Introduction

The Department of Commerce's (DOC's) Minority Business Development Agency (MBDA) is the lead federal agency dedicated to supporting growth and global competitiveness of the minority business community.¹ Numerous congressional hearings, undergirded by historical and current academic research, have tried to document the extent to which members of minority groups confront disparities and disadvantages in creating new businesses, expanding markets, and finding opportunities for their business enterprises.² Barriers include difficulty in accessing capital, a lack of capacity or expertise, and exclusion from business networks. Given these challenges, Congress and many successive presidential Administrations since the Nixon Administration have supported national policies intended to address these disparities through MBDA.

MBDA's primary mission is to assist minority businesses in achieving entrepreneurial participation and parity in the nation's free enterprise system and to overcome social and economic disadvantages that have limited their participation. To these ends, MBDA is charged with formulating and coordinating federal policies and programs to support minority business enterprises (MBEs) by providing technical and managerial expertise and resources through a network of local business development centers. This report includes

• a discussion of the agency's origins and authority;
• a summary of the agency's funding history, including Administration requests and final appropriations;
• a review of the agency's recent programs, initiatives, performance, and accomplishments; and
• a review of current issues and considerations.

For over 50 years, Congress approved legislation to fund MBDA without providing the agency statutory authorization. For example, in FY2021, MBDA received $48 million in annual appropriations and an additional $25 million in supplemental appropriations to assist MBEs adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.³ The Minority Business Development Act of 2021 (MBD Act of 2021; Division K of the Infrastructure Investment and Jobs Act, P.L. 117-58) statutorily authorized the agency, codified selected existing programs, and added new programs and roles.⁴ In August 2022, Donald R. Cravins Jr. was confirmed by the Senate as the first Under Secretary of Commerce for Minority Business Development.⁵ In January 2024, Under Secretary Cravins stepped down and MBDA reported that Eric Morrissette will temporarily lead the agency.⁶

MBDA Origins and Authority

MBDA was originally established as the Office of Minority Business Enterprise (OMBE) by President Richard Nixon with the signing of Executive Order (E.O.) 11458 on March 5, 1969.¹⁶ During the 1968 presidential campaign, then-Republican candidate Nixon embraced the idea of "Black Capitalism," which promoted increasing minority participation as owners and managers in the U.S. economy as a means of not only promoting economic advancement and parity, but political power as well.¹⁷ Eager to demonstrate his commitment to these goals and pressed by civil rights advocates to fulfill his campaign promise, President Nixon chose to bypass Congress and the legislative process, opting to establish a Cabinet-level committee on minority enterprise.¹⁸ Within the first 100 days of his administration, President Nixon had established the OMBE as a policy prescription for issues of racial inequality and social injustice.

The OMBE's mission, as outlined in E.O. 11458, was threefold:

• encourage the coordination of the plans, operations, and programs of the federal government in ways that strengthen participation of minority businesses in the activities of federal agencies;
• promote the deployment of the resources of state and local governments, businesses, trade associations, and other nongovernmental entities in support of minority businesses; and
• establish a clearinghouse to identify and disseminate information to support the successful operation of MBEs.

E.O. 11458 also established an Advisory Council on Minority Enterprise (ACME), charging it with advising and supporting the Secretary of Commerce on matters affecting the success of minority businesses, including recommendations for further actions. During its first two years, the ACME played a significant role in shaping the OMBE's agenda. The ACME also helped develop efforts to increase minority participation in franchises.¹⁹

Stymied by organizational difficulties, including a lack of cooperation from other Cabinet-level departments, an inexperienced staff, and the absence of a dedicated budget, the OMBE struggled during its first years of operation. It was also said to be handicapped in pursuing its mission by the Commerce Secretary's decision "not to become involved in individual cases or with programs at the operational level and not to seek to encroach upon existing programs functions of other federal agencies."

E.O. 11625—Expanding Agency Role

To address concerns raised during the OMBE's initial two years of operations, President Nixon, on October 13, 1971, signed E.O. 11625, Prescribing Additional Arrangements for Developing and Coordinating a National Program for Minority Business Enterprise.²⁰ The new E.O. was intended to clarify and strengthen OMBE's role. In remarks made at the time the new E.O. was issued, President Nixon noted the following:

This order gives the Secretary a clear mandate to establish and carry out Federal policy concerning minority enterprise and to coordinate the related efforts of all Federal departments and agencies. It also directs the departments and agencies to develop systematic data collection processes concerning their minority enterprise programs and to cooperate in expanding the overall Federal effort.²¹

In addition to reinforcing the original E.O.'s objectives, the new E.O. called for the OMBE to create a network of minority business centers. These centers would be charged with providing managerial and technical assistance to minority businesses and conducting special projects, including the provision of direct financial assistance to minority businesses. This development marked an evolution in the agency's role from an advisory one undertaken principally through the ACME to an active one, supporting the development of minority business enterprises using public-private partnerships.

Agency Reorganization

During the Carter Administration, Congress considered, but did not pass, enabling legislation authorizing the agency and its mission.²² In 1979, the Carter Administration reorganized and renamed the OMBE as the Minority Business Development Agency (MBDA). The reorganization was, in part, a response to reports that characterized the agency's efforts to support MBEs as fragmented, heavily focused on small businesses, and favoring the number of firms assisted rather than the quality of assistance provided. The Carter Administration's efforts were intended to refocus the agency on assisting "minority businesses develop into medium- and large-size firms in growth industries that produced jobs, stabilized communities, and improved the overall economy."²³

See "Additional Agency History" in Appendix A for information about MBDA's history since the Carter Administration. See "Legislative Proposals, 96^th Congress-117^th Congress" in Appendix C for a summary of bills related to MBDA and its activities.

Agency Establishment

Congress considered proposals to codify MBDA for decades (see Appendix C) prior to the enactment of the MBD Act of 2021. MBDA's powers and duties are now to be set in accordance with the statute "and without regard to Executive Order 11625 (36 Federal Register 19967; relating to prescribing additional arrangements for developing and coordinating a national program for minority business enterprise)."²⁴

The MBD Act of 2021 also established within the agency an Office of Business Centers, an Office on Minority Business Development Grants, and regional MBDA offices.²⁵ The act directs the agency to submit a report to Congress by March 15, 2022, that describes

• the agency's organizational structure;
• the agency's organizational position within DOC; and
• how the agency will function in relation to the operations carried out by other DOC components.²⁶

MBDA is also required to submit two reports to Congress by November 15, 2022. The first report must include a summary of its efforts to serve MBEs in states without a Business Center, and recommendations for extending outreach to underserved areas. The second report must address the ways that MBEs can address gaps in the supply chain.²⁷ The act directs MBDA and the DOC Office of Inspector General to submit reports on MBDA's grants to nonprofit organizations.²⁸ In addition to biennial reports, the act further directs MBDA to submit reports on its entrepreneurship education activities and a study on alternative financing solutions.²⁹ The Comptroller General of the United States is required to report to Congress on the agency's programs by no later than November 15, 2025.³⁰

The MBD Act of 2021 authorized to be appropriated $110 million for MBDA for each fiscal year, FY2021 through FY2025. The act directed MBDA to allocate the majority of annual appropriations, if approved, to the Business Center program, and to reserve $20 million each fiscal year for the Rural Business Center program.³¹ MBDA received $73 million in appropriations for FY2021, $55 million in appropriations for FY2022, $70 million in appropriations for FY2023, and $68.25 million in appropriations for FY2024.

