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National Business Relocation Study

IV. Federal Agency Survey Results

BACKGROUND
A study was completed of the present relocation payments for non-residential displacees authorized in the Code of Federal Regulations (49 CFR Part 24 Sections 303 and 304).

As part of the study, representatives from the U.S. Army Corps of Engineers, U.S. General Services Administration, Housing and Urban Development, Federal Aviation Administration, U.S. Fish & Wildlife Service, Environmental Protection Agency, Naval Facilities Engineering Command, and National Park Service were contacted.

The participating agencies received a two-page questionnaire that requested specific information on the number of businesses displaced by the agency and on the agency's ability to pay greater benefits than those authorized by 49 CFR Part 24 Sections 303 and 304. The questionnaire included questions to elicit opinions from the agency representatives about the adequacy of benefits authorized in the regulations.

SURVEY BASE
The eight responding federal agencies have displaced more than 600 businesses within the past three years. Of those, about ten percent were categorized by the agencies as being "complex businesses." Twenty questionnaires were completed by the eight agencies; the disparity in these numbers is because some agencies have more than one division performing similar relocation work. Only three of the twenty agency representatives responding have not performed business relocations within the last two years.

ADEQUACY OF MOVING & REESTABLISHMENT PAYMENTS
The agency representatives were asked if they felt the present payments authorized in 49 CFR Part 24 Sections 303 (moving) and 304 (reestablishment) are adequate to meet the needs of a displaced business. Seventy-five percent of the agencies indicated that the moving expenses are adequate. Sixty percent of the agencies indicated that the $10,000 cap on expenses eligible for reestablishment benefits is not adequate to create a successful business operation after a relocation. A common observation of these agencies was that relocated businesses incurred substantial reestablishment costs beyond those authorized for reimbursement. There was no statistical data on the number or dollar amount of the reestablishment payments over the maximum.

RELOCATION DIFFICULTIES
The questionnaire asked if the agencies have displaced any businesses that experienced difficulty in relocating and reestablishing because of code-required modifications at the relocation site. Approximately eighty percent responded that they had not experienced any difficulty, but the other twenty percent responded that they had major difficulties with some business relocations due to code-required modifications at the relocation site. Some agencies observed, while they had not yet encountered this problem, they were anticipating it as a factor in some business relocations evolving from future projects. The majority of the agencies identified the $10,000 cap on reestablishment payments as a primary concern, since this amount was often insufficient to cover all code required modifications and other costs linked to some business relocations. Some agency responses indicated the insufficiency of reimbursement created by the present $10,000 cap was driving some business owners to retirement or forcing the businesses to close.

SEARCHING & REESTABLISHMENT PAYMENTS
The research included asking respondents for their judgments on the adequacy of the amounts of payments authorized for search and reestablishment expenses, and further requested those who felt the current amounts are inadequate to provide an amount they deemed would be more appropriate. Approximately seventy-five percent of the respondents felt the current reimbursement cap of $1,000 for search expenses is adequate; those that believed $1,000 is insufficient suggested increases of the amount to $2,000, $2,500, and even $5,000. One respondent was unsure what amount was appropriate for this benefit. Sixty percent of the respondents from federal agencies felt that the current cap of $10,000 for reestablishment expenses was inadequate. Respondents suggested amounts ranging from $15,000 to $50,000 would be more appropriate. Some suggested that no cap be placed on reimbursement for reestablishment expenses, holding that reimbursements be based on the actual amount required to make a displaced business whole.

SUGGESTED REESTABLISHMENT EXPENSES

Pie Chart showing Reestablishment Expenses. 40% were Adequate. 15% were between $11,000 - $20,000. 20% were between $21,000 - $30,000. 10% were between $31,000 - $50,000. 15% were No Cap.

ELIGIBLE REESTABLISHMENT EXPENSES
Respondents were asked if they believed the categories of eligible expenses for business reestablishment should be expanded. Most respondents from federal agencies felt that the categories were adequate, although several respondents suggested an additional payment is needed to compensate business operations for the down time encountered by businesses during the moving process.

Updated: 04/02/2013
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