I

103D CONGRESS

1ST SESSION H. R. 2498

To assist community, business, and worker readjustment required as a result

of the closure of military installations and reductions in defense spending,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 23, 1993

Mr. GOODLING introduced the following bill; which was referred jointly to the

Committees on Armed Services, Education and Labor, Banking, Finance

and Urban Affairs, Public Works and Transportation, and Small Business

A BILL

To assist community, business, and worker readjustment required as a result of the closure of military installations

and reductions in defense spending, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Defense Diversification

5 and Community Adjustment Act of 1993’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents is as follows:

Sec. 1. Short title.
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Sec. 2. Table of contents.

TITLE I—IMPROVED DEFENSE CONVERSION, REINVESTMENT,

AND TRANSITION ASSISTANCE ACTIVITIES

Sec. 101. Definitions.

Sec. 102. Assistant Secretary of Defense for Economic Adjustment.

Sec. 103. Community assistance grants through the Department of Defense.

Sec. 104. Community economic adjustment assistance through the Economic

Development Administration of the Department of Commerce.

Sec. 105. Improved notification for dislocated workers of available assistance.

Sec. 106. Economic diversification and adjustment assistance through the Department of Defense.

Sec. 107. Small business assistance through the Department of Defense.

Sec. 108. Information and coordination services.

Sec. 109. Authority to allow one-year moratorium on payment of rent for use

of certain property by certain defense contractors for non-government purposes.

Sec. 110. Authorization of appropriations.

TITLE II—IMPROVEMENTS TO THE DEFENSE DIVERSIFICATION

PROGRAM UNDER THE JOB TRAINING PARTNERSHIP ACT

Sec. 201. Transfer of authority to carry out program from Secretary of Defense

to Secretary of Labor.

Sec. 202. Authorization of appropriations.

Sec. 203. Effective date.

1 TITLE I—IMPROVED DEFENSE

2 CONVERSION, REINVEST3 MENT, AND TRANSITION AS4 SISTANCE ACTIVITIES

5 SEC. 101. DEFINITIONS.

6 For purposes of this title:

7 (1) The term ‘‘community adjustment commit8 tee’’ means an entity formed to aid in adjustment

9 activities for a substantially and seriously affected

10 community following the announcement or a pro11 posed announcement of a reduction in a defense con12 tract or subcontract, reductions or termination of

13 operations at a defense facility.
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1 (2) The term ‘‘defense agency’’ means the De2 partment of Defense, the Department of Energy, the

3 National Aeronautics and Space Administration, the

4 Coast Guard, and other Federal agencies with re5 spect to defense-related operations of the agency.

6 (3) The term ‘‘defense contract’’ means any

7 contract entered into between a person and a de8 fense agency to provide material or defense-related

9 operations.

10 (4) The term ‘‘defense contractor’’ means any

11 person engaged in the furnishing of defense material

12 pursuant to the terms of a defense contract, includ13 ing components manufacturers, suppliers, and serv14 ice contractors.

15 (5) The term ‘‘defense facility’’ means—

16 (A) any private plant or other establish17 ment (or part thereof) used under a defense

18 contract or subcontract or engaged in the pro19 duction, repair, modification, storage, or han20 dling of defense material; or

21 (B) any government-owned or government22 leased facility (including military installations)

23 used by a defense agency.

24 (6) The term ‘‘defense subcontract’’ means any

25 subcontract entered into between a person and a de-
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1 fense contractor to provide material or defense-relat2 ed operations.

3 (7) The term ‘‘defense subcontractor’’ means

4 any facility engaged in the furnishing of defense ma5 terial pursuant to the terms of a defense sub6 contract.

7 (8) The term ‘‘military installation’’ means a

8 base, camp, post, station, yard, center, or homeport

9 facility for any ship in the United States, or any

10 other facility under the jurisdiction of a military de11 partment located in the United States.

