May 16th, 2016 by WCBC Radio
Sixth District Congressman John Delaney filed legislation today to extend federal HUBZone eligibility for Garrett County businesses through 2022. The GARRETT HubZone Redesignation Act would reform the Small Business Administration’s (SBA) management of the HUBZone program, giving Garrett County and similar communities nationwide significantly more time to benefit from the program and adjust to potential changes. Absent congressional action, Garrett County will lose HUBZone status in 2018. According to the Garrett County Chamber of Commerce, there are 11 HUBZone certified businesses countywide, employing more than 320 people.
“This bill is about protecting local jobs and attracting new economic development in Garrett County,” said Congressman Delaney. “HUBZone status supports hundreds of local jobs and it is crucial that we extend eligibility for Garrett County businesses. Three hundred jobs in Garrett County – that’s tremendously important to the community. Local business officials and community leaders have made it clear that there are numerous problems with the SBA redesignation process and it needs to be reformed.”
“The HUBZone designation is the main reason that two of our largest employers (Garrett Container Systems and GCC Technologies) located to Garrett County (and why they have remained) and we currently have 11 companies participating in the program,” said Paul Edwards, Chairman Garrett County Board of Commissioners. “Being a struggling rural county with the 4th lowest per capita income in the state, these businesses are invaluable to our economy and to our community. This legislation would help provide more time to work with these companies to hopefully retain them, as well as to help the community transition and diversify. I am very impressed that the Congressman has taken this on our behalf and appreciate his efforts.”
“The HUB Zone program is vitally important to Garrett County as we have 11 companies employing more than 300 people utilizing the program,” said Nicole Christian, President & CEO of the Garrett County Chamber of Commerce. “The County will lose its HUB Zone status in the near future and the legislation that Congressman Delaney is sponsoring will soften the blow for these companies and provide additional time for Garrett County to work to retain our HUB Zone designation. We are appreciative of Congressman Delaney’s efforts to help our community and the companies that are thriving because of the HUB Zone program.”
“For 14 years, TDEC has effectively used the HUBZone certification to substantially grow our business while creating new jobs in Garrett County, MD, an area of persistent unemployment,” said R. Dennis DeFour, President TDEC. “Extending the redesignation period to 7 years will allow companies in Garrett and other affected areas to continue to leverage the certification creating even more new jobs which is good for business and the economy.”
“A major objective of the HUBZone program is to spur economic development and generate jobs in economically distressed areas by setting aside federal contracting dollars towards small businesses servicing those areas,” said Shirley Bailey, GCC Technologies. “One of the major deterrents to companies investing in these areas is the business uncertainty associated with area redesignations and the short time frame associated with the current 3 year re-designation period. By increasing the re-designation period from 3 to 7 years, communities and businesses will be provided a level of business certainty that will enable them an opportunity to diversify and maintain the business investments in the re-designated communities while mitigating financial impacts. The HUBZone Council considers this legislation to be a major step in creating jobs in our nation's most distressed communities and helping those communities continue to move towards economic stability.”
The Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program is a small business federal contracting assistance program designed to encourage economic development in economically underperforming areas.
The Growing and Reviving Rural Economies Through Transitioning (GARRETT) HUBZone Redesignation Act
Background:
· The Small Business Administration (SBA) administers the Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program. Created in 1997, HUBZone is a small business federal contracting assistance program designed to encourage economic development in economically underperforming rural and urban areas.
· HUBZone-certified companies receive competitive and sole source contracting and a 10% price evaluation preference in full and open contract competitions, as well as subcontracting opportunities.
· The Census Bureau periodically analyzes data to determine which counties are designated as HUBZones. If a HUBZone no longer qualifies, they are assigned as “redesignated” for 3 years with full elimination of HUBzone benefits at the conclusion of the term.
The Problem:
· Entities residing in areas that lose their HUBZone designation only have three years to prepare for the loss of HUBZone Status.
· In 2015, Garrett County, MD, was redesignated, meaning the community will lose the HUBZone status in 2018.
· For some companies, federal contracts represent approximately 50% of their revenue and a loss of HUBZone status will have a significant impact not just on their individual business, but on the local economy and the local tax base, impacting the private and public sectors significantly.
· The short redesignation period also inhibits more substantial, long-term investments from businesses due to lack of certainty.
· Time is needed for local governments to prepare to keep and attract businesses and jobs.
The Solution:
· Extend the “redesignation” period to 7 years.
· Such an extension will provide communities and businesses an opportunity to diversify their business to transition seamlessly.
· An extension will also provide the confidence needed for businesses to further increase the investment in currently designated HUBZones.
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