I
104TH CONGRESS
1ST SESSION
H. R. 114
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
JANUARY 4, 1995
Mr. MFUME introduced the following bill; which was referred to the Committee
on Banking and 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-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Minority Business De-
velopment Act of 1993’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that—
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(1) the opportunity for full participation in our
free enterprise system by socially and economically
disadvantaged individuals is essential if we are to
obtain social and economic equality for such individ-
uals and improve the functioning of our national
economy;
(2) that many such individuals are socially dis-
advantaged because of their identification as mem-
bers of certain groups that have suffered the effects
of discriminatory practices or similar invidious cir-
cumstances over which they have no control;
(3) such groups include, but are not limited to,
Black Americans, Hispanic Americans, Native
Americans, Asian Pacific Americans, Asian Indian
Americans, and other minorities;
(4) it is in the national interest to expeditiously
ameliorate the conditions of socially and economi-
cally disadvantaged groups;
(5) such conditions can be improved by provid-
ing the maximum practicable opportunity for the de-
velopment of business concerns owned by members
of socially and economically disadvantaged groups;
(6) such opportunity cannot be fully realized
unless the Federal Government secures the partici-
pation and cooperation of the private sector in a
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joint effort to promote the development of business
owned by disadvantaged individuals; and
(7) such effort will result in a more equitable
share of productive resources being devoted to busi-
ness owned by the disadvantaged and will promote
a balanced economy and increased competition.
(b) PURPOSE.—It is, therefore, the purpose of this
Act to—
(1) establish an Administration within the De-
partment of Commerce which will promote and ad-
minister programs in the private and public sectors
to assist the development of business owned by the
disadvantaged; and
(2) achieve such development through the con-
duct of programs which will result in increased ac-
cess to skilled labor, capital, management, and tech-
nology by such business.
SEC. 3. DEFINITIONS.
As used in this Act the following terms have the fol-
lowing meanings:
(1) The term ‘‘Secretary’’ means the Secretary
of Commerce.
(2) The terms ‘‘State’’, ‘‘States’’, and ‘‘United
States’’ include the several States, the District of
Columbia, the Commonwealth of Puerto Rico, the
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territories of the Virgin Islands, Guam, and Amer-
ican Samoa, the Commonwealth of the Northern
Marianas, and the Trust Territory of the Pacific Is-
lands.
(3) The terms ‘‘socially and economically dis-
advantaged business concerns’’ and ‘‘disadvantaged
business’’ means any for-profit business enterprise
which is at least 51 percent owned by one or more
socially and economically disadvantaged individuals;
or, in the case of any publicly owned business, at
least 51 percent of the stock of which is owned by
one or more socially and economically disadvantaged
individuals; and whose management and daily busi-
ness operations are controlled by one or more of
such individuals.
(4) The term ‘‘socially disadvantaged individ-
uals’’ means those who have been subjected to racial
or ethnic prejudice or cultural bias because of their
identity as a member of a group without regard to
their individual qualities.
(5)(A) The term ‘‘economically disadvantaged
individuals’’ means those socially disadvantaged indi-
viduals whose ability to compete in the free enter-
prise system has been impaired due to diminished
capital and credit opportunities as compared to oth-
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ers in the same business area who are not socially
disadvantaged.
(B) The Assistant Secretary shall presume that
socially and economically disadvantaged individuals
include Black Americans, Hispanic Americans, Na-
tive Americans, Asian Pacific Americans, Asian In-
dian Americans, individuals found to be disadvan-
taged by the Small Business Administration pursu-
ant to section 8(a) of the Small Business Act, other
individuals so designated by the Minority Business
Development Agency under section 1400.1 of title
15 of the Code of Federal Regulations (as in effect
on October 1, 1986), and other individuals belonging
to other minority groups which the Small Business
Administration may, from time to time, determine to
be socially and economically disadvantaged groups
pursuant to Public Law 95–507.
(6) The term ‘‘Administration’’ means the Mi-
nority Business Development Administration estab-
lished by this Act.
(7) The term ‘‘Assistant Secretary’’ means the
Assistant Secretary of the Minority Business Devel-
opment Administration.
(8) The term ‘‘agency’’ means any executive
agency as defined in section 105 of title 5, United
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States Code, and the military departments as de-
fined by section 102 of title 5, United States Code.
(9) The term ‘‘public sector’’ means any State,
State agency, political subdivision of a State, or
agency of such a political subdivision.
