I

103D CONGRESS

1ST SESSION H. R. 841

To establish economic conversion programs in the Department of Defense

to assist communities, businesses, and workers adversely affected by

reductions in defense contracts and spending and closures of military

installations and to provide an additional credit against Federal unemployment tax for States with reemployment assistance programs.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 4, 1993

Mrs. KENNELLY introduced the following bill; which was referred jointly to

the Committees on Armed Services, Ways and Means, Education and

Labor, Banking, Finance and Urban Affairs, and Science, Space, and

Technology

A BILL

To establish economic conversion programs in the Department of Defense to assist communities, businesses, and

workers adversely affected by reductions in defense contracts and spending and closures of military installations

and to provide an additional credit against Federal unemployment tax for States with reemployment assistance

programs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Defense Economic Re3 investment Act of 1993’’.

4 SEC. 2. TABLE OF CONTENTS.

5 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Definitions.

TITLE I—WORKER AND MILITARY PERSONNEL ASSISTANCE

PROGRAMS

Sec. 101. Incentives for the placement of displaced defense workers, at-risk defense workers, and separated military personnel.

Sec. 102. Additional credit against Federal unemployment tax for States with

reemployment assistance program.

Sec. 103. Basic skills training and advanced skills retraining programs.

Sec. 104. Special engineer retraining program.

TITLE II—DEFENSE ECONOMIC DEVELOPMENT

Sec. 201. Defense economic development grants.

TITLE III—NATIONAL TECHNOLOGY AND INDUSTRIAL BASE

INITIATIVES

Sec. 301. Alternative technology development and application partnerships.

Sec. 302. Establishment of environmental and entrepreneurial technology centers.

Sec. 303. Manufacturing technology surveys.

Sec. 304. Loan guarantees for the conversion and diversification of defense facilities with a major defense contract or subcontract.

6 SEC. 3. DEFINITIONS.

7 For purposes of this Act:

8 (1) The term ‘‘defense dependent community’’

9 means a community which, as determined by the

10 Secretary of Defense—

11 (A) has within its administrative and polit12 ical jurisdiction a defense facility; and
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1 (B) suffers a workforce reduction, over a

2 12-month period, of 250 or more employee posi3 tions (including part-time employee positions)

4 and the loss of 10,000 or more work hours per

5 week as a result of the actual or threatened

6 curtailment, completion, elimination, or realign7 ment of a defense contract or program or the

8 realignment or closure of a defense facility.

9 (2) The term ‘‘defense dependent area’’ means

10 a defense dependent community and the area encom11 passed within a 50 mile radius of the community.

12 (3) The term ‘‘displaced defense worker’’ means

13 an employee, including a civilian employee of the De14 partment of Defense, who has been terminated or

15 laid off, or has received a notice of termination or

16 lay off, as a consequence of reductions in expendi17 tures by the United States for defense or the closure

18 of a defense facility, as determined in accordance

19 with regulations issued by the Secretary of Defense.

20 (4) The term ‘‘at-risk defense worker’’ means

21 an employee of a defense facility at which other em22 ployees have been terminated or laid off, or received

23 a notice of termination or lay off, as a consequence

24 of reductions in expenditures by the United States

25 for defense or the closure of the facility.
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1 (5) The term ‘‘separated member’’ means a

2 member of the Armed Forces who is involuntarily

3 separated from active duty, as defined in section

4 1141 of title 10, United States Code, accepts dis5 charge or release from active duty under section

6 1174a or 1175 of that title, or is given early retire7 ment under section 4403 the National Defense Au8 thorization Act for Fiscal Year 1993 (10 U.S.C.

9 1293 note).

10 (6) The term ‘‘defense facility’’ means—

11 (A) a private or government facility pro12 ducing goods or services for the Department of

13 Defense pursuant to a defense contract or sub14 contract; or

15 (B) a military installation.

16 (7) The term ‘‘Secretary’’ means the Secretary

17 of Defense.
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1 TITLE I—WORKER AND MILI2 TARY PERSONNEL ASSIST3 ANCE PROGRAMS

4 SEC. 101. INCENTIVES FOR THE PLACEMENT OF DIS5 PLACED DEFENSE WORKERS, AT-RISK DE6 FENSE WORKERS, AND SEPARATED MILITARY

7 PERSONNEL.

8 (a) PLACEMENT PROGRAM.—The Secretary of De9 fense shall establish a program to assist displaced defense

10 workers, at-risk defense workers, and separated members

11 of the Armed Forces to obtain reemployment in defense

12 dependent areas.

13 (b) AGREEMENTS WITH EMPLOYERS.—The Sec14 retary shall enter into agreements with public or private

15 employers that agree to extend employment positions to

16 displaced defense workers, at-risk defense workers, and

17 separated members.

18 (c) CONTENTS OF AGREEMENT.—An agreement be19 tween the Secretary and an employer under subsection (b)

20 shall include the following terms and conditions:

21 (1) The Secretary shall agree to pay 25 percent

22 of the first-years wages (not to exceed a total of

23 $5,000 per employee) paid to each displaced defense

24 worker, at-risk defense worker, or separated member
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1 employed by the employer during the term of the

2 agreement.

3 (2) The employer shall agree—

4 (A) to hire a specified number of displaced

5 defense workers, at-risk defense workers, and

6 separated members during the term of the

7 agreement for a period of employment of at

8 least 180 days at the same wage provided to

9 similarly situated employees of the employer;

10 and

11 (B) to place the displaced defense workers,

12 at-risk defense workers, and separated members

13 in employment positions located in a defense

14 dependent area or to relocate the workers and

15 members outside a defense dependent area.

16 (d) REPAYMENT REQUIREMENTS.—If an employer

17 terminates the employment of a displaced defense worker,

18 at-risk defense worker, or separated member employed

19 pursuant to an agreement under this section before the

20 date specified in subsection (c) (unless such termination

21 is for cause), the employer shall reimburse the Secretary

22 for the amount provided with respect to the worker or

23 member.
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1 (e) CERTAIN AGREEMENTS PROHIBITED.—The Sec2 retary may not make a payment under this subsection to

3 an employer if the Secretary determines that—

4 (1) the employer terminated the employment of

5 employee, or failed to rehire a laid off employee, in

6 order to fill the vacancy with a displaced defense

7 worker, at-risk defense worker, or separated mem8 ber;

9 (2) rehires the same worker or member more

10 than once in order to qualify for additional assist11 ance with respect to the worker or member.

