[Congressional Bills 103th Congress] [From the U.S. Government Publishing Office] [H.R. 1259 Introduced in House (IH)] 103d CONGRESS 1st Session H. R. 1259 To provide for the economic conversion and diversification of industries in the defense industrial base of the United States that are adversely affected by significant reductions in spending for national defense. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES March 9, 1993 Mr. Lantos introduced the following bill; which was referred jointly to the Committees on Banking, Finance and Urban Affairs, Education and Labor, Small Business, Foreign Affairs, and Public Works and Transportation _______________________________________________________________________ A BILL To provide for the economic conversion and diversification of industries in the defense industrial base of the United States that are adversely affected by significant reductions in spending for national defense. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Defense Industrial Stabilization and Community Transition Act of 1993''. TITLE I--PRESIDENTIAL COUNCIL ON ECONOMIC DIVERSIFICATION AND ADJUSTMENT SEC. 101. ESTABLISHMENT AND MEMBERSHIP. (a) Establishment.--There is established in the Executive Office of the President a Council to be known as the ``Presidential Council on Economic Diversification and Adjustment''. (b) Membership.--The Council shall be composed of the following: (1) The Secretary of Commerce, who shall be the Chairman of the Council. (2) The Secretary of Labor. (3) The Secretary of Health and Human Services. (4) The Secretary of Defense. (5) The Secretary of Energy. SEC. 102. RESPONSIBILITIES. (a) In General.--The Council shall have the following responsibilities: (1) To determine the amounts of the projected future reductions in spending under the national defense budget function and the sectors under such budget function in which significant reductions will occur. (2) To identify the communities and businesses within the United States that will be adversely affected by such spending reductions. (3) To assist those businesses and the economies of those communities to diversify into nondefense commercial activities before such spending reductions adversely affect such businesses and communities. (4) To assist defense-dependent industries in seeking new markets for the products of such industries. (5) To assist workers adversely affected by spending reductions referred to in paragraph (1). (6) To serve as a liaison among Federal Government programs on technology transfer, marketing assistance, small business, economic development, job training, and export enhancement in order to ensure that all available Federal resources are utilized to minimize the adverse effects referred to in paragraph (2) in the most effective manner possible. (7) To maintain the integrity of the defense industrial base of the United States during periods of significant reductions in spending under the national defense budget function. (8) To ensure that the technological base of the United States is not unduly impaired by such reductions. (9) To publish an annual report in accordance with subsection (b). (10) To maintain a clearinghouse of information on State and local initiatives on economic and commercial diversification of businesses referred to in paragraph (2) and the economies of communities referred to in that paragraph and to publish an annual report on, and evaluation of, those initiatives. (11) To assist State economic development offices in the planning of regional meetings and conferences on economic and commercial diversification and to participate in such meetings and conferences to the extent appropriate. (12) To ensure that communities, businesses, and workers likely to be significantly adversely affected by spending reductions referred to in section 102(a)(1) are given advanced notice, under section 4101 of Public Law 101-510 (10 U.S.C. 2391 note) or otherwise, of the likely adverse effects of such reductions. (13) To allocate funds in the Defense Economic Adjustment Trust Fund established under section 801 to programs, projects, and activities referred to in subsection (b) of that section. (b) Annual Report on Adversely Affected Communities and Businesses.--At the same time as the President submits the budget to Congress pursuant to section 1105 of title 31, United States Code, each year, the Council shall publish a report that identifies-- (1) the defense-dependent communities and businesses that are likely to be significantly adversely affected by spending reductions that-- (A) are provided for under the national defense budget function in that budget or in the multiyear defense program submitted to Congress with that budget pursuant to section 114a of title 10, United States Code; or (B) may result from projected changes in programs, projects, and activities of the Department of Defense that are provided for in any other relevant documents; and (2) the defense-dependent communities and businesses that might be adversely affected by potential future spending reductions under the national security budget function. SEC. 103. DEFENSE DEPENDENCY AND DEFENSE BUSINESSES. (a) Defense Dependency.--The Council shall prescribe the criteria for determining which regions, communities, businesses, and industries are defense-dependent regions, communities, businesses, and industries for the purposes of this Act. (b) Defense Business Defined.