[Congressional Record Volume 156, Number 23 (Tuesday, February 23, 2010)]
[Senate]
[Pages S702-S703]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Ms. Landrieu, Mr. Bond, and Mr. 
        Merkley):
  S. 3020. A bill to direct the Administrator of the Small Business 
Administration to reform and improve the HUBZone program for small 
business concerns, and for other purposes; to the Committee on Small 
Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today, along with Senators Landrieu, 
Bond, and Merkley to introduce the Historically Underutilized Business 
Zone, HUBZone, Improvement Act of 2010. This vital piece of bipartisan 
legislation is similar to that which I introduced in the 110th 
Congress, S. 3699. The purpose of the bill is to help ensure that only 
eligible firms participate in the critical HUBZone program by requiring 
that the Small Business Administration, SBA, implement Government 
Accountability Office, GAO, recommendations for improving the 
management, oversight and evaluation of the program.
  As former Chair and now Ranking Member of the Senate Committee on 
Small Business and Entrepreneurship, I have long championed critical 
small business programs such as the HUBZone program, which provides 
Federal contracting opportunities to small firms located in 
economically distressed areas.
  The program is devised to help stimulate economic development and job 
creation. In these troubled economic times, a properly functioning 
HUBZone program is essential for nation-wide economic recovery. 
According to the SBA, as of October 2009, 21,222 certified businesses 
have participated in the HUBZone program since its inception in 1997. 
In fiscal year 2008, HUBZone firms were awarded approximately $10.1 
billion in Federal contracts. And let there be no doubt--with the 
Federal Government contracting for over $500 billion in goods and 
services in fiscal year 2009 alone--we must have a robust and 
trustworthy HUBZone program for small businesses to continue generating 
jobs in our nation's most economically distressed communities.
  The GAO has issued multiple reports detailing fraud and abuses within 
the HUBZone program. Alarmingly, the GAO found that the mechanisms the 
SBA uses to certify and monitor HUBZone firms provide limited assurance 
that only eligible firms participate in the program. The GAO 
specifically stated that the ``SBA's control weaknesses exposed the 
government to fraud and abuse.'' The GAO also had concerns that the SBA 
had no mechanisms to adequately assess program results.
  The legislation I am introducing today would take immediate steps to 
rectify the serious issues that GAO found. The bill requires the SBA to 
implement the GAO recommendations resulting from the study and audits. 
These include maintaining an accurate, correct and up-to-date map; 
implementing policies that ensure that only eligible firms participate 
in the program; employing appropriate technology to control costs and 
maximize other benefits, such as uniformity, completeness, 
simplification and efficiency; notifying the Congressional Small 
Business Committees of any backlogs in applications and 
recertifications with plans and timetables for eliminating the 
backlogs; and implementing plans to assess the effectiveness of the 
HUBZone program.
  Moreover, the Federal Government must strive to continue to provide 
maximum practicable contracting opportunities to those who are 
legitimate HUBZone firms. I am dismayed by the myriad ways that 
government departments and agencies have time and again egregiously 
failed to meet most of their statutory small business contracting 
goals. I am alarmed that only one Federal small business contracting 
program--the Small Disadvantaged Business program--has met its 
statutory goal, and that the three other small business goaling 
programs have all fallen drastically short. In fiscal year 2008, the 
Federal Government met only 2.34 percent of its 3 percent government-
wide goal for the HUBZone program. Even worse, the Federal Government 
missed meeting its overall goal for small business contracting by 
almost 2 percent, depriving small businesses of over $10 billion.
  I am confident that this legislation will require the changes 
necessary to eliminate fraud while paving the way for the Federal 
Government to maximize the use of this contracting vehicle. In turn, 
qualified HUBZone firms will provide the essential job creation and 
economic development necessary in their respective communities. The 
HUBZone program is a tremendous tool for replacing lost jobs across all 
industry sectors in distressed geographic areas, and clearly, this 
program should be better utilized.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3020

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``HUBZone Improvement Act of 
     2010''.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the terms ``HUBZone'' and ``HUBZone small business 
     concern'' and ``HUBZone map'' have the meanings given those 
     terms in section 3(p) of the Small Business Act (15 U.S.C. 
     632(p)), as amended by this Act; and
       (3) the term ``recertification'' means a determination by 
     the Administrator that a business concern that was previously 
     determined to be a qualified HUBZone small business concern 
     is a qualified HUBZone small business concern under section 
     3(p)(5) of the Small Business Act (15 U.S.C. 632(p)(5)).