12 (f) SPECIAL PROGRAM FOR CERTAIN DEFENSE CON13 TRACTORS.—(1) In the case of a defense facility that has

14 begun or announced the termination or lay off of employ15 ees before the date of the enactment of this Act as a result

16 of the actual or threatened curtailment, completion, elimi17 nation, or realignment of a defense contract or program,

18 the Secretary may implement an incentive program under

19 this subsection to assist the facility to rehire the termi20 nated or laid off employees and prevent additional termi21 nations or lay offs.

22 (2) Under the program, the Secretary shall agree to

23 pay 12.5 percent of the next-year wages (not to exceed

24 a total of $2,500 per employee) paid to each employee of

25 the facility who is rehired or whose employment would oth-
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1 erwise be ended in the absence of the assistance, as deter2 mined by the Secretary.

3 (3) In exchange for assistance under this subsection,

4 the defense facility shall agree to pay the premium for any

5 continuation coverage for health care elected by an em6 ployee for whom assistance is provided if the employee

7 subsequently becomes qualified for such continuation cov8 erage.

9 (g) AUTHORIZATION OF APPROPRIATIONS.—There is

10 authorized to be appropriated to the Secretary

11 $1,400,000,000 for fiscal year 1994 to carry out this sec12 tion. Funds appropriated pursuant to this subsection shall

13 be available until expended.

14 SEC. 102. ADDITIONAL CREDIT AGAINST FEDERAL UNEM15 PLOYMENT TAX FOR STATES WITH REEM16 PLOYMENT ASSISTANCE PROGRAM.

17 (a) CREDIT AUTHORIZED.—

18 (1) IN GENERAL.—Chapter 23 of the Internal

19 Revenue Code of 1986 (relating to Federal unem20 ployment tax) is amended by inserting after section

21 3302 the following new section:

22 ‘‘SEC. 3302A. ADDITIONAL CREDIT FOR STATES WITH REEM23 PLOYMENT ASSISTANCE PROGRAMS.

24 ‘‘(a) ALLOWANCE OF CREDIT.—
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1 ‘‘(1) IN GENERAL.—The taxpayer may, to the

2 extent provided in this subsection and subsection

3 (b), credit against the tax imposed by section

4 3301(a)(2) the amount of contributions paid by him

5 into a reemployment assistance fund maintained

6 during the taxable year under a State law certified

7 by the Secretary of Labor as provided in this section

8 for the 12-month period ending on October 31 of

9 such year.

10 ‘‘(2) CERTAIN RULES MADE APPLICABLE.—

11 Rules similar to the rules of paragraph (2), (3), (4),

12 and (5) of section 3302(a) shall apply for purposes

13 of this subsection.

14 ‘‘(b) LIMITATION ON TOTAL CREDITS.—The total

15 credits allowed to a taxpayer under this section shall not

16 exceed 12 percent of the tax against which such credits

17 are allowable.

18 ‘‘(c) APPROVAL OF STATE LAWS.—The Secretary of

19 Labor shall approve any State law submitted to him, with20 in 30 days of such submission, if the Secretary finds

21 that—

22 ‘‘(1) such law establishes a program under

23 which reemployment assistance is to be provided to

24 eligible workers,
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1 ‘‘(2) such program is to be funded by requiring

2 additional contributions from employers subject to

3 the State unemployment compensation law, and

4 ‘‘(3) such additional contributions shall be de5 posited in a special fund established under such

6 State law which is to be used solely for purposes of

7 providing reemployment assistance to eligible work8 ers.

9 ‘‘(d) DEFINITIONS.—For purposes of this section—

10 ‘‘(1) REEMPLOYMENT ASSISTANCE.—The term

11 ‘reemployment assistance’ means any of the follow12 ing—

13 ‘‘(A) counseling and testing services,

14 ‘‘(B) intensive job search assistance,

15 ‘‘(C) job search vouchers,

16 ‘‘(D) retraining assistance,

17 ‘‘(E) retraining vouchers,

18 ‘‘(F) job search and relocation allowances,

19 ‘‘(G) self-employment assistance, and

20 ‘‘(H) cash allowances to individuals while

21 participating in training.

22 ‘‘(2) ELIGIBLE WORKER.—The term ‘eligible

23 worker’ means any individual receiving compensation

24 under the State law during any benefit year—
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1 ‘‘(A) if such individual has received com2 pensation during such benefit year for at least

3 4 consecutive weeks, and

4 ‘‘(B) if, during the 3-year period ending on

5 the last day for the base period for such benefit

6 year, such individual had at least 126 weeks of

7 employment, at wages of $30 or more a week

8 with such individual’s last employer in such

9 base period (or, if data with respect to weeks of

10 employment with such last employer are not

11 available, an equivalent amount of employment

12 computed under regulations prescribed by the

13 Secretary).

14 ‘‘(3) REEMPLOYMENT ASSISTANCE FUND.—The

15 term ‘reemployment assistance fund’ means the spe16 cial fund referred to in subsection (c)(3).

17 ‘‘(4) CONTRIBUTIONS.—The term ‘contribu18 tions’ has the meaning given such term by section

19 3306(g); except that the reference to an unemploy20 ment fund shall be treated as a reference to a reem21 ployment assistance fund.

22 ‘‘(e) CERTIFICATION PROCEDURES MADE APPLICA23 BLE.—The Secretary of Labor shall make certifications of

24 State laws under this section under rules similar to the

25 rules applicable under section 3304. The provisions of sec-
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1 tion 3310 shall apply to any failure to make a certification

2 under this section.’’.