--In this Act, the term ``defense business'' means a commercial enterprise that derives a substantial percentage (as defined by the Council) of its annual revenues from the performance of Department of Defense contracts as a prime contractor or a subcontractor. SEC. 104. COUNCIL WORKING GROUPS. (a) Working Groups Named.--There shall be four working groups under the Council as follows: (1) A working group on technology. (2) A working group on marketing. (3) A working group on small business. (4) A working group on job training. (b) Working Group on Technology.--(1) The Under Secretary of Commerce for Technology shall be the chairman of the working group on technology. (2) The working group on technology shall-- (A) coordinate Federal technology transfer initiatives among defense-dependent businesses and other businesses in defense-dependent regions of the United States; (B) publish an annual guide to Federal Government technology transfer programs that are available for providing assistance to such businesses regarding diversification of production; (C) provide such businesses with assistance in applying for assistance under such programs; and (D) issue an annual report containing a discussion of-- (i) the extent to which skilled labor and technologically advanced equipment is being retained within regions of the United States experiencing significant adverse effects resulting from spending reductions referred to in section 102(a)(1); and (ii) the extent to which existing technology transfer programs are encouraging stability in the availability of skilled labor and technologically advanced equipment in such regions. (3) The working group on technology, the Defense Advanced Research Projects Agency of the Department of Defense, and the National Institute of Standards and Technology shall-- (A) conduct a joint study of the unique technological needs of defense businesses seeking to diversify or convert to nondefense production; and (B) issue a report containing recommendations on ways to strengthen existing programs for the encouragement of such diversification or conversion. (c) Working Group on Marketing.--(1) The Under Secretary of Commerce for International Trade shall be the chairman of the working group on marketing. (2) The working group on marketing shall provide-- (A) businesses referred to in section 102(a)(2) that are seeking to diversify, or are newly diversified, into nondefense commercial activities with-- (i) advice on foreign and domestic markets; and (ii) other relevant marketing advice; (B) publish an annual guide to Federal Government marketing and export financing programs; (C) provide defense businesses in defense-dependent regions of the United States with assistance in applying for Federal Government assistance available through programs of the International Trade Administration of the Department of Commerce and the Export-Import Bank; and (D) administer the grant program under the provisions of title II of this Act. (3) The working group on marketing and the Department of Commerce shall-- (A) conduct a joint study of the unique marketing needs of defense businesses seeking to diversify or convert to nondefense production; and (B) issue a report containing recommendations on ways to strengthen existing programs for encouraging such diversification and conversion. (d) Working Group on Small Business.--(1) The Administrator of the Small Business Administration shall be the chairman of the working group on small business. (2) The working group on small business shall-- (A) ensure that programs administered by the Small Business Administration are coordinated with Federal Government activities that support economic diversification of defense- dependent communities and commercial diversification of defense-dependent businesses; (B) issue an annual guide to Small Business Administration programs available for providing small business concerns that are defense businesses with assistance on diversifying into nondefense business activities and new small business concerns with assistance on commencing nondefense commercial operations in defense-dependent regions of the United States; and (C) issue an annual report containing-- (i) a discussion of the effectiveness of the programs referred to in subparagraphs (A) and (B) in meeting the needs of the businesses referred to in such subparagraphs; and (ii) recommendations for improving such programs. (e) Working Group on Job Training.--(1) The Secretary of Labor shall be the chairman of the working group on job training. (2) The working group on job training shall-- (A) coordinate job training programs for workers who are displaced as a result of the spending reductions referred to in section 102(a)(1); (B) issue an annual guide to Federal Government job training and unemployment programs that are available to workers displaced as a result of such spending reductions; and (C) provide such workers with assistance in applying for Federal Government assistance under those programs that are administered by the Department of Labor. SEC. 105. ADVISORY COMMITTEE. (a) In General.--There shall be an advisory committee for the Council. (b) Composition.--The advisory committee shall consist of three representatives of industry in the defense industrial base of the United States, six representatives of labor unions, and three members not from industry in the defense industrial base of the United States or from labor unions. The members shall be appointed by the President for such terms as the President determines appropriate. (c) Ex Officio Membership of Council Working Groups.