New Programs, Activities and Expanded Roles, Partnerships

The MBD Act of 2021 established new MBDA programs and activities, including the following:

• Initiatives to promote economic resiliency for minority businesses (Title II), including
• An annual diverse business capital formation forum (Sec. 100201),
• A study on alternative financing (Sec. 100202), and
• Grants to historically black colleges and universities (HBCUs) and minority-serving institutions (MSIs) for entrepreneurship curriculum development and new partnerships and activities to increase entrepreneurial education and training (Sec. 100203);
• Rural Business Centers to be operated by MSIs (Title III);
• Grants to nonprofit organizations to support the development, growth, or retention of MBEs (Title IV);
• An MBE Advisory Council (Title V); and
• Coordination and convening activities among federal agencies regarding socially or economically disadvantaged businesses (Title VI).

The act established support for—and in some instances expanded the scope of—existing programs and activities, including MBDA Business Center and Specialty Center programs and MBDA's research, evaluation, outreach, and informational activities.³² For instance, the act directed the Under Secretary to ensure center coverage so that the Business Center Program offers services in "all regions of the United States."³³ The act also recommended increased funding for the Business Center program, with the majority of MBDA funding, as appropriated, spent on the Business Center program (including the Specialty Centers). The Rural Business Center program—although a new program—may be viewed as an expansion of the existing MBDA Business Center program to serve MBEs in rural areas.³⁴

In terms of research, evaluation, and informational activities, Executive Order 11625 previously directed the agency to establish a center for the "development, collection, summarization, and dissemination of information" to promote the establishment and growth of MBEs, among other monitoring, reporting, and evaluation roles. The MBD Act of 2021 codified the agency's research, evaluation, and outreach activities, and directed the agency to undertake certain studies and outreach roles.³⁵ For instance, Section 100103 noted that the agency shall conduct research, studies, and surveys, and shall "provide outreach, educational services, and technical assistance in, at a minimum, the five most commonly spoken languages in the United States to ensure that limited English proficient individuals receive culturally and linguistically appropriate access to the services and information provided by the Agency."³⁶

The MBD Act of 2021 also authorized MBDA to implement services through partnerships with both private and public sector entities, and directed the agency to engage with specific partners (e.g., HBCUs, MSIs, community-based organizations, national nonprofit organizations, and community-based organizations) on new and existing programs. For example, the act established new roles and activities to expand entrepreneurial education activities specifically with HBCUs and MSIs, among other partners. The entrepreneurial education activities include a grant program to develop and implement entrepreneurship curricula and other education and training opportunities for socially or economically disadvantaged individuals in the fields of business, management, and entrepreneurship.³⁷

While the MBD Act of 2021 granted MBDA specific statutory authority to operate these entrepreneurial education programs, MBDA had previously managed similar programs at the agency's initiative. For example, in FY2018, MBDA made grants worth a combined total of $2 million to four HBCUs in order to help the schools compete for federal research and development funds, leverage partnerships with federal laboratories and/or technology-related resources, develop and implement STEM entrepreneurship, and compete for federal contracting opportunities.³⁸

The MBD Act of 2021 directs MBDA to make grants to nonprofit organizations in order to support the growth, development, and retention of MBEs. The act specified that MBDA may consider nonprofit organizations located in a federally recognized area of economic distress and may award grants with consideration for a diverse array of grantees (e.g., community-based organizations, organizations with annual budgets under $1 million, and organizations that serve low-income and rural communities).³⁹ Also, once established, the Minority Business Enterprises Advisory Council—composed of both public and private sector members—will advise MBDA on plans, programs, and activities that relate to socially or economically disadvantaged business concerns.⁴⁰

As noted previously, the act expanded the agency's roles and programs, which may increase awareness of its services and increase access to services by new and previously underserved communities and MBEs.⁴¹ For instance, once established, the new Rural Business Centers will serve lower-density regions that may not have large concentrations of minority populations or MBEs compared to more populous regions or metropolitan areas.⁴² The reestablishment of regional MBDA offices may further extend MBDA's services through their engagement with the local and regional business development partners, lending partners, and federal, state, and local procurement offices.⁴³ Additionally, the agency's authorizing statute involves the Under Secretary in partnerships, outreach, and other activities with public sector entities in order to leverage resources and promote the position of MBEs in local economies.⁴⁴

Funding History

During the agency's first 54 years, MBDA continued to receive annual appropriations while various Administrations considered reorganizing it, authorizing it, defunding its activities, or merging it into the Small Business Administration (SBA) (see Appendix A).

Figure 1 provides a visual representation of OMBE/MBDA appropriations from FY1970 to FY2024. Table A-1 provides a history of Administrations' annual budget requests and enacted appropriations for the agency since FY1970. After fluctuating amounts of funding in its early years, MBDA received annual appropriations of almost $60 million in the early 1980s. Its funding then generally declined, including a 27% reduction in annual appropriation between FY1995 and FY1996. By the late 1990s, MBDA's annual appropriations had fallen below $30 million, where it largely remained for more than a decade. Since FY2013, MBDA's funding has more than doubled to a high of $73 million in FY2021 before dropping to $55 million in FY2022. The Consolidated Appropriations Act, 2024 (P.L. 118-42) funded MBDA at $68.25 million. In FY2020 and FY2021, Congress provided supplemental appropriations to MBDA to assist MBEs in preventing, preparing for, and responding to the COVID-19 pandemic.

Figure 1. OMBE/MBDA Appropriations History: FY1970 to FY2024 (in millions of dollars)

Source: Budget Appendices of the United States. Note: Includes supplemental appropriations.

FY2024 Appropriations

The Consolidated Appropriations Act, 2024 (P.L. 118-42) funded MBDA at $68.25 million—a 2.5% decrease from the agency's FY2023 funding level of $70 million. Congress directed the agency to allocate up to $5 million for grants to American Indian, Alaska Native, and Native Hawaiian entities qualified to provide business, financing, and technical assistance services to tribes.⁴⁵

Recent Administrations' Budget Requests and Related Activities

The Biden Administration's FY2025 budget request included $80 million for MBDA, an amount that would be 17% more than the FY2024 enacted level for annual appropriations of $68.25 million.⁴⁶ The Infrastructure Investment and Jobs Act (P.L. 117-58) authorized to be appropriated $110 million to MBDA for each of fiscal years 2021 through 2025.