3 (2) CLERICAL AMENDMENT.—The table of sec4 tions for chapter 23 of such Code is amended by in5 serting after the item relating to section 3302 the

6 following new item:

‘‘Sec. 3302A. Additional credit for States with reemployment assistance programs.’’.

7 (3) EFFECTIVE DATE.—The amendments made

8 by this subsection shall apply to calendar years after

9 1993.

10 (b) MODIFICATIONS TO FEDERAL UNEMPLOYMENT

11 TAX.—

12 (1) MODIFICATION.—Section 3301 of the Inter13 nal Revenue Code of 1986 (relating to rate of Fed14 eral unemployment tax) is amended to read as fol15 lows:

16 ‘‘SEC. 3301. RATE OF TAX.

17 ‘‘(a) GENERAL RULE.—There is hereby imposed on

18 every employer (as defined in section 3306(a)) for each

19 calendar year an excise tax, with respect to having individ20 uals in his employ, equal to the sum of—

21 ‘‘(1) 5.4 percent of the total wages (as defined

22 in section 3306(b)) paid by him during the calendar

23 year with respect to employment (as defined in sec24 tion 3306(c)), and
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1 ‘‘(2) 0.25 percent of the total Federal taxable

2 wages paid by him during the calendar year with re3 spect to employment (as so defined).

4 ‘‘(b) FEDERAL TAXABLE WAGES.—

5 ‘‘(1) IN GENERAL.—For purposes of subsection

6 (a), the term ‘Federal taxable wages’ means wages

7 as defined in section 3306(b), except that the aver8 age covered wage for the calendar year shall be sub9 stituted for ‘$7,000’ each place it appears in para10 graph (1) of section 3306(b).

11 ‘‘(2) AVERAGE COVERED WAGE.—For purposes

12 of paragraph (1), the term ‘average covered wage’

13 means, with respect to any calendar year, the aver14 age annual wage in employment covered under State

15 unemployment compensation laws for the most re16 cent calendar year for which data are available be17 fore the beginning of the calendar year involved. De18 terminations under the preceding sentence shall be

19 made by the Secretary of Labor.

20 ‘‘(c) TRANSITION RULE.—Paragraph (2) of sub21 section (a) shall be applied with respect to any calendar

22 year after 1993 and before 1997 by substituting ‘0.3 per23 cent’ for ‘0.25 percent’.’’.
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1 (2) CONFORMING AMENDMENTS.—(A) Para2 graph (1) of section 3302(c) of such Code is amend3 ed to read as follows:

4 ‘‘(1) No credit shall be allowed under this sec5 tion against the tax imposed by section 3301(a)(2),

6 and the total credits allowed to a taxpayer under

7 this section shall not exceed 100 percent of the tax

8 against which such credits are allowable.’’.

9 (B) Subparagraph (A) of section 3302(c)(2) of

10 such Code is amended—

11 (i) by striking ‘‘5 percent of the tax im12 posed by section 3301 with respect to the

13 wages’’ in clause (i) and inserting ‘‘0.3 percent

14 of the wages’’; and

15 (ii) by striking ‘‘an additional 5 percent,

16 for each succeeding taxable year, of the tax im17 posed by section 3301 with respect to the

18 wages’’ in clause (ii) and by inserting ‘‘an addi19 tional 0.3 percent, for each succeeding taxable

20 year, of the wages’’.

21 (C) Paragraph (3) of section 3302(c) of such

Code is amended by striking ‘‘71 22 ⁄2 percent of the tax

23 imposed with respect to the wages’’ and inserting

24 ‘‘0.45 percent of the wages’’.
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1 (D) Subsection (d) of section 3302 of such

2 Code is amended by striking paragraph (1) and by

3 redesignating the following paragraphs accordingly.

4 (3) INSTALLMENT PAYMENT PROVISIONS.—

5 Subsection (b) of section 6157 of such Code is

6 amended to read as follows:

7 ‘‘(b) COMPUTATION OF TAX.—The tax for any cal8 endar quarter or other period referred to in paragraph (1)

9 or (2) of subsection (a) shall be determined without regard

10 to paragraph (1) of section 3301(a) and by reducing the

11 amount of the tax under paragraph (2) of section 3301(a)

12 by the maximum credit allowable under section 3302A.’’.

13 (4) EFFECTIVE DATE.—The amendments made

14 by this subsection shall apply to remuneration paid

15 after December 31, 1993.

16 SEC. 103. BASIC SKILLS TRAINING AND ADVANCED SKILLS

17 RETRAINING PROGRAMS.

18 (a) SUPPORT OF PARTNERSHIPS.—The Secretary of

19 Defense shall conduct a program to establish cooperative

20 arrangements (hereinafter in this section referred to as

21 ‘‘partnerships’’) between the Department of Defense and

22 entities described in subsection (c) that the Secretary de23 termines have a demonstrable ability to—

24 (1) identify the skills needed by displaced de25 fense workers and at-risk defense workers to secure
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1 employment in other defense-related fields and

2 nondefense fields;

3 (2) develop training programs for, and provide

4 basic and advanced training to, displaced defense

5 workers and at-risk defense workers in these skills;

6 and

7 (3) assist displaced defense workers and at-risk

8 defense workers who successfully complete such

9 training to secure new employment.

10 (b) TYPES AND AMOUNT OF ASSISTANCE.—The Sec11 retary of Defense may make grants, enter into contracts,

12 or enter into cooperative agreements and other trans13 actions pursuant to section 2371 of title 10, United States

14 Code, in order to establish and assist the partnerships.

15 The Secretary shall ensure that, to the maximum extent

16 practicable, the amount of the funds provided by the Fed17 eral Government under a partnership does not exceed the

18 total amount provided by non-Federal Government partici19 pants in that partnership.

20 (c) ELIGIBLE PARTICIPANTS.—The principal partici21 pant in a partnership shall be an institution of higher edu22 cation with a campus located in or within 20 miles of a

23 defense dependent area or a regional economic develop24 ment alliance operating in a defense dependent area.

