OFFICIAL OPINION No. 26

OFFICIAL OPINION No. 26 Funds-Deposits-Sale of non-prison products-Sale of prison products-Inmates' personal funds. Monies derived from the sale of non-prison industries products resulting from private inmate labor not performed for wages payable out of the Manufacturing Fund must be deposited and retained in the Inmates' General Welfare Fund. Monies derived from the sale of products resulting from the employment of inmate labor for which wages are paid out of the Manufacturing Fund must be deposited in or transferred to the Manufacturing Fund. Inmates' personal funds must be deposited or retained in the Inmates' General Welfare Fund. Harrisburg, Pa., October 24, 1957. Honorable Arthur T. Prasse, Commissioner, Bureau of Correction, Department of Justice, Harrisburg, Pennsylvania. Sir: You have requested an opinion as to the legality of depositing in the Inmates' General Welfare Fund monies derived from the sale of non-prison industries products. This question arises as a result of an audit by the Office of the Auditor General of prison industries for the fiscal years ended May 31, 1955 and 1956, dated May 3, 1957, wherein the following recommendation was made: "INSTITUTIONAL INDUSTRIES CASH During the course of our audit it was noted that from June 1, 1954 through January, 1956, transfers were made from the Institutional Industries Fund to the Manufacturing Fund of moneys received from the sale of non-Prison Industries pro- ducts in accordance with the advice contained in Informal Opinion of the Department of Justice, No. 146, dated Janu- ary 10, 1950. However, subsequent to January, 1956 the pro- ceeds from the sale of these non-Prison Industries were transferred to the Inmates' General Welfare Fund. This pro- cedure is contrary to the advice contained in Informal Opinion No. 1462, dated January 10, 1950. It is, therefore, recom- mended that moneys transferred to the Inmates' General Wel- fare Fund be deposited in the Manufacturing Fund, and in the future, the proceeds from the sale of non-Prison Industries products be transferred directly to the Manufacturing Fund." The Inmates' General Welfare Fund was created in January, 1956, for the purpose of consolidating the separate inmates individual and welfare funds then maintained by the seven penal institutions through- out the Commonwealth. Such consolidation was accomplished in the OPINIONS OF THE ATTORNEY GENERAL 123 interest of establishing a sound investment policy, an equitable dis- tribution of expenditure for institutional benefits and a system of c9ntrols and balances generally desirable in government accounting. The inmates' individual and welfare funds, all non-appropriated, arise from the following sources: inmates' personal accounts, commissary sales, hobby shop sales, non-prison industries functions, donations and the like. As of June 30, 1957, the Inmates' General Welfare Fund consisted of $292,318.66 of inmates' personal monies and $173,215.51 of "welfare monies," representing proceeds received from the sale of non-prison industries products and commissary profits. All of these funds are held by the Commonwealth in a fiduciary capacity. Informal Opinion No. 1462, issued by the Department of Justice on January 10, 1950, dealt with the questions of the legality of main- taining hobby shops in the institutions and the legality of depositing in the Manufacturing Fund monies derived from the operation of such hobby shops. At the time Informal Opinion No. 1462 was written, § 2312 of The Administrative Code of 1929, the Act of April 9, 1929, P. L. 177, as amended, 71 P. S. § 602, provided that the Department of Welfare had the power and duty to establish and maintain prison industries in the penal and correctional institutions of the Commonwealth. Section 2312 prescribed the nature and method of conducting prison industries and provided for the payment into the Manufacturing Fund of the proceeds of sales of manufactured products produced by prison indus- tries. The section further provided for the payment out of the Manu- facturing Fund of all expenses of such industries and for the com- pensation to be paid for the labor performed by inmates in such industries. Informal Opinion No. 1462 recognized that hobby shops are main- tained for the employment of inmates who are incapable of performing industrial work and that individual employment of inmates in other than prison industries was provided in subsection (k) of § 2312, m part, as follows: "The Department of Welfare .shall have the power, and its duty shall be: * * * * * * "(k) To the extent to which it is unable to provide work for every physically able inmate of such institutions, to au- thorize the several boards of trustees of such institutions to permit inmates to engage in such work or industries as the 124 OPINIONS OF THE ATTORNEY GENERAL Department may approve, and which they are able to pro- vide from other sources, but all such work shall be performed, the products thereof sold, and the proceeds thereof disposed of, under the rules and regulations of the department covering the same;" Based upon the foregoing outlined provisions and quoted subsection, Informal Opinion No. 1462 reached the following conclusions: "l. Under the provisions of Section 2312 (k) of The Ad- ministrative Code of 1929, the Department of Welfare has the power and duty to authorize the several boards of trustees of the State penal and correctional institutions to permit in- mates to engage in such work or industries as hobby shops, as the department may approve, the products thereof to be sold, and the proceeds thereof to be disposed of, under the rules and regulations of the department, in accordance with Section 2312 (k) which reads as follows: * .. * * * * "This subsection makes it necessary for the establishment of hobby shops or any other form of work to