In addition to recommending increased appropriations for MBDA, the Biden Administration has initiated other activities to support small, disadvantaged businesses, including MBEs. For example, in March 2024, MBDA signed memorandums of understanding with nine historically black sororities and four minority women's business organizations to help grow women-owned businesses.⁴⁷ In October 2023, the Biden Administration announced that, by FY2024, federal agencies should establish a goal of collectively awarding at least 13% of federal contract spending to small disadvantaged businesses (including minority-owned businesses) in order to increase the small disadvantaged business share of federal contract award dollars to 15% by FY2025.⁴⁸

Agency Overview

Mission and Structure

MBDA's mission is to foster the economic growth and global competitiveness of MBEs. The agency's activities are designed to expand access to capital, markets, and contracts through public and private sector programs, policy, and research. Technical and managerial assistance and other services are principally provided to MBEs through a network of Business Centers, Specialty Centers, and other projects and initiatives.⁴⁹ MBDA and its network partners coordinate with other agencies, such as the Department of the Treasury, DOC's International Trade Administration, the Export-Import (EXIM) Bank, and other federal agencies, nongovernmental organizations, and private firms to expand capital access and contracting and export opportunities for MBEs.⁵⁰

Before the MBD Act of 2021's enactment, MBDA was composed of offices focused on business development, Native American business development, policy analysis and development, management, administration, and education, legislative, and intergovernmental affairs.⁵² The Office of Business Development coordinated the agency's business center activities, and plans and implements business development strategies (e.g., strategies related to access to capital, contracts, emerging domestic and international markets, and global supply chains).⁵³ In 2005, MBDA established the Office of Native American Business Development within the Office of Business Development.⁵⁴ In FY2020, MBDA completed its launch of the Office of Policy Analysis and Development (OPAD). OPAD works with other agencies to expand data, research, analysis, and policy recommendations for minority business development based on economic and industry trends.⁵⁵

MBDA's organization structure shifted following enactment of the MBD Act of 2021 (see "Agency Establishment"). The Office of Business Development is now known as the Office of Business Centers, and OPAD is now known as the Office of Data Research and Evaluation. According to MBDA's FY2025 congressional budget justification, the agency is proposing further organizational adjustments, primarily by placing the Office of the Chief Operating Officer in charge of the Offices of Business Centers and Data and Research Evaluation, among other departments.⁵⁶ Figure 2 and Figure 3 present MBDA's current and proposed organizational structure.

Figure 2. MBDA's Current Organizational Structure

Source: MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 5, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf.

Figure 3. MBDA's Proposed Organizational Structure

Source: MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 6, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf.

Additionally, the MBD Act of 2021 specified that MBDA be led by an Under Secretary of Commerce for Minority Business Development (Under Secretary), selected by the President and confirmed by the Senate. MBDA has not had a Senate-confirmed Under Secretary since early 2024.⁵⁷

MBDA Clients

MBDA clients have historically included U.S. minority business enterprises (MBEs) that are not less than 51 percent-owned by one or more socially or economically disadvantaged individuals; and the management and daily business operations of which are controlled by one or more socially or economically disadvantaged individuals.⁵⁸ According to the agency's authorizing statute, the term "socially or economically disadvantaged individual" means

an individual who has been subjected to racial or ethnic prejudice or cultural bias (or the ability of whom to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities, as compared to others in the same line of business and competitive market area) because of the identity of the individual as a member of a group, without regard to any individual quality of the individual that is unrelated to that identity.⁵⁹

The agency's authorizing statute also noted that the Under Secretary shall presume that the term "socially or economically disadvantaged individual" includes any individual who is

• Black or African American;
• Hispanic or Latino;
• American Indian or Alaska Native;
• Asian;
• Native Hawaiian or other Pacific Islander; or
• A member of a group that the agency determines under part 1400 of title 15, Code of Federal Regulations, as in effect on November 23, 1984, is a socially disadvantaged group eligible to receive assistance.⁶⁰

The agency provides services to MBEs through a network of business centers and other programs and initiatives. The agency's events and referral services are available to businesses of any size. In its FY2021 Notice of Funding Opportunity (NOFO), MBDA primarily focused its Business Center services on businesses with revenues of at least $500,000 annually, although MBDA does not always include such revenue targets in its NOFOs.⁶¹

March 2024 Court Order

As noted, in March 2024, the U.S. District Court for the Northern District of Texas found in Nuziard et al. v. Minority Business Development Agency (MBDA) et al. that MBDA's presumption of social disadvantage for certain program applicants was unconstitutional, and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide (see "Introduction").

MBDA has continued providing services to business owners that self-certify to the definition of "socially or economically disadvantaged individual" as established in the MBD Act of 2021, regardless of the business owner's race.⁶² Moreover, MBDA instructed its staff to not use the racial and ethnic categories that were previously presumed to be socially or economically disadvantaged in determining eligibility for MBDA services.⁶³

Programs

Congress authorizes MBDA to foster, promote, and develop MBEs through grants, contracts, and other agreements with public or private organizations.⁶⁴ The agency's programs and activities focus on addressing MBDA and DOC priorities, and include the Business Center program, among other projects and partnerships.⁶⁵ Through the Business Center network and partnerships, the agency facilitates export opportunities, contracts, and financings for minority clients.⁶⁶ MBDA does not provide loans or grants for business formation or expansion purposes.⁶⁷ According to MBDA's 2023 Year In Review, there were 131 Business Centers in FY2023, including Specialty Centers and other similar projects.⁶⁸

Business Centers

The purpose of MBDA's Business Center Program is to

create a national network of public-private partnerships that—

(1) assist minority business enterprises in—

(A) accessing capital, contracts, and grants; and

(B) creating and maintaining jobs;

(2) provide counseling and mentoring to minority business enterprises; and

(3) facilitate the growth of minority business enterprises by promoting trade.⁶⁹

MBDA provides financial assistance to organizations that operate Business Centers. In turn, MBDA Business Centers provide management and technical assistance to MBEs seeking to expand to new domestic and international markets. According to MBDA's funding procedures, Business Center services focus on business development and capacity building by assisting MBEs to

• improve operational efficiencies;
• increase resources;
• build scale;
• manage risk and increase liability thresholds;
• strengthen management teams;
• access and secure financing, equity, and venture capital;
• raise online capital;
• increase profits and owner equity; and
• implement and integrate new technology and equipment.

Applicants eligible to compete to operate an MBDA Business Center include nonprofit organizations, for-profit firms, state and local governments, educational institutions, and Native American tribal entities. Operators are expected to contribute nonfederal cost share funding.⁷⁰ MBDA lists 40 Business Centers in 32 states and Puerto Rico.⁷¹

MBDA Business Centers may provide services on a fee-for-services basis.⁷² In light of the COVID-19 pandemic, MBDA and its network of Business Centers increased or shifted more activities to online events and through other virtual communications tools.⁷³

Specialty Centers

MBDA also supports Business Centers that provide specialized business development services and technical assistance ("Specialty Centers"). The MBD Act of 2021 defines Specialty Centers as MBDA Business Centers that provide specialty services focusing on specific business needs, including assistance related to

• capital access;
• federal procurement;
• entrepreneurship;
• technology transfer; or
• any other area determined necessary or appropriate based on the priorities of the agency.⁷⁴

In FY2021, MBDA published Notices of Funding Opportunity for Specialty Centers focused on exports, advanced manufacturing, and federal procurement.⁷⁵

• Export Centers seek to expand access to new and global markets and to help identify, screen, promote, and refer MBEs to exporting resources. MBDA export centers are located in Mesa, AZ; Houston, TX; Miami, FL; and San Antonio, TX.⁷⁶
• Advanced Manufacturing Centers provide "[t]argeted assistance for manufacturers that aim to employ new technologies to increase the number of "Made in America" products that can be sold domestically and globally."⁷⁷ MBDA advanced manufacturing centers are located in East Hartford, CT; Baltimore, MD; Louisville, KY; and San Antonio, TX.⁷⁸
• The Federal Procurement Center provides services designed to generate increased federal procurement and acquisition opportunities for MBEs. In FY2021, the federal procurement center was located in Washington, DC.⁷⁹

