I
103D CONGRESS
2D SESSION
H. R. 4222
To amend the Job Training Partnership Act to establish a workforce skills
and development loan program to provide grants to States to guarantee
loans made to employers, representatives of employees, and other entities
to provide skills upgrading for non-managerial employees, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 14, 1994
Mr. GUNDERSON (for himself, Mr. GOODLING, Mr. PETRI, Mr. CASTLE, Mr.
HOBSON, Mr. SHAYS, Mr. JOHNSTON of Florida, and Mr. POSHARD) in-
troduced the following bill; which was referred to the Committee on Edu-
cation and Labor
A BILL
To amend the Job Training Partnership Act to establish
a workforce skills and development loan program to pro-
vide grants to States to guarantee loans made to employ-
ers, representatives of employees, and other entities to
provide skills upgrading for non-managerial employees,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ESTABLISHMENT OF WORKFORCE SKILLS AND
DEVELOPMENT LOAN PROGRAM.
(a) IN GENERAL.—Part B of title III of the Job
Training Partnership Act (29 U.S.C. 1662 et seq.) is
amended by adding at the end the following new section:
‘‘SEC. 327. WORKFORCE SKILLS AND DEVELOPMENT LOAN
PROGRAM.
‘‘(a) FINDINGS AND PURPOSES.—
‘‘(1) FINDINGS.—The Congress finds that—
‘‘(A) the changing nature of the workforce
in the United States is forcing more and more
workers to obtain skills upgrading to keep pace;
‘‘(B) employees who receive formal skills
upgrading enjoy earning advantages of 25 per-
cent or more over those with no such upgrad-
ing;
‘‘(C) the return on investment from formal
training through increased productivity is equiv-
alent to 3 times the cost of such training;
‘‘(D) approximately 40 percent of business
executives say they cannot modernize their
equipment due to worker skill deficiencies;
‘‘(E) companies cite the lack of funds as a
major reason for failure to establish and carry
out workforce skills upgrading programs;
‘‘(F) 
although 
the 
training 
of 
the
workforce in the United States is a national
concern of utmost importance, limited resources
at the Federal level make it infeasible to effec-
tively and efficiently address this concern alone;
and
‘‘(G) States, employers, and representa-
tives of employees need to share the responsibil-
ity in providing skills upgrading for employees.
‘‘(2) PURPOSES.—The purposes of this section
are—
‘‘(A) to encourage industry-based invest-
ment in human resource development that pro-
motes the competitiveness of the Nation’s in-
dustries through productivity and product qual-
ity enhancement;
‘‘(B) to ensure secure jobs for those who
successfully complete skills upgrading; and
‘‘(C) to supplement, and not supplant,
funds available through existing skills upgrad-
ing programs conducted by employers, employee
representatives, and the government; and
‘‘(D) to establish programs which will not
replace, parallel, supplant, compete with, or du-
plicate in any way existing skills upgrading pro-
grams.
‘‘(b) AUTHORIZATION.—
‘‘(1) IN
GENERAL.—From amounts reserved
under section 302(a)(2) for any fiscal year, the Sec-
retary may use not less than 5 percent, but not
more than 10 percent, of such amounts to provide
grants to States to provide loans to eligible entities
described in paragraph (2) to assist such entities in
providing skills upgrading for non-managerial em-
ployees.
‘‘(2) ELIGIBLE
ENTITIES.—An eligible entity
described in this paragraph is—
‘‘(A) an employer;
‘‘(B) a representative of employees;
‘‘(C) a business association;
‘‘(D) a trade organization; or
‘‘(E) a consortium consisting of—
‘‘(i) more than 1 of the entities de-
scribed in subparagraphs (A) through (D);
or
‘‘(ii) an institution of higher education
(as such term is defined in section 481 of
the Higher Education Act of 1965 (20
U.S.C. 1088) which continues to meet the
eligibility and certification requirements
under section 498 of such Act) and 1 or
more of the entities described in subpara-
graphs (A) through (D).
‘‘(c) APPLICATION.—The Secretary may provide a
grant to a State under subsection (b) only if such State
submits to the Secretary an application which contains
such information as the Secretary may reasonably require.
‘‘(d) PRIORITY.—In providing grants under sub-
section (b), the Secretary shall give priority to States that
have demonstrated the ability to expeditiously establish
and carry out loan guarantee programs described in sub-
section (f).
‘‘(e) LIMITATIONS.—
‘‘(1) MAXIMUM ANNUAL GRANT AMOUNT.—The
amount of a grant provided to a State under sub-
section (b) for any fiscal year shall not exceed
$2,000,000.
‘‘(2) MAXIMUM TOTAL GRANT AMOUNT.—The
total amount of grants provided to a State under
subsection (b) shall not exceed $5,000,000.