be conditioned upon the failure to provide the kind of work as authorized by subsection (a) of Section 2312 of The Administrative Code of 1929, and that before a hobby shop is established in an in- stitution there should be some form of action by the Depart- ment of Welfare setting forth this failure, and authorizing the board of trustees of the institution involved to establish a hobby shop or other form of work. This action should be followed by the enactment of rules and regulations by the De- partment of Welfare covering the particular work authorized. "2. The proceeds of the sale of such products must be de- posited in the Manufacturing Fund, in accordance with the provisions of Section 2312 (g) of The Administrative Code of 1929." The Act of July 29, 1953, P. L. 1428, 71 P. S. § 301, transferred supervision and control of the State penal and correctional institutions from the Department of Welfare to the Department of Justice and created a Bureau of Correction in the Departmenet of Justice to carry on the administrative powers and duties previously assigned to the Department of Welfare. With certain changes which have no effect upon the situation covered by this opinion or Informal Opinion No. 1462, former § 2312 became § 915 of the Act of July 29, 1953, P. L. 1428, as amended, 71 P. S. § 305 . .Subject to certain limitations, hereinafter set forth, Informal Opinion No. 1462 continues to represent the view of this department. OPINIONS OF THE ATTORNEY GENERAL 125 Former § 2312 and present § 915 establish a program of inmate labor. Subsection (a) of each section establishes the prison industries program and provides that "all persons * * * who are physically capable of such labor, may be employed at labor for not to exceed eight (8) hours each day, other than Sundays and public holidays." Subsection (a) of present § 915, which differs from former § 2312 in minor grammatical respects, continues as follows: "Such labor shall be for the purpose of doing printing or of manufacturing and producing supplies, or for the prepara- tion and manufacture of building materials for the construc- tion or repair of any State institution or in the work of such construction or repair, or for the planting of seed trees, or for the purpose of industrial training or instruction, or in the manufacture and production of crushed stone, brick, tile and culvert pipe or other material suitable for draining roads of the State or in preparation or road building and ballasting material." Subsection (g) of each section provides that the proceeds "of all sales of manufactured products made under this section and all moneys received for the labor of inmates in State forests or elsewhere than on the grounds of the institution" shall be paid into the Manufacturing Fund. Subsection (h) of each section provides for payment from the Manufacturing Fund of the expenses incurred in the operation of the prisons, including inmates' wages. Subsection (i) of each section provides for the minimum amount, rate and method of payment of inmates' wages, payable out of the Manufacturing Fund. Subsection (k) of each section, quoted above, authorizes the performance of non- prison industry work for inmates physically incapable of performing prison-industry labor as provided in subsection (a) quoted above. The plain purpose of former § 2312 and present § 915 is the es- tablishment of a program of inmate labor based upon an eight hour work day excepting Sundays and holidays. These sections con- template that inmates will be employed in prison industries as far as possible. In those cases where inmates are physically incapable of performing an eight hour work day in prison industries, or where prison industry work cannot be provided for every physically able inmate, non-prison industry labor is authorized. Where inmate labor, performed on the basis of an eight hour work day, is used to produce articles, services or products for sale in prison hobby shops and the inmates so working are paid out of the Manufacturing Fund for such labor, Informal Opinion No. 1462 continues to represent the view of this department that the proceeds from the sale of such articles, serv- ices or products must be deposited in the Manufacturing Fund. On 126 OPINIONS OF THE ATTORNEY GENERAL the other hand, Informal Opinion No. 1462 was never intended to apply to other proceeds of hobby shops derived from the sale of articles and products produced by inmates in their spare time. Nor should In- formal Opinion No. 1462 be construed to apply to monies credited to the individual accounts of inmates derived from wages, personal funds, gifts, Social Security benefits, or similar private sources, or to profits derived from commissary sales, donations, or similar non-appropriated fund sources. It is, therefore, the opinion of this department and you are accord- ingly advised that the June 30, 1957, balance of $465,534.17 in the Inmates' General Welfare Fund should be disposed of as follows: (1) The sum of $292,318.66, consisting of inmates' personal funds must be retained in the Inmates' General Welfare Fund; (2) So much of the sum of $173,215.51, representing proceeds from the sale of products, resulting from the employment of inmate labor during an eight hour work day in hobby shop work for which wages are paid out of the Manufacturing Fund, must be transferred to the Manufacturing Fund; and (3) So much of the sum of $173,215.51, representing profits of com- missary sales, donations, other non-appropriated contributions, and proceeds from the sale of non-prison industries products, resulting from private inmate labor not performed for wages payable out of the Manufacturing Fund, must be retained in the Inmates' General Welfare Fund. Very truly yours, ·DEPARTMENT OF JUSTICE, FRANK P. LAWLEY, JR., Deputy Attorney General. THOMAS D. McBRIDE, Attorney General.