MBDA lists 16 Specialty Centers operating in 11 states, Puerto Rico, and Washington, DC.⁸⁰ MBDA's FY025 congressional budget justification noted that the agency's priorities include establishing additional Specialty Centers focused on women-, native- and indigenous-, and veteran-owned businesses.⁸¹ The budget justification requested $1.96 million to strengthen the existing network of MBDA Business Centers and Specialty Centers.⁸²

Rural Business Centers

The MBD Act of 2021 established a new Rural Business Center program to be implemented by MSIs for services to MBEs in rural areas.⁸³ The program will provide education, training, and legal, financial, and technical assistance to MBEs with a focus on issues relating to

• the adoption of broadband internet access service, digital literacy skills, and e-commerce;
• advanced manufacturing;
• the promotion of manufacturing in the United States;
• ways for MBEs to meet gaps in the supply chain for the United States;
• improving the connectivity of rural MBEs through transportation and logistics;
• promoting trade and export opportunities;
• securing financial capital;
• facilitating entrepreneurship in rural areas;
• creating jobs in rural areas; and
• any other issue relating to the unique challenges faced by rural MBEs.⁸⁴

MBDA launched a pilot Rural Business Center program in FY2023 by providing $3.8 million in supplemental grants to eligible existing Business or Specialty Centers to establish new Rural Business Centers. Business or Specialty Centers were eligible to receive funding if they were located in a state with:

• a rural minority population of at least 200,000;
• a rural population that is at least 20% minority; or
• at least one rural majority-minority county based on U.S. Census Bureau data.⁸⁵

Business or Specialty Centers that received funding to establish a Rural Business Center are expected to provide technical assistance to rural MBEs in their state. As of FY2024, MBDA has funded 19 Rural Business Centers.⁸⁶ MBDA'S FY2025 congressional budget justification listed broadening the Rural Business Center program as an agency priority, and requested $3.182 million to expand the reach of existing Rural Business Centers and potentially establish additional Rural Business Centers.⁸⁷

Entrepreneurship Education Development Activities 

The MBD Act of 2021 also authorized new entrepreneurship education development activities, including the Parren J. Mitchell Entrepreneurship Education Grants program for grants to eligible institutions (e.g., HBCUs, MSIs, tribal colleges or universities, among others). The act also directed MBDA to partner with public and private sector entities and educational institutions to support opportunities for business and management education, apprenticeships, entrepreneurship training, and related activities for the benefit of socially or economically disadvantaged individuals.⁸⁸

MBDA may use broad agency announcements (BAAs) and unsolicited proposals to respond to specific challenges or opportunities. In recent years, MBDA has issued several BAAs to develop entrepreneurship programs for students at Minority Serving Institutions (MSIs) before and after the enactment of the MBD Act of 2021.⁸⁹ For instance, in April 2022, MBDA announced a BAA to develop entrepreneurship programs for students at MSIs.⁹⁰ The BAA resulted in a total of $1.75 million in grants to seven awardees.⁹¹

Related Initiatives, Events, and Partnerships

To further increase MBE's access to capital, contracts, and markets, MBDA partners with other federal agencies and private sector partners on business development services, cross-sector initiatives, annual events, and interagency groups and commissions. For instance, technical and management assistance from MBDA Business Centers may assist MBEs in qualifying for SBA's 8(a) contracting preference program for small businesses owned by socially- and economically-disadvantaged individuals (as well as other SBA programs), or to transition from the 8(a) program to the private sector.⁹² MBDA works with other DOC agencies and the EXIM Bank to encourage MBE participation in international trade, and partners with the Department of Energy's Office of Economic Impact to expand opportunities for MBE participation in the energy supply chain.⁹³ Through the InVision Tour initiative, MBDA has partnered with several agencies to support minority innovation and entrepreneurship in space technology, smart cities, satellites, aerospace, and related industries. InVision Tour partners include NASA's Johnson Space Center, the Environmental Protection Agency (EPA), and agencies of the Departments of Commerce, Defense, Energy, Health and Human Services, Interior, and Homeland Security, among others.⁹⁴

Additional MBDA initiatives have involved partners such as the U.S. India Small Medium Entrepreneurs Council, the U.S. Pan Asian American Chamber of Commerce, the National Minority Supplier Development Council, the National Business League, U.S. Chamber of Commerce, and others.⁹⁵ MBDA's participation in interagency groups and commissions includes the President's Advisory Commission on Asian Americans and Pacific Islanders, among others.⁹⁶

MBDA assistance may also address specific challenges or opportunities, support proof of concept program models, meet presidential or departmental priorities, and facilitate the programs and initiatives not addressed through MBDA's Business Center program.⁹⁷ For instance, in FY2019 and FY2020, MBDA funded projects designed to increase MBE participation in advanced technology and innovation sectors. In FY2020, MBDA grants funded a capital formation initiative and the Minority Growth Equity Fund Initiative (MGEFI), among others.⁹⁸ Additional, targeted MBDA initiatives include the Enterprising Women of Color (EWOC) initiative and centers, the American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects, the Entrepreneurship Education Programs for Formerly Incarcerated Persons, and the Inner-City Innovation Hub Program.⁹⁹ In FY2022, MBDA solicited proposals under a BAA for the Access to Capital/Innovative Finance initiative.¹⁰⁰

Capital Access Initiatives

Barriers to capital—including but not limited to growth capital—limit expansion and scale opportunities for many MBEs. In FY2020, an MBDA award established the MGEFI. The MGEFI's goal is to expand access to capital by facilitating the aggregation and deployment of $1 billion in growth equity capital to MBEs.¹⁰¹ In FY2021, MBDA announced the Equity Multiplier Project, which will fund technical assistance to expand MBE's access to capital. The Equity Multiplier Project focuses on capacity building, venture capital readiness, and increasing access to equity and venture investment and investors.¹⁰² In FY2022, MBDA issued a NOFO for the Access to Capital: Innovative Finance initiative, which was designed to leverage non-traditional financial resources to address barriers to capital access for MBEs.¹⁰³ In FY2023, MBDA announced a NOFO designed to fund technical assistance providers that would help entrepreneurs build capacity and expand access to capital opportunities through the Capital Readiness Program. The program focuses on assistance for entrepreneurs who are socially and economically disadvantaged individuals (SEDI).¹⁰⁴

Enterprising Women of Color (EWOC)

Entrepreneurship is often viewed as a strategy for economic growth and individual economic independence. Minority women are considered the fastest growing population of entrepreneurs.¹⁰⁵ MBDA-supported entrepreneurship programs include activities designed to support minority women business owners. Through the Enterprising Women of Color (EWOC) initiative, launched in 2019, MBDA has provided assistance to expand access to capital, business education, and professional networks. The EWOC initiative also provided assistance to five projects focused on minority women business enterprises beginning in FY2020.¹⁰⁶