12 (9) The term ‘‘qualified small business’’ means

13 a small business concern that—

14 (A) employs less than 500 workers;

15 (B) is independently owned and operated;

16 (C) derives at least 25 percent of its gross

17 revenues from defense contracts or sub18 contracts; and

19 (D) can demonstrate that—

20 (i) it has either experienced or will ex21 perience the loss of a defense contract or

22 subcontract causing significant reductions

23 in the volume of defense-related work in

24 relation to the total defense work in such

25 facility; or
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1 (ii) the loss of a defense facility, con2 tractor, subcontractor will substantially

3 and seriously affect its business.

4 (10) The term ‘‘substantially and seriously af5 fected community’’ means a community—

6 (A) which has within its administrative

7 and political jurisdiction 1 or more military in8 stallations or defense facilities or which is eco9 nomically affected by proximity to a military in10 stallation or defense facility;

11 (B) in which the actual or threatened cur12 tailment, completion, elimination, or realign13 ment of a defense contract results in a

14 workforce reduction of—

15 (i) 2,500 or more employee positions,

16 in the case of a Primary Metropolitan Sta17 tistical Area or similar area (as defined by

18 the Director of the Office of Management

19 and Budget);

20 (ii) 500 or more employee positions,

21 in the case of a Metropolitan Statistical

22 Area or similar area (as defined by the Di23 rector of the Office of Management and

24 Budget);
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1 (iii) 250 or more employee positions,

2 in the case of a labor market area outside

3 of a Metropolitan Statistical Area; or

4 (iv) one percent of the total number of

5 civilian jobs in that area; and

6 (C) which establishes, by evidence, that

7 any workforce reduction referred to in subpara8 graph (B) occurred as a direct result of changes

9 in Department of Defense requirements or pro10 grams.

11 (11) The term ‘‘substantially and seriously af12 fected business’’ means a defense contractor or de13 fense subcontractor which—

14 (A) experiences a reduction, or the threat

15 of a reduction, of—

16 (i) 25 percent or more in sales or pro17 duction; or

18 (ii) 80 percent or more of the

19 workforce of such business in any division

20 of such business or at any plant or other

21 facility of such business; and

22 (B) establishes, by evidence, that the re23 ductions referred to in subparagraph (A) oc24 curred as a direct result of a reduction in the

25 defense budget.
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1 SEC. 102. ASSISTANT SECRETARY OF DEFENSE FOR ECO2 NOMIC ADJUSTMENT.

3 (a) DESIGNATION OF ASSISTANT SECRETARY.—Sub4 section (b) of section 136 of title 10, United States Code,

5 is amended by adding at the end the following new

6 paragraph:

7 ‘‘(5)(A) One of the Assistant Secretaries shall be the

8 Assistant Secretary of Defense for Economic Adjustment

9 who shall be responsible to the Secretary of Defense for

10 the economic conversion program of the United States, in11 cluding—

12 ‘‘(i) assessment of defense economic adjustment

13 problems;

14 ‘‘(ii) consultation with States and communities

15 adversely affected by reductions in defense spending,

16 the completion or termination of a defense contract

17 or subcontract, or the closure or realignment of a

18 military installation;

19 ‘‘(iii) development of measures to relieve such

20 adverse effects; and

21 ‘‘(iv) provision of assistance to such States and

22 communities for conversion and adjustment pur23 poses.

24 ‘‘(B) The Assistant Secretary shall serve as the head

25 of the Office of Economic Adjustment of the Department

26 of Defense and shall supervise the activities of four direc-
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1 tors, to be appointed by the Secretary of Defense, in the

2 following areas:

3 ‘‘(i) Community assistance.

4 ‘‘(ii) Economic diversification and adjustment.

5 ‘‘(iii) Assistance for dislocated workers.

6 ‘‘(iv) Coordination and informational activi7 ties.’’.

8 (b) INCREASE IN NUMBER OF ASSISTANT SECRETAR9 IES.—(1) Subsection (a) of such section is amended by

10 striking out ‘‘eleven’’ and inserting in lieu thereof

11 ‘‘twelve’’.

12 (2) Section 5315 of title 5, United States Code, is

13 amended by striking out ‘‘Assistant Secretaries of Defense

14 (11).’’ and inserting in lieu thereof ‘‘Assistant Secretaries

15 of Defense (12).’’

