Defense Bill in Congress Could Expand HUBZone Locations in Maine

Original Article: Press Herald

A defense bill winding its way through Congress would authorize more than $1 billion in additional spending for destroyers built at Bath Iron Works, as well as changes to a federal program that could help lure more development to the former Brunswick Naval Air Station.

On Tuesday, negotiators from the House and Senate unveiled a compromise on a $612 billion defense bill that would authorize spending levels, provide a pay increase to military personnel and set other defense policies. The bill needs approval by both chambers and faces a potential veto from President Obama over the way Republicans paid for the spending.

But the bill contains a number of provisions sought by members of Maine’s congressional delegation.

The bill would authorize $3.1 billion for the procurement of two more DDG-51 Arleigh Burke-class destroyers – one of which would be built at BIW – and an additional $433 million for construction of DDG-1000 Zumwalt-class destroyers at the shipyard. The Zumwalt program has come under scrutiny in recent months because of cost overruns and delays in delivering the first of the three planned “stealth destroyers,” which are the largest and most technologically advanced destroyers ever built for the Navy but carry a price tag of $4.3 billion each.

The National Defense Authorization Act also contains $400 million in incremental funding for a future Arleigh Burke destroyer that could go to BIW under the terms of a 2002 “ship-swap” agreement between the Navy, the Bath shipyard and its chief competitor, Ingalls Shipbuilding in Pascagoula, Miss. Under the 2002 agreement, the Navy transferred construction of four amphibious warships, known landing platform dock ships, from Bath to Pascagoula and in return agreed to award four destroyers to BIW.

All four members of Maine’s congressional delegation – U.S. Sens. Susan Collins and Angus King, and U.S. Reps. Chellie Pingree and Bruce Poliquin – have argued that Congress’ decision last year to provide funding for a fourth amphibious ship should trigger another destroyer contract for BIW.

“This is good news for BIW,” Pingree said in a statement. “The 2002 deal clearly means that Bath should get another ship if Huntington Ingalls gets a contract for a new LPD. And putting the funding for another ship in the (defense bill) is an important step in the right direction.”

The bill also would expand an economic development program, known as the Historically Underutilized Business Zones or HUBZones program, that members of the delegation said could benefit Brunswick.

Under the program, businesses located within designated HUBZones are eligible for preferential treatment when it comes to landing federal contracts. Congress created HUBZones to encourage redevelopment of former military bases closed through the Base Realignment and Closure, or BRAC, process.

But members of Maine’s delegation have argued that a residency requirement specifying that at least 35 percent of a business’s employees must live within the HUBZone would be too restrictive to benefit Brunswick and some other communities affected by base closures because so few people live on the former bases. King and Collins had proposed the changes in the Senate bill while Poliquin had changes inserted to the House version.

Under the compromise bill, the Small Business Administration would expand the boundaries of the HUBZone residency requirement to include more of the surrounding communities and would extend the window for which former bases are eligible for HUBZone designation from five to eight years.

“This bill takes a significant step forward in improving the HUBZone program for rural communities,” King said in a statement. “By revamping the eligibility criteria, towns and cities that have been hit hard by base closures will be better positioned to revitalize those former bases, jumpstart economic development, attract businesses, and create new jobs.”

The bill now headed to the House and Senate floors only authorizes spending. It will be up to the House and Senate budget writers to actually earmark funding for programs. Collins serves on the Senate Appropriations Committee while Pingree serves on the House Appropriations Committee.