American Indian Alaska Native / Native Hawaiian (AIANNH) Initiatives and Reports

MBDA provides assistance to entities with an expertise in American Indian, Alaska Native, and Native Hawaiian (AIANNH) business for projects that focus on one or more of the following three strategic initiatives: (1) innovation and entrepreneurship; (2) strategic planning; and/or (3) transformative projects.¹⁰⁷ AIANNH projects may provide a range of services including, but not limited to: entrepreneurial assistance, training, capital access, federal procurement assistance, networking and relationship management, deal sourcing, joint ventures and partnerships, strategic infrastructure and economic planning assistance, and education for entrepreneurial and tribal entities. In FY2019-FY2021, MBDA supported 13 projects designed to address specific needs of Native American businesses.¹⁰⁸ In FY2021, MBDA funded 13 AIANNH projects.¹⁰⁹ In FY2022, MBDA's OPAD published a report on business development and economic growth in tribal communities.¹¹⁰

Entrepreneurship Education Programs for Formerly Incarcerated Persons

The Entrepreneurship Education Programs for Formerly Incarcerated Persons are designed to provide individuals with skills and a business network to enable them to start their own business after incarceration. The programs also aim to reduce the rates of recidivism. According to MBDA and other sources, researchers have linked recidivism to unemployment, education level, and inability to reintegrate into communities after prison.¹¹¹

Inner City Innovation Hub Program

The Inner City Innovation Hub program supports new and established entrepreneurs in inner cities and urban areas with high concentrations of minority populations and MBEs. The program focuses on entrepreneurship, digital innovation, artificial intelligence, and research and technology transfer. Recent awards facilitate the growth of MBEs in regionally specific industry concentrations, such as the aerospace industry, and by providing technical assistance to MBEs through accelerators, incubators, and co-working spaces and university-focused technology, artificial intelligence, technology, research, mergers, and acquisitions.¹¹²

National Minority Enterprise Development (MED) Week

According to MBDA, since 1983, every President has issued a Presidential Proclamation designating one week as National Minority Enterprise Development (MED) Week.¹¹³ The event highlights the role of minority entrepreneurs in creating jobs, products, and services, and contributions to local economic activity. Features of recent MED Week events include a conference panel focused on global markets and the National Minority Business Awards Program. MBDA also coordinates, sponsors, and participates in other national events, such as Buy Minority Business Enterprises Day, among others.¹¹⁴

Capital Readiness Program

The American Rescue Plan Act of 2021 (P.L. 117-2) reauthorized the State Small Business Credit Initiative (SSBCI). SSBCI, which is administered by the U.S. Department of the Treasury (Treasury), offered states, the District of Columbia, U.S. territories, and tribal governments a formula-allocated share of $10 billion to help expand access to capital for small businesses. The funding was designed to support activities related to setting up venture capital programs, loan participation programs, and loan guarantee programs, as well as technical assistance. In terms of technical assistance, P.L. 117-2 directed Treasury to transfer funding to MBDA so that MBDA "may use such amounts in a manner the Agency determines appropriate, including through contracting with third parties, to provide technical assistance to business enterprises owned and controlled by socially and economically disadvantaged individuals."¹¹⁵

In December 2022, DOC announced a grant award competition for funding for entities to provide technical assistance to help SSBCI applicants.¹¹⁶ The program was called the Capital Readiness Program (CRP). In August 2023, the Biden Administration announced that MBDA had made 43 CRP awards worth a total of $125 million.¹¹⁷ To help implement and evaluate CRP, MBDA's FY2025 congressional budget justification requested $2.063 million for MBDA's Office of Data Research, and Evaluation.¹¹⁸

Other Initiatives

The MBD Act of 2021 established a Minority Business Enterprise Advisory Council and authorized the Under Secretary to coordinate on matters relating to federal MBE programs. The act also authorized grants to nonprofit organizations to support MBEs.

Additional initiatives and activities support MBDA's mission and priorities of DOC. For instance, MBDA initiatives include global and domestic Business-to-Business (B2B) efforts to expand MBE access to domestic and global markets. In March 2020, in collaboration with Amazon Business, MBDA launched the Minority Business and Technology Initiative, to expand MBE participation in e-commerce and the use of digital technology for domestic and international sales.¹¹⁹ MBDA and Business Center partners participate in Global B2B efforts in Africa, Asia, Latin America, and the Caribbean. MBDA has also joined trade missions and partnered with DOC's International Trade Administration, the EXIM Bank, and other agencies and organizations to expand export opportunities for MBEs.¹²⁰

Performance Metrics

MBDA uses several performance metrics to measure its effectiveness, including

• dollar value of contracts secured for MBDA clients;
• dollar value of capital secured for MBDA clients;
• number of jobs created; and
• number of jobs retained.

According to the latest data available, in FY2022, MBDA reported 15,418 jobs were created or retained with the assistance of MBDA resources.¹²¹ MBDA's measure of jobs created or retained included the number of new full-time and/or part-time positions reported on the client's payroll, and positions MBDA clients would have eliminated without the contract and/or financing obtained with MBDA's help.¹²² Although the value of contracts measures both public and private sector activity, in FY2020, approximately 70% of contracts that MBDA helped MBEs to secure were for private sector deals.¹²³ See Table 1 for a summary of assessments and evaluations of the agency.

Considerations for Congress

In considering the MBD Act of 2021's implementation, Congress may focus its oversight role on the new and expanded activities authorized by the agency's enabling legislation. A perennial issue of congressional interest involves debates about the agency's role in supplementing (or duplicating) other forms of federal assistance for businesses. In addition, there has been continued interest in developing strategies to use MBDA to promote individual economic mobility, as well as broader national economic growth, especially with regard to reducing inequities and advancing minority entrepreneurship, innovation, and business expansion activities.

March 2024 District Court Order

In a March 2024 decision, Nuziard et al. v. Minority Business Development Agency (MBDA) et al., the U.S. District Court for the Northern District of Texas found MBDA's presumption of social disadvantage for certain program applicants to be unconstitutional and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide. (See "Introduction" for more information.)

MBDA has been allowing businesses to receive Business Center services if a business owner self-certifies that they are socially or economically disadvantaged, regardless of race. Congress may consider requiring a procedure other than self-certification for MBDA clients to demonstrate social or economic disadvantage. This could include requiring members of the racial and ethnic groups that were previously presumed to be disadvantaged—as well as all other businesses interested in Business Center services—to demonstrate social or economic disadvantage. One way to accomplish this could be by requiring a written narrative explaining why the applicant is socially or economically disadvantaged. The Small Business Administration has taken this approach with applicants to its 8(a) Business Development Program, which in July 2023 was the subject of a similar court ruling as MBDA's Business Centers. (For more information on 8(a), see CRS In Focus IF12458, The SBA's 8(a) Business Development Program, by R. Corinne Blackford.)

MBDA may choose to appeal the ruling, allow the ruling to stand as is, or opt for another approach. The agency could evaluate how private lenders take actions to remove barriers to credit for underserved or socially or economically disadvantaged business owners; the ruling does not appear to prevent the MBDA from conducting studies.

