I 116th CONGRESS 1st Session H. R. 1432 IN THE HOUSE OF REPRESENTATIVES February 28, 2019 Mr. McNerney (for himself, Ms. Barragán , 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. Short title This Act may be cited as the Minority Business Development Act of 2019 . 2. Findings and purpose (a) Findings The Congress finds that— (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 individuals and improve the functioning of our national economy; (2) many such individuals are socially disadvantaged because of their identification as members of certain groups that have suffered the effects of discriminatory practices or similar invidious circumstances over which they have no control; (3) such groups include, but are not limited to, African 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 economically disadvantaged groups; (5) such conditions can be improved by providing the maximum practicable opportunity for the development 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 participation and cooperation of the private sector in a joint effort to promote the development of business owned by disadvantaged individuals; (7) such effort will result in a more equitable share of productive resources being devoted to business owned by the disadvantaged and will promote a balanced economy and increased competition; (8) while other Federal agencies focus on broader demographic and emerging businesses, MBDA focuses exclusively on the unique needs of minority-owned businesses and enhancing the capacity and reach of medium and large scale minority-owned firms; and (9) MBDA’s national network of business centers is critical to assisting minority-owned businesses gain access to capital, contracts, and new markets through public-private engagement. Therefore, Congress must continue to invest in the MBDA business centers, as they provide direct services to minority-owned businesses. (b) Purpose It is, therefore, the purpose of this Act to— (1) establish an Administration within the Department of Commerce which will promote and administer programs in the private and public sectors to assist the development of business owned by the disadvantaged; and (2) achieve such development through the conduct of programs which will result in increased access to skilled labor, capital, management, and technology by such business. 3. Definitions As used in this Act the following terms have the following 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, and the territories of the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. (3) The terms socially and economically disadvantaged 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 business operations are controlled by one or more of such individuals. (4) The term socially disadvantaged individuals 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 individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area that are not socially disadvantaged. (B) The Assistant Secretary shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, Asian Indian Americans, individuals found to be disadvantaged by the Small Business Administration pursuant 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 Minority Business Development Administration established by this Act. (7) The term Assistant Secretary means the Assistant Secretary of the Minority Business Development Administration. (8) The term agency means any executive agency as defined in section 105 of title 5, United States Code, and the military departments as defined 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 entity which is not in the public sector excluding the Federal Government and its agencies and instrumentalities. 4. Minority business development administration (a) Establishment The Minority Business Development 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 appointed by the President, by and with the advice and consent of the Senate. The Assistant Secretary shall be compensated 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) MBDA Business Centers The Minority Business Development Administration is directed to allocate up to 25 percent of its total appropriation toward cooperative agreements, external awards, and grants to continue the traditional Business Center program and Specialty Project Center program of the Minority Business Development Administration. (c) Report to Congress Within 120 days after the effective date of this subsection, the Secretary shall 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 Administration 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. I MARKET DEVELOPMENT 101. Private sector development (a) 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— (1) to assist disadvantaged business concerns penetrate domestic and foreign markets by making available to such concerns, either directly or in cooperation with private sector organizations, management, and technological assistance, a skilled labor pool, and financial and marketing services; and (2) to encourage disadvantaged firms to establish joint ventures and projects either among themselves or in cooperation with public or private sector organizations for the purpose of increasing the share of any market activity now being performed by disadvantaged business. (b) Joint programs permitted For purposes of subsection (a)(2): (1) The Assistant Secretary may, after consultation with the Attorney General and the Chairman of the Federal Trade Commission, and with the prior written approval of the Attorney General, approve any agreement between such disadvantaged firms or public or private sector organizations providing for a joint program for market development if the Assistant Secretary finds that the joint program 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 agreement 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 enterprise 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 approval, 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 development under an agreement approved by the Assistant Secretary under this subsection, shall be construed 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 Secretary 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 subsection (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 authorized to provide financial assistance in the form of contracts, grants, or cooperative agreements to and with public and private sector organizations, including any association, business firm, trade association, or business organization. No assistance may be provided under the authority of this subsection if such assistance is primarily intended to facilitate the use by disadvantaged business of federally administered programs (not otherwise established by this Act) unless the Assistant Secretary obtains the prior concurrence and written approval of the Small Business Administration. 