“Today, there are 379 Tribally-owned, 641 Alaska-Native Corporation owned, and 2,512 individually-owned Native small businesses. This means individual Native entrepreneurs number 71 percent of the active Native small business enterprises today,” stated Michael G. Anderson, Executive Director of the Native American Contractors Association (NACA).
Two bills that hit the House Natural Resources Committee’s Subcommittee on Indian, Insular, and Alaska Native Affairs on July 24, 2018, stand to significantly improve tribes’ economic development and entrepreneurship toolkits.
The first bill, S. 607, the Native American Business Incubators Program Act, sponsored by Sen. Tom Udall (D-New Mexico), seeks to establish business incubator programs specifically for Native startups and established businesses. In doing so, it simultaneously and significantly tightens who can receive federal funding to provide business and technical financial assistance to tribal entities. The bill additionally designates the Office of Indian Energy and Economic Development within the Department of the Interior to act as watchdog.
Especially well known in the university community with its myriad of scientists seeking to commercialize research findings, a business incubator assists entrepreneurs in navigating the multitude of obstacles preventing innovative ideas from becoming viable business. This includes facilities as well as business and financial technical assistance, business education, counseling, networking, and mentorship. Now tribes, tribal colleges, universities, and other higher education institutions, and tribal or private nonprofit organizations serving reservation communities may apply for competitive grants to provide such resources and services to Native businesses and entrepreneurs.
“With business incubators properly targeted to supporting and advancing entrepreneurial interests, they will be critical to effect and support continued growth of Native small businesses, which is essential to economic development in Native communities. Moreover, incubators will grow businesses that offer products and services, help develop essential business and workforce skills, and promulgate economic development within their region,” Anderson concluded.
Passed in the Senate on March, 22, 2018, the bill now awaits House approval to become law.
While S. 607 helps entrepreneurs to navigate impediments to entrepreneurship, S. 1116, the Indian Community Economic Enhancement Act of 2018, seeks to amend the Native American Business Development, Trade Promotion, and Tourism Act of 2000; the Buy Indian Act; and the Native American Programs Act to enhance industry and economic development opportunities in Indian communities.
Legislative language changes can be food for policy wonks, and this is one such case. But, in brief, though, S. 1116 proposes to:
- Elevates the position of the Office of Native American Business Development (ONABD) to a direct report to the Department of Commerce for tribal economic development
- Waives the matching funds requirement from the CDFI for Indian community development
- Directs the Government Accountability Office to conduct a study to determine the best ways to assist Native Americans to fund economic development
In addition, S. 1116
- Expands the Buy Indian Act
- Permits the Administration for Native Americans to award competitive economic development grant assistance and prioritize grants for developing tribal codes, courts, master plans pertaining to economic development.
Testimony by Chris James, President and CEO of the National Center for American Indian Enterprise Development (NCAIED) largely endorsed the bill while highlighting the obvious: that there are still significant barriers to economic development. To James, the lack of infrastructure, capacity, sufficient collateral, and capital underscore “the need for greater funding for the few federal loan guarantee programs that actually facilitate financing of business, energy, economic, housing, and community development projects in Indian communities….”
James also pointed out the still unaddressed need for tribal tax parity as well as the “disparate treatment” of tribes by lenders that discourages investors from financing tribal projects. Those fixes are contained in H.R. 3138 and S. 2012, both of which are languishing in Congress.
Congress must now deconflict the duplicative language across this set of bills and address tribes’ and entrepreneurs’ access to capital markets in order for these proposed changes to have the positive impact they seek. With “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,…” according to Committee chair, Rep. Doug LaMalfa (R-CA), turning that tide is a tall order for legislation to achieve.