April 21, 2017

Hirono Introduces Bill to Support Maui County’s Small Businesses

Without Action, Maui County HUBZone Designation Would Expire in January 2018

Senators Mazie K. Hirono (D-Hawaii), Ben Cardin (D-Md.), Jim Risch (R-Idaho), Jeanne Shaheen (D-N.H.), and Chris Van Hollen (D-Md.) introduced legislation to extend the federal Historically Underutilized Business Zone Contracting (HUBZone) program for Maui County small businesses, and other communities that are set to lose their HUBZone designation.

Maui County currently qualifies for the HUBZone program. However, under federal law HUBZone designations are periodically updated based on changes to federal statistics related to housing, the unemployment rate, and other factors. As a result, Maui is scheduled to lose its HUBZone status in January 2018 absent Congressional action. The “HUBZone Investment Protection Act of 2017” (S. 690), would extend Maui County’s HUBZone designation for an additional four years.

“Maui County’s HUBZone designation is a critical tool that supports entrepreneurs and creates jobs in underserved communities,” Senator Hirono said. “Maui residents are already grappling with job losses and closures, and losing this program next year would be yet another blow to Maui’s economy. This legislation would extend Maui County’s HUBZone status for another four years during which we can work together to find a long-term solution to support Maui business owners.”

“Maui County’s HUBZone designation has been a strong tool for helping our businesses compete for federal contracts,” said Leslie Wilkins, Vice President of the Maui Economic Development Board. “Maui County is comprised of small towns and rural communities and we do not have the resources available in metro areas. The HUBZone designation has helped to level the playing field for our entrepreneurs and home-grown business, as well as providing an economic incentive for businesses to bring high wage jobs to Maui County.”

The HUBZone program was designed to provide economic opportunity to areas that have had historically low-household incomes, high unemployment, or have suffered from a lack of investment and the loss of jobs from declining manufacturing and industrial sectors or military base closures. Companies that are qualified to participate in the program are better able to compete for and win federal contracts due to “set-asides,” sole-source awards, and price-evaluation preferences that the HUBZone program makes available to eligible businesses. Access to federal contracting opportunities through the HUBZone program can help expand employment, attract capital investment to the community, and provide additional economic development resources that can be combined with existing local businesses.

To qualify for the program, companies must have a principal office in a HUBZone and can remain in the program until the area no longer qualifies as a HUBZone. Areas where economic statistics have improved can apply for and receive a three-year transition or “redesignation period” prior to fully losing their HUBZone designation. Small businesses have indicated that the three-year transition deters many companies from investing in HUBZones because such a short time period is not sufficient to justify the financial risk of locating or relocating in a HUBZone. The “HUBZone Investment Protection Act of 2017” (S. 690) was developed to address this problem by increasing the transition period from three to seven years, which will provide communities and businesses the time to maximize their investments and plan their post-HUBZone business strategy.