89–010 

1 Economic Development: Encouraging Investment in Indian Country: Hearing Before the S. 

Comm. on Indian Affairs, 113th Cong. 2, 3 (written testimony of Gerald Sherman, Vice Chairman, Native CDFI Network). 

Calendar No. 64 

116TH CONGRESS REPORT " ! SENATE 1st Session 116–29 

TO ESTABLISH A BUSINESS INCUBATORS PROGRAM WITHIN THE DEPARTMENT OF THE INTERIOR TO PROMOTE ECONOMIC DEVELOPMENT IN INDIAN RESERVATION COMMUNITIES, AND FOR OTHER PURPOSES 

APRIL 8, 2019.—Ordered to be printed 

Mr. HOEVEN, from the Committee on Indian Affairs, 

submitted the following 

R E P O R T 

[To accompany S. 294] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Indian Affairs, to which was referred the bill 

(S. 294) to establish a business incubators program within the Department of the Interior to promote economic development in Indian reservation communities, having considered the same, reports 

favorably thereon without amendment and recommends that the 

bill do pass. 

PURPOSE

The bill, S. 294, would establish a business incubators program 

within the Department of the Interior, Office of Indian Energy and 

Economic Development to promote entrepreneurship and economic 

development on Indian reservations. The bill would require the Department of the Interior to coordinate with other federal agencies 

to promote Native American business development. 

BACKGROUND

Starting a new business is challenging anywhere, but Native 

American entrepreneurs must navigate a set of unique obstacles 

particular to Indian country.1


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2See COHEN’S HANDBOOK OF FEDERAL INDIAN LAW § 15.03, at 997–999 (Nell Jessup 

Newton ed., 2012) (hereinafter, COHEN’S HANDBOOK) (providing a broader discussion of the 

underlying principles and development of the trust responsibility). 3See COHEN’S HANDBOOK, § 21.02[3], at 1329–30. 4See id.; See also Economic Development: Encouraging Investment in Indian Country: Hearing 

Before the S. Comm. on Indian Affairs, 113th Cong. 2, 3 (written testimony of William M. Lettig, 

Executive Vice President, Key Bank). 5See Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012, Pub. 

L. No. 112–151. 6See HEARTH Act of 2012, available at https://www.bia.gov/bia/ots/hearth (listing tribes). 7See COHEN’S HANDBOOK at § 21.02[3], at 1329; See also Access to Capital and Credit in 

Native Communities, Native Nations Institute, University of Arizona, Digital Version at 39 

(2016), available at: http://nni.arizona.edu/news/articles/access-capital-and-credit-native-communities. 8See Economic Development: Encouraging Investment in Indian Country: Hearing Before the 

S. Comm. on Indian Affairs, 113th Cong. 2, 2 (written testimony of William M. Lettig, Executive 

Vice President, Key Bank). 9 Access to Capital and Credit in Native Communities, supra note 5, at 39. 10See Accessing Capital in Indian Country: Hearing Before the S. Comm. on Indian Affairs, 

114th Cong. 1, 2 (written testimony of Alejandra Y. Castillo, National Director, Minority Business Development Agency, U.S. Dept. of Commerce). 11See id. 12See id. 

The land tenure system is one such obstacle. Much of the land 

in Indian country is held in trust.2 Consequently, the Secretary of 

the Interior must approve activities on these lands as part of the 

federal trust responsibility.3 Secretarial approval creates additional 

expense and uncertainty for Native entrepreneurs and their potential business partners because they must comply with leasing and 

related federal legal requirements that generally do not apply outside Indian country.4

As a remedy, Congress took action to provide tribes with greater 

control to regulate the agricultural, residential, and business leasing of tribal lands by enacting the Helping Expedite and Advance 

Responsible Tribal Home Ownership Act of 2012 (HEARTH Act).5

Since then, 39 federally recognized tribes have utilized this new 

statutory authority by establishing their own leasing rules, which 

the Bureau of Indian Affairs must vet before going into effect.6

The status of reservation lands also complicates access to capital, 

primarily because trust land cannot be alienated and cannot be 

used as collateral to obtain financing.7 As a result, Native entrepreneurs that intend to open businesses on a reservation must look 

to other methods of raising capital to start and grow their businesses. 

