[House Report 115-1037]
[From the U.S. Government Publishing Office]
115th Congress } { REPORT
HOUSE OF REPRESENTATIVES
2d Session } { 115-1037
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NATIVE AMERICAN BUSINESS INCUBATORS PROGRAM ACT
_______
November 20, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Bishop of Utah, from the Committee on Natural Resources, submitted
the following
R E P O R T
[To accompany S. 607]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred
the bill (S. 607) to establish a business incubators program
within the Department of the Interior to promote economic
development in Indian reservation communities, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
PURPOSE OF THE BILL
The purpose of S. 607 is to establish a business incubators
program within the Department of the Interior to promote
economic development in Indian reservation communities.
BACKGROUND AND NEED FOR LEGISLATION
For decades, Native American\1\ communities have struggled
with a wide array of difficulties relating to economic
development on their land, including poor access to capital,
remote and rural locations, and degradation of the local
infrastructure. Only around half of all Native Americans (16 or
older) residing on or near tribal communities have jobs, and a
quarter of Native families earn an income that is below the
federal poverty line.\2\
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\1\In this report, the terms ``Native American,'' ``Native,'' and
``Indian'' are used interchangeably.
\2\2013 American Indian Population and Labor Force Report,
Department of the Interior.
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Today, approximately 56 million acres of land are held in
trust by the United States (through the Department of the
Interior) for the benefit of individual Indians and Indian
tribes.\3\ Many of these lands are in remote areas, and none
may be leased for business, agriculture, or mineral uses
without the approval of the Secretary of the Interior.\4\ Trust
land is generally a prerequisite for a tribe to conduct
gambling under the Indian Gaming Regulatory Act.\5\
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\3\https://www.bia.gov/frequently-asked-questions.
\4\25 U.S.C. 177; 25 U.S.C. 415.
\5\25 U.S.C. 2701 et seq.
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The economies of Indian reservations in remote areas, where
casinos may be a break-even proposition at best, suffer from
great poverty. Many reservations and other Indian communities
lack grocery stores, retail outlets, or banks. Residents may
have to travel great distances (sometimes up to a two-hour
drive) to buy groceries or go to a bank, while spending their
disposable income on purchases off the reservation. Tribes have
sought to keep dollars on their reservations to create
sustainable economies, but they face a variety of challenges:
Federal Approval. As stated above, tribes
and individual Indians may not lease their trust land
without the permission of the Secretary of the Interior
(this problem is not directly addressed by S. 607).
Legal Systems and Infrastructure. To attract
businesses to reservations, tribal governments need to
provide business-friendly laws and independent court
systems. Companies and investors, Indian and non-Indian
alike, rely on governments to ensure fair competition,
maintain law and order, and create laws and judicial
systems that help enforce contracts and property
rights. Not all tribal governments have enacted the
kinds of business and commercial codes that businesses
and banks need before they will locate and operate on
reservations. Additionally, many components of tribal
infrastructure need significant repair or replacement.
Access to Capital. In many Native American
communities, there is a lack of equity resources, such
as home equity or intergenerational family assets.
Likewise, trust land cannot be used as collateral, so
access to capital is complicated further in Indian
Country. Even if access to private capital is
available, it may come at a higher cost.
Remote Locations. The remoteness of many
Indian communities diminishes the possibility of
building commercial markets for goods and services or
developing many types of industrial or manufacturing
economies.
Sovereign Immunity. Under a legal doctrine
developed by federal courts, Indian tribes enjoy
sovereign immunity against States and private citizens.
Such sovereign immunity exists on and off an Indian
reservation. A tribe may not be sued unless its
sovereign immunity is waived by the tribe or by
Congress, which has not debated this issue in many
years. Tribes consider sovereign immunity a valid
exercise of self-governance which promotes economic
development. Developers or investors unfamiliar with a
tribe's use of sovereign immunity may be reluctant to
engage in business ventures with it.
