Economic Development. honoring the promises: the federal trust responsibility in the 21st century» 53
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1 Economic Development Native nations continue to work toward self-determination and self-sufficiency, despite te fact tat federal resources for entrepreneurial development ave been insufficient and targeted elsewere. Wit unemployment reacing an average of 50 percent and sometimes as ig as 80 percent on reservations, it is critical to invest in economic development opportunities for tribal communities. Economic development programs spur community growt, provide job opportunities, and increase quality of life. Te following budget recommendations offer significant promise to address istorically unmet needs for economic development in Indian Country. onoring te promises: te federal trust responsibility in te 21st century» 53
2 Key Recommendations Department of Commerce Commerce, Justice, Science Appropriations Bill Minority Business Development Agency Increase MBDA funding by $3.5 million to $35 million. Te Minority Business Development Agency (MBDA) uses its funding to support minority business enterprise centers (MBECs) and Native American business enterprise centers (NABECs) to provide business consulting, advice on business financing, and procurement tecnical assistance to Indian tribes, tribal enterprises, and American Indian, Alaska Native, or Native Hawaiian business owners. MBDA s budget decreased by alf and was flat-lined for years at $29 million until a sligt increase in FY2010 to $31.5 million. Only about $11 million-$12 million of te budget is devoted to supporting 32 MBECs and 6-8 NABECs. Wit a iger annual funding level, MBDA could support more MBECs and NABECs at levels sufficient to enable tem to ire more business consultants. Tese consultants can assist additional minority and Native companies in accessing needed business capital, pursuing commercial and government contracts, expanding teir services, generating more revenue, and creating more jobs. Tis budget increase will spur job creation and economic growt in Native communities. Department of Commerce Commerce, Justice, Science Appropriations Bill Office of Native American Affairs Fund te Office of Native American Affairs at $3 million. Congress enacted te Native American Business Development, Trade Promotion and Tourism Act of 2000 (P.L ) to codify te Office of Native American Affairs, but funds were not allocated until late 2005 wen MBDA set aside about $200,000 of its own budget for te Office. Indian Country as consistently advocated for dedicated funding for tis Office and as urged tat $3 million be made available from witin te Commerce s Departmental Management budget to re-establis tis Office to implement Indian policy initiatives and expand Native business development initiatives, bot domestically and internationally. Wit independent funding, tis Office could collaborate more effectively wit Commerce and troug te NABECs to fulfill te Secretary s duties prescribed by te 2000 Act, wic include: serving as te economic development lead; conducting outreac to tribes; supporting tourism-related activities and demonstration projects; conducting trade and tourism missions abroad; and osting, co-osting, and supporting Native programs and conferences devoted to business and economic development, business and financial indian country budget request fy2012» 54
3 management training, marketing and procurement tecnical assistance, domestic and international trade promotion, and intertribal, interstate, and international tourism. Small Business Administration Office of Native American Affairs Fund te Small Business Administration s (SBA) Office of Native American Affairs at $2 million. Historically, te SBA s funding for Native American outreac as been very low, particularly wen compared to oter SBA program investments. Outreac responsibilities are performed primarily by te SBA s National Director of te Office of Native American Affairs (ONAA), an increasingly active operation wit significant ongoing initiatives in business development and tribal and business executive training. Wit increased autority and funding, te ONAA could provide greater assistance troug te SBA s E-200 executive training courses (tat ave already proven successful in spurring small business growt and job creation) and oter training assistance to improve access to SBA loans, loan guarantees, and surety bond guarantees. Increased funding would also enable ONAA to more effectively facilitate and monitor Native contractors participating in te SBA s 8(a) Business Development Program, HUBZone, women business, veteran and service disabled veteran business, and oter small business contracting programs. By giving te ONAA more autority and resources to assist tribes, tribal enterprises, and oter Native-owned businesses to build teir entrepreneurial capacity, tese businesses will be more likely to grow, generate increased revenues, create more jobs, and strengten Native communities facing te ongoing impact of decades-long economic distress. Small Business Administration Native American Business Center Grants Fund Native American Business Center Grants at $10 million. Te House and Senate bot passed bills in te 111t Congress to autorize at least $10 million to support Native American Business Center (NABC) grants. Tese grants would expand te availability of business centers tat provide culturally tailored business development training, procurement tecnical assistance, and related services to Indian tribes, tribal enterprises, and oter Native-owned businesses. Entities eligible to apply for NABC grants would include tribal colleges and Native nonprofit organizations dedicated to business and financial consulting and procurement tecnical assistance. Autorization and appropriation of suc grants is essential for te ONAA to be able to access a fair sare of te sizable amounts appropriated eac year for SBA s Entrepreneurial Development programs, including te Small Business Development Center program. onoring te promises: te federal trust responsibility in te 21st century» 55
