline; and
(B) Responding to all monitoring
requests for information and
cooperation aimed at maintaining
continued compliance with this
Guideline.
2. The CAC must promptly report to the
Certificate Holder any contemplated
change in operations which may
affect its ability to maintain
statutory and Guideline
compliance.
c. Compliance Reviews
1. Performance Reports
Within 30 days following the close of
each calendar quarter, each CAC must
submit a quarterly performance report to
its Certificate Holder in a form
prescribed by BJA. The performance
report describes activities undertaken
during the prescribed period. A
consolidated report of all CAC activity
must be submitted to BJA by the
Certificate Holder within 45 days
following the close of each calendar
quarter.
2. On-Site Monitoring Reviews
BJA and BJA technical assistance
contractors are authorized to perform
desk and on-site reviews of all PIECP
participants, including all CACs, as
deemed necessary. On-site reviewers
may request access to any and all
documentation necessary to assist in
determining compliance with the
requirements of this Guideline and 18
U.S.C. 1761. Monitored participants will
be advised in writing of the results of
any such reviews. Immediate corrective
action must be taken to address
determinations of non-compliance and/
or to respond to issues that raise
compliance related-concerns for BJA.
d. BJA’s PIECP Administration
BJA’s PIECP responsibilities include
the following:
1. Review and approval of Certificate
Holder PIECP applications;
2. Monitoring to determine compliance
status of operations within all
CACs;
3. PIECP exception status termination or
suspension for cause related to
substantial non-compliance;
4. Liaison with other Federal agencies
that may affect PIECP operations;
5. Provision of compliance-related
technical assistance; and
6. Any and all other functions necessary
to administer the program in
compliance with 18 U.S.C. 1761(c).
e. PIECP Exception Status Suspension/
Termination
1. Notice of Possible Compliance
Violation
Alleged facts indicative of non-
compliance shall be communicated in
writing by BJA to the involved
Certificate Holder and the involved
designated CAC. These parties must
respond to the allegations, in writing,
within 15 days after receipt of the notice
of non-compliance determination.
Immediate corrective action must be
taken to address determinations of non-
compliance.
2. Voluntary Compliance Agreements
If BJA determines that noncompliant
practices persist, BJA may, in its
discretion, propose a voluntary
compliance agreement to the involved
Certificate Holder.
3. Failure To Achieve Compliance and
Effect of Non-Compliance
If a voluntary compliance agreement
is not presented by BJA or is not
accepted or adequately implemented by
the Certificate Holder within 30 days
after receipt of such an agreement, BJA
may suspend the Certificate Holder’s
certification and/or CAC exception
status.
4. PIECP Exception Status Suspension
and Termination
A certification may be terminated by
BJA if it has been inactive (no
production within a designated CAC) or
suspended for six consecutive months.
A certification and/or designation may
be suspended, and six months
thereafter, terminated upon: (1) issuance
of a notice of a determination that the
Certificate Holder and/or designated
CAC is not acting in compliance with

17014 	Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Notices
the requirements of 18 U.S.C. 1761, this
Guideline or the conditions set forth in
its certificate; or (2) in the discretion of
the Director of BJA and upon a re-
definition of a PIECP Project authorized
under 18 U.S.C. 1761(c). Termination or
suspension of the exception status of
one designated CAC will not
automatically impact the PIECP
exception status of other CACs under
the same certification unless the PIECP
Project certification is suspended or
terminated. The hearing and appeal
procedures set forth in 28 C.F.R. Part 18
do not apply to PIECP applicants or
participants who have had PIECP
exception status suspended or
terminated under this provision.
Dated: March 31, 1999.
Nancy Gist,
Director, Bureau of Justice Assistance.
[FR Doc. 99–8575 Filed 4–6–99; 8:45 am]
BILLING CODE 4410–18–P
DEPARTMENT OF JUSTICE
National Institute of Corrections
Solicitation for a Cooperative
Agreement
SUMMARY: The Department of Justice
(DOJ), National Institute of Corrections
(NIC) announces the availability of
funds in FY ‘99 for a cooperative
agreement to fund a multi-year project
entitled Gender-Specific Responses:
Research Practice and Guiding
Principles.