Unfamiliarity with Indian Country is also a barrier.8 Even when 

an entrepreneur has a promising concept, getting it off the ground 

can be difficult when investors or business partners do not have 

significant experience working in reservation communities and are 

unfamiliar with the challenges associated with operating businesses in Indian Country. The resulting uncertainty can produce 

less favorable terms for Native entrepreneurs or prevent a venture 

from happening altogether.9

Finally, location is often a challenge. Many reservations are located in rural—often remote—areas.10 This fact limits the available 

workforce, making it difficult for Native entrepreneurs to attract 

necessary staff to operate their businesses.11 And infrastructure 

challenges common in rural areas make it difficult for Native entrepreneurs to get their products to market.12 A lack of access to 


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13See U.S. Gov’t Accountability Office, GAO–16–222, Telecommunications: Additional Coordination and Performance Measurement Needed for High-Speed Internet Access Programs on 

Tribal Lands, at 8–12 (2016). 14 Native American Business Incubators Program Act: Hearing on S. 3261 Before the S. Comm. 

on Indian Affairs, 114th Cong. 2, 8 (2016) (written testimony of Derrick Watchman, Chairman, 

Board of Directors, National Center for American Indian Enterprise Development). 

high-speed Internet, for example, is often a roadblock to success for 

businesses that must compete in 21st century markets.13

These unique obstacles vary from reservation to reservation and 

from business to business. Accordingly, it is vital that entrepreneurial development tools provide assistance focused specifically on 

Indian Country and tailored to each entrepreneur.14

Business incubators are uniquely equipped to do this because 

they offer a flexible suite of services intended to help businesses 

grow and thrive. They offer workspace, a collaborative environment, individualized yet comprehensive business skills training, 

and opportunities to build professional networks. By providing 

these focused services, business incubators help Native entrepreneurs develop businesses and create jobs in reservation communities, contributing greatly to overall tribal economic development. 

LEGISLATIVE HISTORY

116th Congress. Senators Udall, Cortez Masto, Heinrich, Smith, 

and Heinrich introduced S. 294 on January 31, 2019, which the 

Senate referred to the Committee. Senator Cantwell joined as a cosponsor of the bill on February 4, 2019. On February 6, 2019, the 

Committee held a duly called business meeting to consider, among 

other bills, S. 294. The Committee ordered the bill reported favorably, without amendment. 

On March 27, 2019, Representatives Haaland, Cole, Torres of 

California, and Young introduced a companion bill, H.R. 1900, in 

the House of Representatives, which referred it to the Committee 

on Natural Resources. No further action has been taken on the bill 

at this time. 

115th Congress. Senators Udall, Cantwell, and Tester introduced 

S. 607, a similar predecessor bill to S. 294, on March 13, 2017. On 

March 29, 2017, the Committee held a duly called business meeting 

to consider, among other bills, S. 607. The Committee ordered the 

bill to be favorably reported, without amendment, to the Senate. 

On September 26, 2017, the Committee reported S. 607 to the full 

Senate. Senator Warren joined the bill as a co-sponsor on March 

6, 2018. 

On March 22, 2018, Senator McConnell proposed an amendment 

in the nature of a substitute, S. Amdt. 2223, to S. 607 for Senator 

Hoeven. S. Amdt. 2223, which added a new ‘‘No Duplicative 

Grants’’ paragraph to subsection (d) of section 4 of the bill, prohibits the Department of the Interior from awarding grants to otherwise eligible applicants that already receive Federal funding for 

the same purposes from another source. The Senate agreed to the 

amendment by unanimous consent and the bill, as amended, by 

voice vote. 

On March 26, 2018, the House of Representatives referred S. 607 

to the Committee on Natural Resources, which in turn referred it 

to the Subcommittee on Indian, Insular, and Alaska Native Affairs. 

The Subcommittee held a hearing on the bill on July 24, 2018 and 


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discharged the bill on September 27, 2018. The House Committee 

considered the bill the same day and ordered the bill reported favorably, without amendment. After the Committee reported the bill 

on November 11, 2018, the full House of Representatives took no 

further action on the bill. 

No member of the House of Representatives introduced a companion bill to S. 607. 

114th Congress. Senators Tester, Cantwell, and Udall introduced 

S. 3261, a similar predecessor bill to S. 294, on July 14, 2016. Senator Murkowski was added as a cosponsor on September 7, 2016. 

The bill was referred to the Committee on Indian Affairs, which 

held a hearing on the bill on September 7, 2016. On September 21, 

2016, the Committee held a duly called business meeting to consider S. 3261, among other bills. The Committee ordered the bill 

to be favorably reported without amendment to the Senate but took 

no further action on the bill. No member of the House of Representatives introduced a companion bill to S. 294. 

SUMMARY OF THE BILL

The Native American Business Incubators Program Act would 

create a competitive grant program in the Office of Indian Energy 

and Economic Development at the Department of the Interior to establish and maintain business incubators that serve Native entrepreneurs in reservation communities. The program is intended to 

make substantial and sustained investments in these business incubators to ensure Native entrepreneurs in reservation communities have uninterrupted access to locally tailored business development services from entities specializing in providing services in 

Native communities. Understanding that needs will be different in 

each Native community, the program is also intended to be flexible 

so that it can be deployed to benefit Native communities throughout the United States. 

SECTION-BY-SECTION ANALYSIS

Section 1—Short title 

This section states that the bill may be cited as the ‘‘Native 

American Business Incubators Program Act’’. 

