The Minority Business Development Agency: An Overview of Its History and Programs

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The Minority Business Development Agency:
~~June 8~~November 22, 2021 , 2021
An Overview of Its History and Programs
Julie M. Lawhorn
The Department of Commerce’s Minority Business Development Agency (MBDA) is The Department of Commerce’s Minority Business Development Agency (MBDA) is ~~the lead~~
Analyst in Economic Analyst in Economic
the lead federal agency dedicated to assisting minority business enterprises (MBEs) in federal agency dedicated to assisting minority business enterprises (MBEs) in ~~overcoming social~~
Development Policy Development Policy
overcoming social and economic disadvantages that have limited their participation in and economic disadvantages that have limited their participation in the nation’s free enterprise the nation’s free enterprise

system. The MBDA’s mission is to support the growth and system. The MBDA’s mission is to support the growth and global competitiveness of the global competitiveness of the
minority business community. Through a network of local business development centers and minority business community. Through a network of local business development centers and

other initiatives, the MBDAother initiatives, the MBDA carries out this mission by providing technical and business carries out this mission by providing technical and business
assistance, support, and resources, as assistance, support, and resources, as ~~well~~ wel as advocacy and research on behalf of MBEs. as advocacy and research on behalf of MBEs.
The agency was The agency was original y established as the Office of Minority Business Enterprise (OMBE) by Executive Order 11458 signed by established as the Office of Minority Business Enterprise (OMBE) by Executive Order 11458 signed by
President Richard Nixon in 1969. In 1979, the Carter Administration reorganized and renamed the OMBE as the Minority President Richard Nixon in 1969. In 1979, the Carter Administration reorganized and renamed the OMBE as the Minority
Business Development Agency (MBDA). Successive Administrations have changed the agency’s focus and reorganized the Business Development Agency (MBDA). Successive Administrations have changed the agency’s focus and reorganized the
delivery of its assistance and services.delivery of its assistance and services.
The agency was provided statutory authorization by the Minority Business Development Act of 2021 (Division K—Infrastructure Investment and Jobs Act, IIJA, P.L. 117-58), enacted on November 15, 2021.  The Carter Administration renamed the agency and refocused its efforts on helping businesses of  The Carter Administration renamed the agency and refocused its efforts on helping businesses of ~~all sizes~~
al sizes develop into medium and large-scale businesses, particularly in growth industries. develop into medium and large-scale businesses, particularly in growth industries.
 In 1981, the Reagan Administration established the Minority Business Development Center  In 1981, the Reagan Administration established the Minority Business Development Center program, program,
which became the MBDA’s primary method for delivering technical and management services to minority which became the MBDA’s primary method for delivering technical and management services to minority
businesses. businesses.
 The George H.W. Bush Administration proposed eliminating the agency and transferring its  The George H.W. Bush Administration proposed eliminating the agency and transferring its mission to the mission to the
~~Small~~ Smal Business Administration (SBA), but ultimately continued the agency as an entity within the Business Administration (SBA), but ultimately continued the agency as an entity within the
Department of Commerce. Department of Commerce.
 The Clinton Administration supported substantial increases in the agency’s budget to fund the  The Clinton Administration supported substantial increases in the agency’s budget to fund the
establishment of Rural Business Development Centers and support the activities of the Minority Business establishment of Rural Business Development Centers and support the activities of the Minority Business
Development Centers and Minority Business Opportunity Committees. Development Centers and Minority Business Opportunity Committees.
 The George W. Bush Administration continued efforts to coordinate the MBDA’s programs with  The George W. Bush Administration continued efforts to coordinate the MBDA’s programs with ~~the~~
the SBA’s programs, pledged to focus MBDA’s resources on minority firms with at least $500,000 or more in SBA’s programs, pledged to focus MBDA’s resources on minority firms with at least $500,000 or more in
annual revenues, and to increase their presence in the global economy. The annual revenues, and to increase their presence in the global economy. The Obama Administration placed Obama Administration placed
increased emphasis on quantifying the impact of MBDA activities, increasing the efficient delivery of its increased emphasis on quantifying the impact of MBDA activities, increasing the efficient delivery of its
services to minority business communities, and increasing coordination with other federal agencies. services to minority business communities, and increasing coordination with other federal agencies.
 The Trump Administration’s first budget request proposed to eliminate the agency, and later  The Trump Administration’s first budget request proposed to eliminate the agency, and later ~~budget~~
budget requests proposed reductions to the agency’s budget by approximately 75%. requests proposed reductions to the agency’s budget by approximately 75%.
 The Biden Administration’s FY2022 Budget Request  The Biden Administration’s FY2022 Budget Request ~~includes $70 million~~ included $70 mil ion for the MBDA, an for the MBDA, an amount that amount that
would be $22 would be $22 ~~million~~ mil ion above the FY2021 enacted level, and a new $1 above the FY2021 enacted level, and a new $1 ~~billion~~ bil ion grant program to assist MBEs grant program to assist MBEs
~~access private capital.~~
access private capital.  The Minority Business Development Act of 2021 (P.L. 117-58) statutorily authorized the agency, codified select existing programs, and added new programs and roles. MBDA’s role and its services have shifted over time to address new and emerging chal enges and opportunities. Today, the agency’s activities are designed to expand access to capital, markets, and contracts through public and private Today, the agency’s activities are designed to expand access to capital, markets, and contracts through public and private
sector programs, policy, and research. Technical assistance and other services are provided to MBEs through specialty sector programs, policy, and research. Technical assistance and other services are provided to MBEs through specialty
projects and a network of business centersprojects and a network of business centers ~~located in areas with the largest concentration of minority populations and the~~
~~largest number of minority businesses. The MBDA~~ . The MBDA also coordinates with other federal agencies, nongovernmental organizations, coordinates with other federal agencies, nongovernmental organizations,
and private firms to expand capital access and contracting and export and private firms to expand capital access and contracting and export opportunities for MBEs. Current issues of congressional interest include the agency’s implementation of new Congressional Research Service The Minority Business Development Agency: An Overview of Its History and Programs programs to reach MBEs, individuals, and communities; the agency’s funding; the integration of existing activities; and the nomination and confirmation of the person who wil lead the agency. Pending appropriations legislation, MBDA may seek to hire additional staff or otherwise increase its capacity to re-establish 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 activities. Congressional Research Service link to page 6 link to page 7 link to page 8 link to page 8 link to page 9 link to page 11 link to page 14 link to page 14 link to page 15 link to page 16 link to page 16 link to page 17 link to page 19 link to page 19 link to page 19 link to page 23 link to page 24 link to page 24 link to page 25 link to page 26 link to page 12 link to page 24 link to page 32 link to page 28 link to page 35 link to page 38 link to page 40 The Minority Business Development Agency: An Overview of Its History and Programs ~~opportunities for MBEs. Although Congress has never~~
~~enacted a statutory authorization for the agency, it has appropriated funding for MBDA for over 50 years. When considering~~
~~the MDBA, Congress may examine the absence of enabling legislation, the coordination of services for MBEs across federal~~
~~agencies, and disagreements over the agency’s funding.~~
~~Congressional Research Service~~