25 Other participants cooperating in a partnership may in-
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1 clude a Federal laboratory or laboratories, Government2 owned and operated industrial facilities, defense contrac3 tors, other institutions of higher education, nonprofit or4 ganizations, and agencies of State governments. Those

5 partnerships that demonstrate multi-disciplinary ap6 proaches to training and regional collaboration of local ef7 forts to deliver comprehensive services to displaced defense

8 workers and at-risk defense workers shall be given priority

9 in receiving assistance.

10 (d) TYPES OF TRAINING.—Basic skills training pro11 vided to displaced defense workers and at-risk defense

12 workers by a partnership receiving assistance under this

13 section may include reentry student programs on studying

14 and computer skills to prepare workers for higher edu15 cation courses and part time and weekend associate and

16 baccalaureate degree programs specially developed for dis17 placed defense workers and at-risk defense workers. Ad18 vanced skills training should be targeted at projected em19 ployment growth areas, such as environmental engineer20 ing, biotechnology and marine biotechnology, and ad21 vanced materials.

22 (e) LOCATION OF TRAINING.—A partnership receiv23 ing assistance under this section must be able to provide

24 training both at defense facilities and at other sites located

25 within a defense dependent area.
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1 (f) SELECTION OF WORKERS.—The application sub2 mitted to the Secretary of Defense by a proposed partner3 ship shall include information on the method by which dis4 placed defense workers and at-risk defense workers will

5 be selected to participate in training provided by the part6 nership. A worker selected to receive advanced training

7 may not be charged for such training.

8 (g) AUTHORIZATION OF APPROPRIATIONS.—There is

9 authorized to be appropriated to the Secretary of Defense

10 $400,000,000 for fiscal year 1994 to carry out this sec11 tion. Funds appropriated pursuant to this subsection shall

12 be available until expended.

13 SEC. 104. ENGINEER RETRAINING PROGRAM.

14 (a) ESTABLISHMENT OF PROGRAM.—(1) The Sec15 retary of Defense shall establish a program under which

16 the Secretary makes grants to eligible entities—

17 (A) to provide retraining services to individuals

18 described in paragraph (2) for the purpose of ena19 bling such individuals to obtain employment in the

20 field of environmental engineering; and

21 (B) to provide fellowship assistance to such in22 dividuals while they are receiving retraining de23 scribed in subparagraph (A).

24 (2) The individuals referred to in paragraph (1) are

25 individuals—
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1 (A) who are displaced defense workers, at-risk

2 defense workers, or separated members of the

3 Armed Forces; and

4 (B) who have experience in the field of engi5 neering.

6 (b) ELIGIBLE ENTITIES.—A grant under this section

7 may be made only to a Tier I Public Research University

8 with facilities located within a defense dependent area.

9 (c) SELECTION CRITERIA.—The Secretary of Defense

10 may select a proposal submitted by a Tier I Public Re11 search University for a grant under this section if the pro12 posal—

13 (1) provides for the establishment of a program

14 to provide training in the field of environmental en15 gineering for individuals described in subsection (a);

16 (2) establishes a competitive fellowship assist17 ance program under which the eligible entity shall

18 award fellowships to 20 such individuals who are

19 participating in the retraining program;

20 (3) gives preference for participation in the pro21 gram to such individuals who are more than 45

22 years of age without regard to whether such individ23 uals have obtained a college degree, or its equiva24 lency, in the field of engineering; and
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1 (4) satisfies such other criteria as the Secretary

2 considers to be appropriate.

3 (d) SELECTION BY SECRETARY.—Applications for

4 grants under this section shall be evaluated and selected

5 on the basis of merit pursuant to competitive procedures

6 prescribed by the Secretary of Defense.

7 (e) LIMITATION.—Not more than $2,000,000 of the

8 total amounts awarded to a Tier I Public Research Uni9 versity in grants under this section may be used by the

10 entity for start-up costs associated with establishing the

11 retraining program, including any costs associated with

12 the construction or renovation of physical facilities.

13 (f) ELIGIBILITY FOR OTHER ASSISTANCE.—This sec14 tion may not be construed to preclude the eligibility of

15 individuals described in subsection (a) from participation

16 in any other assistance program established in this title.

17 (g) DEFINITION.—For purposes of this section, the

18 term ‘‘Tier I Public Research University’’ means an insti19 tution of higher education that the Secretary of Defense

20 determines—

21 (1) offers a full range of baccalaureate pro22 grams;

23 (2) is committed to graduate education through

24 a doctorate degree program that awards at least 50

25 advanced degrees a year;
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1 (3) gives a high priority to research; and

2 (4) receives at least $33,500,000 a year in Fed3 eral funding.

4 (h) AUTHORIZATION OF APPROPRIATIONS.—There is

5 authorized to be appropriated to the Secretary of Defense

6 $100,000,000 for fiscal year 1994 to carry out this sec7 tion. Funds appropriated pursuant to this subsection shall

8 be available until expended.

9 TITLE II—DEFENSE ECONOMIC

10 DEVELOPMENT

11 SEC. 201. DEFENSE ECONOMIC DEVELOPMENT GRANTS.

12 (a) GRANTS AUTHORIZED.—The Secretary of De13 fense shall make grants to communities, including defense

14 dependent communities, located in defense dependent

15 areas to assist these communities in the economic transi16 tion necessary as a result of reductions in expenditures

17 by the United States for defense or the closure of defense

18 facilities.

19 (b) PREFERENCE GIVEN TO CERTAIN COMMU20 NITIES.—In reviewing applications for grants under sub21 section (a), the Secretary shall give preference to applica22 tions from communities—

23 (1) that submit as part of the application a

24 comprehensive plan for the economic redevelopment

25 and conversion of the community from dependence
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1 on defense-based activities to nondefense-related ac2 tivities;

3 (2) that propose to use the grant funds to cre4 ate export-related or manufacturing jobs; and

5 (3) that the largest number of displaced defense

6 workers as a percentage of all workers residing or

7 employed in the community.

8 (c) CERTAIN PREFERENCES PROHIBITED.—In mak9 ing grants under this section, the Secretary may not give

10 a preference to a community adversely affected by the clo11 sure of the military installation over a similarly situated

12 community that has suffered economic distress as a result

13 of the curtailment, completion, elimination, or realignment

14 of a defense contract.