     SEC. 3. PURPOSE; FINDINGS.

       (a) Purpose.--The purpose of this Act is to reform and 
     improve the HUBZone program of the Administration.
       (b) Findings.--Congress finds that--
       (1) the HUBZone program was established under the HUBZone 
     Act of 1997 (Public Law 105-135; 111 Stat. 2627) to stimulate 
     economic development through increased employment and capital 
     investment by providing Federal contracting preferences to 
     small business concerns in those areas, including inner 
     cities and rural counties, that have low household incomes, 
     high unemployment, and suffered from a lack of investment; 
     and
       (2) according to the Government Accountability Office, the 
     weakness in the oversight

[[Page S703]]

     of the HUBZone program by the Administration has exposed the 
     Government to fraud and abuse.

     SEC. 4. HUBZONE IMPROVEMENTS.

       The Administrator shall--
       (1) ensure the HUBZone map--
       (A) is accurate and up-to date; and
       (B) revised as new data is made available to maintain the 
     accuracy and currency of the HUBZone map;
       (2) implement policies for ensuring that only HUBZone small 
     business concerns determined to be qualified under section 
     3(p)(5) of the Small Business Act (15 U.S.C. 632(p)(5)) are 
     participating in the HUBZone program, including through the 
     appropriate use of technology to control costs and maximize, 
     among other benefits, uniformity, completeness, simplicity, 
     and efficiency;
       (3) submit to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report regarding 
     any application to be designated as a HUBZone small business 
     concern or for recertification for which the Administrator 
     has not made a determination as of the date that is 60 days 
     after the date on which the application was submitted or 
     initiated, which shall include a plan and timetable for 
     ensuring the timely processing of the applications; and
       (4) develop measures and implement plans to assess the 
     effectiveness of the HUBZone program that--
       (A) require the identification of a baseline point in time 
     to allow the assessment of economic development under the 
     HUBZone program, including creating additional jobs; and
       (B) take into account--
       (i) the economic characteristics of the HUBZone; and
       (ii) contracts being counted under multiple socioeconomic 
     subcategories.

     SEC. 5. EMPLOYMENT PERCENTAGE.

       Section 3(p) of the Small Business Act (15 U.S.C. 632(p)) 
     is amended--
       (1) in paragraph (5), by adding at the end the following:
       ``(E) Employment percentage during interim period.--
       ``(i) Definition.--In this subparagraph, the term `interim 
     period' means the period beginning on the date on which the 
     Administrator determines that a HUBZone small business 
     concern is qualified under subparagraph (A) and ending on the 
     day before the date on which a contract under the HUBZone 
     program for which the HUBZone small business concern submits 
     a bid is awarded.
       ``(ii) Interim period.--During the interim period, the 
     Administrator may not determine that the HUBZone small 
     business is not qualified under subparagraph (A) based on a 
     failure to meet the applicable employment percentage under 
     subparagraph (A)(i)(I), unless the HUBZone small business 
     concern--

       ``(I) has not attempted to maintain the applicable 
     employment percentage under subparagraph (A)(i)(I); or
       ``(II) does not meet the applicable employment percentage--

       ``(aa) on the date on which the HUBZone small business 
     concern submits a bid for a contract under the HUBZone 
     program; or
       ``(bb) on the date on which the HUBZone small business 
     concern is awarded a contract under the HUBZone program.''; 
     and
       (2) by adding at the end the following:
       ``(8) Hubzone program.--The term `HUBZone program' means 
     the program established under section 31.
       ``(9) Hubzone map.--The term `HUBZone map' means the map 
     used by the Administration to identify HUBZones.''.

     SEC. 6. REDESIGNATED AREAS.

       Section 3(p)(4)(C)(i) of the Small Business Act (15 U.S.C. 
     632(p)(4)(C)(i)) is amended to read as follows:
       ``(i) 3 years after the first date on which the 
     Administrator publishes a HUBZone map that is based on the 
     results from the 2010 decennial census; or''.
                                 ______