Defense Diversification Act of 1992

Defense Diversification Act of 1992 - Title I: Guarantees for Defense-Dependent Small Businesses - Amends the Small Business Act to authorize the Small Business Administration to guarantee loans to assist small business concerns that are defense-dependent contractors in the financing of projects to: (1) convert defense-related productive facilities or equipment of such concerns to nondefense-related use; (2) diversify the operations of such concerns toward greater emphasis upon the civilian sector of the economy; or (3) retrain employees as part of the conversion and diversification process.

Directs the Secretary of the Treasury to establish a loan guarantee program to assist defense facilities holding major defense contracts or subcontracts in financing the same type of projects. Sets forth requirements for loan guarantees and limitations on guarantee authority.

Title II: Tax Incentives to Assist in Defense Industry Diversification - Amends the Internal Revenue Code to establish a special depreciation deduction for nondefense-related equipment placed in service after December 31, 1992, and before January 1, 1996, by defense contractors. Allows such deduction, with limitations, against the alternative minimum tax.

Allows the investment tax credit to rehabilitate buildings used for defense-related purposes, including post-1936 buildings, into buildings to be used for non-defense related purposes during the period after December 31, 1992, and before January 1, 1996.

Extends the exclusion from gross income for employer-provided educational assistance from June 30, 1992, until December 31, 1995.

Allows defense contractors that diversify into nondefense-related businesses an itemized deduction for each eligible individual who begins work for the contractor after June 30, 1992, and before January 1, 1996. Sets forth the amounts of such deduction for a three-year period and other special rules. Allows such deduction, with limitations, against the alternative minimum tax.

Allows an alternative five-percent research credit for expenses of defense contractors that increase nondefense related research.

Title III: Grants to States to Provide Technical and Financial Assistance to Defense-Dependent Contractors - Authorizes appropriations to carry out this title.

Sets forth requirements for the allocation of grants to States under this title and State application requirements. Directs a State to certify to the Secretary of Defense that it will: (1) provide an amount equal to one dollar for every ten dollars of Federal funds to provide technical and financial assistance to defense-dependent contractors; (2) maintain its aggregate expenditures from all other sources for programs which provide such assistance at or above the average level of such expenditures in the two fiscal years preceding the enactment of this Act; (3) require contractors receiving assistance to provide funds in an amount equal to one dollar for every dollar of funds provided under the program; and (4) report to the Secretary on the use of the grant.

Provides that States will allocate grant funds for assistance to defense-dependent contractors as follows: (1) 40 percent for making quality and productivity improvements and expanding markets; and (2) 60 percent for undertaking human resource development initiatives essential for defense diversification, industrial modernization, and the fulfillment of improved competitiveness strategies.