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90 Second Summaries: Season 2, Episode 21
Spotlight on the States: The Prison Industries Act
ALEC model legislation -- introduced nationally in 1995; updated in 2004
Watch this episode of 90 Second Summaries at http://bit.ly/S02E21

Status: According to the Bureau of Justice Assistance, 37 states and four other jurisdictions have certified PIE programs in place. As of 6/30/2010, 30 of those programs were active.

Purpose: Congress created the Prison Industry Enhancement Certification Program (PIECP) with the Justice System Improvement Act of 1979. This program was designed to "establish employment opportunities for inmates that approximate private sector work opportunities", thereby helping them gain skills to find work upon release. PIE provided both a cheap source of labor to participating private companies and an effective way for prison administrators to keep inmates busy while helping defray their cost to the state, but was scantily used by the states until the advent of the Prison Industries Act. For years, the use of prison labor by private companies had been legally barred to prevent unfair competition.

Summary: Originally crafted in 1993 by Texas State Rep. Ray Allen, the Prison Industries Act is designed to better incentivize use of prison labor by private companies and more effectively enrich these companies. The PIE program stipulates that inmates must be paid a prevailing market wage, although up to 80 percent of that wage (after taxes) can be diverted to the state to offset the cost of incarceration and for other purposes. It furthermore sets conditions that restrict the use of inmate employees to undercut market competition. This legislation leverages loopholes in both of those restrictions to the benefit of the participating corporations in the following ways:

• Diverts a portion of the money deducted from inmate pay to "private sector prison industries expansion accounts" that can be used to construct work facilities, recruit corporations to participate as private sector industries programs, and pay program management, implementation and oversight costs. As laid out in the 2004 version, this special fund receives the first $2 million of state deductions from inmate pay and half of any further amount.
• Creates a "Private Sector Prison Industries Oversight Authority" that oversees approval and operation of PIE programs. This body is composed of various stakeholders appointed by the governor, with key elected officials as ex-oficio members.
• Exploits a loophole in PIECP to drastically expand the cases in which prison labor can be used.
• The original legislation specified distribution of the inmate's gross wages:
◦ 10% going to the inmate for use while incarcerated;
◦ 20% to pay restitution to the victims of his or her crime if under a court order to do so;
◦ 20% to the inmate's spouse and children (if they exist); unless they are on welfare, in which case this portion is paid to the state to offset the cost of their benefits;
◦ 10% to an escrow account for the inmate's personal use upon release from prison (20% if no restitution is ordered)
◦ The remainder (40-70%) is received by the state as partial reimbursement for the inmate's imprisonment cost.
Note: the 2004 legislation now being advanced did not include such guidelines.

Supporters: American Legislative Exchange Council, Corrections Corporation of America, etc.
• Supporters see this act as a way to fulfill the original purpose of the PIE program, preparing prisoners for increased future job prospects, helping offset the cost of their imprisonment, and providing an affordable source of labor to participating companies.

Opponents: Labor and allied groups, most Democrats, etc.
• Opponents generally view this legislation as a way to establish backdoor slave labor in the United States, as inmate employees often receive under a dollar per hour in direct compensation.

Further links
Full model legislative text (2004 version): http://alecexposed.org/w/images/4/4d/7N4-Prison_Industries_Act_Exposed.pdf
Full model legislative text (1995 version): http://www.scribd.com/doc/59334595/ALEC-Prison-Industries-Act
The Nation article about the bill: http://www.thenation.com/article/162478/hidden-history-alec-and-prison-labor
National Correctional Industries Association 2010 report on the state of the PIE program: http://bit.ly/mPnfwe
Official Justice Department PIECP page: http://www.ojp.usdoj.gov/BJA/grant/piecp.html
PRIDE Enterprises explanation of the PIE program: http://www.pride-enterprises.org/about/mission/pie.html
Unicor Federal Prison Industries Inc. Factory Locations: http://www.unicor.gov/information/publications/pdfs/corporate/CATMC3811_C.pdf

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