U.S. Senators Jeff Merkley (D-Ore.), Kit Bond (R-Mo.), and Evan Bayh (D-Ind.) today introduced legislation to help local businesses stay afloat during times of recession and high unemployment. The Rebuilding Local Business Act creates a temporary three-year HUBZone "Rebuilding Status" for counties that have an unemployment rate of 20 percent above the national rate during a recession, ensuring that the program is more flexible and responsive to changing economic conditions.
"While the HUBZone program works as intended when the national unemployment rate is low, it falls short when a recession wreaks havoc," Merkley said. "By tweaking the HUBZone program during a recession to include high-unemployment counties like Deschutes, Jackson, and Columbia, we can save jobs and help local businesses keep their doors open."
"This bipartisan bill will temporarily expand the successful jobs-creating HUBZone program to help small businesses rebuild, revitalize and bring hope to the communities in Missouri and across the nation that are suffering the most from job loss," Bond said.
"Small businesses are the engine that drives our economy," Bayh said. "Economic growth is not as strong as it should be and unemployment, particularly in Indiana, remains unacceptably high. Ensuring that more counties with high rates of unemployment qualify to participate in the HUBZone program is a practical approach to improving the economy and creating jobs for hardworking Hoosiers."
"I support this bill because it will keep people who live in Deschutes County working in Deschutes County," Deschutes County Commissioner Alan Unger said. "One of the best ways to raise employment numbers is to support small, local businesses that employ people in their community."
The HUBZone program allows businesses within a designated HUBZone area to apply for preferential consideration for federal contracts. Since the designation of HUBZone areas relies mainly on census data, some counties that currently qualify for the program must wait for census numbers to be updated until they can be considered. Unfortunately, this only occurs every decade. And the program currently requires HUBZones to have unemployment rates of 40 percent above the national average, which means that even counties with a 13 percent unemployment rate are not eligible, since that level is not currently 40 percent over the unusually high national rate.
The Rebuilding Local Business Act of 2010 corrects these problems during a recession by:
* Temporarily changing the data source for county eligibility from census data to Bureau of Labor Statistics data during times of recession. BLS statistics on county unemployment rates are compiled and released monthly.
* Temporarily lowering eligibility levels from 40 percent above the national unemployment rate to 20 percent above the national rate.
The bill has been endorsed by the HUBZone Contractors National Council.
Senator Merkley has co-sponsored two other bills that would improve the HUBZone program. The HUBZone Improvement Act addresses fraud and abuse in the program and makes technical corrections to assist qualifying businesses. The Small Business Programs Parity Act of 2010 would place the HUBZone program on equal standing with other SBA small business programs. This would help small businesses in counties that are currently not HUBZone counties but are still struggling with poor economic conditions.