The Minority Business Development Agency: An Overview of Its History and Programs Congressional Research Service The Minority Business Development Agency: An Overview of Its History and Programs

Introduction
The Department of Commerce’s Minority Business Development Agency (MBDA) is the lead The Department of Commerce’s Minority Business Development Agency (MBDA) is the lead
federal agency dedicated to supporting growth and global competitiveness of the minority federal agency dedicated to supporting growth and global competitiveness of the minority
business community.business community. 1 Numerous congressional hearings, undergirded by historical and current 1 Numerous congressional hearings, undergirded by historical and current
academic research, have tried to document the extent to which members of minority groups 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 confront disparities and disadvantages in creating new businesses, expanding markets, and
finding opportunities for their business enterprises.2 Barriers include difficulty in accessing 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 capital, a lack of capacity or expertise, and exclusion from business networks. Given these
~~challenges~~chal enges, Congress and many successive presidential administrations since the Nixon , Congress and many successive presidential administrations since the Nixon
Administration have supported national policies intended to address these disparities through the Administration have supported national policies intended to address these disparities through the
MBDA. MBDA.
The MBDA’s primary mission is to assist minority businesses in achieving entrepreneurial The 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 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, the MBDA is charged economic disadvantages that have limited their participation. To these ends, the MBDA is charged
with formulating and coordinating federal policies and programs to support minority business with formulating and coordinating federal policies and programs to support minority business
enterprises (MBEs) by providing technical and managerial expertise and resources through a enterprises (MBEs) by providing technical and managerial expertise and resources through a
network of local business development centers. This report includes network of local business development centers. This report includes
 a discussion of the agency’s origins and authority;  a discussion of the agency’s origins and authority;
 a summary of the agency’s funding history, including Administration requests  a summary of the agency’s funding history, including Administration requests
and final appropriations; and final appropriations;
 a review of the agency’s recent programs, initiatives, performance, and  a review of the agency’s recent programs, initiatives, performance, and
accomplishments; and accomplishments; and
 a review of current issues and considerations.  a review of current issues and considerations.
~~Although Congress has never enacted a statute establishing the agency, it has appropriated~~
~~funding for MBDA for over 50 years. In FY2021, Congress approved $48 million in annual~~
~~appropriations for the agency.3 In FY2020 and FY2021, Congress also provided a combined $35~~
~~million in two rounds of supplemental appropriations for the agency in response to the adverse~~
~~economic impact of the Coronavirus Disease 2019 (COVID-19) pandemic on MBEs.4~~

