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Susan C.
Republican ME

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  • Statements on Introduced Bills and Joint Resolutions

    by Senator Susan M. Collins

    Posted on 2013-01-31

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    COLLINS (for herself and Mr. King): S. 206. A bill to expand the HUBZone program for communities affected by base realignment and closure, and for other purposes; to the Committee on Small Business and Entrepreneurship.



    Ms. COLLINS. Mr. President, today I am introducing legislation to expand the geographic boundaries of HUBZones located at former U.S. military installations closed through the so-called Base Closure and Realignment--or BRAC--process. This legislation mirrors S. 3675, the HUBZone Expansion Act of 2012, which I introduced with Senator Snowe last session.

    I am pleased to have my new colleague from Maine, Senator Angus King, join me in offering this legislation. Senator King knows the impact a base closing can have on a local community all too well, coming as he does from Brunswick, ME, which recently lost a major military installation through the BRAC process. Military bases are often the economic heart of the towns and cities in which they are located, and communities can struggle for years to overcome the closure of those facilities.

    In recognition of this fact, Congress passed legislation providing HUBZone status for 5 years to military facilities closed through the BRAC process. This allows small businesses located within the HUBZone to obtain certain federal contracting preferences. The HUBZone program is also available to small businesses located in ``economically distressed communities,'' that suffer from low income, high poverty rates, or high unemployment.

    According to the Congressional Research Service, there are currently 127 BRAC-related HUBZones in the United States. Unfortunately, for many of the military bases that have been closed, HUBZone status has not brought the benefits we had hoped for. One of the reasons is simple-- the law defines the geographic boundaries of a BRAC-related HUBZone to be the same as the boundaries of the base that was closed. When that is combined with the requirement that 35 percent of the employees of a qualifying business must live within the HUBZone, the problem is clear: very few people live on these former bases, so it is difficult or impossible for businesses to get the workers they need to meet the requirements of the HUBZone program.

    As I mentioned, one of these HUBZones is located at the former Brunswick Naval Air Station, in Brunswick, Maine. This facility closed in 2011, as a result of the 2005 BRAC round. When the Navy left, Brunswick and its neighbor, Topsham, lost more than 2400 military and civilian personnel. These two towns have a combined population of just 22,000, so losing the Naval Air Station has had a significant economic impact on them. Because so few people actually live within the boundaries of the former base, its HUBZone designation does not provide the help they need, and that we had hoped for.

    My legislation would expand the geographic boundaries of BRAC-related HUBZones to include the town or county where the closed installation is located, or census tracts contiguous to the installation, up to a total population base of 50,000. This would provide a large enough pool of potential workers to enable qualifying businesses to locate within the HUBZone, and to help host communities overcome the loss of military installations closed through the BRAC process.

    The Association of Defense Communities has endorsed the concept of expanding BRAC-related HUBZones in this manner. In December, the ADC wrote to Senate Armed Services Committee Chairman Levin and Ranking Member McCain, noting how important it is that ``Congress restore its intent to support BRAC-impacted communities attracting small businesses to help build and strengthen their local economies.'' Steve Levesque, the Executive Director of the Midcoast Regional Redevelopment Authority, or ``MRRA,'' which oversees the redevelopment of the former Brunswick Naval Air Station, has also urged Congress to modify the HUBZone program. In a letter to me last month, Steve explained that BRAC facilities do not have the residential areas needed to support the 35 percent residency requirement for businesses located within the HUBZone. As a consequence, these businesses cannot ``realize the HUBZone benefits for BRAC'd installations as envisioned by Congress.'' This point was underscored in a letter from Heather Blease, an entrepreneur who is hoping to locate a new business at the former Brunswick Naval Air Station. Ms. Blease describes the HUBZone law as ``flawed,'' because the 35 percent residency requirement makes it impossible for businesses like hers to achieve HUBZone status.

    I ask my collegues to consider the legislation we are offering today to help communities get back on their feet after the loss of a military installation closed through the BRAC process.

    Mr. President, I ask unanimous consent that letters of support be printed in the Record.

    There being no objection, the material was ordered to be printed in the Record, as follows: Association of Defense Communities, Washington, DC, December 11, 2012.

    Hon. Carl Levin, Chairman, Committee on Armed Services, U.S. Senate, Washington, DC.

    Hon. John McCain, Ranking Member, Committee on Armed Services, U.S. Senate, Washington, DC.

    Dear Mr. Chairman and Ranking Member McCain: The Association of Defense Communities (ADC) admires your longstanding support of current and former military communities. ADC, the leading organization representing those communities, always appreciates the opportunity to share information with you and your staff that may help strengthen communities with active installations and those that continue to redevelop following base closure or realignment.

    Communities that have been impacted by Base Realignment and Closure (BRAC) often face severe economic distress for years, especially during times of national economic difficulty. To assist in these communities' recovery, Congress authorized in the Small Business Reauthorization Act of 1997 that BRAC- impacted communities would receive Small Business Administration HUBZone certification, a federal initiative that further helps small businesses in disadvantaged areas to compete for federal contracts. The designation gives small businesses relocating to closed military installation areas equal footing with businesses in other disadvantaged areas that receive the designation because of their location in under-utilized census tracts.

