Minority Business Development Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 1432 To establish a Minority Business Development Administration in the Depart- ment of Commerce, to clarify the relationship between such Administra- tion and the Small Business Administration, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 28, 2019 Mr. MCNERNEY (for himself, Ms. BARRAGA´N, Ms. JUDY CHU of California, Mr. RUSH, and Mr. YOUNG) introduced the following bill; which was re- ferred to the Committee on Financial Services, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To establish a Minority Business Development Administra- tion in the Department of Commerce, to clarify the rela- tionship between such Administration and the Small Business Administration, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Minority Business De- 4 velopment Act of 2019’’. 5 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1432 IH SEC. 2. FINDINGS AND PURPOSE. 1 (a) FINDINGS.—The Congress finds that— 2 (1) the opportunity for full participation in our 3 free enterprise system by socially and economically 4 disadvantaged individuals is essential if we are to 5 obtain social and economic equality for such individ- 6 uals and improve the functioning of our national 7 economy; 8 (2) many such individuals are socially disadvan- 9 taged because of their identification as members of 10 certain groups that have suffered the effects of dis- 11 criminatory practices or similar invidious cir- 12 cumstances over which they have no control; 13 (3) such groups include, but are not limited to, 14 African Americans, Hispanic Americans, Native 15 Americans, Asian Pacific Americans, Asian Indian 16 Americans, and other minorities; 17 (4) it is in the national interest to expeditiously 18 ameliorate the conditions of socially and economi- 19 cally disadvantaged groups; 20 (5) such conditions can be improved by pro- 21 viding the maximum practicable opportunity for the 22 development of business concerns owned by members 23 of socially and economically disadvantaged groups; 24 (6) such opportunity cannot be fully realized 25 unless the Federal Government secures the partici- 26 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1432 IH pation and cooperation of the private sector in a 1 joint effort to promote the development of business 2 owned by disadvantaged individuals; 3 (7) such effort will result in a more equitable 4 share of productive resources being devoted to busi- 5 ness owned by the disadvantaged and will promote 6 a balanced economy and increased competition; 7 (8) while other Federal agencies focus on 8 broader demographic and emerging businesses, 9 MBDA focuses exclusively on the unique needs of 10 minority-owned businesses and enhancing the capac- 11 ity and reach of medium and large scale minority- 12 owned firms; and 13 (9) MBDA’s national network of business cen- 14 ters is critical to assisting minority-owned businesses 15 gain access to capital, contracts, and new markets 16 through public-private engagement. Therefore, Con- 17 gress must continue to invest in the MBDA business 18 centers, as they provide direct services to minority- 19 owned businesses. 20 (b) PURPOSE.—It is, therefore, the purpose of this 21 Act to— 22 (1) establish an Administration within the De- 23 partment of Commerce which will promote and ad- 24 minister programs in the private and public sectors 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1432 IH to assist the development of business owned by the 1 disadvantaged; and 2 (2) achieve such development through the con- 3 duct of programs which will result in increased ac- 4 cess to skilled labor, capital, management, and tech- 5 nology by such business. 6 SEC. 3. DEFINITIONS. 7 As used in this Act the following terms have the fol- 8 lowing meanings: 9 (1) The term ‘‘Secretary’’ means the Secretary 10 of Commerce. 11 (2) The terms ‘‘State’’, ‘‘States’’, and ‘‘United 12 States’’ include the several States, the District of 13 Columbia, the Commonwealth of Puerto Rico, and 14 the territories of the Virgin Islands, Guam, Amer- 15 ican Samoa, and the Commonwealth of the Northern 16 Mariana Islands. 17 (3) The terms ‘‘socially and economically dis- 18 advantaged business concerns’’ and ‘‘disadvantaged 19 business’’ means any for-profit business enterprise 20 which is at least 51 percent owned by one or more 21 socially and economically disadvantaged individuals; 22 or, in the case of any publicly owned business, at 23 least 51 percent of the stock of which is owned by 24 one or more socially and economically disadvantaged 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 1432 IH individuals; and whose management and daily busi- 1 ness operations are controlled by one or more of 2 such individuals. 