March 22, 2017

Van Hollen, Cardin Fight to Save Small Business Jobs in Economically Challenged Rural and Urban Areas

U.S. Senators Chris Van Hollen and Ben Cardin (D-Md.) joined with Senators Jim Risch (R-Idaho), Jeanne Shaheen (D-N.H.), and Mazie Hirono (D-Hawaii) to introduce a bill that improves the Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program and helps small businesses rebuild, revitalize, and invest in distressed communities across the United States. The "HUBZone Investment Protection Act of 2017" (S. 690), acts to avert the imminent loss of jobs and certified small businesses in these already economically-fragile rural and urban regions.Text of the bill can be found here.

"Maryland succeeds only when every community has access to good paying jobs. HUBZones help businesses thrive in both rural and urban areas that are still hurting from the economic downturn, and we must do everything possible to protect them and ensure they can continue to grow. This legislation strengthens HUBZones and the small businesses in Maryland that they support," said Senator Van Hollen

"Across America, small businesses continue to be responsible for creating two out of every three new jobs, but this success is still is not reaching every corner of every state. The HUBZone program gives a boost to rural and urban regions that have been slow to realize economic recovery and growth," said Senator Cardin. "HUBZone companies create jobs and communities like Maryland's Garrett County and Baltimore City will benefit from this bipartisan effort to prevent the loss of small businesses at a time when these communities are still economically vulnerable. It is the smart thing to do for Maryland and for our nation."

The HUBZone program was designed to provide economic opportunity to inner cities and rural counties that have low-household incomes, high unemployment, and whose communities have suffered from a lack of investment and the loss of jobs from declining manufacturing and industrial sectors. Companies that are qualified to participate in the program receive preferential treatment in federal contracting in the form of "set-asides," sole-source awards, and price-evaluation preferences.

To qualify for the program, companies must have a principal office in a HUBZone and can remain in the program until the area no longer qualifies as a HUBZone, based on improved economic data, and for three years thereafter. Small businesses have indicated that the three-year transition or "designation period" deters many companies from investing in HUBZones because such a short time period is not sufficient to justify the financial risk of locating or relocating in a HUBZone. The "HUBZone Investment Protection Act of 2017" (S. 690) was developed to address this problem by increasing the transition period from 3 to 7 years, which will provide communities and businesses the time to maximize their investments and plan their post-HUBZone business strategy.

SBA regulates and implements the program, determines which businesses are eligible to receive HUBZone contracts, maintains a database of qualified HUBZone businesses, and adjudicates protests of eligibility to receive HUBZone contracts.HUBZone Certification requirements can be found here.