[Congressional Record Volume 159, Number 14 (Thursday, January 31, 2013)]
[Senate]
[Pages S444-S445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. 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.

                          ____________________