(10) The term ‘‘private sector’’ means any en-
tity which is not in the public sector excluding the
Federal Government, it agencies and instrumental-
ities.
SEC. 4. MINORITY BUSINESS DEVELOPMENT ADMINISTRA-
TION.
(a) ESTABLISHMENT.—The Minority Business Devel-
opment Agency in the Department of Commerce is hereby
redesignated and established as the ‘‘Minority Business
Development Administration’’. The Administration shall
be headed by an Assistant Secretary of Commerce ap-
pointed by the President, by and with the advice and con-
sent of the Senate. The Assistant Secretary shall be com-
pensated at the rate now or hereafter provided for level
IV of the Executive Schedule and shall have responsibility
for the administration of this Act. This position shall be
in addition to the other positions of Assistant Secretary
which are authorized by law.
(b) REPORT TO CONGRESS.—Within 120 days after
the effective date of this subsection, the Secretary shall
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inform appropriate committees of both the Senate and
House of Representatives of—
(1) the organizational structure established
within the Administration;
(2) the organizational position of the Adminis-
tration within the Department of Commerce; and
(3) a description of how the Administration
shall function in relation to the operations of other
agencies within the Department.
TITLE I—MARKET
DEVELOPMENT
SEC. 101 PRIVATE SECTOR DEVELOPMENT.
(a) DUTIES OF THE ADMINISTRATION.—It shall be
the duty of the Administration and it is hereby empow-
ered, whenever it determines such action is necessary or
appropriate—
(1) to assist disadvantaged business concerns
penetrate domestic and foreign markets by making
available to such concerns, either directly or in co-
operation with private sector organizations, manage-
ment, and technological assistance, a skilled labor
pool and financial and marketing services; and
(2) to encourage disadvantaged firms to estab-
lish joint ventures and projects either among them-
selves or in cooperation with public or private sector
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organizations for the purpose of increasing the share
of any market activity now being performed by dis-
advantaged business.
(b) JOINT PROGRAMS PERMITTED.—For purposes of
subsection (a)(2):
(1) The Assistant Secretary may, after con-
sultation with the Attorney General and the Chair-
man of the Federal Trade Commission, and with the
prior written approval of the Attorney General, ap-
prove any agreement between such disadvantaged
firms or public or private sector organizations pro-
viding for a joint program for market development
if the Assistant Secretary finds that the joint pro-
gram proposed will maintain and strengthen the free
enterprise system and the economy of the Nation.
The Assistant Secretary or the Attorney General
may at any time withdraw approval of the agree-
ment and the joint program for market development
covered thereby, if either finds that the agreement
or the joint program carried on under it is no longer
in the best interests of the competitive free enter-
prise system and the economy of the Nation. A copy
of the statement of any such finding and approval
intended to be within the coverage of this paragraph,
and a copy of any modification or withdrawal of ap-
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proval, shall be published in the Federal Register.
The authority conferred by this on the Assistant
Secretary shall not be delegated.
(2) No act or omission to act, pursuant to and
within the scope of any joint program for market de-
velopment under an agreement approved by the As-
sistant Secretary under this subsection, shall be con-
strued to be within the prohibitions of the antitrust
laws or the Federal Trade Commission Act. Upon
publication in the Federal Register of the notice of
withdrawal of his approval of the agreement granted
under this paragraph, either by the Assistant Sec-
retary or by the Attorney General, the provisions of
this paragraph shall not apply to any subsequent act
or omission to act.
(c) REQUIREMENT
OF PARTICIPATION
OF SMALL
BUSINESS CONCERN IN JOINT PROGRAM.—At least 1
party to each agreement for a joint program for market
development approved under (b) shall be a small business
concern, as defined pursuant to section 3 of the Small
Business Act (15 U.S.C. 632). If there are more than 2
parties to such an agreement, a majority of the parties
shall be small business concerns.
(d) FINANCIAL ASSISTANCE.—In order to carry out
the purposes of this section, the Administration is hereby
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authorized to provide financial assistance in the form of
contracts, grants, or cooperative agreements to and with
public and private sector organizations, including any as-
sociation, business firm, trade association, or business or-
ganization. No assistance may be provided under the au-
thority of this subsection if such assistance is primarily
intended to facilitate the use by disadvantaged business
of federally administered programs (not otherwise estab-
lished by this Act) unless the Assistant Secretary obtains
the prior concurrence and written approval of the Associ-
ate Administrator for Minority Small Business and Cap-
ital Ownership Development of the Small Business Admin-
istration.
