I
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 Transpor-
tation
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 reduc-
tions in spending for national defense.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Defense Industrial Sta-
bilization and Community Transition Act of 1993’’.
TITLE 
I—PRESIDENTIAL 
COUNCIL 
ON
ECONOMIC DIVERSIFICATION AND AD-
JUSTMENT
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 Serv-
ices.
(4) The Secretary of Defense.
(5) The Secretary of Energy.
SEC. 102. RESPONSIBILITIES.
(a) IN GENERAL.—The Council shall have the follow-
ing responsibilities:
(1) To determine the amounts of the projected
future reductions in spending under the national de-
fense 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 af-
fected by such spending reductions.
(3) To assist those businesses and the econo-
mies of those communities to diversify into
nondefense commercial activities before such spend-
ing reductions adversely affect such businesses and
communities.
(4) To assist defense-dependent industries in
seeking new markets for the products of such indus-
tries.
(5) To assist workers adversely affected by
spending reductions referred to in paragraph (1).
(6) To serve as a liaison among Federal Gov-
ernment programs on technology transfer, marketing
assistance, small business, economic development,
job training, and export enhancement in order to en-
sure that all available Federal resources are utilized
to minimize the adverse effects referred to in para-
graph (2) in the most effective manner possible.
(7) To maintain the integrity of the defense in-
dustrial 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 reduc-
tions.
(9) To publish an annual report in accordance
with subsection (b).
(10) To maintain a clearinghouse of informa-
tion 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 an-
nual report on, and evaluation of, those initiatives.
(11) To assist State economic development of-
fices in the planning of regional meetings and con-
ferences 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 af-
fected 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 re-
ductions.
(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 ad-
versely affected by spending reductions that—
(A) are provided for under the national de-
fense budget function in that budget or in the
multiyear defense program submitted to Con-
gress 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 Depart-
ment 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 po-
tential future spending reductions under the national
security budget function.
SEC. 103. DEFENSE DEPENDENCY AND DEFENSE BUSI-
NESSES.
(a) DEFENSE DEPENDENCY.—The Council shall pre-
scribe the criteria for determining which regions, commu-
nities, 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 ini-
tiatives among defense-dependent businesses and
other businesses in defense-dependent regions of the
United States;
(B) publish an annual guide to Federal Govern-
ment technology transfer programs that are avail-
able for providing assistance to such businesses re-
garding diversification of production;
(C) provide such businesses with assistance in
applying for assistance under such programs; and
(D) issue an annual report containing a discus-
sion of—
(i) the extent to which skilled labor and
technologically advanced equipment is being re-
tained within regions of the United States expe-
riencing 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 techno-
logically 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 techno-
logical needs of defense businesses seeking to diver-
sify or convert to nondefense production; and
(B) issue a report containing recommendations
on ways to strengthen existing programs for the en-
couragement 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 diversi-
fied, 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 Govern-
ment marketing and export financing programs;
(C) provide defense businesses in defense-de-
pendent regions of the United States with assistance
in applying for Federal Government assistance avail-
able 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 Depart-
ment of Commerce shall—
(A) conduct a joint study of the unique market-
ing 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 encour-
aging 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 busi-
ness.
(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 busi-
nesses;
(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 busi-
those programs that are administered by the De-
partment of Labor.
SEC. 105. ADVISORY COMMITTEE.
(a) IN GENERAL.—There shall be an advisory com-
mittee 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 ap-
propriate.
(c) EX OFFICIO MEMBERSHIP OF COUNCIL WORK-
ING 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 estab-
lished under subsection (a).
SEC. 106. COUNCIL PERSONNEL MATTERS.
(a) STAFF.—The Chairman of the Council may ap-
point 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 reim-
bursement to the department or agency from which the
employee is detailed.
(c) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The Chairman of the Council may pro-
cure temporary and intermittent services under section
3109(b) of title 5, United States Code, at rates for individ-
uals 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 equiva-
lent of the annual rate of basic pay prescribed for Execu-
tive 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 commit-
tee who are officers or employees of the United States
shall serve without compensation in addition to that re-
ceived 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 sub-
sistence, 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 pur-
poses 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 alter-
native 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 facil-
ity of a defense business for the purpose of planning for
the diversification of that facility into nondefense commer-
cial activities.
(b) GRANT ELIGIBILITY.—An alternative use com-
mittee 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 lo-
cated.
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 deter-
mine 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 rel-
evant technologies to determine the feasibility of var-
ious 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.