--The advisory committee members shall be members without vote of the Council and of the working groups referred to in section 103 and shall provide advice to the Council and to those working groups. (d) Inapplicability of Termination Provision in the Federal Advisory Committee Act.--Section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the advisory committee established under subsection (a). SEC. 106. COUNCIL PERSONNEL MATTERS. (a) Staff.--The Chairman of the Council may appoint a staff director and such other additional personnel as may be necessary to enable the Council to perform its duties. The employment of a staff director shall be subject to confirmation by the Council. (b) Detail of Government Employees.--Any Federal Government employee may be detailed to the Council or a working group of the Council without reimbursement to the department or agency from which the employee is detailed. (c) Procurement of Temporary and Intermittent Services.--The Chairman of the Council may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for Executive Level V of the Executive Schedule under section 5316 of such title. (d) Advisory Committee.--(1) Each member of the advisory committee established under section 105 who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for Executive Level V of the Executive Schedule under section 5316 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Council or a working group of the Council. All members of the advisory committee who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States. (2) The members of the advisory committee shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Council. (3) A member of the advisory committee who is not otherwise employed by the Federal Government shall not be considered to be a Federal employee except for the purposes of-- (A) chapter 81 of title 5, United States Code, relating to compensation for work-related injuries; and (B) chapter 171 of title 28, United States Code, relating to torts claims. TITLE II--GRANT ASSISTANCE FOR ALTERNATIVE USE COMMITTEES SEC. 201. GRANT AUTHORITY. The Presidential Council on Economic Diversification and Adjustment may make a grant to any eligible alternative use committee at a facility of a defense business for a purpose described in section 203. SEC. 202. ELIGIBLE ALTERNATIVE USE COMMITTEES. (a) Alternative Use Committee Defined.--For the purposes of this title, an alternative use committee at a defense business is any committee established at a facility of a defense business for the purpose of planning for the diversification of that facility into nondefense commercial activities. (b) Grant Eligibility.--An alternative use committee at a facility of a defense business is eligible for a grant under this title if, as determined by the Secretary of Commerce, the committee is composed of-- (1) three representatives of the management of that facility; (2) three representatives of employees of that facility; (3) three representatives of local government in the area in which the facility is located; and (4) three representatives of nongovernmental leaders in the community in which the facility is located. SEC. 203. GRANT PURPOSES. A grant may be made to an eligible alternative use committee at a facility of a defense business for any of the following purposes: (1) To provide for a marketing expert to determine the potential market needs in the region of the facility that provide diversification and conversion opportunities for that facility. (2) To provide a suitable office or offices for such committee. (3) To provide for one or more experts in relevant technologies to determine the feasibility of various diversification and conversion alternatives for that facility. SEC. 204. GRANT AMOUNT AND PERIOD. (a) Maximum Amount.--A grant to an alternative use committee at a facility of a defense business for the conduct of any activity referred to in section 203 may not exceed the lesser of one-third of the cost incurred for such activity during the period covered by the grant or $50,000. (b) Period.--A grant may be made to a recipient for one year. Second and subsequent grants may be made for one year each. SEC. 205. GRANT APPLICATION. The application of an alternative use committee for a grant under this title shall contain the following information: (1) The composition of the committee. (2) A detailed proposal for the use of the grant proceeds, including-- (A) the cost of the activity or activities referred to in section 203 that are proposed to be carried out by the applicant; and (B) in the case of a proposal for funding activities referred to in paragraph (1) or (3) of that section, the potential market needs or diversification and conversion alternatives, as the case may be, to be studied and the methodology to be used in conducting the study. (3) Such other information as the Secretary of Commerce may prescribe. SEC. 206. REGULATIONS. The Secretary of Commerce, in consultation with the Presidential Council on Economic Diversification and Adjustment, may prescribe regulations for the administration of this title. TITLE III--DISPLACED WORKERS SEC. 301. DEFENSE CONVERSION ADJUSTMENT PROGRAM. Section 325 of the Job Training Partnership Act (29 U.S.C. 1662d) is amended by inserting ``and the sums made available under section 801 of the Defense Savings Investment Act of 1991'' after ``Act of 1990''. SEC. 302. FUNDING MATTERS. (a) Transfer Authority.