3 (4) The term ‘‘socially disadvantaged individ- 4 uals’’ means those who have been subjected to racial 5 or ethnic prejudice or cultural bias because of their 6 identity as a member of a group without regard to 7 their individual qualities. 8 (5)(A) The term ‘‘economically disadvantaged 9 individuals’’ means those socially disadvantaged indi- 10 viduals whose ability to compete in the free enter- 11 prise system has been impaired due to diminished 12 capital and credit opportunities as compared to oth- 13 ers in the same business area that are not socially 14 disadvantaged. 15 (B) The Assistant Secretary shall presume that 16 socially and economically disadvantaged individuals 17 include Black Americans, Hispanic Americans, Na- 18 tive Americans, Asian Pacific Americans, Asian In- 19 dian Americans, individuals found to be disadvan- 20 taged by the Small Business Administration pursu- 21 ant to section 8(a) of the Small Business Act, other 22 individuals so designated by the Minority Business 23 Development Agency under section 1400.1 of title 24 15 of the Code of Federal Regulations (as in effect 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 1432 IH on October 1, 1986), and other individuals belonging 1 to other minority groups which the Small Business 2 Administration may, from time to time, determine to 3 be socially and economically disadvantaged groups 4 pursuant to Public Law 95–507. 5 (6) The term ‘‘Administration’’ means the Mi- 6 nority Business Development Administration estab- 7 lished by this Act. 8 (7) The term ‘‘Assistant Secretary’’ means the 9 Assistant Secretary of the Minority Business Devel- 10 opment Administration. 11 (8) The term ‘‘agency’’ means any executive 12 agency as defined in section 105 of title 5, United 13 States Code, and the military departments as de- 14 fined by section 102 of title 5, United States Code. 15 (9) The term ‘‘public sector’’ means any State, 16 State agency, political subdivision of a State, or 17 agency of such a political subdivision. 18 (10) The term ‘‘private sector’’ means any enti- 19 ty which is not in the public sector excluding the 20 Federal Government and its agencies and instru- 21 mentalities. 22 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 1432 IH SEC. 4. MINORITY BUSINESS DEVELOPMENT ADMINISTRA- 1 TION. 2 (a) ESTABLISHMENT.—The Minority Business Devel- 3 opment Agency in the Department of Commerce is hereby 4 redesignated and established as the ‘‘Minority Business 5 Development Administration’’. The Administration shall 6 be headed by an Assistant Secretary of Commerce ap- 7 pointed by the President, by and with the advice and con- 8 sent of the Senate. The Assistant Secretary shall be com- 9 pensated at the rate now or hereafter provided for level 10 IV of the Executive Schedule and shall have responsibility 11 for the administration of this Act. This position shall be 12 in addition to the other positions of Assistant Secretary 13 which are authorized by law. 14 (b) MBDA BUSINESS CENTERS.—The Minority 15 Business Development Administration is directed to allo- 16 cate up to 25 percent of its total appropriation toward 17 cooperative agreements, external awards, and grants to 18 continue the traditional Business Center program and 19 Specialty Project Center program of the Minority Busi- 20 ness Development Administration. 21 (c) REPORT TO CONGRESS.—Within 120 days after 22 the effective date of this subsection, the Secretary shall 23 inform appropriate committees of both the Senate and 24 House of Representatives of— 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 1432 IH (1) the organizational structure established 1 within the Administration; 2 (2) the organizational position of the Adminis- 3 tration within the Department of Commerce; and 4 (3) a description of how the Administration 5 shall function in relation to the operations of other 6 agencies within the Department. 7 TITLE I—MARKET 8 DEVELOPMENT 9 SEC. 101. PRIVATE SECTOR DEVELOPMENT. 10 (a) DUTIES OF THE ADMINISTRATION.