Defense Economic Adjustment Act

Defense Economic Adjustment Act - Title I: Defense Economic Adjustment Council - Establishes in the Office of the President the Defense Economic Adjustment Council. Establishes an Office of Economic Adjustment to provide necessary staff support for the Council. Sets forth the duties of the Council which include: (1) disseminating information to Federal, State, and local agencies and authorities concerning changes in defense spending affecting employment in defense industries; (2) oversight of programs providing assistance to areas adversely affected by such changes; (3) reviewing local alternative use plans; and (4) preparing and distributing a Conversion Guidelines Handbook.

Title II: Alternative Use Committees - Requires the establishment, at every defense facility employing at least 100 persons, of Alternative Use Committees representing management and labor to undertake economic conversion planning and preparation for the employment of the personnel and utilization of the facilities in the event of a reduction or elimination of any defense facility or the curtailment, conclusion, or disapproval of any defense contract.

Provides that defense contractors that fail to submit an alternative use plan to the Council or refuse or fail to carry out the provisions of a plan approved by the Council shall lose eligibility for future contracts for a period of three years as well as losing contract termination payments and eligibility for tax credits.

Requires Alternative Use Committees to periodically review plans for the conversion of the facility to civilian-oriented production and to send periodic reports to the Council regarding the progress of such plans. Directs the committees to provide occupational retraining and reemployment counseling services for employees who are displaced by the implementation of a conversion plan or the closing of a defense facility.

Specifies provisions which are to be included in each alternative use plan.

Title III: Economic Adjustment Fund - Establishes within the Treasury a Workers Economic Adjustment Reserve Trust Fund.

Requires defense contracts to contain a provision under which the defense contractor is to pay into such Fund an amount equal to one and one quarter percent per year of the value of the contractor's gross revenues on sales under such contract.

Directs the Secretary of the Treasury to deposit ten percent of the projected savings from defense cutbacks into the Fund.

Authorizes appropriations in such amounts as may be necessary to such Fund to enable the Secretary to make payments and disbursements authorized by this Act.

Title IV: Economic Adjustment Assistance for Workers - Entitles certified workers who are displaced because of defense cutbacks to specified benefits for a two-year period, including: (1) compensation sufficient to maintain the employee's income at a level equal to 90 percent of the first $20,000 per year and 50 percent of the next $5,000 in excess of $20,000 of that worker's regular annual wage; (2) vested pension credit under any applicable pension plan; (3) maintenance of any medical, disability, or life insurance coverage which such an individual had by reason of employment by the defense contractor; and (4) retraining, job search, and relocation expenses.

Provides for agreements with States to make the payments and provide the benefits authorized by this title.

Requires that in order to be eligible for benefits under this Act a displaced worker must agree to maintain an active registration with the Secretary of Labor or an appropriate State employment agency and to accept any employment determined by the Secretary or the agency to be of the same skill or work of a similar nature at the same pay as such worker was receiving before being displaced.

Provides that adjustment benefits under this Act shall not be taken into account in determining an individual's eligibility for unemployment compensation.

Provides that adjustment benefits shall terminate when a displaced worker obtains employment providing 90 percent of the first $20,000 per year and 50 percent of the next $5,000 in excess of $20,000 of the worker's previous wage or two years after displacement, whichever occurs sooner.

Title V: Community Economic Adjustment Planning - Entitles communities which are substantially and seriously affected by the reduction or elimination of military facilities or curtailment or conclusion of defense contracts to Federal assistance for economic adjustment to avoid substantial dislocations and for economic adjustment assistance should such dislocation occur.

Directs the Council to develop guidelines by which the criteria for eligibility for planning assistance are to be applied.

Authorizes the sale of excess defense capital property or facilities where such a facility is reduced or closed to the affected community at a public benefit discount.

Title VI: Industrial Economic Adjustment - Authorizes the Secretary of the Treasury to make or guarantee low-interest, long-term loans to assist contractors in carrying out an approved alternative use plan to convert a plant or facility to civilian purposes. Prohibits making any such loan or loan guarantee if financing for such plan is available from any other source.

Title VII: Use of Certain Research Fund - Authorizes the use of Department of Defense research and development funds for work which has a potential relationship to an urgent national requirement in a designated non-defense sector of the economy.

Directs the Defense Economic Adjustment Council to define urgent national requirements for non-defense sectors of the economy.

Title VIII: Authorization of Appropriations - Authorizes appropriations in such amounts as may be necessary to carry out the provisions of this Act.