Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

115th Congress }                                          { REPORT
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 115-1037

======================================================================
 
            NATIVE AMERICAN BUSINESS INCUBATORS PROGRAM ACT

                                _______
                                

 November 20, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Bishop of Utah, from the Committee on Natural Resources, submitted 
                             the following

                              R E P O R T

                         [To accompany S. 607]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (S. 607) to establish a business incubators program 
within the Department of the Interior to promote economic 
development in Indian reservation communities, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of S. 607 is to establish a business incubators 
program within the Department of the Interior to promote 
economic development in Indian reservation communities.

                  BACKGROUND AND NEED FOR LEGISLATION

    For decades, Native American\1\ communities have struggled 
with a wide array of difficulties relating to economic 
development on their land, including poor access to capital, 
remote and rural locations, and degradation of the local 
infrastructure. Only around half of all Native Americans (16 or 
older) residing on or near tribal communities have jobs, and a 
quarter of Native families earn an income that is below the 
federal poverty line.\2\
---------------------------------------------------------------------------
    \1\In this report, the terms ``Native American,'' ``Native,'' and 
``Indian'' are used interchangeably.
    \2\2013 American Indian Population and Labor Force Report, 
Department of the Interior.
---------------------------------------------------------------------------
    Today, approximately 56 million acres of land are held in 
trust by the United States (through the Department of the 
Interior) for the benefit of individual Indians and Indian 
tribes.\3\ Many of these lands are in remote areas, and none 
may be leased for business, agriculture, or mineral uses 
without the approval of the Secretary of the Interior.\4\ Trust 
land is generally a prerequisite for a tribe to conduct 
gambling under the Indian Gaming Regulatory Act.\5\
---------------------------------------------------------------------------
    \3\https://www.bia.gov/frequently-asked-questions.
    \4\25 U.S.C. 177; 25 U.S.C. 415.
    \5\25 U.S.C. 2701 et seq.
---------------------------------------------------------------------------
    The economies of Indian reservations in remote areas, where 
casinos may be a break-even proposition at best, suffer from 
great poverty. Many reservations and other Indian communities 
lack grocery stores, retail outlets, or banks. Residents may 
have to travel great distances (sometimes up to a two-hour 
drive) to buy groceries or go to a bank, while spending their 
disposable income on purchases off the reservation. Tribes have 
sought to keep dollars on their reservations to create 
sustainable economies, but they face a variety of challenges:
           Federal Approval. As stated above, tribes 
        and individual Indians may not lease their trust land 
        without the permission of the Secretary of the Interior 
        (this problem is not directly addressed by S. 607).
           Legal Systems and Infrastructure. To attract 
        businesses to reservations, tribal governments need to 
        provide business-friendly laws and independent court 
        systems. Companies and investors, Indian and non-Indian 
        alike, rely on governments to ensure fair competition, 
        maintain law and order, and create laws and judicial 
        systems that help enforce contracts and property 
        rights. Not all tribal governments have enacted the 
        kinds of business and commercial codes that businesses 
        and banks need before they will locate and operate on 
        reservations. Additionally, many components of tribal 
        infrastructure need significant repair or replacement.
           Access to Capital. In many Native American 
        communities, there is a lack of equity resources, such 
        as home equity or intergenerational family assets. 
        Likewise, trust land cannot be used as collateral, so 
        access to capital is complicated further in Indian 
        Country. Even if access to private capital is 
        available, it may come at a higher cost.
           Remote Locations. The remoteness of many 
        Indian communities diminishes the possibility of 
        building commercial markets for goods and services or 
        developing many types of industrial or manufacturing 
        economies.
           Sovereign Immunity. Under a legal doctrine 
        developed by federal courts, Indian tribes enjoy 
        sovereign immunity against States and private citizens. 
        Such sovereign immunity exists on and off an Indian 
        reservation. A tribe may not be sued unless its 
        sovereign immunity is waived by the tribe or by 
        Congress, which has not debated this issue in many 
        years. Tribes consider sovereign immunity a valid 
        exercise of self-governance which promotes economic 
        development. Developers or investors unfamiliar with a 
        tribe's use of sovereign immunity may be reluctant to 
        engage in business ventures with it.
    In recent years, Congress has enacted laws to grant tribes 
stronger, more comprehensive control over businesses, 
agricultural, and residential leasing of tribal lands. One 
example is the Helping Expedite and Advance Responsible Tribal 
Home Ownership Act of 2012, or the HEARTH Act.\6\ Congress has 
also enacted multiple laws to assist these communities in 
obtaining access to capital in the forms of loan guarantees, 
procurement programs, and community development financial 
institutions (CDFIs). One of these laws, the Native American 
Business Development, Trade Promotion, and Tourism Act of 
2000,\7\ aids tribes with business development and helps ensure 
that tribal businesses follow all legal and regulatory 
requirements, among other things.
---------------------------------------------------------------------------
    \6\Public Law 112-151, 25 U.S.C. 415.
    \7\25 U.S.C. 4301 et seq.
---------------------------------------------------------------------------
    While Congress has attempted to alleviate challenges 
experienced by tribal businesses, various challenges remain. As 
mentioned previously, many Indian reservations and communities 
are in predominantly rural, remote locations, and enticing 
entrepreneurs to fund and support businesses in these areas can 
be difficult.
    S. 607 is premised on the idea that programs supporting 
business incubators are uniquely able to support tribal 
businesses in ways that broad legislation cannot, as incubators 
can be tailored to fit the needs of the various regions where 
tribal businesses exist. As defined in the bill, a business 
incubator is an organization that provides physical workspace 
and facilities resources to startups and established businesses 
and is designed to accelerate the growth and success of 
businesses through a variety of business support resources and 
services. By offering services that range from workplace 
enhancement, comprehensive skills training, and networking 
assistance, business incubators have been a reliable and 
consistent solution to the many problems that continue to 
plague Indian Country.
    There are several native business incubator networks 
serving Indian country throughout the United States; however S. 
607 would establish a new program within the Department of the 
Interior. The bill would also require the Department of the 
Interior to coordinate its business incubator activities with 
other federal agencies to promote Native American business 
development.

