King Secures HUBZone Provision in Defense Bill

Press Release

U.S. Senator Angus King (I-Maine), a member of the Senate Armed Services Committee, announced today that the Committee has approved the Fiscal Year 2016 National Defense Authorization Act (NDAA) with a provision to improve the eligibility criteria of HUBZones located at former U.S. military installations closed through the so-called "Base Closure and Realignment," or BRAC process.

The bill also contains provisions pushed by Senator King to fully fund shipbuilding priorities at Bath Iron Works and support military construction projects at Bangor IAP and Portsmouth Naval Shipyard.

"Military bases are often the economic engine of the towns and cities they call home, but when those bases close down, it doesn't mean a town has to as well," Senator King said. "With the right investments and federal funding, the government can partner with local redevelopment authorities to revitalize former bases and spur economic growth -- and that's exactly what our HUBZone provision will accomplish. The provision tailors the HUBZone program to cities and towns that have been hit hard by base closures, improving the program to jumpstart economic development, attract businesses, and create new jobs."

"I'm delighted that Senator King was able to include the BRAC HUBZone provision in the Senate version of the NDAA," said Steve Levesque, Executive Director of the Midcoast Regional Redevelopment Authority. "Both of our Maine senators have been tremendous champions of this bill, which will be a big boost to the businesses here at Brunswick Landing to allow them to grow at this former naval air station. We are so fortunate to have the senators that we do representing our interests in Washington."

"Today's announcement is an important step forward in helping towns and cities across America receive the important HUBZone designation and get back on their feet after a base closure," said Senator Collins. "I will continue to pursue every channel possible to get this legislation signed into law, which is why earlier this week Senator King and I introduced The HUBZone Expansion Act. Military bases throughout Maine and across the country are key drivers of our local economies. When they are closed through the BRAC process, it can take years for the communities in which they were located to fully recover."

Current law assists communities affected by military installation closures by giving businesses established on closed bases preferential access to federal procurement opportunities via the Small Business Administration's HUBZone program. To qualify for these preferences, at least 35 percent of the business's employees must reside on the closed base or in other economically challenged areas. Moreover, businesses that locate on former bases are only granted this special status for five years after the base closes.

However, very few people live on former bases, which makes it difficult -- if not impossible -- for businesses that are interested in helping redevelop bases attract the workers they need to meet the requirements of the HUBZone program. The amendment introduced by Senator King and included in the bill, which is identical to legislation he introduced earlier this week with Senator Susan Collins, would allow businesses that locate on a closed base to draw employees from just outside the boundaries of the closed base to meet the 35 percent requirement.

Additionally, local redevelopment authorities are often tasked with attracting new businesses to former bases, but their work cannot begin until they assume control of the base property, which can take several years -- and because HUBZone preferences only apply for five years from closure, businesses can lose years of program eligibility. Senator King's amendment would also extend the period of time for which a closed base is eligible for HUBZone status from five years after closure to eight years.

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