To provide for a demonstration project by Federal Prison Industries.

Amends the Federal criminal code to: (1) require Federal Prison Industries (FPI), not later than December 1, 1995, to establish a demonstration project in which prisoners are paid wages at rates not less than the Federal minimum wage applicable for similar work done by free labor in order to engage in the production of goods of a type currently made primarily in foreign countries which may be sold domestically to the general public at market prices; and (2) authorize the Director of the Bureau of Prisons to deduct from such wages an amount, not to exceed 80 percent of the wages, that the Director determines will defray the costs to the United States associated with the imprisonment of that prisoner.

Directs FPI and the Director, within two years, to jointly report to the Congress on the demonstration project's economic viability and on whether such project should be continued or expanded.