SEC. 102. PUBLIC SECTOR DEVELOPMENT.
(a) DUTIES OF THE ADMINISTRATION.—It shall be
the duty of the Administration and it is hereby empow-
ered, whenever it determines such action is necessary or
appropriate—
(1) to consult and cooperate with State and
local governments for the purpose of leveraging local
resources to promote the position of disadvantaged
business in the local economy, including, but not be
limited to, assisting such governments to establish—
(A) procurement programs and goals for
the utilization of disadvantaged business,
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(B) management and technological assist-
ance programs,
(C) financial and marketing assistance pro-
grams,
(D) mobilization activities designed to at-
tract skilled labor for use by disadvantaged
firms, and
(E) an informational program designed to
inform local disadvantaged business of the
availability of programs conducted under the
authority of this section; and
(2) to convene meetings with leaders and offi-
cials of State and local governments for the purpose
of recommending and promoting local administrative
and legislative initiatives needed to advance the posi-
tion of disadvantaged business in the local economy.
(b) FINANCIAL ASSISTANCE.—In order to carry out
the purposes of subsection (a) the Administration is here-
by authorized to provide financial assistance to State and
local governments in the form of contracts, grants, or co-
operative agreements.
(c) PUBLICATIONS IN THE FEDERAL REGISTER.—(1)
At least 120 days before the beginning of each fiscal year,
the Administration shall publish for public comment in the
Federal Register the actual or anticipated amount of fi-
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nancial assistance that will or may be available in the im-
mediately succeeding fiscal year for grants, contracts and
cooperative agreements planned to be awarded pursuant
to this section. Such publication shall also identify the pro-
posed allocation of funds between the several States (and
cities within such States) and the exact methodology used
by the Administration to make such proposed allocations.
(2) At least 60 days prior to the beginning of each
fiscal year, the Administration shall publish in the Federal
Register its response to comments received pursuant to
paragraph (1) and any change in the allocation methodol-
ogy which may be adopted as a result thereof including
its effect on the allocation of funds on the several States
(and cities within such States) for the immediately suc-
ceeding fiscal year.
TITLE II—CAPITAL FORMATION
SEC. 201. ACCESS TO EQUITY CAPITAL.
(a) PILOT AND DEMONSTRATION PROJECTS.—The
Administration is hereby authorized to defray all or part
of the costs of pilot or demonstration projects conducted
by public or private organizations which are designed to
assist disadvantaged business in obtaining access to equity
capital.
(b) SEC CONSULTATION AND COOPERATION.—The
Securities and Exchange Commission shall consult and co-
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operate with the Administration in an effort to promote
access by disadvantaged business to securities markets
and otherwise achieve the purposes of this title.
SEC. 202. MBDA STUDY ON CAPITAL FORMATION ALTER-
NATIVES.
(a) IN GENERAL.—The Administrator shall conduct
a study on alternatives for providing capital formation as-
sistance to qualified disadvantaged business concerns, in-
cluding—
(1) the implementation of a revolving fund the
proceeds of which would be used to provide financial
assistance to qualified disadvantaged business con-
cerns through the purchase of equity investment in
such concerns; and
(2) the implementation of a surety bond refer-
ral assistance program, specifically the implementa-
tion of an individual surety bond referral program.
(b) REPORT.—The Administrator shall submit a re-
port to the Committees on Small Business of the House
of Representatives and of the Senate within 6 months
after the date of the enactment of this Act that contains
the Administrator’s findings of the study conducted under
subsection (a). Such report shall specifically address the
feasibility of the alternatives described in paragraphs (1)
and (2) of such subsection and any other alternative ex-
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plored by the Administration concerning the provision of
capital formation assistance to qualified disadvantaged
business concerns.
TITLE III—MANAGEMENT
EDUCATIONAL DEVELOPMENT
SEC. 301. DUTIES OF THE ADMINISTRATION.