~~1 15 C.F.R. §~~ For over 50 years, Congress approved legislation to fund the MBDA without providing the agency statutory authorization. For example, in FY2021, the MBDA received $48 mil ion in annual appropriations and an additional $25 mil ion in supplemental appropriations to assist MBEs adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.3 The Minority Business Development Act of 2021 (Division K—Infrastructure Investment and Jobs Act, P.L. 117-58) statutorily authorized the agency, codified selected existing programs, and added new programs and roles.4 1 15 C.F.R. §1400.2 “Determination of Group Eligibility for MBDA Assistance, Definitions” defines Minority 1400.2 “Determination of Group Eligibility for MBDA Assistance, Definitions” defines Minority
BusinessBusiness Enterprise as a businessEnterprise as a business ~~that~~ that is ownedis owned or controlled by one or more socially or economically disadvantaged or controlled by one or more socially or economically disadvantaged
persons. Sociallypersons. Socially ~~disadvantaged~~ disadvantaged persons means those persons who have been subjectedpersons means those persons who have been subjected to cultural, racial, or ethnic to cultural, racial, or ethnic
prejudiceprejudice ~~because~~ because of their identity as members of a group without regardof their identity as members of a group without regard to their individual qualities.to their individual qualities. Economically Economically
disadvantageddisadvantaged persons means those persons whose ability to compete in the free enterprise system has been impaired persons means those persons whose ability to compete in the free enterprise system has been impaired
duedue to diminished capital and credit opportunities because of their identity as members of a group without regard to to diminished capital and credit opportunities because of their identity as members of a group without regard to
their individualtheir individual qualities,qualities, as compared to others in the same line of businessas compared to others in the same line of business and competitive market area. Person means and competitive market area. Person means
a citizen of the United States or an alien lawfullya citizen of the United States or an alien lawfully admitted for permanent residence.admitted for permanent residence.
2 U.S. 2 U.S. Congress, HouseCongress, House Committee on Small Business,Committee on Small Business, Subcommittee on GeneralSubcommittee on General Oversight and Minority Enterprise, Oversight and Minority Enterprise,
~~Establishment~~Establishm ent of a Minority Business ~~Development Administration in the Department of Commerce~~Developm ent Adm inistration in the Departm ent of Com m erce, 96th Congress, 2nd , 96th Congress, 2nd
sess.,sess., June 9, 1980, and JuneJune 9, 1980, and June 16, 1980 (Washington16, 1980 (Washington, DC: GPO, 1980); MBDA, “: GPO, 1980); MBDA, “ Demographic Demographic ~~Trends~~T rends Publications,” Publications,”
https://www.mbda.gov/page/demographic-trends-publications;https://www.mbda.gov/page/demographic-trends-publications; and Robert W. Fairlie and Aliciaand Robert W. Fairlie and Alicia M. Robb,M. Robb, Race and
Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States (Cambridge, (Cambridge, MA: MA: ~~The~~T he MIT MIT
Press, 2010). Press, 2010).
3 P.L. 116-260. 3 P.L. 116-260.
~~4 P.L. 116-136 and P.L. 116-260~~The MBDA also received $10 million in supplemental appropriations in FY2020. See P.L. 116-136. 4 P.L. 117-58, 135 Stat. 429, November 15, 2021. .
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The Minority Business Development Agency: An Overview of Its History and Programs