15 (d) ANTI-ROBBERY RULE.—The Secretary of De16 fense shall take such steps as may be necessary to ensure

17 that a community receiving a grant under this section does

18 not use such grant to assist in the relocation of an existing

19 business, or existing employment positions with that busi20 ness, to that community from another community

21 (e) USE OF FUNDS.—A community receiving a grant

22 under this section may use the grant funds for the follow23 ing activities:
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1 (1) The acquisition of real property (including

2 air rights, water rights, and other interests therein)

3 which is—

4 (A) blighted, deteriorated, deteriorating,

5 undeveloped, or inappropriately developed from

6 the standpoint of sound community develop7 ment and growth;

8 (B) appropriate for rehabilitation or con9 servation activities;

10 (C) appropriate for the preservation or res11 toration of historic sites, the beautification of

12 urban land, the conservation of open spaces,

13 natural resources, and scenic areas, the provi14 sion of recreational opportunities, or the guid15 ance of urban development;

16 (D) to be used for the provision of public

17 works, facilities, and improvements eligible for

18 assistance under this title; or

19 (E) to be used for other public purposes.

20 (2) The acquisition, construction, reconstruc21 tion, or installation (including design features and

22 improvements with respect to such construction, re23 construction, or installation that promote energy ef24 ficiency) of public works, facilities (except for build-
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1 ings for the general conduct of government), and

2 site or other improvements.

3 (3) Code enforcement in deteriorated or deterio4 rating areas in which such enforcement, together

5 with public improvements and services to be pro6 vided, may be expected to arrest the decline of the

7 area.

8 (4) Clearance, demolition, removal, and reha9 bilitation (including rehabilitation which promotes

10 energy efficiency) of buildings and improvements

11 (including interim assistance, and financing public

12 or private acquisition of privately owned properties

13 for rehabilitation and the rehabilitation of such

14 properties, and including the renovation of closed

15 school buildings).

16 (5) Special projects directed to the removal of

17 material and architectural barriers which restrict the

18 mobility and accessibility of elderly and handicapped

19 persons.

20 (6) Payments to housing owners for losses of

21 rental income incurred in holding for temporary pe22 riods housing units to be utilized for the relocation

23 of individuals and families displaced by activities

24 conducted these using grant funds.
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1 (7) Disposition (through sale, lease, donation,

2 or otherwise) of any real property acquired using

3 grant funds or its retention for public purposes.

4 (8) Provision of public services, including those

5 concerned with employment, crime prevention, child

6 care, health, drug abuse, education, energy conserva7 tion, welfare or recreation needs, if such services

8 have not been provided by the unit of general local

9 government (through funds raised by such unit, or

10 received by such unit from the State in which it is

11 located) during any part of the twelve-month period

12 immediately preceding the date of the grant under

13 this section. However, not more that 15 percent of

14 the amount of the grant may be used for activities

15 under this paragraph.

16 (9) Payment of the non-Federal share required

17 in connection with a Federal grant-in-aid program

18 undertaken as part of the activities authorized under

19 this subsection.

20 (10) Payment of the cost of completing a

21 project funded under title I of the Housing and

22 Community Development Act of 1974.

23 (11) Relocation payments and assistance for

24 displaced individuals, families, businesses, organiza-
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1 tions, and farm operations, when determined by the

2 grantee to be appropriate.

3 (12) Activities necessary to develop a com4 prehensive community development plan and to de5 velop a policy-planning-management capacity so that

6 the recipient of assistance under this section may

7 more rationally and effectively—

8 (A) determine its needs;

9 (B) set long-term goals and short-term ob10 jectives;

11 (C) devise programs and activities to meet

12 these goals and objectives;

13 (D) evaluate the progress of such pro14 grams in accomplishing these goals and objec15 tives; and

16 (E) carry out management, coordination,

17 and monitoring of activities necessary for effec18 tive planning implementation.

19 (13) Payment of reasonable administrative

20 costs and carrying charges related to the planning

21 and execution of community development and hous22 ing activities, including the provision of information

23 and resources to residents of areas in which commu24 nity development and housing activities are to be
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1 concentrated with respect to the planning and execu2 tion of such activities.

3 (14) Activities which are carried out by public

4 or private nonprofit entities, including—

5 (A) acquisition of real property;

6 (B) acquisition, construction, reconstruc7 tion, rehabilitation, or installation of (i) public

8 facilities (except for buildings for the general

9 conduct of government), site improvements, and

10 utilities, and (ii) commercial or industrial build11 ings or structures and other commercial or in12 dustrial real property improvements; and

13 (C) planning.

14 (15) Assistance to neighborhood-based non15 profit organizations, local development corporations,

16 or entities organized under section 301(d) of the

17 Small Business Investment Act of 1958 to carry out

18 a neighborhood revitalization or community eco19 nomic development or energy conservative project,

20 and assistance to neighborhood-based nonprofit or21 ganizations, or other private or public nonprofit or22 ganizations, for the purpose of assisting, as part of

23 neighborhood revitalization or other community de24 velopment, the development of shared housing oppor25 tunities (other than by construction of new facilities)
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1 in which elderly families (as defined in section

2 3(b)(3) of the United States Housing Act of 1937)

3 benefit as a result of living in a dwelling in which

4 the facilities are shared with others in a manner

5 that effectively and efficiently meets the housing

6 needs of the residents and thereby reduces their cost

7 of housing.

8 (16) Activities necessary to the development of

9 energy use strategies related to a recipient’s develop10 ment goals, to assure that those goals are achieved

11 with maximum energy efficiency, including items

12 such as—

13 (A) an analysis of the manner in, and the

14 extent to, which energy conservation objectives

15 will be integrated into local government oper16 ations, purchasing and service delivery, capital

17 improvements, budgeting, waste management,

18 district heating and cooling, land use planning

19 and zoning, and traffic control, parking, and

20 public transportation functions; and

21 (B) a statement of the actions the recipi22 ent will take to foster energy conservation and

23 the use of renewable energy resources in the

24 private sector, including the enactment and en25 forcement of local codes and ordinances to en-
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1 courage or mandate energy conservation or use

2 of renewable energy resources, financial and

3 other assistance to be provided (principally for

4 the benefit of low- and moderate-income per5 sons) to make energy conserving improvements

6 to residential structures and any other proposed

7 energy conservation activities.