It shall be the duty of the Administration and it is
hereby empowered, whenever it determines such action is
necessary or appropriate to—
(1) promote and assist the education and train-
ing of disadvantaged individuals in subjects directly
related to business administration and management;
(2) join with the encourage accredited colleges
and universities, leaders in business and industry, or
other public or private entities, particularly for prof-
it entities owned and operated by socially and eco-
nomically disadvantaged individuals, to develop pro-
grams to offer scholarships and fellowships, appren-
ticeships, internships, and to sponsor seminars and
conferences, and similar activities related to business
for the benefit of disadvantaged individuals;
(3) stimulate and accelerate curriculum design
and improvement in support of disadvantaged busi-
ness development; and
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(4) encourage and assist private institutions
and organizations and State and local government
agencies to undertake similar activities.
TITLE IV—RESEARCH AND
INFORMATION
SEC. 401. DUTIES OF THE ADMINISTRATION.
(a) REPORT
ON
REQUIRED
PRODUCTIVE
RE-
SOURCES.—Not later than 1 year after the effective date
of this subsection, the Administration shall submit to the
Congress a report detailing the types and amounts of pro-
ductive resources (both public and private) needed to ad-
vance and represent disadvantaged business at all phases
and levels of the economic system in numbers representa-
tive of the relative population of disadvantaged individuals
in the United States. The report shall provide separate
recommendations for achieving such representation
through a phased approach involving short-term and long-
term goals and objectives.
(b) POWERS AND DUTIES.—(1) In order to achieve
the purposes of this Act, the Administration shall—
(A) collect and analyze data, including, but not
limited to, the causes for success or failure of busi-
nesses owned by the disadvantaged,
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(B) perform evaluations of private and public
sector programs designed to assist the development
of disadvantaged business; and
(C) conduct research, studies, and surveys of
economic conditions generally and how such condi-
tions particularly affect the development of dis-
advantaged business.
(2) The Administration is hereby authorized to pro-
vide financial assistance by contract, grant, or cooperative
agreement to public and private organizations to assist the
Administration in carrying out the provisions of paragraph
(1).
(3) The Administration is hereby authorized to—
(A) develop and maintain, on a current basis, a
data bank on disadvantaged business, except that—
(i) such activity shall be conducted in co-
operation and consultation with the Associate
Administrator for Minority Small Business and
Capital Ownership Development of the Small
Business Administration, and
(ii) such data bank does not duplicate the
information stored or capable of being stored by
the procurement automated source system
(PASS) maintained by the Small Business Ad-
ministration; and
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(B) establish and maintain an information
clearinghouse for the collection and dissemination of
demographic, economic, financial, managerial, and
technical data pertinent to disadvantaged business
and, to this end, to take such steps as the Adminis-
tration may deem necessary and desirable to search
for, collect, classify, coordinate, integrate, record,
and catalog such information.
TITLE V—ADMINISTRATIVE AND
OTHER POWERS OF THE AD-
MINISTRATION; MISCELLANE-
OUS PROVISIONS
SEC. 501. ADMINISTRATIVE POWERS.
In performing the duties under this Act, the Adminis-
tration is authorized to—
(1) adopt and use a seal for the Minority Busi-
ness Development Administration which shall be ju-
dicially noticed;
(2) hold hearings, sit and act, and take testi-
mony as the Administration may deem advisable;
(3) acquire in any lawful manner any property
as the Administration may deem necessary or appro-
priate to conduct the activities authorized in this
Act;
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(4) make advance payments under grants, con-
tracts, and cooperative agreements;
(5) donate without cost (except for costs of care
and handling) for use in any Federal, State, or local
government or in any recipient nonprofit organiza-
tion for purposes of the development of disadvan-
taged business any real or tangible personal property
acquired by the Administration under this Act. The
Administration may impose reasonable terms, condi-
tions, reservations, and restrictions upon the use of
any property donated under this section;
(6) enter into agreements with other Federal
agencies;
(7) employ experts and consultants or organiza-
tions thereof as authorized by section 3109 of title
5, United States Code, to compensate individuals so
employed at rates not in excess of the per diem rate
authorized for GS–18 of the General Schedule, in-
cluding traveltime, and allow them travel expenses
(including per diem in lieu of subsistence) while
away from their homes or regular places of business,
as authorized by section 5703 of title 5, United
States Code, for persons in the Government service
employed intermittently, while so employed; con-
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tracts for such employment may be renewed annu-
ally;
(8) sue and be sued in any court of record of
a State having general jurisdiction or in any United
States district court, and jurisdiction is conferred
upon such district court to determine such con-
troversies without regard to the amount in con-
troversy; but no attachment, garnishment, or other
similar process, mesne or final, shall be issued
against the Administration or its property; nothing
in this Act shall be construed to except the activities
under this Act from application of sections 507(b),
517, and 2679 of title 28, United States Code; and
(9) prescribe such rules, regulations, and proce-
dures as the Administration may deem appropriate
to carry out this Act.