16 SEC. 103. COMMUNITY ASSISTANCE GRANTS THROUGH THE

17 DEPARTMENT OF DEFENSE.

18 (a) COMMUNITY ADJUSTMENT PLAN.—The Assistant

19 Secretary of Defense for Economic Adjustment shall facili20 tate the development of a community adjustment plan for

21 each substantially and seriously affected community by

22 members of that community to reduce the adverse effects

23 of defense downsizing. The Assistant Secretary shall carry

24 out this section through the Director of Community As-
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1 sistance appointed under section 136(b)(5) of title 10,

2 United States Code.

3 (b) COMMUNITY ADJUSTMENT COMMITTEES.—

4 (1) IN GENERAL.—The Director shall facilitate

5 and aid in the formation of a community adjustment

6 committee for each substantially and seriously af7 fected community. Except as provided in paragraph

8 (2), to receive assistance under this subsection, a

9 community adjustment committee must contain the

10 following members:

11 (A) At least 3 representatives from the

12 management of defense facilities in the commu13 nity.

14 (B) At least 3 representatives of employees

15 of defense facilities in the community.

16 (C) At least 3 representatives of the local

17 government of the community.

18 (D) At least 3 representatives of non19 governmental leaders in the community.

20 (2) EXISTING COMMUNITY ADJUSTMENT COM21 MITTEE.—The requirement described in the second

22 sentence of paragraph (1) shall not apply in the case

23 of a community adjustment committee which is in

24 existence as of the date of the enactment of this sub25 section.
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1 (c) TECHNICAL ASSISTANCE FOR COMMITTEES.—(1)

2 Grants and assistance may be made available following the

3 formation of a community adjustment committee for the

4 purpose of providing the committee with technical assist5 ance. A grant may be made—

6 (A) to provide for a business expert to examine

7 the potential market needs of the region in which

8 the community is located to identify economic ad9 justment and conversion opportunities for defense

10 facilities in the community; and

11 (B) to provide for a technological expert to de12 termine the feasibility of various adjustment and

13 conversion alternatives for defense facilities in the

14 community.

15 (2) Grants and other assistance under this subsection

16 may not exceed $100,000 per community adjustment com17 mittee.

18 (d) ECONOMIC DEVELOPMENT GRANTS.—(1) A sub19 stantially and seriously affected community that has a

20 community adjustment committee and has developed and

21 is ready to implement a community adjustment plan ap22 proved by the Director shall be eligible for grants under

23 this subsection.

24 (2) A grant under this subsection may be used to im25 plement a community adjustment plan to relieve the stress
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1 caused upon a community as a result of defense

2 downsizing. The grants may be used to—

3 (A) implement the ideas of the community ad4 justment committee findings for the community;

5 (B) hire an economic development consultant to

6 aid in the management and facilitation efforts of

7 conversion;

8 (C) develop specific action plans for conversion;

9 and

10 (D) apply to the Economic Development Ad11 ministration of the Department of Commerce for

12 conversion assistance.

13 SEC. 104. COMMUNITY ECONOMIC ADJUSTMENT ASSIST14 ANCE THROUGH THE ECONOMIC DEVELOP15 MENT ADMINISTRATION OF THE DEPART16 MENT OF COMMERCE.

17 (a) ASSISTANCE AUTHORIZED.—A community that

18 has been determined by the Economic Development Ad19 ministration of the Department of Commerce, in consulta20 tion with the Office of Economic Adjustment of the De21 partment of Defense, to be a substantially and seriously

22 affected community shall be eligible for economic adjust23 ment assistance authorized under title IX of the Public

24 Works and Economic Development Act of 1965, subject

25 to the availability of appropriations for such purpose and
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1 subject to meeting the eligibility requirements of such

2 title.

