[Congressional Record Volume 158, Number 160 (Wednesday, December 12, 2012)]
[Senate]
[Pages S7979-S7980]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Ms. Snowe):
  S. 3675. 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, with 
Senator Snowe, to expand the geographic boundaries of HUBZones located 
at former U.S. military installations that have been closed through the 
so-called Base Closure and Realignment--or BRAC--process. These 
military installations were often the economic heart of the community 
in which they were located, and those 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. Last week, the Defense Reauthorization bill passed by 
the Senate included language, authored by Senator Sherrod Brown of 
Ohio, to extend HUBZone status for these facilities for an additional 
five years.
  The HUBZone program provides certain federal contracting preferences 
to small businesses located within a HUBZone. In addition to the BRAC-
related HUBZones I have already mentioned, HUBZones are 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.
  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, the host community lost 
more than 2400 military and civilian personnel. Brunswick and its 
neighbor, Topsham, have a combined population of just 22,000, so losing 
the Naval Air Station has had a significant economic impact on these 
communities. Because so few people actually live within the boundaries 
of the former base, its HUBZone designation does not provide any real 
assistance to these communities.
  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 a letter to Senate 
Armed Services Committee Chairman Levin and Ranking Member McCain, the 
ADC noted 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, also urges Congress to modify 
the HUBZone program. In a letter, 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 colleagues to consider the legislation I am 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. Seante, 
         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,

                                                December 11, 2012.
     Hon. Susan Collins,
     U.S. Senator,
     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

[[Page S7980]]

     and create upwards of 200 jobs, if we are successful in 
     getting the current HUBZone program for closed military 
     installations broadened.
       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.
                                  ____

                                                December 12, 2012.
     Hon. Susan Collins,
     U.S. Senator,
     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 HUI3Zone 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.

  Ms. SNOWE. Mr. President, I rise to speak in support of a bill that I 
am cosponsoring today with my colleague from Maine, Senator Collins, 
that will ensure that the Small Business Administration's, SBA, 
Historically Underutilized Business Zone, HUBZone, program will support 
the many communities around this Nation that have been negatively 
impacted by base closures.
  Over the course of my career, my state has experienced two major base 
closures--Loring Air Force Base was closed by the 1991 BRAC round and 
Brunswick Naval Air Station was closed by the 2005 BRAC round. Like 
every community around the Nation that has experienced a base closure, 
Brunswick and Loring have fought tirelessly to replace the jobs and 
economic impact of their military installations.
  Unfortunately, theirs is an exceptionally difficult task. Consider, 
for instance, that the closure of Brunswick Naval Air Station directly 
eliminated nearly 3,300 military and federal civilian jobs, and 
indirectly caused the loss of approximately 3,800 additional jobs from 
the region. Overcoming the effects of such dramatic changes in a local 
employment and economic market is, without question, a long-term 
challenge that is made even more difficult in a period of prolonged 
economic recession.
  That is why I have always argued that the Nation has a responsibility 
to do everything within our power to help those communities that have 
supported our military infrastructure for decades to recover from the 
devastating economic impacts of a base closure.
  One way that we can assist in their recovery is to encourage the 
location and growth of small businesses in and around closed military 
installations. As Ranking Member of the Senate Committee on Small 
Business and Entrepreneurship, I frequently talk with small business 
owners and employees about their challenges and needs. In many cases, 
they tell me about the difficulties they face in competing against 
larger and more established businesses for federal contracts.
  That is why, in my efforts to champion our Nation's small businesses 
and to promote their interests, I have supported the Small Business 
Administration's HUBZone Empowerment Contracting program. Congress 
established this program as part of the Small Business Reauthorization 
Act in 1997 in order to spur business development and employment 
opportunities in economically distressed areas of the country. In 2004, 
with my support, we took the critical step of expanding the HUBZone 
program to include ``base closure areas,'' which directly addressed 
military installations that have been closed through any of several 
military base closure and realignment authorities, including BRAC 
rounds.
  Although this was an important step forward, the 2004 expansion to 
include closed military installations in the HUBZone program was 
limited to areas within the physical boundaries of the military base. 
Current law requires that 35 percent of the employees of a HUBZone 
qualified small business concern also must live within the HUBZone 
designated area.
  However, small businesses that are interested in establishing a 
location at a closed military installation in order to gain the 
benefits of becoming a HUBZone small business concern are likely to 
discover that not very many people live on the grounds of that closed 
base, leaving them without sufficient workers to meet the 35 percent 
requirement. This, of course, defeats the very purpose of the HUBZone 
designation for closed military installations by serving as a 
disincentive for small businesses to open shop at a redeveloping base.
  In light of these facts, and considering that the economic and 
employment impacts of closing a military installation are 
unquestionably and disproportionately felt by the people who reside in 
the communities around former military installations--not just within 
the fencelines of former bases--it is clear that the HUBZone 
designation for closed military installations needs to be clarified.
  That is why the bill that I have cosponsored with my colleague 
adjusts the designation of a base closure area to include the 
geographic area that is the municipality, county, or census tract in 
which the installation is located (as well as the adjacent census 
tract), which incorporates up to 50,000 people. And so, to my friends 
and colleagues here in the Senate, I urge you to join me in supporting 
this bill and showing your strong support for providing the maximum 
benefits of the HUBZone designation to the many communities around our 
nation that have been impacted by base closures.
                                 ______