4 Small Business Administration Consultation on 8(a) Improvements Provide at least $1 million witin te SBA s Business Development Program for SBA Consultations on and Implementation of 8(a) Improvements. Tese resources are critical to advancing te SBA s regulatory reform agenda to improve accountability, efficiency, and transparency by re-engineering 8(a) program operations as applied to Alaska Natives, Indian Tribes, and Native Hawaiian organizations and te 8(a) enterprises tey own. Tis dedicated funding would enable SBA to continue and complete its consultations wit tribes and tese community-based enterprises on te 8(a) regulatory canges proposed by te SBA in October 2009, and promulgate final rules based on te full public record developed during te extensive comment period. Te intended result sould be clear direction to bot te SBA and te 8(a) participants on ow program requirements apply to tese enterprises and ow transparency and compliance wit tese requirements will improve performance, management, oversigt, and overall accountability by contractors and te SBA. Department of te Treasury Community Development Financial Institutions (CDFI) Fund Increase Native CDFI funding up to 10 percent and at least $15 million in FY2012. Te Native Initiative of te CDFI Fund as ad a tangible effect on nearly 100 Native communities tat are now ome to certified or developing CDFIs. American Recovery and Reinvestment Act and FY investments in te CDFI Fund and direct increases in te Native Initiative allocation ave been a welcome investment, but still leave significant unmet needs for access to capital and financial skill development in Native communities. Over te past five years, te number of annual applications to te Native CDFI Initiative as continued to grow, wit some application years exceeding $20 million. Given te economic conditions of many Native communities, we encourage te CDFI Fund to move toward a set-aside of 10 percent of te CDFI Fund appropriations to support te development and growt of Native CDFIs. Te services provided by Native CDFIs are critical to te economic recovery of Native communities. Offering more training for Native entrepreneurs in preparing business plans, applications for business loans and letters of credit, and contracting certifications would enable tem to grow teir businesses and increase Native employment. indian country budget request fy2012» 56
5 Department of te Interior Interior Appropriations Bill Office of Indian Energy and Economic Development (OIEED) Fund te Office of Indian Energy and Economic Development at $5 million. Te Department of te Interior s OIEED as launced many creative and successful initiatives to encourage energy resource development on tribal lands, spur economic and business development assistance and training, expand job and skills training opportunities, and leverage limited federal funding to provide access to capital. More funding would enable te OIEED to expand te scope and usefulness of its Indian Loan Guarantee Program to finance more business development (including support for Native business development providers engaged in assisting Native businesses in preparing business plans and financing applications); enable more Native contractors to satisfy surety bonding requirements necessary to perform construction projects; expand use of te Section 477 program and oter job training initiatives; and assist business incubation pilot projects initiated in recent years to facilitate Native business growt and job creation. Te OIEED as also worked wit Interior s acquisition staff to develop stronger and more streamlined procurement procedures for use of te Buy Indian Act autority to procure goods and services from Native contractors and suppliers to te maximum extent possible. Department of te Interior Interior Appropriations Bill OIEED Guarantees for Indian Loans, Surety Bonds, Development Bonds Fund te Indian Loan Guarantee Program at $15 million. Te OIEED s Division of Capital Investment oversees te Indian Loan Guarantee Program tat enables eligible borrowers to develop viable Indian businesses troug conventional lender financing tat migt oterwise be unavailable and elps lenders reduce excessive risks on te loans tey make. In order to expand access to capital for Indian tribes and businesses, OIEED is exploring weter te loan guarantee pool could be leveraged furter to implement its surety bond guarantee autority tat as never been used or guarantee tribal bonds issued for economic and community development purposes. onoring te promises: te federal trust responsibility in te 21st century» 57
6 Department of Defense Defense Appropriations Bill Procurement Tecnical Assistance Centers, Defense Logistics Agency Fund AIPTACs at $3.6 million witin $31 million for te PTAP. Te Defense Logistics Agency as supported te Procurement Tecnical Assistance Program (PTAP) wit cooperative agreement assistance to regional, statewide, and local centers. Many of tese Procurement Tecnical Assistance Centers (PTACs) are oused witin educational institutions tat elp support teir operations. American Indian PTACs offer valuable assistance to tribal and oter Native-owned companies in navigating te large, complex federal procurement market and winning government contracts for stimulus projects, war-figting efforts, and myriad oter government undertakings. Department of Defense Defense Appropriations Bill Indian Incentive Program Fund te 5 percent Indian Incentive Payment Program at $15 million. For te past 20 years, Congress as appropriated $8 million per year for payment of 5 percent Indian Incentive Payments (IIP) to Department of Defense (DOD) contractors tat subcontract work to Native-owned subcontractors under DOD contracts. Once DOD fully implemented te IIP program, demand began to outstrip te funding available to make IIP payments to contractors. An increase to $15 million in funding for te IIP program will address te backlogged IIP requests tat ave already been approved and expand Native access to te federal contracting process. indian country budget request fy2012» 58
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