I 

116TH CONGRESS 

1ST SESSION H. R. 1432 

To establish a Minority Business Development Administration in the Department of Commerce, to clarify the relationship between such Administration 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 referred 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 Administration in the Department of Commerce, to clarify the relationship between such Administration and the Small 

Business Administration, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Minority Business De5 velopment Act of 2019’’. 


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1 SEC. 2. FINDINGS AND PURPOSE. 

2 (a) FINDINGS.—The Congress finds that— 

3 (1) the opportunity for full participation in our 

4 free enterprise system by socially and economically 

5 disadvantaged individuals is essential if we are to 

6 obtain social and economic equality for such individ7 uals and improve the functioning of our national 

8 economy; 

9 (2) many such individuals are socially disadvan10 taged because of their identification as members of 

11 certain groups that have suffered the effects of dis12 criminatory practices or similar invidious cir13 cumstances over which they have no control; 

14 (3) such groups include, but are not limited to, 

15 African Americans, Hispanic Americans, Native 

16 Americans, Asian Pacific Americans, Asian Indian 

17 Americans, and other minorities; 

18 (4) it is in the national interest to expeditiously 

19 ameliorate the conditions of socially and economi20 cally disadvantaged groups; 

21 (5) such conditions can be improved by pro22 viding the maximum practicable opportunity for the 

23 development of business concerns owned by members 

24 of socially and economically disadvantaged groups; 

25 (6) such opportunity cannot be fully realized 

26 unless the Federal Government secures the particiVerDate Sep 11 2014 20:10 Mar 12, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1432.IH H1432

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1 pation and cooperation of the private sector in a 

2 joint effort to promote the development of business 

3 owned by disadvantaged individuals; 

4 (7) such effort will result in a more equitable 

5 share of productive resources being devoted to busi6 ness owned by the disadvantaged and will promote 

7 a balanced economy and increased competition; 

8 (8) while other Federal agencies focus on 

9 broader demographic and emerging businesses, 

10 MBDA focuses exclusively on the unique needs of 

11 minority-owned businesses and enhancing the capac12 ity and reach of medium and large scale minority13 owned firms; and 

14 (9) MBDA’s national network of business cen15 ters is critical to assisting minority-owned businesses 

16 gain access to capital, contracts, and new markets 

17 through public-private engagement. Therefore, Con18 gress must continue to invest in the MBDA business 

19 centers, as they provide direct services to minority20 owned businesses. 

21 (b) PURPOSE.—It is, therefore, the purpose of this 

22 Act to— 

23 (1) establish an Administration within the De24 partment of Commerce which will promote and ad25 minister programs in the private and public sectors 


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1 to assist the development of business owned by the 

2 disadvantaged; and 

3 (2) achieve such development through the con4 duct of programs which will result in increased ac5 cess to skilled labor, capital, management, and tech6 nology by such business. 

7 SEC. 3. DEFINITIONS. 

8 As used in this Act the following terms have the fol9 lowing meanings: 

10 (1) The term ‘‘Secretary’’ means the Secretary 

11 of Commerce. 

12 (2) The terms ‘‘State’’, ‘‘States’’, and ‘‘United 

13 States’’ include the several States, the District of 

14 Columbia, the Commonwealth of Puerto Rico, and 

15 the territories of the Virgin Islands, Guam, Amer16 ican Samoa, and the Commonwealth of the Northern 

17 Mariana Islands. 

18 (3) The terms ‘‘socially and economically dis19 advantaged business concerns’’ and ‘‘disadvantaged 

20 business’’ means any for-profit business enterprise 

21 which is at least 51 percent owned by one or more 

22 socially and economically disadvantaged individuals; 

23 or, in the case of any publicly owned business, at 

24 least 51 percent of the stock of which is owned by 

25 one or more socially and economically disadvantaged 


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1 individuals; and whose management and daily busi2 ness operations are controlled by one or more of 

3 such individuals. 

4 (4) The term ‘‘socially disadvantaged individ5 uals’’ means those who have been subjected to racial 

6 or ethnic prejudice or cultural bias because of their 

7 identity as a member of a group without regard to 

8 their individual qualities. 

9 (5)(A) The term ‘‘economically disadvantaged 

10 individuals’’ means those socially disadvantaged indi11 viduals whose ability to compete in the free enter12 prise system has been impaired due to diminished 

13 capital and credit opportunities as compared to oth14 ers in the same business area that are not socially 

15 disadvantaged. 