8 (17) Provision of assistance to private, for-prof9 it entities, when the assistance is appropriate to

10 carry out an economic development project (that

11 shall minimize, to the extent practicable, displace12 ment of existing businesses and jobs in neighbor13 hoods) that—

14 (A) creates or retains jobs for low- and

15 moderate-income persons;

16 (B) prevents or eliminates slums and

17 blight;

18 (C) meets urgent needs;

19 (D) creates or retains businesses owned by

20 community residents;

21 (E) assists businesses that provide goods

22 or services needed by, and affordable to, low23 and moderate-income residents; or
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1 (F) provides technical assistance to pro2 mote any of the activities under subparagraphs

3 (A) through (E).

4 (18) Rehabilitation or development of housing

5 assisted under section 17 of the United States Hous6 ing Act of 1937.

7 (19) Provision of assistance to facilitate sub8 stantial reconstruction of housing owned and occu9 pied by low and moderate income persons

10 (A) where the need for the reconstruction

11 was not determinable until after rehabilitation

12 under this section had already commenced; or

13 (B) where the reconstruction is part of a

14 neighborhood rehabilitation effort and the

15 grantee (i) determines the housing is not suit16 able for rehabilitation, and (ii) demonstrates to

17 the satisfaction of the Secretary that the cost of

18 substantial reconstruction is significantly less

19 than the cost of new construction and less than

20 the fair market value of the property after sub21 stantial reconstruction.

22 (20) Provision of direct assistance to facilitate

23 and expand homeownership among persons of low

24 and moderate income (except that such assistance
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1 shall not be considered a public service for purposes

2 of paragraph (8)) by using such assistance to—

3 (A) subsidize interest rates and mortgage

4 principal amounts for low- and moderate-in5 come homebuyers;

6 (B) finance the acquisition by low- and

7 moderate-income homebuyers of housing that is

8 occupied by the homebuyers;

9 (C) acquire guarantees for mortgage fi10 nancing obtained by low- and moderate-income

11 homebuyers from private lenders (except that

12 amounts received under this title may not be

13 used under this subparagraph to directly guar14 antee such mortgage financing and grantees

15 under this title may not directly provide such

16 guarantees);

17 (D) provide up to 50 percent of any down18 payment required from low- or moderate-income

19 homebuyers; or

20 (E) pay reasonable closing costs (normally

21 associated with the purchase of a home) in22 curred by low- or moderate-income homebuyers.

23 (f) ADMINISTRATIVE ASSISTANCE.—Upon the re24 quest of the recipient of a grant under this section, the

25 Secretary may agree to perform administrative services on
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1 a reimbursable basis on behalf of such recipient in connec2 tion with the use of the grant.

3 (g) AUTHORIZATION OF APPROPRIATIONS.—There is

4 authorized to be appropriated to the Secretary

5 $1,000,000,000 for fiscal year 1994 to carry out this sec6 tion. Funds appropriated pursuant to this subsection shall

7 be available until expended.

8 TITLE III—NATIONAL TECH9 NOLOGY AND INDUSTRIAL

10 BASE INITIATIVES

11 SEC. 301. ALTERNATIVE TECHNOLOGY DEVELOPMENT AND

12 APPLICATION PARTNERSHIPS.

13 (a) SUPPORT OF PARTNERSHIPS.—(1) Subchapter

14 III of chapter 148 of title 10, United States Code, is

15 amended by adding at the end the following new section:

16 ‘‘§ 2519. Alternative technology development and ap17 plication partnerships

18 ‘‘(a) SUPPORT OF PARTNERSHIPS.—The Secretary of

19 Defense shall conduct a program to provide assistance for

20 the establishment or continuation of cooperative arrange21 ments (hereinafter in this section referred to as ‘partner22 ships’) between institutions of higher education described

23 in subsection (d) and agencies of State governments and

24 other entities referred to in section 2511(b) of this title

25 in order to enhance existing programs of alternative tech-
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1 nology development and application, and the establishment

2 of new programs in alternative technology development

3 and application, with respect to—

4 ‘‘(1) pollution prevention and coastal environ5 mental restoration, including robotics application to

6 defense environmental restoration activities;

7 ‘‘(2) biotechnology, including marine bio8 technology, and biomanufacturing;

9 ‘‘(3) advanced materials;

10 ‘‘(4) nanoprecision and microprecision tech11 nologies;

12 ‘‘(5) generation and transmission of laser light;

13 and

14 ‘‘(6) machine tool design.

15 ‘‘(b) TYPES AND AMOUNT OF ASSISTANCE.—The

16 Secretary of Defense may make grants, enter into con17 tracts, or enter into cooperative agreements and other

18 transactions pursuant to section 2371 of this title in order

19 to assist the partnerships. The Secretary shall ensure that,

20 to the maximum extent practicable, the amount of the

21 funds provided by the Federal Government under a part22 nership does not exceed the total amount provided by non23 Federal Government participants in that partnership.

24 ‘‘(c) USE OF ASSISTANCE.—A partnership receiving

25 assistance under this section may use the assistance—
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1 ‘‘(1) to support research, development, and ap2 plication of alternative technologies referred to in

3 subsection (a); and

4 ‘‘(2) to construct and operate facilities in or ad5 jacent to university research facilities in order to

6 maintain favorable conditions for research, develop7 ment, and application of alternative technologies re8 ferred to in subsection (a).

9 ‘‘(d) ELIGIBLE INSTITUTIONS OF HIGHER EDU10 CATION.—Assistance under this section may be provided

11 only to institutions of higher education with research fa12 cilities located in or within 50 miles of a community which

13 has within its administrative and political jurisdiction a

14 defense contractor or military installation for which the

15 Secretary of Defense determines that the actual or threat16 ened curtailment, completion, elimination, or realignment

17 of a defense contract or program or the realignment or

18 closure of the installation or a facility of the contractor

19 results, or is likely to result, in a workforce reduction, over

20 a 12-month period, of 250 or more employee positions (in21 cluding part-time employee positions) and the loss of

22 10,000 or more work hours per week.