‘‘(f) USE OF AMOUNTS.—A State shall use amounts
received from a grant under subsection (b) to establish
a loan guarantee program to assist eligible entities de-
scribed in subsection (b)(2) to provide skills upgrading for
non-managerial employees. In carrying out such program,
the State shall meet the following requirements:
‘‘(1) ESTABLISHMENT OF RESERVE FUND FOR
LOAN GUARANTEES.—The State shall establish a re-
serve fund from amounts received from such grant
for the purpose of making commitments to guaran-
tee the payment of principal and interest on loans
made by financial institutions to such eligible enti-
ties to provide skills upgrading for non-managerial
employees.
‘‘(2) CRITERIA FOR LOAN GUARANTEES.—The
State, in conjunction with appropriate financial in-
stitutions, shall establish and publish criteria for
providing loan guarantees to eligible entities under
the program, including criteria that provides for the
following:
‘‘(A) A loan guarantee may be issued
under the program only if, at the time such
guarantee is issued the eligible entity agrees to
pay as an insurance premium an amount equal
to 1 percent of the principal received by such
entity under the loan to the State’s reserve
fund.
‘‘(B)(i) Subject to clause (ii), the eligible
entity will use amounts received from the loan
to provide skills upgrading for mid- and lower-
level employees, which may include (but is not
limited to)—
‘‘(I) training in total quality manage-
ment, statistical process control, produc-
tion techniques, office automation, mate-
rials resource planning; and
‘‘(II) training to improve basic skills,
including reading, writing, and arithmatic.
‘‘(ii) In providing such skills upgrading,
the eligible entity shall give priority to non-
managerial employees who—
‘‘(I) directly produce or deliver goods
or services; or
‘‘(II) are in danger of being termi-
nated or laid off as a result of moderniza-
tion 
in 
the 
workplace, 
corporate
downsizing, foreign or domestic competi-
tion, or Federal policies adversely affecting
1 or more industries.
‘‘(C) Amounts from a loan shall not be
used to pay the wages or other benefits of any
employee receiving assistance under the pro-
gram.
‘‘(3) PAYMENT BY STATE TO FINANCIAL INSTI-
TUTIONS IN CASES OF DEFAULT.—
‘‘(A) IN
GENERAL.—In accordance with
criteria developed by the Secretary, the State
shall make payments from the State’s reserve
fund to financial institutions that have provided
loans to eligible entities that have defaulted on
such loans for the purpose of reimbursing such
institutions for the amount of principal and in-
terest remaining unpaid to the institutions by
reason of such default.
‘‘(B) NO FULL FAITH AND CREDIT OF THE
UNITED STATES.—Loans provided by financial
institutions to eligible entities under loan guar-
antee programs under this section shall not be
obligations of, or guaranteed in any respect by,
the United States.
‘‘(4) LIMITATIONS
ON
LOAN
GUARANTEES.—
The authority of a State to extend loan guarantees
under this section shall not at any time exceed an
amount equal to 1,000 percent of the aggregate
principal amount in the State’s reserve fund.
‘‘(5) INTEREST
FROM
AMOUNTS
IN
RESERVE
FUND.—Any interest earned from amounts in the
State’s reserve fund shall be credited to such fund.
‘‘(g) 
ADDITIONAL
AMOUNTS.—In 
addition 
to
amounts received from a grant under subsection (b), the
Governor of a State may use not more than 5 percent of
the amount reserved under section 302(c) for a fiscal year
to establish and carry out the loan guarantee program
under subsection (f).
‘‘(h) FEDERAL AND STATE SHARE.—
‘‘(1) FEDERAL
SHARE.—The Federal share
under this section may not exceed 50 percent of the
total cost of the program established under sub-
section (f) for any fiscal year.
‘‘(2) STATE SHARE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the State share shall be pro-
vided from non-Federal sources and may be in
cash or in-kind, fairly evaluated.
‘‘(B) EXCEPTION.—The State share may
include amounts reserved in accordance with
subsection (g).’’.
(b) CONFORMING AMENDMENTS.—
(1) RESERVATION
OF
AMOUNTS.—Paragraph
(1) of section 302(c) of the Job Training Partner-
ship Act (29 U.S.C. 1652(c)(1)) is amended—
‘‘(I) on successful programs to up-
grade the skills of workers carried out pur-
suant to section 327;
‘‘(II) on research and evaluation con-
ducted concerning such programs; and
‘‘(III) that will assist employers, rep-
resentatives of employees, business associa-
tions, trade organizations, and consortia
consisting of more than 1 of the preceding
entities in designing and implementing the
most effective skills upgrading methods
available today; and
‘‘(ii) facilitate communication and the ex-
change of information and ideas among States
and the entities described in clause (i)(III) car-
rying out such skills upgrading pursuant to sec-
tion 327.’’.
SEC. 3. AMENDMENT TO HIGHER EDUCATION ACT OF 1965.
Section 439(d)(1) of the Higher Education Act of
1965 is amended by adding at the end the following new
sentence: ‘‘For purposes of this section, loans made pursu-
ant to section 327 of the Job Training Partnership Act
may be considered to be student loans which are not in-
sured or guaranteed as provided for in this subsection.’’.
Æ