16 (B) The Assistant Secretary shall presume that 

17 socially and economically disadvantaged individuals 

18 include Black Americans, Hispanic Americans, Na19 tive Americans, Asian Pacific Americans, Asian In20 dian Americans, individuals found to be disadvan21 taged by the Small Business Administration pursu22 ant to section 8(a) of the Small Business Act, other 

23 individuals so designated by the Minority Business 

24 Development Agency under section 1400.1 of title 

25 15 of the Code of Federal Regulations (as in effect 


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1 on October 1, 1986), and other individuals belonging 

2 to other minority groups which the Small Business 

3 Administration may, from time to time, determine to 

4 be socially and economically disadvantaged groups 

5 pursuant to Public Law 95–507. 

6 (6) The term ‘‘Administration’’ means the Mi7 nority Business Development Administration estab8 lished by this Act. 

9 (7) The term ‘‘Assistant Secretary’’ means the 

10 Assistant Secretary of the Minority Business Devel11 opment Administration. 

12 (8) The term ‘‘agency’’ means any executive 

13 agency as defined in section 105 of title 5, United 

14 States Code, and the military departments as de15 fined by section 102 of title 5, United States Code. 

16 (9) The term ‘‘public sector’’ means any State, 

17 State agency, political subdivision of a State, or 

18 agency of such a political subdivision. 

19 (10) The term ‘‘private sector’’ means any enti20 ty which is not in the public sector excluding the 

21 Federal Government and its agencies and instru22 mentalities. 


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1 SEC. 4. MINORITY BUSINESS DEVELOPMENT ADMINISTRA2 TION. 

3 (a) ESTABLISHMENT.—The Minority Business Devel4 opment Agency in the Department of Commerce is hereby 

5 redesignated and established as the ‘‘Minority Business 

6 Development Administration’’. The Administration shall 

7 be headed by an Assistant Secretary of Commerce ap8 pointed by the President, by and with the advice and con9 sent of the Senate. The Assistant Secretary shall be com10 pensated at the rate now or hereafter provided for level 

11 IV of the Executive Schedule and shall have responsibility 

12 for the administration of this Act. This position shall be 

13 in addition to the other positions of Assistant Secretary 

14 which are authorized by law. 

15 (b) MBDA BUSINESS CENTERS.—The Minority 

16 Business Development Administration is directed to allo17 cate up to 25 percent of its total appropriation toward 

18 cooperative agreements, external awards, and grants to 

19 continue the traditional Business Center program and 

20 Specialty Project Center program of the Minority Busi21 ness Development Administration. 

22 (c) REPORT TO CONGRESS.—Within 120 days after 

23 the effective date of this subsection, the Secretary shall 

24 inform appropriate committees of both the Senate and 

25 House of Representatives of— 


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1 (1) the organizational structure established 

2 within the Administration; 

3 (2) the organizational position of the Adminis4 tration within the Department of Commerce; and 

5 (3) a description of how the Administration 

6 shall function in relation to the operations of other 

7 agencies within the Department. 

8 TITLE I—MARKET 

9 DEVELOPMENT 

10 SEC. 101. PRIVATE SECTOR DEVELOPMENT. 

11 (a) DUTIES OF THE ADMINISTRATION.—It shall be 

12 the duty of the Administration and it is hereby empow13 ered, whenever it determines such action is necessary or 

14 appropriate— 

15 (1) to assist disadvantaged business concerns 

16 penetrate domestic and foreign markets by making 

17 available to such concerns, either directly or in co18 operation with private sector organizations, manage19 ment, and technological assistance, a skilled labor 

20 pool, and financial and marketing services; and 

21 (2) to encourage disadvantaged firms to estab22 lish joint ventures and projects either among them23 selves or in cooperation with public or private sector 

24 organizations for the purpose of increasing the share 


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1 of any market activity now being performed by dis2 advantaged business. 

3 (b) JOINT PROGRAMS PERMITTED.—For purposes of 

4 subsection (a)(2): 

5 (1) The Assistant Secretary may, after con6 sultation with the Attorney General and the Chair7 man of the Federal Trade Commission, and with the 

8 prior written approval of the Attorney General, ap9 prove any agreement between such disadvantaged 

10 firms or public or private sector organizations pro11 viding for a joint program for market development 

12 if the Assistant Secretary finds that the joint pro13 gram proposed will maintain and strengthen the free 

14 enterprise system and the economy of the Nation. 

