Democratic View

September 21, 2001

ADDITIONAL VIEWS
H.R. 2538 - Native American Small Business Development Act

 

Democrats strongly support providing assistance for the development of small businesses on Native American lands. Under H.R. 2538, the U.S. Small Business Administration's Small Business Development Center (SBDC) Program can and will create more jobs, foster more entrepreneurship, and stimulate economic development on Native American lands. New small businesses located on reservation lands will grow and existing ones will continue to expand.

H.R. 2538 will establish a three-year pilot project providing grants to State SBDC Programs, which can then establish Native American SBDCs to assist Indian Tribe Members, Native Alaskan, and Native Hawaiian populations, with their small business development needs. Under the new section 21(a)(7)(C)(i), established under Section 3 of the Act, State SBDC Programs with the largest population of Indian Tribe Members, Native Alaskans, and Native Hawaiians, will receive priority when awarding grants. In addition, the one-percent population requirement, can be either one percent of any of the three populations, or any combination thereof.

The grants must be used to establish one or more Native American SBDCs, on or near Native American lands. H.R. 2538 does not limit, in any way, the number of centers or subcenters a state program may propose to implement. We expect the Administrator to balance the need of multiple sites with quality assistance and counseling when awarding grants. This is where consultation with the local Tribal Councils will be essential in maximizing the benefits resulting from the program.

H.R. 2538 provides that each State SBDC Program ‘‘receiving grants shall request the advice of local Tribal Councils on how best to provide assistance to Indian Tribe Members, Native Alaskans, and Native Hawaiians and where to locate satellite centers to provide such assistance.'' However, the report language fails to emphasize the important role these groups will play as advisors to the SBDC Program. The cooperative nature of the relationship between the State SBDC Program and the Native American population should be a priority and is essential to the success of the program.

Not only will Indian Tribe Members, Native Alaskans, and Native Hawaiians have access to counseling and technical assistance provided through the pilot program, they will be an integral part in developing that assistance. Other Federal assistance programs have fallen short either because the infrastructure of the delivery system did not exist, or the targeted population had little, if any, involvement in developing the type of assistance to be provided. We believe that a significant factor in developing a successful Federal assistance program for a targeted population, is participation by that population.

In addition, State SBDC Programs are required to complete a grant application that shall include information on the extent of prior consultation with local Tribal Councils. We believe that this requirement is necessary to ensure that the State SBDC Programs seek the recommendations and suggestions of the targeted populations. We also believe that Section 4 of the Act requires these recommendations and suggestions to be given substantial weight in the Administrator's decisionmaking when awarding grants. We cannot stress enough the importance of the participation by Indian Tribe Members, Native Alaskan, and Native Hawaiian populations, in successfully fulfilling these requirements.

It is also important to emphasize the role the Association for Small Business Development Centers will play in promulgating the regulations required under H.R. 2538. The U.S. Small Business Administration must consult with the Association of Small Business Development Centers in establishing standards relating to (1) educational, technical, and support services to be provided by SBDCs receiving grant monies, and (2) any work plan that is required to be submitted by an applicant. Setting standards will help ensure that grants will be awarded to the most qualified state programs and provide a mechanism by which the Administrator can evaluate the success of the program. In addition, we believe the Administrator must give the Association's recommendations substantial weight.

Lastly, we believe that fees must not be charged in conjunction with this pilot project. Although the SBDCs are permitted to charge fees under limited circumstances, one-on-one counseling is provided free of charge. Current and past Administrations have attempted to implement a fee-for-service structure for SBDC services that are, and have been, historically free. Implementing such a structure would not only be detrimental to the pilot program, but to the entire SBDC Program. Democrats have consistently opposed such a move and will continue to oppose future attempts.

Although initial efforts to assist Native American populations has proven successful, barriers limiting further expansion and development still exist. Difficulties arise because of minimal resources and provisions requiring State SBDC Programs to match their Federal dollars with private funds. In the past, SBDCs have found it difficult to raise matching funds for targeted ventures.

However, we believe that under this pilot program, the Native American SBDCs can provide an effective mechanism for providing counseling and management assistance to small business owners on Native American lands. Utilizing the existing SBDC network can, and will, ensure the success of this pilot program. Therefore, we support this pilot program and the entrepreneurial assistance it will provide.