Peters Cosponsors Bipartisan Bill to Extend HUBZone Redesignation Period from Three to Seven Years

WASHINGTON, DC – U.S. Senator Gary Peters (D-MI) announced he is cosponsoring bipartisan legislation to support the Small Business Administration’s (SBA) Historically Underutilized Business Zone (HUBZone) program by extending from three years to seven years the period in which HUBZone businesses can retain their status after losing the program’s designation. The HUBZone program increases capital investment in distressed areas by providing small businesses located in certain areas with contracting opportunities. Many communities in Michigan, particularly across Northern Michigan and the Upper Peninsula, are designated as HUBZone regions by the SBA.

“Small businesses drive economic growth locally and nationally by tapping into innovation and potential that might otherwise never be developed,” said Senator Peters. “Hundreds of businesses in Michigan benefit from access to new contracting opportunities as a result of their HUBZone designation, and this commonsense legislation will help ensure they have the time they need to adapt when their designation changes—providing more stability and security for small businesses and their employees.”

The SBA’s HUBZone program provides government contracting opportunities, sole-source awards, and price evaluation preferences to businesses with principal offices in eligible HUBZones. HUBZones are census tracts designated as having low household incomes, high unemployment, and a lack of economic opportunity. When an area no longer qualifies, it is classified as “redesignated” and businesses have a transitional period in which they still qualify for benefits, after which they must find new contracts or relocate if they cannot find business.

Small businesses have indicated that the three-year transition period deters many companies from investing in HUBZones because the financial risk of being established in a HUBZone is offset by the short period. The HUBZone Investment Protection Act would help provide communities and HUBZone businesses with sufficient time to maximize their investments and plan their post-HUBZone business strategies extending the transition period from three years to seven years.