15 The Assistant Secretary or the Attorney General 

16 may at any time withdraw approval of the agree17 ment and the joint program for market development 

18 covered thereby, if either finds that the agreement 

19 or the joint program carried on under it is no longer 

20 in the best interests of the competitive free enter21 prise system and the economy of the Nation. A copy 

22 of the statement of any such finding and approval 

23 intended to be within the coverage of this paragraph, 

24 and a copy of any modification or withdrawal of ap25 proval, shall be published in the Federal Register. 


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1 The authority conferred by this on the Assistant 

2 Secretary shall not be delegated. 

3 (2) No act or omission to act, pursuant to and 

4 within the scope of any joint program for market de5 velopment under an agreement approved by the As6 sistant Secretary under this subsection, shall be con7 strued to be within the prohibitions of the antitrust 

8 laws or the Federal Trade Commission Act. Upon 

9 publication in the Federal Register of the notice of 

10 withdrawal of his approval of the agreement granted 

11 under this paragraph, either by the Assistant Sec12 retary or by the Attorney General, the provisions of 

13 this paragraph shall not apply to any subsequent act 

14 or omission to act. 

15 (c) REQUIREMENT OF PARTICIPATION OF SMALL

16 BUSINESS CONCERN IN JOINT PROGRAM.—At least 1 

17 party to each agreement for a joint program for market 

18 development approved under subsection (b) shall be a 

19 small business concern, as defined pursuant to section 3 

20 of the Small Business Act (15 U.S.C. 632). If there are 

21 more than 2 parties to such an agreement, a majority of 

22 the parties shall be small business concerns. 

23 (d) FINANCIAL ASSISTANCE.—In order to carry out 

24 the purposes of this section, the Administration is hereby 

25 authorized to provide financial assistance in the form of 


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1 contracts, grants, or cooperative agreements to and with 

2 public and private sector organizations, including any as3 sociation, business firm, trade association, or business or4 ganization. No assistance may be provided under the au5 thority of this subsection if such assistance is primarily 

6 intended to facilitate the use by disadvantaged business 

7 of federally administered programs (not otherwise estab8 lished by this Act) unless the Assistant Secretary obtains 

9 the prior concurrence and written approval of the Small 

10 Business Administration. 

11 SEC. 102. PUBLIC SECTOR DEVELOPMENT. 

12 (a) DUTIES OF THE ADMINISTRATION.—It shall be 

13 the duty of the Administration and it is hereby empow14 ered, whenever it determines such action is necessary or 

15 appropriate— 

16 (1) to consult and cooperate with State and 

17 local governments for the purpose of leveraging local 

18 resources to promote the position of disadvantaged 

19 business in the local economy, including, but not be 

20 limited to, assisting such governments to establish— 

21 (A) procurement programs and goals for 

22 the utilization of disadvantaged business; 

23 (B) management and technological assist24 ance programs; 


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1 (C) financial and marketing assistance pro2 grams; 

3 (D) mobilization activities designed to at4 tract skilled labor for use by disadvantaged 

5 firms; and 

6 (E) an informational program designed to 

7 inform local disadvantaged business of the 

8 availability of programs conducted under the 

9 authority of this section; and 

10 (2) to convene meetings with leaders and offi11 cials of State and local governments for the purpose 

12 of recommending and promoting local administrative 

13 and legislative initiatives needed to advance the posi14 tion of disadvantaged business in the local economy. 

15 (b) FINANCIAL ASSISTANCE.—In order to carry out 

16 the purposes of subsection (a) the Administration is here17 by authorized to provide financial assistance to State and 

18 local governments in the form of contracts, grants, or co19 operative agreements. 

20 (c) PUBLICATIONS IN THE FEDERAL REGISTER.— 

21 (1) At least 120 days before the beginning of 

22 each fiscal year, the Administration shall publish for 

23 public comment in the Federal Register the actual 

24 or anticipated amount of financial assistance that 

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1 ceeding fiscal year for grants, contracts, and cooper2 ative agreements planned to be awarded pursuant to 

3 this section. Such publication shall also identify the 

4 proposed allocation of funds between the several 

5 States (and cities within such States) and the exact 

6 methodology used by the Administration to make 

7 such proposed allocations. 

8 (2) At least 60 days prior to the beginning of 

9 each fiscal year, the Administration shall publish in 

10 the Federal Register its response to comments re11 ceived pursuant to paragraph (1) and any change in 

12 the allocation methodology which may be adopted as 

13 a result thereof including its effect on the allocation 

14 of funds on the several States (and cities within 

15 such States) for the immediately succeeding fiscal 

16 year. 

17 TITLE II—CAPITAL FORMATION 

18 SEC. 201. ACCESS TO EQUITY CAPITAL. 

19 The Securities and Exchange Commission shall con20 sult and cooperate with the Administration in an effort 

21 to promote access by disadvantaged business to securities 

22 markets and otherwise achieve the purposes of this title. 


