1 | Page Framing Paper: RBDG Proposed Rule

USDA Rural Development Tribal Consultation

Rural Business Development Grant Program

Proposed Rule Framing Paper

July 12, 2023 

What We Heard from Tribes in Prior Consultation

Tribal nations have no tax base and often participate in the private marketplace through 

corporations, instrumentalities, and related enterprise structures to generate governmental 

revenue. Therefore, Tribal-owned corporations, businesses, and enterprises are hybrids 

and are both governmental in nature and “commercial.” This nuance presents challenges in 

accessing U.S. Department of Agriculture (USDA) programs that customarily distinguish 

between commercial and essential governmental projects. 

Progress Made to Date

• The U.S. Department of Agriculture conducted prior consultations and listening 

sessions to identify barriers and solicit input from Tribal leaders and Tribal partners

accessing USDA programs and services.

 Participants provided feedback that helped clarify and improve eligibility for 

Tribal-owned entities participating in USDA programs and services. 

 On March 9 and 11, 2021 and April 11, 2022, the USDA Office of Tribal 

Relations conducted Tribal Consultations on Equity and Barriers. 

 Link to prior consultations: Tribal Consultations Webpage

• The U.S. Department of Agriculture issued a proposed rule for the Rural Business 

Development Grant (RBDG) program to expand Tribal applicant eligibility to include 

Tribal-owned entities.

 Link to the proposed rule: 7 CFR Chapter XLII — Rural Business 

Development Grant Regulation: Tribes and Tribal Business References to 

Provide Equitable Access

• The U.S. Department of Agriculture scheduled a virtual Tribal consultation and 

listening session on July 12, 2023. 

 The consultation and listening session will begin at 2:00 p.m. ET. 

 A Tribal Caucus at 1 p.m. ET will proceed the consultation. 

 Link to register for the caucus and the Tribal consultation and listening 

session: Meeting Registration
2 | Page Framing Paper: RBDG Proposed Rule

Program Summary and Summary of Regulatory Changes

The RBDG program is intended for governmental entities and non-profits that foster 

economic development, job creation, and business creation in rural and Tribal 

communities.

Eligible applicants for RBDG assistance include: 

• Rural towns. 

• Rural communities. 

• State agencies. 

• Authorities. 

• Nonprofit corporations. 

• Institutions of higher education. 

• Federally recognized Tribes. 

• Cooperatives organized as a private nonprofit corporation. 

The Proposed Rule amends the RBDG program regulations to clarify and expand eligibility 

for federally recognized Tribes to support wholly owned Tribal-government entities as 

program beneficiaries.

The proposed rule changes aim to:

• Expand the “Small and Emerging Business” definition to include Tribal governments 

and Tribal-owned entities.

• Clarify the definition for “Conflict of Interest” to explain how the agency defines the 

relationship between Tribal Nations and their Tribal-owned entities.

Page 33552 of Volume 88, Number 100 of the Federal Register incorporates the proposed 

updated regulatory language in the “Definitions” section. 

The “Definitions” section reads as follows: 

§ 4280.403 Definitions

 Conflict of Interest. When the grantee’s employees, Board of Directors, or their 

immediate families have a legal or personal financial interest in the recipient(s) 

receiving the benefits or services of the grant. Tribal Governments, subdivisions 

of Tribal Governments (chapters, districts, authorities, townships, etc.), and Tribal 

arms and instrumentalities, entities wholly-owned and chartered by Tribal 

Governments including but not limited to: Tribal owned corporations (including 

Section 17 Corporations, Community Development Corporations and Economic 

Development Corporations), Tribal owned businesses, Tribal owned authorities, 

Tribal owned utilities, other Tribally owned enterprises and their subsidiaries will 

not be considered as having a conflict of interest due to their, or their Board’s, 

ties to their associated Tribe or each other.

 Indian Tribe (Tribal), Tribal Government and/or Federally Recognized 

Tribes. Any Indian or Alaska Native tribe, band, nation, pueblo, village or 

community as defined by the Federally Recognized Indian Tribe List Act (List 

Act) of 1994 (Pub. L. 103–454).
3 | Page Framing Paper: RBDG Proposed Rule

 Small and Emerging Business. Any private and/or nonprofit business which will 

employ 50 or fewer new employees and has less than $1 million in gross 

revenue; for retail operations, gross revenue may be reduced by cost of goods 

sold and returns or for a service organization, gross revenue may be reduced by 

the cost of providing service or for a manufacturing operation, gross revenue may 

be reduced by the cost of raw materials and the cost of production. The $1 

million gross revenue and 50 or fewer new employee thresholds apply only to 

each individual Tribal owned enterprise applicant or recipient. Due to the unique 

structuring of Tribal economic development, the revenue or employees of the 

Tribe and/or parent Tribal enterprise will not apply towards the individual Tribal 

enterprise applicant or recipient, regardless of shared ownership or Directors. 

The revenue of Tribes, subdivisions of Tribes and Tribal entity applicants, will not 

be considered revenue in determining program and project eligibility.

Consultation Input Requested

The RBDG program, by statute, remains an intermediary program. The program allows

USDA to make grants to eligible applicants to support rural economic development, create 

new business and jobs, and save existing rural businesses and jobs. The updated 

regulatory language will not address the challenges Tribes and Tribally owned entities face 

when purchasing equipment or real estate the eligible applicant will own or that will directly 

benefit the applicant.

Rural Development seeks Tribal input on these specific changes to ensure the changes will 

increase Tribal access to the program.

• Do Tribal leaders agree these changes will help increase tribal eligibility within the 

RBDG program?

• Is there anything we should strike or edit in the updated regulatory language?

• Is there anything we overlooked that we should include in the updated regulatory 

language?

• Does your Tribe have any unique organizational structures for your enterprises that 

we should consider as we finalize these changes?

Next Steps

• Analyze the RBDG proposed rule feedback garnered through Tribal consultation.

• Address the RBDG proposed rule formal comments made through the federal 

register.

• Utilize the feedback gathered from consultation and written comments to issue the 

RBDG final rule in the Federal Register.