23 ‘‘(e) PRIORITY FOR CERTAIN ASSISTANCE.—In pro24 viding assistance under this section, the Secretary shall

25 give a preference to an institution of higher education with
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1 an established record of conducting research regarding al2 ternative technologies referred to in subsection (a), par3 ticularly as part of a State comprehensive economic devel4 opment and conversion plan. The Secretary may also give

5 a preference to alternative technology development and ap6 plication programs involving dual-use critical technology

7 and partnerships and partnership proposals involving de8 fense contractors.

9 ‘‘(f) MERIT COMPETITION.—Applications for assist10 ance under this section shall be evaluated on the basis of

11 merit pursuant to competitive procedures prescribed by

12 the Secretary of Defense. The Secretary may select a part13 nership to receive assistance if the proposal, at a mini14 mum, satisfies each of the following:

15 ‘‘(1) Contains innovative approaches for the de16 velopment or application of alternative technology.

17 ‘‘(2) Demonstrates a strong commitment by the

18 proponents to apply the resources necessary to

19 achieve the objectives for which the assistance is to

20 be made.

21 ‘‘(3) Provides for the conduct of research that

22 supports the proposed program and is likely to im23 prove manufacturing technology.
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1 ‘‘(4) Demonstrates a significant level of involve2 ment of eligible firms in the proposed research ac3 tivities.

4 ‘‘(5) Is likely to attract superior students.

5 ‘‘(6) Proposes to involve fully qualified faculty

6 personnel who are experienced in research and edu7 cation in areas associated with manufacturing engi8 neering and technology.

9 ‘‘(7) Proposes to achieve a significant level of

10 participation by women, members of minority

11 groups, and individuals with disabilities through ac12 tive recruitment of students from among such per13 sons.

14 ‘‘(8) Includes employees who have been termi15 nated or laid off, or have received a notice of termi16 nation or lay off, as a consequence of reductions in

17 expenditures by the United States for defense or the

18 closure of a defense facility, as determined in ac19 cordance with regulations issued by the Secretary of

20 Defense.’’.

21 (2) The table of sections at the beginning of such sub22 chapter is amended by adding at the end the following

23 new item:

‘‘2519. Alternative technology development and application partnerships.’’.

24 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

25 authorized to be appropriated to the Secretary of Defense
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1 $500,000,000 for fiscal year 1994 to carry out section

2 2519 of title 10, United States Code, as added by sub3 section (a). Funds appropriated pursuant to this sub4 section shall be available until expended.

5 SEC. 302. ESTABLISHMENT OF ENVIRONMENTAL AND EN6 TREPRENEURIAL TECHNOLOGY CENTERS.

7 (a) SUPPORT OF CENTERS.—(1) Subchapter III of

8 chapter 148 of title 10, United States Code, is amended

9 by adding after section 2519, as added by section 301,

10 the following new section:

11 ‘‘§ 2520. Environmental and entrepreneurial tech12 nology centers

13 ‘‘(a) GRANTS TO ESTABLISH CENTERS.—The Sec14 retary of Defense shall make grants to institutions of

15 higher education in defense dependent areas to assist in

16 the establishment or operation of environmental and en17 trepreneurial technology centers that would focus on the

18 transfer of technology and human resources from defense19 related industries into growth sectors of the environmental

20 field. The grants shall be awarded on a competitive basis.

21 ‘‘(b) ELIGIBLE INSTITUTIONS OF HIGHER EDU22 CATION.—In order to qualify for a grant under this sec23 tion, an institution of higher education must demonstrate

24 appropriate environmental research capabilities and re25 sources, as well as proven interaction with defense-related
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1 industries, as determined by the Secretary of Defense. The

2 institution of higher education must also offer graduate

3 programs of coursework in environmental science and en4 gineering and must integrate these programs into research

5 efforts of the proposed centers in order to provide students

6 with the practical experience in the activities specified in

7 subsection (c). In selecting grant recipients, the Secretary

8 shall give priority to institutions of higher education with

9 a proven interaction with the Environmental Protection

10 Agency.

11 ‘‘(c) ELIGIBLE ACTIVITIES.—A proposed center

12 should include at least four of the following activities as

13 the primary focus of the center, and must be able to dem14 onstrate expertise in these areas:

15 ‘‘(1) Pollution prevention.

16 ‘‘(2) Site remediation.

17 ‘‘(3) Environmental systems modeling.

18 ‘‘(4) Industrial waste treatment.

19 ‘‘(5) Chemical demilitarization.

20 ‘‘(6) Analytical environmental chemistry.

21 ‘‘(d) TECHNOLOGY TRANSFER AND TRAINING.—

22 Technology transfer and training must be integrated into

23 all activities of a center receiving a grant under this sec24 tion.
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1 ‘‘(e) NUMBER AND AMOUNT OF GRANTS.—In order

2 for this grant program to be as effective as possible, a

3 stable funding base is necessary for new centers. To pro4 vide such a base, the Secretary of Defense shall award

5 only 10 grants under this section in fiscal year 1994. In

6 fiscal years 1995 and 1996, the Secretary shall give these

7 10 grantees priority for additional grants if the Secretary

8 determines the these grantees have properly and success9 fully used previous grants. The Secretary shall award 15

10 grants under this section in fiscal year 1995 and 20 grants

11 under this section in fiscal year 1996. A grant under this

12 section may not exceed $3,000,000.

13 ‘‘(f) DEFINITIONS.—In this section:

14 ‘‘(1) The term ‘center’ means an environmental

15 and entrepreneurial technology center assisted or

16 proposed to be assisted under this section.

17 ‘‘(2) The term ‘defense dependent area’ has the

18 meaning given that term in section 3(2) of the De19 fense Economic Reinvestment Act of 1993.’’.