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1 SEC. 202. MBDA STUDY ON CAPITAL FORMATION ALTER2 NATIVES. 

3 (a) IN GENERAL.—The Administrator shall conduct 

4 a study on alternatives for providing capital formation as5 sistance to qualified disadvantaged business concerns. 

6 (b) REPORT.—The Administrator shall submit a re7 port to Congress within 6 months. 

8 TITLE III—MANAGEMENT 

9 EDUCATIONAL DEVELOPMENT 

10 SEC. 301. DUTIES OF THE ADMINISTRATION. 

11 It shall be the duty of the Administration and it is 

12 hereby empowered, whenever it determines such action is 

13 necessary or appropriate to— 

14 (1) promote and assist the education and train15 ing of disadvantaged individuals in subjects directly 

16 related to business administration and management; 

17 (2) join with and encourage accredited colleges 

18 and universities, leaders in business and industry, or 

19 other public or private entities, particularly for prof20 it entities owned and operated by socially and eco21 nomically disadvantaged individuals, to develop pro22 grams to offer scholarships and fellowships, appren23 ticeships, internships, and to sponsor seminars and 

24 conferences and similar activities related to business 

25 for the benefit of disadvantaged individuals; 


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1 (3) stimulate and accelerate curriculum design 

2 and improvement in support of disadvantaged busi3 ness development; and 

4 (4) encourage and assist private institutions 

5 and organizations and State and local government 

6 agencies to undertake similar activities. 

7 TITLE IV—RESEARCH AND 

8 INFORMATION 

9 SEC. 401. DUTIES OF THE ADMINISTRATION. 

10 (a) REPORT ON REQUIRED PRODUCTIVE RE11 SOURCES.—Not later than 1 year after the effective date 

12 of this subsection, the Administration shall submit to the 

13 Congress a report detailing the types and amounts of pro14 ductive resources (both public and private) needed to ad15 vance and represent disadvantaged business at all phases 

16 and levels of the economic system in numbers representa17 tive of the relative population of disadvantaged individuals 

18 in the United States. The report shall provide separate 

19 recommendations for achieving such representation 

20 through a phased approach involving short-term and long21 term goals and objectives. 

22 (b) POWERS AND DUTIES.— 

23 (1) In order to achieve the purposes of this Act, 

24 the Administration shall— 


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1 (A) collect and analyze data, including, but 

2 not limited to, the causes for success or failure 

3 of businesses owned by the disadvantaged; 

4 (B) perform evaluations of private and 

5 public sector programs designed to assist the 

6 development of disadvantaged business; and 

7 (C) conduct research, studies, and surveys 

8 of economic conditions generally and how such 

9 conditions particularly affect the development of 

10 disadvantaged business. 

11 (2) The Administration is hereby authorized to 

12 provide financial assistance by contract, grant, or co13 operative agreement to public and private organiza14 tions to assist the Administration in carrying out the 

15 provisions of paragraph (1). 

16 (3) The Administration is hereby authorized to 

17 establish and maintain an information clearinghouse 

18 for the collection and dissemination of demographic, 

19 economic, financial, managerial, and technical data 

20 pertinent to disadvantaged business and, to this end, 

21 to take such steps as the Administration may deem 

22 necessary and desirable to search for, collect, clas23 sify, coordinate, integrate, record, and catalog such 

24 information. 


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1 TITLE V—ADMINISTRATIVE AND 

2 OTHER POWERS OF THE AD3 MINISTRATION; MISCELLA4 NEOUS PROVISIONS 

5 SEC. 501. ADMINISTRATIVE POWERS. 

6 In performing the duties under this Act, the Adminis7 tration is authorized to— 

8 (1) adopt and use a seal for the Minority Busi9 ness Development Administration which shall be ju10 dicially noticed; 

11 (2) hold hearings, sit and act, and take testi12 mony as the Administration may deem advisable; 

13 (3) acquire in any lawful manner any property 

14 as the Administration may deem necessary or appro15 priate to conduct the activities authorized in this 

16 Act; 

17 (4) make advance payments under grants, con18 tracts, and cooperative agreements; 

19 (5) donate without cost (except for costs of care 

20 and handling) for use in any Federal, State, or local 

21 government or in any recipient nonprofit organiza22 tion for purposes of the development of disadvan23 taged business any real or tangible personal property 

24 acquired by the Administration under this Act. The 

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1 tions, reservations, and restrictions upon the use of 

