[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Senate]
[Pages S1022-S1023]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 273. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives relating to the closure, realignment, or downsizing of 
military installations; to the Committee on Finance.


               DEFENSE CONVERSION TAX CREDIT LEGISLATION

 Ms. SNOWE. Mr. President, I am introducing two bills today to 
assist workers who have lost their jobs as a result of closure or 
cutbacks at defense installations or the loss of defense contracts by 
private industry. The first bill extends the existing targeted jobs tax 
credit to employers who hire individuals who have lost their jobs at a 
Federal military installation through a closing, realignment or 
reduction in force. The credit equals 40 percent of the first $6,000 in 
wages paid to each newly hired worker. The second bill I am introducing 
provides defense contractors with an income tax credit for 20 percent 
of costs incurred in retraining employees for nondefense-related jobs.
  Since 1988, the Department of Defense has undertaken four base 
realignment and closure [BRAC] rounds--in 1988, 1991, 1993, and 1995. 
In total the BRAC process has authorized the closing of 261 military 
facilities, including 98 major defense installations where 300 or more 
civilian and/or military jobs were eliminated. Many base closings and 
realignments under the BRAC

[[Page S1023]]

process are still in progress and their full impact has not yet been 
felt. In addition, reductions in force continue to be the order of the 
day at the Pentagon. In December, the Navy announced plans to reduce 
civilian employment by 11,000 positions at 240 facilities.
  The economic impact of defense downsizing on the affected individuals 
and surrounding communities can be devastating. In my own State of 
Maine, the closure of Loring Air Force Base in 1994 resulted in the 
loss of nearly 20 percent of the jobs in Aroostook County, affecting 
3,000 military personnel, 900 civilians and an additional 6,000 private 
sector jobs which were dependent on the air base. The annual loss of 
income to Maine's economy from the Loring closure totaled more than 
$370 million.
  At the other end of the State, Kittery-Portsmouth Naval Shipyard has 
seen its workforce cut from 8,600 employees in 1989, when the Berlin 
wall fell, to 3,600 today with another reduction of 454 Navy civilian 
jobs planned for 1997. And Bath Iron Works, Maine's largest defense 
contractor, has seen its employment level drop from a high of 12,000 in 
1990 to 7,500 today. Smaller defense contractors in Maine have 
experienced similar job losses.
  Mr. President, defense downsizing and economic conversion can be an 
excruciatingly slow and painful process for those households and 
communities in Maine and across the country who are going through it. I 
feel strongly that our obligation to the military and civilian workers 
who, after all, helped win the cold war, does not end with adoption of 
the BRAC recommendations. Successful defense conversion is a long-term 
process requiring a multi-pronged strategy that must include 
coordinated Government assistance to affected communities, workers, and 
businesses.
  The two tax credit proposals I am introducing today form an essential 
part of that strategy. They will encourage the private sector to hire 
workers whose jobs have been lost from Federal defense facilities and 
will encourage defense contractors to retrain workers for employment in 
nondefense areas. I urge my Senate colleagues to join me in supporting 
these important legislative initiatives.
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