--The Council may transfer funds under section 801(b) of this Act to the Department of Labor for the purpose of providing assistance under section 325 of the Job Training Partnership Act (29 U.S.C. 1662d) to eligible employees, as defined in such section. (b) Obligation of Transferred Funds.--Of the amount transferred pursuant to subsection (a) for any fiscal year-- (1) at least 50 percent shall be obligated not later than February 1 of that fiscal year; and (2) at least 90 percent shall be obligated not later than August 1 of that fiscal year. TITLE IV--EXPORT OPPORTUNITIES SEC. 401. ANNUAL REPORT OF THE EXPORT-IMPORT BANK. Section 9(d)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635g(d)(1)) is amended-- (1) by striking out ``and'' at the end of subparagraph (D); (2) by striking out the period at the end of subparagraph (E) and inserting in lieu thereof ``; and''; and (3) by adding at the end the following: ``(F) to support the commercial diversification of industries that are dependent to a significant extent on Federal Government spending under the national defense budget function.''. SEC. 402. GUARANTEES FOR COMMERCIAL DEFENSE EXPORTS. Section 24 of the Arms Export Control Act is amended by adding the following new subsection: ``(d)(1) In order to enhance the ability of United States exporters to compete on an equal footing with exporters of other countries, the President may extend guarantees under the authority of this subsection in connection with the commercial sale of defense articles and services to NATO countries, Japan, Australia, New Zealand, and Israel. The aggregate amount guaranteed under this subsection in any fiscal year may not exceed $1,000,000,000. ``(2) In extending medium- and long-term guarantees for commercial sales pursuant to paragraph (1), the President shall not offer terms and conditions more beneficial than would be provided by the Export- Import Bank of the United States under similar circumstances in conjunction with the provision of guarantees for nondefense articles and services. ``(3) Section 653 of the Foreign Assistance Act of 1961 shall not apply to funds appropriated to carry out this subsection. In addition, section 634A of that Act and any similar provision of law shall apply to the obligation of funds to carry out this subsection only with respect to guarantees, in particular cases of amounts exceeding $20,000,000. ``(4) There are authorized to be appropriated for each of fiscal years 1992 and 1993, $63,500,000 for the subsidy cost of the guarantees authorized under this subsection. ``(5) The authorities of this subsection may be exercised only to such extent and in such amounts as provided for in advance in appropriations Acts. ``(6) Applications for guarantees issued under this subsection shall be submitted to the Secretary of State, who is authorized to make such arrangements as necessary with other agencies, including with the Export-Import Bank of the United States, to process these applications and otherwise to implement this subsection. ``(7)(A) A fee shall be charged for each guarantee issued under this subsection. ``(B) All fees collected in connection with guarantees under this subsection shall be available to offset the cost of guarantee obligations under this subsection. ``(C) All of the fees referred to in this paragraph, together with earnings on those fees and other income arising from guarantee operations under this subsection, shall be held in a financing account maintained in the Treasury of the United States. All funds in such account may be invested in obligations of the United States. Any interest or other receipts derived from such investments shall be credited to such account and may be used for the purposes specified in subparagraph (B).''. TITLE V--DEFENSE PRODUCTION ACT SEC. 501. LOAN GUARANTEES. Section 301 of the Defense Production Act of 1950 (50 U.S.C. App. 2091) is amended by adding at the end the following new subsection: ``(f)(1) The President may also authorize any department or agency of the Federal Government referred to in subsection (a)(1) to guarantee in whole or in part any public or private financing institution (including any Federal Reserve bank) against loss of principal or interest on any loan, discount or advance, or on any commitment in connection therewith, which may be made by such financing institution for the purpose of financing the conversion of businesses referred to in paragraph (2) from the production of goods primarily for national defense-related purposes to the production of goods for other commercial purposes. A guaranteeing agency may provide a guaranty authorized under this paragraph by commitment to purchase, agreement to share losses, or otherwise. ``(2) The President may provide guaranty authority under paragraph (1) only with respect to financing for businesses critical to the defense industrial base of the United States that are likely to be closed as a result of projected reductions in Federal Government spending under the national security budget function. ``(3) A guaranteeing agency may exercise authority provided by the President under paragraph (1) without regard to provisions of law relating to the making, performance, amendment, or modification of contracts. ``(4) A small business concern (as defined in accordance with section 3 of the Small Business Act) may not be held ineligible for the issuance of a guaranty under paragraph (1) by reason of alternative sources of supply. ``(5) Subsections (a)(3) and (e) do not apply to the authority provided under paragraph (1).''