MBDA Origins and Authority
The MBDAThe MBDA ~~was originally~~ was original y established as the Office of Minority Business Enterprise (OMBE) by established as the Office of Minority Business Enterprise (OMBE) by
President Richard Nixon with the signing of Executive Order (E.O.) 11458 on President Richard Nixon with the signing of Executive Order (E.O.) 11458 on ~~March~~Marc h 5, 1969.5 5, 1969.5
During the 1968 presidential campaign, then-Republican candidate Nixon embraced the idea of 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 “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 the U.S. economy as a means of not only promoting economic advancement and parity, but
political power as political power as ~~well~~wel .6 Eager to demonstrate his commitment to these goals and pressed by civil .6 Eager to demonstrate his commitment to these goals and pressed by civil
rights advocates to rights advocates to ~~fulfill~~ fulfil his campaign promise, President Nixon chose to bypass Congress and his campaign promise, President Nixon chose to bypass Congress and
the legislativethe legislative process, opting to establish a process, opting to establish a ~~cabinet~~Cabinet-level committee on minority enterprise.7 -level committee on minority enterprise.7
Within the first 100 days of his administration, President Nixon had established the OMBE as a 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. policy prescription for issues of racial inequality and social injustice.
The OMBE’s mission, as outlined in E.O. 11458, was threefold: The OMBE’s mission, as outlined in E.O. 11458, was threefold:
 encourage the coordination of the plans, operations, and programs of the federal  encourage the coordination of the plans, operations, and programs of the federal
government in ways that strengthen participation of minority businesses in the government in ways that strengthen participation of minority businesses in the
activities of federal agencies; activities of federal agencies;
 promote the deployment of the resources of state and local governments,  promote the deployment of the resources of state and local governments,
businesses, trade associations, and other nongovernmental entities in support of businesses, trade associations, and other nongovernmental entities in support of
minority businesses; and minority businesses; and
 establish a clearinghouse to identify and disseminate information to support the  establish a clearinghouse to identify and disseminate information to support the
successful operation of MBEs. successful operation of MBEs.
E.O. 11458 also established an Advisory Council on Minority Enterprise (ACME), charging it 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 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 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 ACMEACME played a significant role in shaping the OMBE’s agenda. The ACME also helped develop also helped develop
efforts to increase minority participation in franchises.8 efforts to increase minority participation in franchises.8
Stymied by organizational difficulties, including a lack of cooperation from other Stymied by organizational difficulties, including a lack of cooperation from other ~~cabinet~~Cabinet-level -level
departments, an inexperienced staff, and the absence of a dedicated budget, the OMBE struggled departments, an inexperienced staff, and the absence of a dedicated budget, the OMBE struggled