Section 2—Findings 

This section states Congress finds that there are unique challenges associated with establishing a business in Indian country 

and business incubators are business development tools that are 

well-suited to helping Native American entrepreneurs establish 

and operate businesses in or near reservation communities. This 

section further states that Congress finds that business incubators 

that assist Native entrepreneurs will promote tribal economic development. 

Section 3—Definitions 

This section sets forth the definitions of ‘‘Business Incubator’’, 

‘‘Eligible Applicant’’, ‘‘Indian Tribe’’, ‘‘Institution of Higher Education’’, ‘‘Native American; Native’’, ‘‘Native Business’’, ‘‘Native Entrepreneur’’, ‘‘Program’’, ‘‘Reservation’’, ‘‘Secretary’’, and ‘‘Tribal 

College or University’’. 


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Section 4—Establishment of program 

This section establishes a competitive grant program in the Office of Indian Energy and Economic Development at the Department of the Interior to establish and maintain business incubators 

that serve Native entrepreneurs and reservation communities. 

This section also defines who is eligible to apply for a grant. Eligible applicants include tribes, institutions of higher education (including TCUs), and non-profit organizations. 

This section describes application and program requirements. An 

eligible applicant must submit an application that includes a 3-year 

plan, information demonstrating the applicant’s effectiveness and 

experience, and a site description. Eligible applicants must also 

meet minimum requirements that include providing: culturally tailored services; a competitive process for selecting participants; a 

physical workspace; business skills training and education; 

mentorship opportunities; and access to professional networks. 

This section provides application evaluation considerations and 

establishes that priority will be given to business incubators sited 

in or near the reservation community the applicant intends to 

serve. 

This section prohibits the Department from awarding grants to 

otherwise eligible applicants that already receive Federal funding 

for the same purposes from another source. 

This section contains oversight provisions that apply to the agency and grant recipients. It requires the Department to submit a report to Congress within two years of awarding the first round of 

grants under the program. The report must include information on 

the performance and effectiveness of the program grantees, and the 

Committee expects the Department to include a discussion of compliance with the ‘‘No Duplicative Grants’’ provision contained in 

Section (4)(d)(5). 

Section 5—Regulations 

This section requires the Secretary to promulgate regulations implementing the program within one hundred eighty days of enactment. 

Section 6—Schools to business incubator pipeline 

This section requires the Secretary to facilitate relationships between grant recipients and educational institutions serving Native 

American communities. 

Section 7—Agency partnerships 

This section requires the Secretary to coordinate with other 

agencies that have business development programs to ensure grant 

recipients have information and materials necessary to inform incubator participants about available federal programs and assist 

them when applying. 

Section 8—Authorizations of appropriations 

This section authorizes $5,000,000 to be appropriated for each of 

fiscal years 2018 through 2023, and such sums as may be necessary thereafter. 


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COST AND BUDGETARY CONSIDERATIONS

S. 294 would authorize the appropriation of $5 million a year 

over the 2020–2024 period for the Bureau of Indian Affairs to make 

grants to other organizations that would provide business incubation services to Native American entrepreneurs and businesses including physical workplaces, business skills training, and access to 

networks of potential investors. Grants would be awarded for 

three-year periods and could be renewed for an additional three 

years. 

CBO assumes S. 294 will be enacted in fiscal year 2019 and that 

the authorized amounts will be appropriated for each fiscal year. 

Estimated outlays are based on historical spending patterns for 

similar programs. 

CBO estimates that implementing the bill would cost $18 million 

over the 2020–2024 period. The costs of the legislation fall within 

budget function 450 (community and regional development). 

As shown in Table 1, CBO estimates that implementing the bill 

would cost $18 million over the 2020–2024 period. The costs of the 

legislation fall within budget function 450 (community and regional 

development). 

TABLE 1.—ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER S. 294 

By fiscal year, millions of dollars— 

2019 2020 2021 2022 2023 2024 2019–2024 

Authorization .................................... 0 5 5 5 5 5 25 

Estimated Outlays ........................... 0 1 3 4 5 5 18 

EXECUTIVE COMMUNICATIONS

The Committee has received no communications from the Executive Branch regarding S. 294. 

REGULATORY AND PAPERWORK IMPACT STATEMENT

Paragraph 11(b) of rule XXVI of the Standing Rules of the Senate requires each report accompanying a bill to evaluate the regulatory and paperwork impact that would be incurred in carrying 

out the bill. The Committee believes that S. 294 will have a minimal impact on regulatory or paperwork requirements. 

CHANGES IN EXISTING LAW

In compliance with the Standing Rules of the Senate and the 

Committee Rules, subsection 12 of rule XXVI of the Standing Rules 

of the Senate is waived. In the opinion of the Committee, it is necessary to dispense with subsection 12 of rule XXVI of the Standing 

Rules of the Senate in order to expedite the business of the Senate. 

Æ 


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