    While the intent of Congress was to provide the HUBZone designation to help closed military installations attract small businesses, one aspect of the HUBZone program actually works against these redevelopment areas. To maintain HUBZone status, 35 percent of a business' employees must also live in a HUBZone area. Because a military installation's HUBZone area encompasses only the base itself, many closed military installations do not have a substantial number of HUBZone- certified residential areas from which to draw sufficient future employees for the businesses desiring to locate on those properties. Thus, it is often impossible for a business to qualify for HUBZone status and compete fairly against other small businesses.

    Many defense community leaders are hopeful this issue can be resolved without additional spending, creation of a new government program or a change in government contracting goals. Senator Susan Collins is also working to address this issue during the final stages of the FY 2013 National Defense Authorization Act. We look forward to sharing further information with your office and hers to help explain why it is important to defense communities that Congress restore its intent to support BRAC-impacted communities attracting small businesses to help build and strengthen their local economies.

    As always, ADC appreciate your service and support and hopes you will contact us if we may be of further assistance.

    Respectfully, Robert M. Murdock, President, Association of Defense Communities.

    ____ Midcoast Regional Redevelopment Authority, Brunswick, ME, December 11, 2012.

    Hon. Susan Collins, U.S. Senator, Dirksen Senate Office Building, Washington, DC.

    Dear Senator Collins: I represent the Midcoast Regional Redevelopment Authority, which is charged with redeveloping the former Naval Air Station Brunswick, Maine that closed in 2011 and is now known as Brunswick Landing.

    We seek your assistance in modifying the current federal program related to SBA HUBZones to make it a more effective tool for businesses locating at Brunswick Landing. Over the past several years, we have had several companies inquire about the current HUBZone status of the former NAS Brunswick. In fact, we are currently working with one company who is willing to locate here and create upwards of 200 jobs, if we are successful in getting the current HUBZone program for closed military installations broadened.

    [[Page S445]] With the implementation of the latest 2005 BRAC round, a number of military installations have been closed across the country resulting in severe economic distress for those communities and States that have realized these closures. Redeveloping these BRAC'd properties proved quite difficult in good economic times, and now it is made even more difficult with the national and State economic recession we are experiencing.

    While it would seem that the HUBZone designation for a closed military installation would be an aid to its redevelopment efforts, the 35% residency rule in the existing law actually makes the program not a very effective redevelopment tool for these properties at all. With the exception of closed military installations, most of the HUBZones in the Country are census tract based. Under current law, only the closed military base itself (i.e., the geographic area which used to be the former base) is designated as a HUBZone, which is a much smaller area than the census tract basis. Furthermore, many closed military installations do not have a substantial amount of residential areas from which to draw sufficient future employees (35%) for the businesses desiring to locate on those properties.

    In addition the above, the Small Business Act established a five year time-frame for the duration of the HUBZone from the actual date of base closure. This is of particular concern given that the actual transfer of properties from the military services to the base closure communities often occurs many years following closure. Thus, these properties are not available for business development until actually transferred.

    The net effect is that eligible HUB businesses seeking new or expanded opportunities on closed installations cannot meet these requirements and thus are not able to realize the HUBZone benefits for BRAC'd installations as envisioned by Congress. This issue exacerbates the difficulties for us and other similar communities to overcome the devastating economic effects of base closures.

    In order to make the BRAC HUBZone designation an effective economic development tool for Brunswick Landing, as well as all the other closed installations across the country, the attached amendment language to the existing law is recommended. It should be noted that these recommendations do not create a new program, require additional government spending, or increase federal contracting goals.

    Thank you for your service to our Country and the State of Maine and your thoughtful consideration of this request.

    Sincerely, Steven H. Levesque, Executive Director.

    ____ Heather D. Blease, Freeport, ME, December 12, 2012.

    Hon. Susan Collins, U.S. Senator, Dirksen Senate Office Building, Washington, DC.

    Dear Senator Collins: I have established a new contact center business that focuses on providing service to the federal government. A key strategy for our success hinges upon the establishment of my business as a HUBZone certified entity.

    As a native of Brunswick, Maine, I am keenly interested in locating my business at the former Brunswick Naval Air Station, now called Brunswick Landing. As a BRAC facility, the SBA rules limit the boundary of the HUBZone geographically to base property which has very few housing units.

    In order to achieve HUBZone certification, 35% of my employees need to reside within the HUBZone.

    As the law is written, I cannot locate at Brunswick Landing and hope to achieve HUBZone status. The BRAC HUBZone law is flawed as written. Our Congress attempted to create an economic development vehicle to help communities recover from base closures, but unless the law is tweaked, the HUBZone designation is meaningless.

    Please help modify the existing definition for BRAC HUBZones by broadening the boundary of the HUBZone for closed military installations to include the surrounding community. In the case of my company, it provides me with HUBZone employees to put to work so I can meet the HUBZone certification requirements.

    If the law is changed, I will locate my business at Brunswick Landing and provide hundreds of jobs to the economically depressed area. Otherwise, I will need to seek out other alternatives.

    Thank you for your service to our country, the State of Maine and your interest in helping small businesses thrive.

    With greatest respect, Heather D. Blease, CEO, Savi Systems, LLC.

    ____________________

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