20 (2) The table of sections at the beginning of such sub21 chapter is amended by adding after the item relating to

22 section 2519, as added by section 301, the following new

23 item:

‘‘2520. Environmental and entrepreneurial technology centers.’’.

24 (b) AUTHORIZATION OF APPROPRIATIONS.—(1)

25 There is authorized to be appropriated to the Secretary
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1 of Defense to carry out section 2520 of title 10, United

2 States Code, as added by subsection (a)—

3 (A) $25,000,000 for fiscal year 1994;

4 (B) $32,000,000 for fiscal year 1995;

5 (C) $40,000,000 for fiscal year 1996.

6 (2) Funds appropriated pursuant to this subsection

7 shall be available until expended.

8 SEC. 303. MANUFACTURING TECHNOLOGY SURVEYS.

9 (a) GRANTS FOR SURVEYS.—(1) Subchapter I of

10 Chapter 148 of title 10, United States Code, is amended

11 by adding at the end the following new section:

12 ‘‘§ 2508. State manufacturing technology surveys

13 ‘‘(a) GRANTS TO CONDUCT SURVEYS.—The National

14 Defense Technology and Industrial Base Council shall

15 make a grant to each State to carry out a survey of eligible

16 firms engaged in manufacturing activities in the State.

17 The survey shall include an inventory of manufacturing

18 equipment, processes, and technologies used in the State

19 and such other information as may be necessary to deter20 mine the manufacturing technology capabilities of the in21 dustrial base in the State.

22 ‘‘(b) APPLICATION.—The Council shall not accept the

23 proposal of a State to conduct a survey under subsection

24 (a) unless the application contains assurances that the

25 State will use institutions of higher education and non-
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1 profit industrial manufacturers associations in the prepa2 ration and execution of the survey.’’.

3 (2) The table of sections at the beginning of such

4 chapter is amended by adding at the end the following

5 new item:

‘‘2508. State manufacturing technology surveys.’’.

6 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

7 authorized to be appropriated to the Secretary of Defense

8 $50,000,000 for fiscal year 1994 for grants under section

9 2508 of title 10, United States Code, as added by sub10 section (a). Funds appropriated pursuant to this sub11 section shall be available until expended.

12 SEC. 304. LOAN GUARANTEES FOR THE CONVERSION AND

13 DIVERSIFICATION OF DEFENSE FACILITIES

14 WITH A MAJOR DEFENSE CONTRACT OR SUB15 CONTRACT.

16 (a) PROGRAM REQUIRED.—The Secretary of the

17 Treasury shall establish a loan guarantee program to as18 sist a defense facility holding a major defense contract or

19 subcontract to finance one or more of the following eco20 nomic development projects:

21 (1) Conversion of defense-related production fa22 cilities or equipment of the small business concern to

23 nondefense-related use.

24 (2) Diversification of the operations of the

25 small business concern toward greater emphasis on
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1 production or services for the civilian sector of the

2 economy.

3 (3) Training employees of the small business

4 concern as part of a conversion or diversification

5 process.

6 (b) DETERMINATIONS FOR GUARANTEES.—On such

7 terms and conditions as the Secretary considers appro8 priate, the Secretary may make commitments to guarantee

9 the payment of principal and interest on loans to a defense

10 facility under subsection (a) only if at the time the com11 mitment is issued the Secretary determines that—

12 (1) the commitment is needed to enable the de13 fense facility to convert or diversify to nondefense14 related activities, and failure to meet such need

15 would adversely and seriously affect the economy of,

16 or employment in, the United States or any region

17 thereof;

18 (2) the defense facility has submitted to the

19 Secretary a satisfactory operating plan (including

20 budget and cash flow projections) for the next four21 year period demonstrating the ability of the defense

22 facility to continue operations as a going concern as

23 a result of the conversion or diversification, and

24 after that period, to continue such operations as a
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1 going concern without additional guarantees or other

2 Federal financing; and

3 (3) the Secretary has received such assurances

4 as the Secretary may require that the operating plan

5 is realistic and feasible.

6 (c) REQUIREMENTS FOR LOAN GUARANTEES.—A

7 loan guarantee may be issued under this section only pur8 suant to a commitment issued under subsection (b). The

9 terms of any such commitment shall provide that a loan

10 guarantee may be issued under this section only if at the

11 time the loan guarantee is issued, the Secretary deter12 mines that—

13 (1) credit is not otherwise available to the de14 fense facility under reasonable terms or conditions

15 sufficient to meet its financing needs as reflected in

16 its conversion or diversification plan;

17 (2) the prospective earning power of the defense

18 facility, together with the character and value of the

19 security pledged, furnish reasonable assurance of re20 payment of the loan to be guaranteed in accordance

21 with its terms;

22 (3) the loan to be guaranteed bears interest at

23 a rate determined by the Secretary to be reasonable

24 taking into account the current average yield on out25 standing obligations of the United States with re-
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1 maining periods to maturity comparable to the ma2 turity of such loan; and

3 (4) the operating plan of the defense facility

4 continues to meet the requirements of subsection

5 (b).

6 (d) DETERMINATIONS CONCLUSIVE.—Any deter7 mination by the Secretary that the conditions established

8 by this section have been met shall be conclusive, and such

9 determination shall be evidenced by the issuance of the

10 guarantee or commitment for which such determination

11 is required.

12 (e) LIMITATIONS ON GUARANTEE AUTHORITY.—The

13 authority of the Secretary to extend loan guarantees under

14 this section shall not at any time exceed $6,000,000,000

15 in the aggregate principal amount outstanding.

16 (f) DEFINITIONS.—For purposes of this section:

17 (1) The term ‘‘defense facility’’ does not include

18 a military installation.

19 (2) The term ‘‘major defense contract or sub20 contract’’ means—

21 (A) defense contracts in a total amount of

22 not less than $5,000,000 (without regard to the

23 date on which the contracts were awarded); or

24 (B) subcontracts in a total amount of not

25 less than $500,000 entered into in connection
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1 with a defense contract (without regard to the

2 effective dates of the subcontracts).

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