Family Unity Demonstration Project Act of 1991

Title I: General Provisions - Family Unity Demonstration Project Act of 1991 - Authorizes appropriations for State (80 percent) and Federal (20 percent) family unity demonstration projects that enable eligible prisoners to live in community correctional facilities with their children for purposes of alleviating harm to children and primary caretaker parents caused by separation due to incarceration, promoting policies to assign prisoners to correctional facilities for which they qualify closest to their family homes, reducing prison populations and recidivism rates, and reducing the cost of providing correctional services.

Title II: Grants to States - Authorizes the Director of the National Institute of Correction (NIC) to make grants to States to carry out such projects, giving preference to States providing assurances that: (1) both the State corrections, and State health and human services, agency will participate in, and cooperate closely in all aspects of, the development and operation of the project; (2) public and nonprofit private community-based organizations will be integrally involved in carrying out such project; (3) the State will target economically disadvantaged, incarcerated prisoners and their children for participating in such project; (4) the State has a policy that provides for the placement of prisoners, whenever possible, in correctional facilities for which they qualify that are located closest to their family homes; (5) the State will follow specified guidelines with respect to the selection of prisoners to participate in such project; and (6) certain other requirements will be met.

Directs the NIC to: (1) make grants on a competitive basis, based on specified criteria and preferences; and (2) make grants in any fiscal year for which funds are available to five eligible States geographically dispersed throughout the United States.

Sets forth: (1) conditions for grant eligibility; and (2) reporting requirements by States receiving grants to the NIC.

Title III: Family Unity Demonstration Project for Federal Prisoners - Directs the Attorney General to: (1) carry out a family unity demonstration project that enables eligible prisoners to live in community correctional facilities with their children; (2) comply with preference and reporting requirements established under title II of this Act; and (3) consult with the Secretary of Health and Human Services regarding development and operation of such project.