Implementation of Enabling Legislation

As mentioned, the MBD Act of 2021 created several new programs and reporting requirements for the agency and authorized the appropriation of $110 million each fiscal year from FY2021 through FY2025 (see Table A-1 for recent MBDA appropriations). MBDA may seek to hire additional staff or otherwise increase its capacity to reestablish regional offices, administer existing and new programs, and activate additional roles, such as coordination among federal agencies and new areas of technical assistance and research (e.g., workforce development services, supply chain opportunities, and other priorities outlined in the act). Congress will have an opportunity to oversee all of these activities. For example, Congress may seek to monitor key milestones and engage with MBDA as it implements new structures, roles, and programs.¹²⁴ Congress may also seek to monitor the agency's performance metrics, which may be revised to reflect expanded service areas and/or different types of outcomes.¹²⁵

Other issues of congressional interest include

• the degree to which MBDA services may be available to previously unserved or underserved minority communities and MBEs (e.g., rural areas and areas not served by existing programs). As noted, the act directed MBDA to apply revised criteria to define MBEs, and Congress may be interested in the impact of a revised MBE definition on the agency's outreach and program activities (see "MBDA Clients").
• MBDA's efforts to coordinate with other federal agencies in the "establishment, preservation, and strengthening of socially or economically disadvantaged business concerns."¹²⁶
• MBDA's required reports (see "Agency Establishment").

MBDA is further tasked with evaluating the impact of federal support of socially or economically disadvantaged business concerns.¹²⁷

Duplication of SBA Activities

Whether MBDA complements or duplicates the SBA's programs, especially those programs targeted to minority populations (e.g., the Microloan program)¹²⁸ or the socially and economically disadvantaged (e.g., the 8(a) Business Development Program)¹²⁹, has been a perennial issue of congressional interest. There have been several proposals in the past to terminate MBDA and transfer its activities to the SBA. There have also been proposals to transfer SBA programs that support minority business development to MBDA (or a reorganized version of the agency within DOC).¹³⁰ MBDA's proponents have argued that the agency complements rather than conflicts with the SBA's programs. The SBA focuses on small businesses. MBDA does not restrict its activities, referrals, or events based on business size. However, MBDA Business Centers have recently focused on providing technical and business development services to minority firms with employees and revenues that exceed $500,000.¹³¹ Additionally, Title VI of the MBD Act of 2021 directs the Under Secretary "to ensure consistency with program goals and to avoid duplication" by reviewing all proposed federal training and technical assistance activities in direct support of the programs carried out under the Business Center program and the Rural Business Center program.¹³²

Additional Considerations

Over the years, due to the unique set of challenges and circumstances faced by minority business owners, some analysts and policymakers have called for MBDA to take on new or expanded roles, services, and partnerships. The MBD Act of 2021 expanded MBDA's scope of activities by providing it several new roles and programs. As Congress reviews options to support economic development, MBDA may continue to offer existing and potentially new avenues for providing financial and technical assistance to MBEs. For instance, in light of COVID-19's disproportionate impact on MBEs, Congress may further consider economic recovery policy options to address the unique challenges faced by MBEs as well as other options to involve MBDA in additional convening, coordinating, and assistance roles.¹³³

Appendix A. Additional Agency History

Successive Administrations since the Carter Administration have changed the agency's focus and reorganized the delivery of its assistance and services. Among other shifts, the agency expanded its services through the Business Center program in the 1980s and focused on enhancing global competitiveness of MBEs in the 1990s and early 2000s. During the Obama Administration, the agency continued to enhance global competitiveness and coordinated inter-agency minority business initiatives. Beginning in FY2017, the Trump Administration proposed cuts to the agency's budget and proposed orienting the agency's initiatives away from services for individual businesses. The Biden Administration has proposed increased annual appropriations, a dedicated Assistant Secretary, and expanded programs and activities for the agency.

Evolving Delivery System

In 1981, the Reagan Administration established the Minority Business Development Center program (MBDC), which became MBDA's primary method for delivering technical and management services to minority businesses. The centers, located in metropolitan areas, were designed to serve as "one-stop" service centers intended to address the needs of minority entrepreneurs. The centers focused on recruiting and encouraging private corporations to do business with minority firms, including creating a directory of minority firms and their capabilities. President Ronald Reagan also issued E.O. 12432, Minority Business Enterprise Development, which required federal agencies with substantial procurement and grant-making authority to develop plans that encourage minority business participation in federal procurement, contracts, and grants.¹³⁴ President George H.W. Bush proposed eliminating the agency and transferring its mission to the SBA, but ultimately continued the agency as an entity within DOC.¹³⁵

In 1994, President Clinton issued E.O. 12928, Promoting Procurement with Small Businesses Owned and Controlled by Socially and Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions.¹³⁶ Although E.O. 12928 did not directly reference E.O. 11625, it reiterated support for expanding access to federal procurement contracts for businesses owned by socially and economically disadvantaged individuals, black colleges and universities, and other minority institutions. The Clinton Administration supported substantial increases in the agency's budget. In seeking to expand MBDA's reach and capacity, the Clinton Administration sought increases to fund the establishment of Rural Business Development Centers, and the activities of the MBDCs and Minority Business Opportunity Committees (MBOC).

In 1996, the agency announced the initiation of a pilot program, the Community Based Enhancement Services (CBES). According to the Federal Register Notice on March 6, 1996, the CBES's goal was "to enable MBDA to enter into strategic alliances, coordinating the delivery of its services with those of other entities capable of assisting in minority and/or small and disadvantaged business development in a particular market."¹³⁷

An audit of the pilot program found significant deficiencies in MBDA's administration of the pilot project, noting that MBDA failed to monitor and assess the grantees' performance in accord with its own handbook.¹³⁸ The report recommended that MBDA develop project-specific performance measures to reflect the nature of the project, assign staff with adequate technical and business expertise to monitor project activities, and undertake timely and thorough evaluation to determine program effectiveness.¹³⁹

Under the George W. Bush Administration, MBDA continued efforts to coordinate its programs with the programs of the SBA supporting minority and disadvantaged firms. The Bush Administration, based on research findings, pledged to focus its resources on minority firms with $500,000 or more in annual revenues.¹⁴⁰ 

The agency funded programs and services including

• National Enterprise Centers staffed by MBDC personnel who provided support services, including referrals and marketing services, to business entities of significant size and capacity;
• MBDCs, which provided consultant services to firms with significant growth potential; and
• MBOCs that provided consulting services, including identifying potential sources of equity and working capital, assisting minority entrepreneurs gain access to profitable markets.

The agency also funded a number of projects intended to address communities with special needs (Special Projects). Other activities included supporting youth entrepreneurship (Emerging Minority Business Leaders Program), improving access to capital (Equity Capital Access Committee), and the continued development of an online database of potential procurement and contracting opportunities.

Global Competitiveness

Starting in the 1990s, the agency began to focus on assisting minority firms enter and compete in the global economy. A 2003 MBDA study explored issues and opportunities for minority businesses seeking international opportunities. The preliminary study's key findings included the following observations:

• Minority businesses may not be able to compete directly with massive U.S. companies that have already established a multinational presence in developed economies.
• By capitalizing on their unique competitive strengths, especially in developing countries, minority-business enterprises (MBEs) can compete with larger multinational companies.
• A secondary conclusion is that the quality of information about MBE interaction with the international economy is badly outdated, and further research must be conducted. Given the need to design successful policies and programs to support MBE international expansion, this lack of data is a critical hurdle that must be overcome.¹⁴¹

During the Obama Administration, in addition to a focus on facilitating entry or expansion of minority firms into the global market place, increased emphasis was placed on quantifying the impact of MBDA activities, increasing the efficient delivery of services to minority business communities, and increasing coordination with other federal agencies. Federal agencies that have partnered with MBDA include the SBA, the International Trade Administration, the Export-Import Bank, the National Institute of Standards and Technology, and the Economic Development Administration.

