Government Contracts Monitor

Short Take: SBA Revises HUBZone Rules to Implement Changes in 2016 NDAA

August 8, 2016

The U.S. Small Business Administration (SBA) recently announced a final rule making several amendments to the HUBZone Program designed to implement section 866 of the National Defense Authorization Act for Fiscal Year 2016 (2016 NDAA). Like Section 866 of the 2016 NDAA, the rule expands the HUBZone program to assist small businesses in disaster areas and base closure areas and provides equal treatment under the HUBZone program for small businesses owned by authorized Native Hawaiian Organizations (NHOs).

More particularly, the rule treats certain “Major Disaster” areas as HUBZones for a period of 5 years. The subject areas include census tracts and nonmetropolitan counties (NMC) in which the President has declared a “major disaster”, if such census tract or NMC lost its HUBZone eligibility within the past 5 years or will lose its UBZone eligibility within 2 years after the major disaster. In addition, the rule provides that areas where catastrophic incidents occurred shall be treated as HUBZones for a period of 10 years, subject to the same conditions (loss of HUBZone eligibility within the past 5 years or within 2 years after the catastrophic incident). The rule also extends HUBZone eligibility for base closure areas (BRACs) to 8 years (up from 5) and expands HUBZone eligibility to census tracts and NMCs that (1) contain BRACs, (2) intersect with BRACs, (3) are contiguous to BRACs, or (4) are contiguous to any census tract or NMC described in (1) through (3). Finally, the new rule expressly allows small businesses owned by NHOs to qualify as HUBZone companies.

This rule will be effective on October 3, 2016 without further action, unless significant adverse comment is received by September 6, 2016 (in which case SBA will withdraw the rule in the Federal Register. Comments should be identified by RIN 3245–AG81 and may be submitted via the Federal Rulemaking Portal at http://www.regulations.gov or by mail or hand-delivery / courier to: Mariana Pardo, Director, HUBZone Program, 409 Third Street SW., Washington, DC 20416. SBA will post all comments on www.regulations.gov.

Attorneys

Lindsay Simmons