Purpose: The National Institute of
Corrections is seeking proposals for a
cooperative agreement to provide
planning assistance in designing a
multi-year project on gender responsive
strategies for women offenders. The
assistance will be provided to the
National Institute of Corrections’ (NIC)
Women Offenders’ Initiative, a five
person, Institute-wide team comprised
of representatives from each of the four
program divisions. The multi-year
project is entitled Gender-Specific
Responses: Research, Practice and
Guiding Principles, and is described on
page 47 of the NIC Service Plan for
Fiscal Year 1999.
Authority: Pub. L. 93–415.
Funds Available: The maximum
amount available is $20,000 for one
cooperative agreement for the planning/
design phase of the project. The
planning assistance must be completed
within a three month period.
Deadline for Receipt of Applications:
Applications must be postmarked by
4:00 p.m., Eastern daylight time on
Friday, April 30, 1999.
Addresses and Further Information:
Requests for the application kit, which
includes details on the project’s
objectives, etc., should be directed to
Judy Evens, Grants Control Office,
National Institute of Corrections, 320
First St, NW, Room 5007, Washington,
DC 20534 or by calling 800–995–6423,
ext. 159 or 202–307–3106, ext. 159. You
may also obtain a copy of the kit by e-
mailing Ms. Evens at jevens@bop.gov.
All technical and/or programmatic
information on this announcement
should be directed to Ms. Phyllis
Modley at the above address or by
calling 800–995–6423, ext. 133 or 202–
307–3106, ext, or by e-mail at:
pmodley@bop.gov.
Eligible Applicants: An eligible
applicant may be: a private
organization, non-profit organization,
individual or institution.
Review Consideration: Applications
received under this announcement will
be subjected to an NIC 3 to 5 member
Peer Review Process.
Number of Awards: One (1).
NIC Application Number: 99D02.
Other Information: The person or
organization which is the successful
applicant for this planning phase may
not apply for the subsequent, multi-year
development project.
Executive Order 12372:
This program is subject to the
provisions of Executive Order 12372.
Executive Order 12372 allows States the
option of setting up a system for
reviewing applications from within
their States for assistance under certain
Federal programs. Applicants (other
than Federally-recognized Indian tribal
governments) should contact their State
Single Point of Contact (SPOC), a list of
which is included in the application kit,
along with further instructions on
proposed projects serving more than on
State.
The Catalog of Federal Domestic
Assistance number is: 16.603
Dated: April 1, 1999.
Morris L. Thigpen,
Director, National Institute of Corrections.
[FR Doc. 99–8529 Filed 4–6–99; 8:45 am]
BILLING CODE 4410–36–M
DEPARTMENT OF JUSTICE
Federal Bureau of Prisons
National Institute of Corrections;
Agency Information Collection
Activities: Reinstatement, Without
Change, of a Previously Approved
Collection for Which Approval Has
Expired
ACTION: Notice of information collection
under review; Data base of offender job
training and placement service
providers.
The Department of Justice, Federal
Bureau of Prisons, National Institute of
Corrections has submitted the following
information collection request for
review and clearance in accordance
with the Paperwork Reduction Act of
1995. The proposed information
collection is published to obtain
comments from the public and affected
agencies. Comments are encouraged and
will be accepted until June 7, 1999.
Written comments and suggestions
from the public and affected agencies
concerning the proposed collection of
information should address one or more
of the following four points:
(1) Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency/component,
including whether the information will
have practical utility;
(2) Evaluate the accuracy of the
agencies/components estimate of the
burden of the proposed collection of
information, including the validity of
the methodology and assumptions used;
(3) Enhance the quality, utility, and
clarity of the information to be
collected; and
(4) Minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g. permitting electronic submission of
responses.
If you have additional comments,
suggestions, or need a copy of the
proposed information collection
instrument with instructions, or
additional information, please contact
John E. Moore, 202–307–1300 Ext. 147,
National Institute of Corrections, Office
of Correctional Job Training and
Placement, 320 First Street, N.W.,
Washington, D.C. 20534.
Overview of This Information
Collection
(1) Type of information collection:
Reinstatement, without change, of a