. SEC. 502. DIRECT LOANS. Section 302 of the Defense Production Act of 1950 (50 U.S.C. App. 2092) is amended by adding at the end the following new subsection: ``(d)(1) The President may make loans (including participations in, or guarantees of, loans) to businesses referred to in paragraph (2) in order to finance, in whole or in part, the conversion of such businesses from the production of goods primarily for national defense- related purposes to the production of goods for other commercial purposes. ``(2) The President may provide for loans under paragraph (1) only for businesses critical to the defense industrial base of the United States that are likely to be closed as a result of projected reductions in Federal Government spending under the national security budget function. ``(3) Subsections (b) and (c) do not apply to the authority provided under paragraph (1).''. SEC. 503. JOINT VENTURES. Title III of the Defense Production Act of 1950 (50 U.S.C. 2091 et seq.) is amended by adding at the end the following: ``SEC. 310. JOINT VENTURES. ``(a) In General.--The President is authorized to enter into a joint venture to carry out the purposes of-- ``(1) section 301(f); or ``(2) section 302(d); and to authorize guarantees and make loans as authorized by either such section to assist such a joint venture. ``(b) Limitation.--The total investment or other participation by the United States in any joint venture under this section may not exceed 40 percent of the total investment by all parties to the joint venture. ``(c) Regulations.--The Secretary of Defense may issue such regulations as may be necessary to carry out this section.''. SEC. 504. EFFECTIVE DATE. The amendments made by sections 501, 502, and 503 shall take effect on October 1, 1992. TITLE VI--SMALL BUSINESS SEC. 601. SMALL BUSINESS DEVELOPMENT CENTERS. The Administrator of the Small Business Administration shall take such actions as may be necessary to increase-- (1) the number of small business development centers established under section 21 of the Small Business Act (15 U.S.C. 648) in defense-dependent regions of the United States; and (2) the assistance and services provided by the small business development centers to defense-dependent small business concerns in such regions, especially marketing assistance. SEC. 602. INCREASED ALLOCATION FOR SMALL BUSINESS INNOVATION RESEARCH PROGRAM. (a) In General.--Section 9(f)(1) of the Small Business Act (15 U.S.C. 638(f)(1)) is amended by striking out ``1.25 per centum'' each place it appears and inserting in lieu thereof ``1.75 per centum''. (b) Effective Date.--The amendment made by subsection (a) shall take effect on October 1, 1992. TITLE VII--ECONOMIC DEVELOPMENT ASSISTANCE SEC. 701. ELIGIBILITY FOR SPECIAL ECONOMIC DEVELOPMENT AND ADJUSTMENT ASSISTANCE. Communities identified pursuant to section 102(a)(2) shall be eligible to receive special economic development and adjustment assistance under title IX of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3241 et seq.). SEC. 702. FUNDING MATTERS. (a) Transfer Authority.--The Council may transfer funds under section 801(b)(4) of this Act to the Department of Commerce for the purpose of providing assistance under title IX of the Public Works and Economic Development Act of 1965 to communities referred to in section 701. (b) Obligation of Transferred Funds.--Of the amount transferred pursuant to subsection (a) for any fiscal year-- (1) at least 50 percent shall be obligated not later than February 1 of that fiscal year; and (2) at least 90 percent shall be obligated not later than August 1 of that fiscal year. TITLE VIII--DEFENSE ECONOMIC ADJUSTMENT TRUST FUND SEC. 801. ESTABLISHMENT AND USES OF FUND. (a) Establishment.--There is established on the books of the Treasury a fund to be known as the ``Defense Economic Adjustment Trust Fund'' (hereafter in this section referred to as the ``Fund''). The Fund shall be administered by the Secretary of the Treasury under the direction of the Presidential Council on Economic Diversification and Adjustment established by section 101(a). (b) Uses of Fund.--Sums in the Fund shall be available for carrying out programs, projects, and activities, as the Council may direct, under-- (1) this Act; (2) sections 301(f) and 302(d) of the Defense Production Act of 1950 (50 U.S.C. App. 2091(f) and 2092(d)), as added by sections 501 and 502; (3) section 303 of that Act (50 U.S.C. App. 2093); (4) section 310 of that Act, as added by section 503; (5) title IX of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3241 et seq.); and (6) section 325 of the Job Training Partnership Act (29 U.S.C. 1662d). (c) Source of Funds.--There is authorized to be appropriated to the Fund for each fiscal year the amount equal to 10 percent of the difference between-- (1) the amount of the budget authority necessary to support military personnel end strengths for such fiscal year at the same levels as was provided for the preceding fiscal year; and (2) the amount of the budget authority necessary to support military personnel end strengths for such fiscal year at the levels prescribed by law for such fiscal year. <all>