—It shall be 11 the duty of the Administration and it is hereby empow- 12 ered, whenever it determines such action is necessary or 13 appropriate— 14 (1) to assist disadvantaged business concerns 15 penetrate domestic and foreign markets by making 16 available to such concerns, either directly or in co- 17 operation with private sector organizations, manage- 18 ment, and technological assistance, a skilled labor 19 pool, and financial and marketing services; and 20 (2) to encourage disadvantaged firms to estab- 21 lish joint ventures and projects either among them- 22 selves or in cooperation with public or private sector 23 organizations for the purpose of increasing the share 24 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 1432 IH of any market activity now being performed by dis- 1 advantaged business. 2 (b) JOINT PROGRAMS PERMITTED.—For purposes of 3 subsection (a)(2): 4 (1) The Assistant Secretary may, after con- 5 sultation with the Attorney General and the Chair- 6 man of the Federal Trade Commission, and with the 7 prior written approval of the Attorney General, ap- 8 prove any agreement between such disadvantaged 9 firms or public or private sector organizations pro- 10 viding for a joint program for market development 11 if the Assistant Secretary finds that the joint pro- 12 gram proposed will maintain and strengthen the free 13 enterprise system and the economy of the Nation. 14 The Assistant Secretary or the Attorney General 15 may at any time withdraw approval of the agree- 16 ment and the joint program for market development 17 covered thereby, if either finds that the agreement 18 or the joint program carried on under it is no longer 19 in the best interests of the competitive free enter- 20 prise system and the economy of the Nation. A copy 21 of the statement of any such finding and approval 22 intended to be within the coverage of this paragraph, 23 and a copy of any modification or withdrawal of ap- 24 proval, shall be published in the Federal Register. 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 1432 IH The authority conferred by this on the Assistant 1 Secretary shall not be delegated. 2 (2) No act or omission to act, pursuant to and 3 within the scope of any joint program for market de- 4 velopment under an agreement approved by the As- 5 sistant Secretary under this subsection, shall be con- 6 strued to be within the prohibitions of the antitrust 7 laws or the Federal Trade Commission Act. Upon 8 publication in the Federal Register of the notice of 9 withdrawal of his approval of the agreement granted 10 under this paragraph, either by the Assistant Sec- 11 retary or by the Attorney General, the provisions of 12 this paragraph shall not apply to any subsequent act 13 or omission to act. 14 (c) REQUIREMENT OF PARTICIPATION OF SMALL 15 BUSINESS CONCERN IN JOINT PROGRAM.—At least 1 16 party to each agreement for a joint program for market 17 development approved under subsection (b) shall be a 18 small business concern, as defined pursuant to section 3 19 of the Small Business Act (15 U.S.C. 632). If there are 20 more than 2 parties to such an agreement, a majority of 21 the parties shall be small business concerns. 22 (d) FINANCIAL ASSISTANCE.—In order to carry out 23 the purposes of this section, the Administration is hereby 24 authorized to provide financial assistance in the form of 25 VerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 1432 IH contracts, grants, or cooperative agreements to and with 1 public and private sector organizations, including any as- 2 sociation, business firm, trade association, or business or- 3 ganization. No assistance may be provided under the au- 4 thority of this subsection if such assistance is primarily 5 intended to facilitate the use by disadvantaged business 6 of federally administered programs (not otherwise estab- 7 lished by this Act) unless the Assistant Secretary obtains 8 the prior concurrence and written approval of the Small 9 Business Administration. 10 SEC. 102. PUBLIC SECTOR DEVELOPMENT. 11 (a) DUTIES OF THE ADMINISTRATION.—It shall be 12 the duty of the Administration and it is hereby empow- 13 ered, whenever it determines such action is necessary or 14 appropriate— 15 (1) to consult and cooperate with State and 16 local governments for the purpose of leveraging local 17 resources to promote the position of disadvantaged 18 business in the local economy, including, but not be 19 limited to, assisting such governments to establish— 20 (A) procurement programs and goals for 21 the utilization of disadvantaged business; 22 (B) [Text truncated for display. 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