102. Public sector development (a) 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— (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; (B) management and technological assistance programs; (C) financial and marketing assistance programs; (D) mobilization activities designed to attract 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 officials of State and local governments for the purpose of recommending and promoting local administrative and legislative initiatives needed to advance the position of disadvantaged business in the local economy. (b) Financial assistance In order to carry out the purposes of subsection (a) the Administration is hereby authorized to provide financial assistance to State and local governments in the form of contracts, grants, or cooperative 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 financial assistance that will or may be available in the immediately succeeding fiscal year for grants, contracts, and cooperative agreements planned to be awarded pursuant to this section. Such publication shall also identify the proposed 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 methodology 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 succeeding fiscal year. II CAPITAL FORMATION 201. Access to equity capital The Securities and Exchange Commission shall consult and cooperate with the Administration in an effort to promote access by disadvantaged business to securities markets and otherwise achieve the purposes of this title. 202. Mbda study on capital formation alternatives (a) In general The Administrator shall conduct a study on alternatives for providing capital formation assistance to qualified disadvantaged business concerns. (b) Report The Administrator shall submit a report to Congress within 6 months. III MANAGEMENT EDUCATIONAL DEVELOPMENT 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 training of disadvantaged individuals in subjects directly related to business administration and management; (2) join with and encourage accredited colleges and universities, leaders in business and industry, or other public or private entities, particularly for profit entities owned and operated by socially and economically disadvantaged individuals, to develop programs to offer scholarships and fellowships, apprenticeships, 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 business development; and (4) encourage and assist private institutions and organizations and State and local government agencies to undertake similar activities. IV RESEARCH AND INFORMATION 401. Duties of the administration (a) Report on required productive resources 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 productive resources (both public and private) needed to advance and represent disadvantaged business at all phases and levels of the economic system in numbers representative 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 businesses owned by the disadvantaged; (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 conditions particularly affect the development of disadvantaged business. (2) The Administration is hereby authorized to provide 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 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 Administration may deem necessary and desirable to search for, collect, classify, coordinate, integrate, record, and catalog such information. V ADMINISTRATIVE AND OTHER POWERS OF THE ADMINISTRATION; MISCELLANEOUS PROVISIONS 501. Administrative powers In performing the duties under this Act, the Administration is authorized to— (1) adopt and use a seal for the Minority Business Development Administration which shall be judicially noticed; (2) hold hearings, sit and act, and take testimony as the Administration may deem advisable; (3) acquire in any lawful manner any property as the Administration may deem necessary or appropriate to conduct the activities authorized in this Act; (4) make advance payments under grants, contracts, 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 organization for purposes of the development of disadvantaged business any real or tangible personal property acquired by the Administration under this Act. The Administration may impose reasonable terms, conditions, 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 organizations 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–15 of the General Schedule, including travel time, 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; contracts for such employment may be renewed annually; (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 controversies without regard to the amount in controversy; 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 procedures as the Administration may deem appropriate to carry out this Act. 502. Audits (a) Recordkeeping requirement Each recipient 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 of the undertaking supplied by other sources, and such other records as will facilitate an effective audit. (b) Access by government officials The Assistant Secretary, the Inspector General of the Department of Commerce, and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit, investigation, 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 report 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 administrative action. 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 hereunder during the previous fiscal year. Further, the Assistant 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. 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 judgment shall not affect, impair, or invalidate the remainder of this Act or its application to other persons and circumstances, but shall be confined in its operation to the provision of this Act or the application thereof to the persons and circumstances directly involved in the controversy in which such judgment shall have been rendered. 505. 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 specifically authorized. 506. 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 determined without regard to Executive Order Numbered 11625.