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 unem-
ployment 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 Depart-
ment of Defense to assist communities, businesses, and
workers adversely affected by reductions in defense con-
tracts and spending and closures of military installations
and to provide an additional credit against Federal un-
employment tax for States with reemployment assistance
programs.
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 Economic Re-
investment Act of 1993’’.
SEC. 2. TABLE OF CONTENTS.
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 de-
fense 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 cen-
ters.
Sec. 303. Manufacturing technology surveys.
Sec. 304. Loan guarantees for the conversion and diversification of defense fa-
cilities with a major defense contract or subcontract.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) The term ‘‘defense dependent community’’
means a community which, as determined by the
Secretary of Defense—
(A) has within its administrative and polit-
ical jurisdiction a defense facility; and
(B) suffers a workforce reduction, over a
12-month period, of 250 or more employee posi-
tions (including part-time employee positions)
and the loss of 10,000 or more work hours per
week as a result of the actual or threatened
curtailment, completion, elimination, or realign-
ment of a defense contract or program or the
realignment or closure of a defense facility.
(2) The term ‘‘defense dependent area’’ means
a defense dependent community and the area encom-
passed within a 50 mile radius of the community.
(3) The term ‘‘displaced defense worker’’ means
an employee, including a civilian employee of the De-
partment of Defense, who has been terminated or
laid off, or has received a notice of termination or
lay off, as a consequence of reductions in expendi-
tures by the United States for defense or the closure
of a defense facility, as determined in accordance
with regulations issued by the Secretary of Defense.
(4) The term ‘‘at-risk defense worker’’ means
an employee of a defense facility at which other em-
ployees have been terminated or laid off, or received
a notice of termination or lay off, as a consequence
of reductions in expenditures by the United States
for defense or the closure of the facility.
(5) The term ‘‘separated member’’ means a
member of the Armed Forces who is involuntarily
separated from active duty, as defined in section
1141 of title 10, United States Code, accepts dis-
charge or release from active duty under section
1174a or 1175 of that title, or is given early retire-
ment under section 4403 the National Defense Au-
thorization Act for Fiscal Year 1993 (10 U.S.C.
1293 note).
(6) The term ‘‘defense facility’’ means—
(A) a private or government facility pro-
ducing goods or services for the Department of
Defense pursuant to a defense contract or sub-
contract; or
(B) a military installation.
(7) The term ‘‘Secretary’’ means the Secretary
of Defense.
TITLE 
I—WORKER 
AND 
MILI-
TARY 
PERSONNEL 
ASSIST-
ANCE PROGRAMS
SEC. 101. INCENTIVES FOR THE PLACEMENT OF DIS-
PLACED DEFENSE WORKERS, AT-RISK DE-
FENSE WORKERS, AND SEPARATED MILITARY
PERSONNEL.
(a) PLACEMENT PROGRAM.—The Secretary of De-
fense shall establish a program to assist displaced defense
workers, at-risk defense workers, and separated members
of the Armed Forces to obtain reemployment in defense
dependent areas.
(b) AGREEMENTS WITH EMPLOYERS.—The Sec-
retary shall enter into agreements with public or private
employers that agree to extend employment positions to
displaced defense workers, at-risk defense workers, and
separated members.
(c) CONTENTS OF AGREEMENT.—An agreement be-
tween the Secretary and an employer under subsection (b)
shall include the following terms and conditions:
(1) The Secretary shall agree to pay 25 percent
of the first-years wages (not to exceed a total of
$5,000 per employee) paid to each displaced defense
worker, at-risk defense worker, or separated member
employed by the employer during the term of the
agreement.
(2) The employer shall agree—
(A) to hire a specified number of displaced
defense workers, at-risk defense workers, and
separated members during the term of the
agreement for a period of employment of at
least 180 days at the same wage provided to
similarly situated employees of the employer;
and
(B) to place the displaced defense workers,
at-risk defense workers, and separated members
in employment positions located in a defense
dependent area or to relocate the workers and
members outside a defense dependent area.
(d) REPAYMENT REQUIREMENTS.—If an employer
terminates the employment of a displaced defense worker,
at-risk defense worker, or separated member employed
pursuant to an agreement under this section before the
date specified in subsection (c) (unless such termination
is for cause), the employer shall reimburse the Secretary
for the amount provided with respect to the worker or
member.