3 (b) PROCESS.—Any determination made under sub4 section (a) shall be made in accordance with the standards

5 and procedures established by the Economic Adjustment

6 Committee established in Executive Order 12049 (10

7 U.S.C. 111 note).

8 SEC. 105. IMPROVED NOTIFICATION FOR DISLOCATED

9 WORKERS OF AVAILABLE ASSISTANCE.

10 Section 4201 of the Defense Economic Adjustment,

11 Diversification, Conversion, and Stabilization Act of 1990

12 (Public Law 101–510; 104 Stat. 1851) is amended by

13 adding at the end the following new subsection:

14 ‘‘(c) ROLE OF DIRECTOR OF DISLOCATED WORK15 ERS.—The Assistant Secretary of Defense for Economic

16 Adjustment shall be responsible for the notification re17 quirements imposed by this section. The Assistant Sec18 retary shall carry out this subsection through the Director

19 for Dislocated Workers appointed under section 136(b)(5)

20 of title 10, United States Code. The Director shall develop

21 a method of rapidly identifying substantially and seriously

22 affected businesses and qualified small businesses in order

23 to provide for sufficient time to allow workers with such

24 businesses to enroll in adjustment programs, such as the

25 defense conversion adjustment program under sections
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1 325 and 325A of the Job Training Partnership Act (29

2 U.S.C. 1662d, 1662d-1).’’.

3 SEC. 106. ECONOMIC DIVERSIFICATION AND ADJUSTMENT

4 ASSISTANCE THROUGH THE DEPARTMENT OF

5 DEFENSE.

6 (a) IN GENERAL.—The Assistant Secretary of De7 fense for Economic Adjustment shall be responsible for as8 sessment and conversion possibilities for defense contrac9 tors, subcontractors, and qualified small businesses in a

10 substantially and seriously affected community. The As11 sistant Secretary shall carry out this section through the

12 Director of Diversification and Adjustment appointed

13 under section 136(b)(5) of title 10, United States Code.

14 The Director shall use technical assistance of the Depart15 ment of Defense to assist in the conversion and retention

16 of defense capabilities, the retooling of defense-related in17 frastructure to commercial use, and research and develop18 ment related to conversion.

19 (b) RETENTION OF CRITICAL TECHNOLOGIES.—The

20 Director, in conjunction with the Director of the Defense

21 Logistics Agency, will develop a listing of Department of

22 Defense classified and nonclassified critical technologies to

23 target those businesses involved in the production of criti24 cal technologies that could be lost due to a defense

25 downsizing or reduction. The Director will work with the
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1 Secretary of Defense to provide grants and technical as2 sistance to aid in the retention of critical technologies that

3 have a chance to be lost due to downsizing.

4 SEC. 107. SMALL BUSINESS ASSISTANCE THROUGH THE DE5 PARTMENT OF DEFENSE.

6 (a) BUSINESS GRANTS AND LOANS.—

7 (1) ASSISTANCE FOR QUALIFIED SMALL BUSI8 NESSES.—A qualified small business may apply to

9 the Assistant Secretary of Defense for Economic Ad10 justment for grants and other assistance to aid in

11 conversion to nondefense activities. The Assistant

12 Secretary shall carry out this section through the

13 Director of Community Assistance Grants appointed

14 under section 136(b)(5) of title 10, United States

15 Code.

16 (2) ASSISTANCE FOR EMPLOYEES.—The Direc17 tor may also assist employees or former employees

18 of a defense contractor or defense subcontractor to

19 establish a small business concern.

20 (3) USE OF GRANTS.—A grant made under this

21 subsection may be used—

22 (A) to facilitate the conversion of a de23 fense-related business to a nondefense-related

24 business;
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1 (B) to develop new business opportunities

2 and markets for a qualified small business; and

3 (C) for the purpose of retooling or machin4 ery purchases for the purpose of commercial

5 manufacturing.