Proposals to Establish, Transfer, or Eliminate the Agency

Executive branch and legislative proposals have sought to transfer, eliminate, or—alternatively—statutorily authorize the agency. MBDA was originally created by executive order. Prior to the MBD Act of 2021's enactment in 2021, there were a number of proposals over the years to statutorily authorize MBDA. Absent specific statutory requirements, the President could have exercised authority to effectively terminate MBDA's discretionary activities at any time without congressional consultation or consent. Nevertheless, during this time, Congress could have (and has from time to time) appropriated funds to carry out specific activities, and potentially supersede presidential discretion.¹⁴² In addition, Congress could have revoked or modified the executive order, potentially eliminating, expanding, or restricting the agency.

Transferring the agency would have changed the agency's role and visibility. Several reorganization plans from the late 1970s through the 1990s from the executive branch would have moved MBDA out of DOC.¹⁴³ For instance, the George H.W. Bush Administration proposed to transfer MBDA into the SBA in FY1989 and FY1990.¹⁴⁴ In FY2018, the Trump Administration recommended a $6 million budget for MBDA, to be used to close out the agency.¹⁴⁵ The Trump Administration's budgets in FY2019, FY2020, and FY2021 would have reduced the agency's annual funding to approximately $10 million and proposed to change the focus of MBDA services from assisting individual MBEs to efforts to address issues facing the broader minority business community.¹⁴⁶

The Trump Administration's first budget request (for FY2018) proposed to eliminate the agency, and later budget requests proposed reductions to the agency's budget by approximately 75%. For example, the Trump Administration sought to reduce the agency's budget to $10.3 million for FY2021, with the intent of redirecting resources away from services for individual businesses.¹⁴⁷ According to budget documents, the Trump Administration supported the termination of MBDA and its programs as part of its wider efforts to reduce federal spending and to redefine the role of the federal government in domestic affairs. MBDA and its activities are among a number of federal programs that support private sector job creation.¹⁴⁸ The Administration's opposition may have been rooted in a view of federalism which argues that these kinds of activities are the responsibilities of state and local governments and the private and nonprofit sectors, not the federal government. MBDA supporters contend that the agency's mission is critical to the nation's economic future and that the agency's programs and services address a number of deficiencies and impediments faced by minority entrepreneurs.

As previously noted, Congress continued to provide MBDA appropriations even as various Administrations and legislative proposals considered reorganizing the agency, defunding the agency's activities, or merging it into the SBA. Legislative proposals to transfer or establish MBDA and its programs are included in Appendix C, and Table A-1 provides a history of Administrations' annual budget requests and enacted appropriations for the agency since FY1970.

MBDA Annual Budget Requests and Enacted Appropriations, FY1970–FY2024

Table A-1 provides a history of annual budget requests and enacted appropriations for MBDA since FY1970.

Appendix B. Assessments and Evaluations

During its 52-year history, MBDA has been the subject of numerous evaluative reports. These reports have examined the agency's efficacy in creating and assisting minority businesses, performance measures used to gauge progress in achieving agency objectives, and program management and duplication issues.

National Advisory Council on Minority Business Enterprise 2013

In 2013, the National Advisory Council on Minority Business Enterprise (NACMBE) released a set of recommendations to improve MBDA's effectiveness. The NACMBE, which was created by the Obama Administration in 2010, was a voluntary body comprised of representatives from business and public sectors. The final recommendations included the following:

• centralizing and consolidating federal MBE development efforts into one single well-funded agency;
• assisting MBEs' development of long-term contractual relations with larger businesses to facilitate integration;
• expanding MBE access to capital by establishing new sources of capital through the use of tax credits in exchange for equity capital investments in MBEs or by an enterprise bond fund;
• establishing an MBE Academy to provide ongoing education to MBE owners through a public private partnership; and
• building a comprehensive longitudinal database to support long-term policy analysis of the issues and opportunities.¹⁴⁹

PART Evaluation 2007

Starting in 2002, the George W. Bush Administration initiated its Program Assessment Rating Tool (PART) as a means to evaluate the effectiveness of federal programs. The PART instrument was a set of questionnaires focused on four elements: purpose and design; strategic planning; program management; and program outcomes. A PART evaluation of the agency conducted in 2007 found MBDA performance to be Adequate with high marks for program purpose and design (80%); strategic planning (75%); and program management (100%).¹⁵⁰ Among the highlights, the evaluation noted the following:

• The program has developed appropriate annual and long-term measures that focus on the direct impact of its assistance on business clients. However, more research and evaluation needs to be conducted on the long-term impact of MBDA assistance.
• The program has strong management. It awards grants using a competitive process, and provides sufficient oversight of grant activities, including tracking of progress towards meeting performance goals.
• While MBDA is focused on minority small businesses, there are many other sources of minority business assistance and support at the federal, state, and local level. At the federal level, the SBA provides similar assistance through its entrepreneurial development programs.¹⁵¹

Office of Inspector General Reports

Past reports of the Commerce Department's Office of Inspector General (IG) examined various aspects of the agency and its operations. Three of these reports are summarized below.¹⁵²

• A 2017 report by DOC IG reviewed MBDA's management of cooperative agreements for the Minority Business Center Program and found no significant problems. The MBDA director concurred with the report's recommendations, which directed MBDA to enforce existing and implement new procedures related to oversight, reporting policies and procedures, and the agency's methodology for verifying select performance measures.¹⁵³
• A 2006 report by DOC IG found that MBDA performance measures were undermined by inappropriately combining results for three different programs and unreliable performance data. The report was initiated after the agency reported a 300% increase in the number of clients assisted during the 2004 program year by MBOCs despite a decrease in FY2004 appropriations. The report found that MBDA, in reporting FY2004 results, inappropriately combined results for MBOCs with two other programs—Business Development Centers and the Phoenix program—resulting in the inflation of the number of clients served by MBOCs.¹⁵⁴ The MBDA director concurred with the recommendations of the report, which directed MBDA to define clearly key performance measures and the types of actions that may be counted toward measuring the "dollar value of contract awards obtained," and report performance measures of its programs separately.
• A 1998 audit report by DOC IG identified deficiencies in the process MBDA used to monitor the performance of a pilot project that would test the viability of the Community-Based Enhancement Services initiatives as an alternative to the Minority Business Development Center. The report found that MBDA's monitoring of the pilot project failed to follow the agency's written policies and procedures and thus was ineffective in its assessment of the program. MBDA concurred with the report's findings and committed to incorporating the recommendations put forth by the report, which included assigning staff with appropriate expertise who will follow MBDA policies and procedures; and developing project specific performance measures and specific reporting requirements to reflect the specific nature of the project.¹⁵⁵

Appendix C. Legislative Proposals, 96^th Congress-118^th Congress

Since MBDA's inception, a number of bills have been introduced that would have "codified" the agency or its duties by, for example, establishing, redesignating, or transferring the agency; creating new programs within the agency; or authorizing the agency to carry out certain functions. The following bills—introduced in the 96^th -117^th Congresses—address the agency's statutory authority or its activities.