(e) CERTAIN AGREEMENTS PROHIBITED.—The Sec-
retary may not make a payment under this subsection to
an employer if the Secretary determines that—
(1) the employer terminated the employment of
employee, or failed to rehire a laid off employee, in
order to fill the vacancy with a displaced defense
worker, at-risk defense worker, or separated mem-
ber;
(2) rehires the same worker or member more
than once in order to qualify for additional assist-
ance with respect to the worker or member.
(f) SPECIAL PROGRAM FOR CERTAIN DEFENSE CON-
TRACTORS.—(1) In the case of a defense facility that has
begun or announced the termination or lay off of employ-
ees before the date of the enactment of this Act as a result
of the actual or threatened curtailment, completion, elimi-
nation, or realignment of a defense contract or program,
the Secretary may implement an incentive program under
this subsection to assist the facility to rehire the termi-
nated or laid off employees and prevent additional termi-
nations or lay offs.
(2) Under the program, the Secretary shall agree to
pay 12.5 percent of the next-year wages (not to exceed
a total of $2,500 per employee) paid to each employee of
the facility who is rehired or whose employment would oth-
erwise be ended in the absence of the assistance, as deter-
mined by the Secretary.
(3) In exchange for assistance under this subsection,
the defense facility shall agree to pay the premium for any
continuation coverage for health care elected by an em-
ployee for whom assistance is provided if the employee
subsequently becomes qualified for such continuation cov-
erage.
(g) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized 
to 
be 
appropriated 
to 
the 
Secretary
$1,400,000,000 for fiscal year 1994 to carry out this sec-
tion. Funds appropriated pursuant to this subsection shall
be available until expended.
SEC. 102. ADDITIONAL CREDIT AGAINST FEDERAL UNEM-
PLOYMENT TAX FOR STATES WITH REEM-
PLOYMENT ASSISTANCE PROGRAM.
(a) CREDIT AUTHORIZED.—
(1) IN GENERAL.—Chapter 23 of the Internal
Revenue Code of 1986 (relating to Federal unem-
ployment tax) is amended by inserting after section
3302 the following new section:
‘‘SEC. 3302A. ADDITIONAL CREDIT FOR STATES WITH REEM-
PLOYMENT ASSISTANCE PROGRAMS.
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—The taxpayer may, to the
extent provided in this subsection and subsection
(b), credit against the tax imposed by section
3301(a)(2) the amount of contributions paid by him
into a reemployment assistance fund maintained
during the taxable year under a State law certified
by the Secretary of Labor as provided in this section
for the 12-month period ending on October 31 of
such year.
‘‘(2) CERTAIN
RULES
MADE
APPLICABLE.—
Rules similar to the rules of paragraph (2), (3), (4),
and (5) of section 3302(a) shall apply for purposes
of this subsection.
‘‘(b) LIMITATION ON TOTAL CREDITS.—The total
credits allowed to a taxpayer under this section shall not
exceed 12 percent of the tax against which such credits
are allowable.
‘‘(c) APPROVAL OF STATE LAWS.—The Secretary of
Labor shall approve any State law submitted to him, with-
in 30 days of such submission, if the Secretary finds
that—
‘‘(1) such law establishes a program under
which reemployment assistance is to be provided to
eligible workers,
‘‘(2) such program is to be funded by requiring
additional contributions from employers subject to
the State unemployment compensation law, and
‘‘(3) such additional contributions shall be de-
posited in a special fund established under such
State law which is to be used solely for purposes of
providing reemployment assistance to eligible work-
ers.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) REEMPLOYMENT ASSISTANCE.—The term
‘reemployment assistance’ means any of the follow-
ing—
‘‘(A) counseling and testing services,
‘‘(B) intensive job search assistance,
‘‘(C) job search vouchers,
‘‘(D) retraining assistance,
‘‘(E) retraining vouchers,
‘‘(F) job search and relocation allowances,
‘‘(G) self-employment assistance, and
‘‘(H) cash allowances to individuals while
participating in training.
‘‘(2) ELIGIBLE
WORKER.—The term ‘eligible
worker’ means any individual receiving compensation
under the State law during any benefit year—