6 (b) IMPROVED COOPERATION BETWEEN DOD AND

7 SBA.—The Assistant Secretary of Defense for Economic

8 Adjustment shall work with the Administrator of the

9 Small Business Administration—

10 (1) to coordinate their activities on behalf of

11 qualified small businesses;

12 (2) to target substantially and seriously affected

13 communities to provide assistance from the Small

14 Business Administration to aid in the conversion of

15 qualified small businesses to nondefense activities;

16 (3) to provide a listing of lenders, that are ap17 proved by the Administrator, to qualified small busi18 nesses to assist such businesses to receive financing

19 for defense conversion activities; and

20 (4) to provide information to former employees

21 of defense facilities, defense contractors, and defense

22 subcontractors, and qualified small businesses to as23 sist in the possible formation of new small busi24 nesses.
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1 SEC. 108. INFORMATION AND COORDINATION SERVICES.

2 (a) LISTING OF CONVERSION, REINVESTMENT, AND

3 TRANSITION PROGRAMS.—The Assistant Secretary of De4 fense for Economic Adjustment shall develop and maintain

5 a list of all Federal programs concerned with the assess6 ment and relief of defense economic adjustment problems

7 resulting from reductions in defense spending, the comple8 tion or termination of defense contracts and subcontracts,

9 the displacement of defense workers and members of the

10 Armed Forces, and the closure or realignment of military

11 installations.

12 (b) INFORMATIONAL RESPONSIBILITIES.—The As13 sistant Secretary of Defense for Economic Adjustment

14 shall provide informational services to defense contractors

15 and defense subcontractors that desire to enter into part16 nerships under subchapter III of chapter 148 of title 10,

17 United States Code, for the purpose of developing, apply18 ing, or marketing dual-use technologies or for other busi19 ness purposes. In carrying out this subsection, the Assist20 ant Secretary shall consult with the Federal Trade Com21 mission to ensure that any such partnership formed is con22 sistent with the provisions of all applicable Antitrust Acts,

23 as defined in section 4 of the Federal Trade Commission

24 Act (15 U.S.C. 44).

25 (c) USE OF DIRECTOR OF COORDINATION AND IN26 FORMATIONAL ACTIVITIES.—The Assistant Secretary
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1 shall carry out this section through the Director of Coordi2 nation and Informational Activities appointed under sec3 tion 136(b)(5) of title 10, United States Code. The Direc4 tor shall develop the list required by subsection (a) in con5 sultation with appropriate officers of the Department of

6 Commerce, the Department of Labor, and the Small Busi7 ness Administration.

8 SEC. 109. AUTHORITY TO ALLOW ONE-YEAR MORATORIUM

9 ON PAYMENT OF RENT FOR USE OF CERTAIN

10 PROPERTY BY CERTAIN DEFENSE CONTRAC11 TORS FOR NON-GOVERNMENT PURPOSES.

12 (a) AUTHORITY.—(1) With respect to production and

13 research property owned by the Government, the Sec14 retary of Defense is authorized to provide a one-year mor15 atorium on the payment of rent for non-Government use

16 of that property by any defense contractor described in

17 subsection (b). After the expiration of the moratorium, the

18 Secretary shall collect the rent from the defense contractor

19 for the use of the property during that year over such pe20 riod of time as the Secretary considers appropriate.

21 (2) The authority provided in this subsection applies

22 whether or not the property is required by the Department

23 of Defense for performance of defense contracts or sub24 contracts.
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1 (b) CONTRACTORS COVERED.—Subsection (a) applies

2 to any person under contract with the Department of De3 fense which is affected by a termination or significant re4 duction of major research and development programs and

5 procurement programs of the Department of Defense.

6 (c) DEFINITIONS.—For purposes of this section:

7 (1) The term ‘‘non-Government use’’ means use

8 other than for purposes in support of a contract

9 with the Department of Defense, including direct

10 commercial sales to domestic and foreign customers.

11 (2) The term ‘‘production and research prop12 erty’’ has the meaning provided under the provisions

13 of the Federal Acquisition Regulation relating to

14 contractor use and rental of Government property.

15 (d) EFFECTIVE DATE.—The authority provided by

16 this subsection shall take effect on October 1, 1993.

