The HUBZone Program encourages companies to relocate their businesses into communities with high unemployment rates, thereby creating opportunities where they are needed most. Written and passed into law over twenty years ago, the legislation behind the HUBZone Program has not kept pace with today’s economic environment. Here are four legislative updates proposed by the HUBZone Council to make this happen:
1. Increase Re-Designation Periods to 7 Years
Currently, HUBZones have 3-year re-designation periods. Extending this period to seven years would convince more businesses that they will have sufficient time to succeed and, therefore, encourage them to make even greater investments in their businesses and their HUBZone community.
2. Assure Tax Advantage in the Case of Re-Designation
In the same way, companies that locate their principal office to a HUBZone need to know that they will hold onto their tax advantage even after a HUBZone has been re-designated.
3. Increase the HUD Limit
The Department of Housing and Urban Development (HUD) limits the amount of qualified areas to 20% of defined metropolitan areas. Nearby non-qualifying areas are only better off, relatively speaking, than their HUBZone neighbors. By extending the HUD limit, these surrounding areas will benefit by HUBZone designation and the resulting investment into their community.
4. Increase Participation in Non-Metropolitan Counties
While non-metropolitan areas can only qualify for HUBZone status if their unemployment rate is greater than 140% of the lesser of the National or State unemployment rate, lowering this requirement would allow for more HUBZones. Non-metropolitan areas also would benefit from more HUBZones if the cut-off for median incomes of 80% of the State median household income was increased.
HUBZones are one of the best ways to create jobs in America and, in today’s lackluster economy, America needs more. These initiatives would quickly encourage most businesses to plant a stake and invest in these hard hit communities.