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Managing America: Small Business

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Week Ending June 22, 2006

H.R.2284 To amend the Small Business Act to expand and improve the assistance provided by Small Business Development Centers to Indian tribe members, Alaska Natives, and Native Hawaiians.

Congress finds that the rate of American Indians and Alaskan Natives living below 50% of the poverty level is 11.2, a number nearly double the general population. The unemployment rate for those groups, over age 16, is 13.6% yet the Tribes and Natives own more than 201,000 businesses and generate more than $26 billion in revenues. 16% of those businesses are construction-related.

This Act aims to stimulate economies and foster economic development on Indian lands, assist in the creation of new small businesses owned by Tribe members and Native Alaskans and Hawaiians and expand existing ones.

The SBA would accomplish those goals through business counseling and technical assistance in an effort to, among other things, reduce default rates on SBA business loans.

Grant assistance to SBA Business Development Centers would be increased to assist with outreach, development, and enhancement on Indian lands of small business startups and expansions of businesses owned by the Tribe and Native entrepreneurs. Centers could be established in any State in which at least 1% of the population is represented by Tribal or Native populations.

Grant applications would show the capability of the Center to provide training and services, the location of the proposed Center, the amount of funding required and the extent to which the applicant has consulted with the local Tribal Councils.

A SBA Development center receiving a grant shall request the advice of tribal organizations on how best to provide assistance.

Sponsor:  Rep. Tom Udall (D-NM-3^rd)

Vote: Passed House 351 to 73 June 20, 2007 (RC 514)

Cost to the taxpayers: Cost data not yet available

Earmark Certification:   Not applicable to this bill.

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MORE INFORMATION

(a) Findings- Congress finds the following:

(1) The rate for American Indians and Alaskan Natives living below 50 percent the poverty level is 11.2 percent, nearly double the rate of the general population.

(2) The unemployment rate for American Indians and Alaskan Natives 16 years and over is 13.6 percent, nearly double the rate of the general population.

(3) Indian tribe members and Alaska Natives own more than 201,000 businesses and generate more than $26,000,000,000 in revenues. The construction industry accounted for 16 percent of these businesses and 22.5 percent of their total receipts. The next largest was the service industry (13.2 percent and 3.4 percent, respectively). The third largest was the health care and social assistance industry (12.1 percent and 4.6 percent, respectively).

(4) The Small Business Development Center program is cost effective. Clients receiving long-term counseling under the program in 2005 generated additional tax revenues of $248,000,000, nearly 2.8 times the cost of the program to the Federal Government.

(5) Using the existing infrastructure of the Small Business Development Center program, small businesses owned by Indian tribe members, Alaska Natives, and Native Hawaiians receiving services under the program will have a higher survival rate than the average small business not receiving such services.

(6) Business counseling and technical assistance is critical on Indian lands where similar services are scarce and expensive.

(7) Increased assistance through counseling under the Small Business Development Center program has been shown to reduce the default rate associated with lending programs of the Small Business Administration.

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