17 SEC. 110. AUTHORIZATION OF APPROPRIATIONS.

18 (a) IN GENERAL.—There are authorized to be appro19 priated to the Secretary of Defense $300,000,000 for fis20 cal year 1994 to carry out activities under sections 103,

21 106, 107, and 108 of this Act and section 4201(c) of the

22 Defense Economic Adjustment, Diversification, Conver23 sion, and Stabilization Act of 1990 (as added by section

24 105 of this Act).
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1 (b) PROCUREMENT TECHNICAL ASSISTANCE.—There

2 are authorized to be appropriated to the Secretary of De3 fense $25,000,000 for fiscal year 1994 for the purpose

4 of providing procurement technical assistance under sec5 tion 2418 of title 10, United States Code, through the pro6 curement technical assistance centers.

7 (c) DEFENSE DUAL-USE ASSISTANCE EXTENSION

8 PROGRAM.—There are authorized to be appropriated to

9 the Secretary of Defense $75,000,000 for fiscal year 1994

10 to carry out the defense dual-use assistance extension pro11 gram under section 2524 of title 10, United States Code,

12 of which—

13 (1) $50,000,000 shall be available to support

14 the conversion technology research programs of the

15 National Institute of Standards and Technology; and

16 (2) $25,000,000 shall be available to support

17 the manufacturing extension program.

18 (d) AVAILABILITY OF APPROPRIATIONS.—Amounts

19 appropriated pursuant to this section shall remain avail20 able until expended.
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1 TITLE II—IMPROVEMENTS TO

2 THE DEFENSE DIVERSIFICA3 TION PROGRAM UNDER THE

4 JOB TRAINING PARTNERSHIP

5 ACT

6 SEC. 201. TRANSFER OF AUTHORITY TO CARRY OUT PRO7 GRAM FROM SECRETARY OF DEFENSE TO

8 SECRETARY OF LABOR.

9 Section 325A of the Job Training Partnership Act

10 (29 U.S.C. 1662d-1) is amended—

11 (1) in subsection (a), by striking ‘‘From the

12 amount made available’’ and all that follows through

13 ‘‘Secretary of Labor,’’ and inserting ‘‘The Sec14 retary’’;

15 (2) in subsection (c), by striking ‘‘Secretary of

16 Defense’’ each place it appears and inserting ‘‘Sec17 retary’’;

18 (3) in subsection (d)—

19 (A) in the introductory sentence of para20 graph (1), by striking ‘‘of Defense’’;

21 (B) in paragraph (1)(A), by striking ‘‘in

22 consultation with the Secretary of Labor,’’; and

23 (C) in the introductory sentence of para24 graph (2), by striking ‘‘of Defense’’;

25 (4) in subsection (e)—
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1 (A) in the heading of such subsection, by

2 striking ‘‘OF DEFENSE’’; and

3 (B) by striking ‘‘Secretary of Defense’’

4 each place it appears and inserting ‘‘Secretary’’;

5 (5) in subsection (i), by striking ‘‘of Defense’’;

6 and

7 (6) in subsection (k)—

8 (A) in the introductory sentence of para9 graph (1), by striking ‘‘the Secretary of De10 fense, in consultation with the Secretary of

11 Labor’’ and inserting ‘‘the Secretary, in con12 sultation with the Secretary of Defense’’; and

13 (B) in paragraph (2), by striking ‘‘of De14 fense’’.

15 SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

16 Section 3 of the such Act is amended by adding at

17 the end the following new subsection:

18 ‘‘(g)(1) There are authorized to be appropriated to

19 carry out section 325A $50,000,000 for fiscal year 1994.

20 ‘‘(2) Amounts authorized to be appropriated under

21 paragraph (1) are in addition to amounts authorized to

22 be appropriated and made available to carry out such sec23 tion pursuant to—

24 ‘‘(A) subsection (b); and
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1 ‘‘(B) section 4465(c) of the Defense Conver2 sion, Reinvestment, and Transition Assistance Act of

3 1992.

4 ‘‘(3) Amounts appropriated pursuant to paragraph

5 (1) are authorized to remain available until expended.’’.

6 SEC. 203. EFFECTIVE DATE.

7 The amendments made by this title shall take effect

8 on the date of the enactment of this Act or October 1,

9 1993, whichever occurs later.

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