SEC. 502. AUDITS.
(a) RECORDKEEPING REQUIREMENT.—Each recipi-
ent of assistance under this Act shall keep such records
as the Administration shall prescribe, including records
which fully disclose the amount and the disposition by the
recipient of the proceeds of such assistance, the total cost
of the undertaking for which such assistance is given or
used, the amount and nature of that portion of the cost
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of the undertaking supplied by other sources, and such
other records as will facilitate an effective audit.
(b) ACCESS BY GOVERNMENT OFFICIALS.—The As-
sistant Secretary, the Inspector General of the Depart-
ment of Commerce, and the Comptroller General of the
United States, or any of their duly authorized representa-
tives, shall have access for the purpose of audit, investiga-
tion, and examination to any books, documents, papers,
records, and other materials of the recipient which are
pertinent to the assistance received under this Act.
(c) REVIEW BY COMPTROLLER GENERAL.—Not later
than 18 months after the date of the enactment of this
Act, the Comptroller General of the United States shall
conduct a thorough review of the programs authorized by
this Act and shall transmit to the Congress a detailed re-
port of the Comptroller’s findings, including therein an
evaluation of the effectiveness of the programs authorized
to achieve the purpose of this Act, a description of any
failure to comply with the requirements of this Act, and
recommendations for corrective legislative or administra-
tive action.
SEC. 503. ANNUAL REPORT.
The Assistant Secretary shall, not later than 120
days after the close of each fiscal year, submit to the
President a full report of the Administration’s activities
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hereunder during the previous fiscal year. Further, the As-
sistant Secretary shall, from time to time, submit to the
President recommendations for legislation or other actions
as the Assistant Secretary deems desirable to promote the
purposes of this Act. Each Federal agency shall consult
with the Assistant Secretary on a timely basis so that the
Assistant Secretary may consider them for the Assistant
Secretary’s report and recommendations to the President.
SEC. 504. SEPARABILITY.
If any provision of this Act or the application thereof
to any persons or circumstances shall be adjudged by any
court of competent jurisdiction to be invalid, such judg-
ment shall not affect, impair, or invalidate the remainder
of this Act or its application to other persons and cir-
cumstances, but shall be confined in its operation to the
provision of this Act or the application thereof to the per-
sons and circumstances directly involved in the con-
troversy in which such judgment shall have been rendered.
SEC. 505. AUTHORITY OF ASSOCIATE ADMINISTRATOR FOR
MINORITY SMALL BUSINESS AND CAPITAL
OWNERSHIP DEVELOPMENT.
(a) IN GENERAL.—Section 7(j)(11) of the Small
Business Act (15 U.S.C. 636(j)(11)) is amended to read
as follows:
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‘‘(11) The Associate Administrator for Minority
Small Business and Capital Ownership Development
shall be responsible for coordinating and formulating
policies relating to assistance provided by Federal
agencies (excluding the Minority Business Develop-
ment Administration) to small business concerns de-
scribed in section 7(i) and small business concerns
owned and controlled by the socially and economi-
cally disadvantaged as defined pursuant to section
8(d).’’.
(b) CONSTRUCTION OF PROVISIONS.—Nothing in this
Act is intended to duplicate or limit any programs or
projects administered by the Small Business Administra-
tion.
(c) COOPERATION BY FEDERAL AGENCIES.—Each
Federal agency shall cooperate and consult with the Ad-
ministrator and the Small Business Administration to fa-
cilitate the accomplishment of the purposes of this Act and
the Small Business Act.
SEC. 506. AUTHORIZATION FOR APPROPRIATIONS.
There are hereby authorized to be appropriated such
sums as may be necessary and appropriate to carry out
the provisions and purposes of this Act other than those
for which appropriations may from time to time be specifi-
cally authorized.
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SEC. 507. TERMINATION OF AUTHORITY UNDER EXECUTIVE
ORDER NUMBERED 11625.
Beginning on the date of the enactment of this Act,
the powers and duties of the Administration shall be deter-
mined without regard to Executive Order Numbered
11625.
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