2 any property donated under this section; 

3 (6) enter into agreements with other Federal 

4 agencies; 

5 (7) employ experts and consultants or organiza6 tions thereof as authorized by section 3109 of title 

7 5, United States Code, to compensate individuals so 

8 employed at rates not in excess of the per diem rate 

9 authorized for GS–15 of the General Schedule, in10 cluding travel time, and allow them travel expenses 

11 (including per diem in lieu of subsistence) while 

12 away from their homes or regular places of business, 

13 as authorized by section 5703 of title 5, United 

14 States Code, for persons in the Government service 

15 employed intermittently, while so employed; con16 tracts for such employment may be renewed annu17 ally; 

18 (8) sue and be sued in any court of record of 

19 a State having general jurisdiction or in any United 

20 States district court, and jurisdiction is conferred 

21 upon such district court to determine such con22 troversies without regard to the amount in con23 troversy; but no attachment, garnishment, or other 

24 similar process, mesne or final, shall be issued 

25 against the Administration or its property; nothing 


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1 in this Act shall be construed to except the activities 

2 under this Act from application of sections 507(b), 

3 517, and 2679 of title 28, United States Code; and 

4 (9) prescribe such rules, regulations, and proce5 dures as the Administration may deem appropriate 

6 to carry out this Act. 

7 SEC. 502. AUDITS. 

8 (a) RECORDKEEPING REQUIREMENT.—Each recipi9 ent of assistance under this Act shall keep such records 

10 as the Administration shall prescribe, including records 

11 which fully disclose the amount and the disposition by the 

12 recipient of the proceeds of such assistance, the total cost 

13 of the undertaking for which such assistance is given or 

14 used, the amount and nature of that portion of the cost 

15 of the undertaking supplied by other sources, and such 

16 other records as will facilitate an effective audit. 

17 (b) ACCESS BY GOVERNMENT OFFICIALS.—The As18 sistant Secretary, the Inspector General of the Depart19 ment of Commerce, and the Comptroller General of the 

20 United States, or any of their duly authorized representa21 tives, shall have access for the purpose of audit, investiga22 tion, and examination to any books, documents, papers, 

23 records, and other materials of the recipient which are 

24 pertinent to the assistance received under this Act. 


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1 (c) REVIEW BY COMPTROLLER GENERAL.—Not later 

2 than 18 months after the date of the enactment of this 

3 Act, the Comptroller General of the United States shall 

4 conduct a thorough review of the programs authorized by 

5 this Act and shall transmit to the Congress a detailed re6 port of the Comptroller’s findings, including therein an 

7 evaluation of the effectiveness of the programs authorized 

8 to achieve the purpose of this Act, a description of any 

9 failure to comply with the requirements of this Act, and 

10 recommendations for corrective legislative or administra11 tive action. 

12 SEC. 503. ANNUAL REPORT. 

13 The Assistant Secretary shall, not later than 120 

14 days after the close of each fiscal year, submit to the 

15 President a full report of the Administration’s activities 

16 hereunder during the previous fiscal year. Further, the As17 sistant Secretary shall, from time to time, submit to the 

18 President recommendations for legislation or other actions 

19 as the Assistant Secretary deems desirable to promote the 

20 purposes of this Act. Each Federal agency shall consult 

21 with the Assistant Secretary on a timely basis so that the 

22 Assistant Secretary may consider them for the Assistant 

23 Secretary’s report and recommendations to the President. 


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1 SEC. 504. SEPARABILITY. 

2 If any provision of this Act or the application thereof 

3 to any persons or circumstances shall be adjudged by any 

4 court of competent jurisdiction to be invalid, such judg5 ment shall not affect, impair, or invalidate the remainder 

6 of this Act or its application to other persons and cir7 cumstances, but shall be confined in its operation to the 

8 provision of this Act or the application thereof to the per9 sons and circumstances directly involved in the con10 troversy in which such judgment shall have been rendered. 

11 SEC. 505. AUTHORIZATION FOR APPROPRIATIONS. 

12 There are hereby authorized to be appropriated such 

13 sums as may be necessary and appropriate to carry out 

14 the provisions and purposes of this Act other than those 

15 for which appropriations may from time to time be specifi16 cally authorized. 

17 SEC. 506. TERMINATION OF AUTHORITY UNDER EXECUTIVE 

18 ORDER NUMBERED 11625. 

19 Beginning on the date of the enactment of this Act, 

20 the powers and duties of the Administration shall be deter21 mined without regard to Executive Order Numbered 

22 11625. 

Æ 


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