In recent years, Congress has enacted laws to grant tribes
stronger, more comprehensive control over businesses,
agricultural, and residential leasing of tribal lands. One
example is the Helping Expedite and Advance Responsible Tribal
Home Ownership Act of 2012, or the HEARTH Act.\6\ Congress has
also enacted multiple laws to assist these communities in
obtaining access to capital in the forms of loan guarantees,
procurement programs, and community development financial
institutions (CDFIs). One of these laws, the Native American
Business Development, Trade Promotion, and Tourism Act of
2000,\7\ aids tribes with business development and helps ensure
that tribal businesses follow all legal and regulatory
requirements, among other things.
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\6\Public Law 112-151, 25 U.S.C. 415.
\7\25 U.S.C. 4301 et seq.
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While Congress has attempted to alleviate challenges
experienced by tribal businesses, various challenges remain. As
mentioned previously, many Indian reservations and communities
are in predominantly rural, remote locations, and enticing
entrepreneurs to fund and support businesses in these areas can
be difficult.
S. 607 is premised on the idea that programs supporting
business incubators are uniquely able to support tribal
businesses in ways that broad legislation cannot, as incubators
can be tailored to fit the needs of the various regions where
tribal businesses exist. As defined in the bill, a business
incubator is an organization that provides physical workspace
and facilities resources to startups and established businesses
and is designed to accelerate the growth and success of
businesses through a variety of business support resources and
services. By offering services that range from workplace
enhancement, comprehensive skills training, and networking
assistance, business incubators have been a reliable and
consistent solution to the many problems that continue to
plague Indian Country.
There are several native business incubator networks
serving Indian country throughout the United States; however S.
607 would establish a new program within the Department of the
Interior. The bill would also require the Department of the
Interior to coordinate its business incubator activities with
other federal agencies to promote Native American business
development.
SECTION-BY-SECTION ANALYSIS
Sec. 1. Short title
Provides that this Act may be cited as the
``Native American Business Incubators Program Act.
Sec. 2. Findings
Provides Congressional findings.
Sec. 3. Definitions
Defines terms used in the Act.
Sec. 4. Establishment of program
Requires the Department of the Interior to
establish a grant program in the Office of Indian
Energy and Economic Development for establishing and
operating business incubators that serve Native
American communities.
A business incubator is an organization
that: (1) provides physical workspace and facilities
resources to startups and established businesses; and
(2) is designed to accelerate the growth and success of
businesses through a variety of business support
resources and services. Grant applicants may be
institutions of higher education, private nonprofits,
Native American tribes, or tribal nonprofits.
Sec. 5. Regulations
Directs the Secretary of the Interior to
issue new regulations to implement the program 180 days
after the bill is signed into law.
Sec. 6. Schools to business incubator pipeline
The Secretary of the Interior must
facilitate the establishment of relationships between
grant recipients and educational institutions serving
Native American communities.
Sec. 7. Agency partnerships
Directs the Secretary of the Interior to
coordinate with the Secretary of Agriculture, Secretary
of Commerce, Secretary of the Treasury and the
Administrator of the Small Business Administration to
ensure that business incubators receiving grant funds
under the program have the information and materials
they need to apply for each agenda's business and
entrepreneurial development programs.
Sec. 8. Authorizations of appropriations
Authorizes the appropriation of $5 million
for each of fiscal years 2019 through 2023 to carry out
the program.
COMMITTEE ACTION
S. 607 was introduced on March 13, 2017, by Senator Tom
Udall (D-NM). The Senate passed the bill by voice vote on March
22, 2018. In the House of Representatives, the bill was
referred to the Committee on Natural Resources and within the
Committee to the Subcommittee on Indian, Insular and Alaska
Native Affairs. The Subcommittee held a hearing on the bill on
July 24, 2018. On September 27, 2018, the Committee on Natural
Resources met to consider the bill. The Subcommittee was
discharged by unanimous consent. No amendments were offered,
and the bill was ordered favorably reported to the House of
Representatives by unanimous consent.
COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural Resources' oversight findings and
recommendations are reflected in the body of this report.
COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL BUDGET ACT
1. Cost of Legislation and the Congressional Budget Act.
With respect to the requirements of clause 3(c)(2) and (3) of
rule XIII of the Rules of the House of Representatives and
sections 308(a) and 402 of the Congressional Budget Act of
1974, the Committee has received the following estimate for the
bill from the Director of the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 2, 2018.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 607, the Native
American Business Incubators Program Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Robert Reese.
Sincerely,
Keith Hall,
Director,
Enclosure.
S. 607--Native American Business Incubators Program Act
Summary: S. 607 would authorize the Bureau of Indian
Affairs (BIA) to award grants to eligible public and private
organizations to provide physical workspaces and other
resources to Native American entrepreneurs and businesses. The
legislation would authorize the appropriation of $5 million
annually over the 2019-2023 period.
CBO estimates that implementing S. 607 would cost $18
million over the 2019-2023 period, assuming appropriation of
the authorized amounts. Enacting the legislation would not
affect direct spending or revenues; therefore, pay-as-you-go
procedures do not apply.
CBO estimates that enacting S. 607 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
S. 607 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 607 is shown in the following table. The
costs of the legislation fall within budget function 450
(community and regional development).
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By fiscal year, in millions of dollars--
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2019 2020 2021 2022 2023 2019-2023
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INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level................................ 5 5 5 5 5 25
Estimated Outlays.................................. 1 3 4 5 5 18
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Basis of estimate: For this estimate, CBO assumes that S.
607 will be enacted near the end of 2018 and that the
authorized amounts will be appropriated for each fiscal year
beginning in 2019. Estimated outlays are based on historical
spending patterns for similar programs.
S. 607 would authorize the appropriation of $5 million
annually over the 2019-2023 period to fund a grant program to
aid the development of Native American businesses. The program
would be managed by BIA and would include providing physical
workplaces, business skills training, and access to networks of
potential investors, among other services. All grants would be
awarded for three-year periods and could be renewed for
additional three-year terms. CBO estimates that implementing
the program would cost $18 million over the 2019-2023 period
and $7 million after 2023.
Pay-As-You-Go considerations: None.
Increase in long-term direct spending and deficits: CBO
estimates that enacting S. 607 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2029.
Intergovernmental and private-sector impact: S. 607
contains no intergovernmental or private-sector mandates as
defined in UMRA. Tribal governments would benefit from grants
established in the bill to support the growth of Native
American businesses and Native American entrepreneurs. Any
costs to tribal governments would result from complying with
conditions of assistance.
Previous CBO estimate: On April 21, 2017, CBO transmitted
an estimate for S. 607 as ordered reported by the Senate
Committee on Indian Affairs on March 29, 2017. The two versions
of S. 607 are similar and the differences in CBO's estimate of
their cost reflect differences in CBO's assumed date of
enactment of the legislation.
Estimate prepared by: Federal costs: Robert Reese;
Mandates: Rachel Austin.
Estimate reviewed by: Kim P. Cawley, Chief, Natural and
Physical Resources Cost Estimates Unit; Susan Willie, Chief,
Public and Private Mandates; H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
2. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to establish a business incubators
program within the Department of the Interior to promote
economic development in Indian reservation communities.
EARMARK STATEMENT
This bill does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of
the House of Representatives.
COMPLIANCE WITH PUBLIC LAW 104-4
This bill contains no unfunded mandates.
COMPLIANCE WITH H. RES. 5
Directed Rule Making. Section 5 of this bill directs the
Secretary of the Interior to issue regulations to implement the
program authorized by this bill.
Duplication of Existing Programs. This bill does not
establish or reauthorize a program of the federal government
known to be duplicative of another program. Such program was
not included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-139
or identified in the most recent Catalog of Federal Domestic
Assistance published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169) as relating to other programs.
PREEMPTION OF STATE, LOCAL OR TRIBAL LAW
This bill is not intended to preempt any State, local or
tribal law.
CHANGES IN EXISTING LAW
If enacted, this bill would make no changes to existing
law.
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