• The 96^th Congress considered, but did not pass, legislative proposals to provide MBDA statutory authorization. The House Committee on Small Business held hearings on bills (H.R. 6904 and S. 2565) that would have established a permanent MBDA within DOC.¹⁵⁶ The House bill, introduced by Representatives Parren Mitchell and Joseph Addabbo, would have granted the agency the authority to engage in a number of activities in support of the agency's mission, including equity financing of minority business; financial and technical assistance in penetrating domestic and foreign markets; and minority business management education. A Senate bill, S. 2565, introduced by Senator Abraham Ribicoff and backed by the Carter Administration, would have authorized the creation of a Minority Business Development Agency focused on the provision of technical assistance to minority firms. The Senate bill included much of the language of E.O. 11625.
• In the 98^th Congress, Senator William Roth introduced the Department of International Trade and Industry Act of 1983 (S. 121), which proposed transferring MBDA to the SBA as one of several aspects of an executive branch agency reorganization plan.¹⁵⁷
• During the 99^th Congress, Representative Parren Mitchell introduced H.R. 4632, a bill that would have denied any appropriations to MBDA to avoid potential duplication of services with the SBA's Associate Administrator for Minority Small Business and Capital Ownership Development. MBDA's activities, as well as any unexpended balances, would have been transferred to the SBA Associate Administrator for Minority Small Business and Capital Ownership Development.
• During the 101^st through the 104^th Congresses, Representative Kweisi Mfume introduced legislation (H.R. 1769, H.R. 373, H.R. 278, H.R. 114, respectively) that would have redesignated MBDA as the Minority Business Development Administration. The bill would have directed MBDA to assist disadvantaged businesses penetrate domestic and foreign markets, encourage firms to form joint ventures to increase their share of the market, provide financial assistance to public and private entities in support of the mission of MBDA, conduct pilot projects that would assist disadvantaged businesses obtain and expand access to capital; support management education efforts, and conduct research to advance the nation's understanding of the issues and opportunities surrounding minority business enterprises.
• During the 111^th Congress, Senator Bob Casey introduced S. 4026, the Minority Business Development Improvements Act of 2010. This bill would have required MBDA to establish the Minority Business Development Program and charged it with providing qualified minority businesses with technical assistance and contract procurement assistance. This bill would have also outlined minority business qualification requirements for the program. It would have required that (1) not less than 51% of the qualified minority business is directly and unconditionally owned or controlled by historically disadvantaged individuals; and (2) each officer or other individual exercising control over regular operations would meet the definition of a historically disadvantaged individual. Additionally, the bill would have authorized the program to provide technical assistance to qualified disadvantaged businesses and support efforts to expand federal procurement opportunities for disadvantaged businesses.
• Also during the 111^th Congress, Representative Bobby Rush introduced H.R. 4343, the Minority Business Development Improvements Act of 2009, which would have required the National Director of the Minority Business Development Agency to establish and administer a Minority Business Development Program focused on providing loan guarantees, technical assistance, and contract procurement assistance to qualified minority businesses. The bill would have defined a qualified minority business as a business that is at least 51% directly owned or controlled by historically disadvantaged individuals. In addition, the net worth of each principal of the minority business could not exceed $2 million. The bill would have directed MBDA's National Director to (1) establish a database to assist prime contractors in identifying historically disadvantaged firms for subcontracting, (2) enter into agreements to provide set-aside contracting opportunities to minority businesses, and (3) terminate a minority business from the program for specified violations. Representative Rush also introduced H.R. 4929, Expanding Opportunities for Main Street Act of 2010. This bill included a provision that would have required MBDA to establish a Minority Business Development Program with the objective of providing technical assistance, loan guarantees, and contract procurement assistance to minority businesses. This bill would have also authorized MBDA to (1) enter into agreements to provide set-aside contracting opportunities to minority businesses; and (2) terminate a minority business from the program for specified violations. This bill would have also required MBDA to establish a database to assist prime contractors in identifying historically disadvantaged firms for subcontracting.
• During the 112^th Congress, Senator Tom Udall introduced S. 1334, Expanding Opportunities for Main Street Act of 2011. An identical bill (H.R. 2424) was introduced by Representative Bobby Rush. Both bills' MBDA provisions are identical to provisions included in H.R. 4929, introduced by Representative Rush during the 111^th Congress.
• During the 113^th Congress, Representative Bobby Rush introduced H.R. 2551, Expanding Opportunities for Main Street Act. Title II of the bill deals exclusively with MBDA and includes the same provisions included in H.R. 4343, introduced during the 111^th Congress.
• During the 114^th and 115^th Congresses, no bills were introduced to formally establish the agency and its duties by statute.
• During the 116^th Congress, Representative Jerry McNerney introduced H.R. 1432, the Minority Business Development Act of 2019, to redesignate and establish MBDA as the Minority Business Development Administration. Later in the 116^th Congress, Representative Al Green introduced H.R. 6869 and Senator Benjamin Cardin introduced S. 4208, both titled the Minority Business Resiliency Act of 2020. Both bills were designed to codify the agency by providing it statutory authorization and provide additional funding to help MBEs recover from the COVID-19 pandemic, among other activities. Later in 2020, Senator Benjamin Cardin introduced the Heroes Small Business Lifeline Act (S. 4818), and it included the Minority Business Resiliency Act of 2020 as a subtitle of the larger bill. Representative Karen Bass introduced H.R. 8352 and Senator Charles Schumer introduced S. 5065, which both included the Minority Business Resiliency Act of 2020 as a subtitle of the larger bill. During the 116^th Congress, versions of the Heroes Act (H.R. 925, S. 4800, H.R. 8406) included language to establish the agency and fund emergency grants for nonprofit organizations and MBEs impacted by the COVID-19 pandemic, among other activities. Also during the 116^th Congress, Senator Kelly Loeffler introduced S. 5011 to codify MBDA and establish an Office of African American Affairs within the agency.
• During the 117^th Congress, Senator Benjamin Cardin introduced two versions of the Minority Business Resiliency Act of 2021 (S. 1255 in April 2021 and S. 2068 in June 2021) to make permanent and expand MBDA's activities. Representative Al Green introduced companion legislation in the House (H.R. 2689). Senator Roger Wicker also introduced the Reaching America's Rural Minority Businesses Act of 2021 (S. 1749). The Minority Business Development Act of 2021 (Division K—Infrastructure Investment and Jobs Act, P.L. 117-58), enacted on November 15, 2021, provided statutory authorization for the agency.
• During the 118^th Congress, Representative Haley Stevens introduced H.R. 4499, the IDEA Act of 2023. The bill would require MBDA to establish a grant program for business accelerators, which would then help MBEs access capital and provide MBEs with networking opportunities. Representative Emanuel Cleaver introduced the Endowment Transparency Act (H.R. 4405), which would require MBDA to report on recommended changes for substantially increasing the use of MBEs or women-owned businesses in the investment and bond transactions of institutions of higher education. A companion Senate bill (S. 2187) was introduced by Senator Cory Booker.