                      SECTION-BY-SECTION ANALYSIS

Sec. 1. Short title

           Provides that this Act may be cited as the 
        ``Native American Business Incubators Program Act.

Sec. 2. Findings

           Provides Congressional findings.

Sec. 3. Definitions

           Defines terms used in the Act.

Sec. 4. Establishment of program

           Requires the Department of the Interior to 
        establish a grant program in the Office of Indian 
        Energy and Economic Development for establishing and 
        operating business incubators that serve Native 
        American communities.
           A business incubator is an organization 
        that: (1) provides physical workspace and facilities 
        resources to startups and established businesses; and 
        (2) is designed to accelerate the growth and success of 
        businesses through a variety of business support 
        resources and services. Grant applicants may be 
        institutions of higher education, private nonprofits, 
        Native American tribes, or tribal nonprofits.

Sec. 5. Regulations

           Directs the Secretary of the Interior to 
        issue new regulations to implement the program 180 days 
        after the bill is signed into law.

Sec. 6. Schools to business incubator pipeline

           The Secretary of the Interior must 
        facilitate the establishment of relationships between 
        grant recipients and educational institutions serving 
        Native American communities.

Sec. 7. Agency partnerships

           Directs the Secretary of the Interior to 
        coordinate with the Secretary of Agriculture, Secretary 
        of Commerce, Secretary of the Treasury and the 
        Administrator of the Small Business Administration to 
        ensure that business incubators receiving grant funds 
        under the program have the information and materials 
        they need to apply for each agenda's business and 
        entrepreneurial development programs.

Sec. 8. Authorizations of appropriations

           Authorizes the appropriation of $5 million 
        for each of fiscal years 2019 through 2023 to carry out 
        the program.

                            COMMITTEE ACTION

    S. 607 was introduced on March 13, 2017, by Senator Tom 
Udall (D-NM). The Senate passed the bill by voice vote on March 
22, 2018. In the House of Representatives, the bill was 
referred to the Committee on Natural Resources and within the 
Committee to the Subcommittee on Indian, Insular and Alaska 
Native Affairs. The Subcommittee held a hearing on the bill on 
July 24, 2018. On September 27, 2018, the Committee on Natural 
Resources met to consider the bill. The Subcommittee was 
discharged by unanimous consent. No amendments were offered, 
and the bill was ordered favorably reported to the House of 
Representatives by unanimous consent.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

      COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL BUDGET ACT

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 2, 2018.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 607, the Native 
American Business Incubators Program Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                                Keith Hall,
                                                          Director,
    Enclosure.

S. 607--Native American Business Incubators Program Act

    Summary: S. 607 would authorize the Bureau of Indian 
Affairs (BIA) to award grants to eligible public and private 
organizations to provide physical workspaces and other 
resources to Native American entrepreneurs and businesses. The 
legislation would authorize the appropriation of $5 million 
annually over the 2019-2023 period.
    CBO estimates that implementing S. 607 would cost $18 
million over the 2019-2023 period, assuming appropriation of 
the authorized amounts. Enacting the legislation would not 
affect direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    CBO estimates that enacting S. 607 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2029.
    S. 607 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 607 is shown in the following table. The 
costs of the legislation fall within budget function 450 
(community and regional development).

 
----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                    ------------------------------------------------------------
                                                       2019      2020      2021      2022      2023    2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Authorization Level................................         5         5         5         5         5         25
Estimated Outlays..................................         1         3         4         5         5         18
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
607 will be enacted near the end of 2018 and that the 
authorized amounts will be appropriated for each fiscal year 
beginning in 2019. Estimated outlays are based on historical 
spending patterns for similar programs.
    S. 607 would authorize the appropriation of $5 million 
annually over the 2019-2023 period to fund a grant program to 
aid the development of Native American businesses. The program 
would be managed by BIA and would include providing physical 
workplaces, business skills training, and access to networks of 
potential investors, among other services. All grants would be 
awarded for three-year periods and could be renewed for 
additional three-year terms. CBO estimates that implementing 
the program would cost $18 million over the 2019-2023 period 
and $7 million after 2023.
    Pay-As-You-Go considerations: None.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting S. 607 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2029.
    Intergovernmental and private-sector impact: S. 607 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Tribal governments would benefit from grants 
established in the bill to support the growth of Native 
American businesses and Native American entrepreneurs. Any 
costs to tribal governments would result from complying with 
conditions of assistance.
    Previous CBO estimate: On April 21, 2017, CBO transmitted 
an estimate for S. 607 as ordered reported by the Senate 
Committee on Indian Affairs on March 29, 2017. The two versions 
of S. 607 are similar and the differences in CBO's estimate of 
their cost reflect differences in CBO's assumed date of 
enactment of the legislation.
    Estimate prepared by: Federal costs: Robert Reese; 
Mandates: Rachel Austin.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural and 
Physical Resources Cost Estimates Unit; Susan Willie, Chief, 
Public and Private Mandates; H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to establish a business incubators 
program within the Department of the Interior to promote 
economic development in Indian reservation communities.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. Section 5 of this bill directs the 
Secretary of the Interior to issue regulations to implement the 
program authorized by this bill.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes to existing 
law.

                                  [all]