5 Executive Order 11458, “Prescribing Arrangements for Developing and Coordinating a National Program for5 Executive Order 11458, “Prescribing Arrangements for Developing and Coordinating a National Program for
Minority BusinessMinority Business Enterprise,” 34Enterprise,” 34 Federal Register 4937, March 5, 1969. 4937, March 5, 1969.
6 Dean Kotlowski, “Black Power-Nixon Style: 6 Dean Kotlowski, “Black Power-Nixon Style: ~~The~~T he Nixon Administration and Minority Business Enterprise,” Nixon Administration and Minority Business Enterprise,” The
Business History Review, vol. 72, no. 3 (Autumn 1998), p. 411. , vol. 72, no. 3 (Autumn 1998), p. 411.
7 Members of the committee included Secretary of Commerce Maurice 7 Members of the committee included Secretary of Commerce Maurice Stans, Secretary of Health, Education, and Stans, Secretary of Health, Education, and
Welfare Robert H. Finch, Secretary of HousingWelfare Robert H. Finch, Secretary of Housing and Urban Development George Romneyand Urban Development George Romney , Secretary of Agriculture , Secretary of Agriculture
Clifford Hardin, and Secretary of Clifford Hardin, and Secretary of ~~Transportation~~T ransportation John Volpe. See Dean Kotlowski, “ John Volpe. See Dean Kotlowski, “ Black Power-Nixon Style: Black Power-Nixon Style: ~~The~~T he
Nixon Administration and Minority BusinessNixon Administration and Minority Business Enterprise,” Enterprise,” The Business History Review, vol. 72, no. 3 (Autumn 1998), , vol. 72, no. 3 (Autumn 1998),
p. 420. p. 420.
8 In 1969, eager to demonstrate results, the OMBE co-sponsored with the Small8 In 1969, eager to demonstrate results, the OMBE co-sponsored with the Small ~~Business~~ Business Administration (SBA) what Administration (SBA) what
waswas ~~dubbed~~ dubbed the 25 x 25 x 2 program, which wasthe 25 x 25 x 2 program, which was one of two federal programs focusedone of two federal programs focused on increasing minority on increasing minority
participation in the franchise industry. participation in the franchise industry. ~~The~~T he plan involved the OMBE, during eight separate rounds, recruiting 25 plan involved the OMBE, during eight separate rounds, recruiting 25
national franchisors who each wouldnational franchisors who each would commit to awardingcommit to awarding 25 franchises to minority owners each year for a two25 franchises to minority owners each year for a two -year -year
period. Seeperiod. See U.S.U.S. Congress,Congress, Senate Select Committee on Small Business,Senate Select Committee on Small Business, ~~The Economic~~ The Econom ic Effects of Franchising, ,
committee print, prepared for the Small Businesscommittee print, prepared for the Small Business Administration by Urban B. Ozanne, D.B.A. and ShelbyAdministration by Urban B. Ozanne, D.B.A. and Shelby D. Hunt. Ph. D. Hunt. Ph.
D, GraduateD, Graduate School of Business,School of Business, the University of Wisconsin, the University of Wisconsin, ~~92nd~~92 nd Cong., 1st sess., September 8, 1971, Cong., 1st sess., September 8, 1971, ~~Committee~~
~~Print (Washington~~committee print (Washington, DC: GPO, 1971), pp. 51-55 and pp. 187-198. : GPO, 1971), pp. 51-55 and pp. 187-198. ~~Two~~T wo years later, the franchising initiatives and SBA’s years later, the franchising initiatives and SBA’s
commitment to minority business development were criticized in a 1971 committee print released by the Senate Select commitment to minority business development were criticized in a 1971 committee print released by the Senate Select
Committee on Small Business.Committee on Small Business. In addition, the OMBE initiated efforts to increase capital assets in minorityIn addition, the OMBE initiated efforts to increase capital assets in minority -controlled -controlled
banking institutions to be made available to minority businesses. banking institutions to be made available to minority businesses.
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~~link to page 22 link to page 27~~ The Minority Business Development Agency: An Overview of Its History and Programs

during its first years of operation. It was also said to be handicapped in pursuing its mission by 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 individualthe Commerce Secretary’s decision “not to become involved in individual cases or with programs cases or with programs
at the operational level and not to seek to encroach upon existing programs functions of other at the operational level and not to seek to encroach upon existing programs functions of other
federal agencies.” federal agencies.”
E.O. 11625—Expanding Agency Role
To address concerns raised during the OMBE’s initial To address concerns raised during the OMBE’s initial two years of operations, President Nixon, two years of operations, President Nixon,
on October 13, 1971, signed E.O. 11625, Prescribing Additional Arrangements for Developing on October 13, 1971, signed E.O. 11625, Prescribing Additional Arrangements for Developing
and Coordinating a National Program for Minority Business Enterprise.9 The new E.O. was and Coordinating a National Program for Minority Business Enterprise.9 The new E.O. was
intended to clarify and strengthen OMBE’s role. In remarks made at the time 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: issued, President Nixon noted the following:
This order gives the This order gives the Secretary a clearSecretary a clear mandate to establish and carry out Federal policy mandate to establish and carry out Federal policy
concerningconcerning minority enterpriseminority enterprise and to coordinate theand to coordinate the related efforts of all Federal related efforts of all Federal
departmentsdepartments and agencies.and agencies. It also directsIt also directs the departmentsthe departments and agenciesand agencies to develop to develop
systematic data collection processes concerning their minority enterprise programs and to systematic data collection processes concerning their minority enterprise programs and to
cooperate in expanding the overall Federal effort.10cooperate in expanding the overall Federal effort.10
In addition to reinforcing the original E.O.’s objectives, the new E.O. In addition to reinforcing the original E.O.’s objectives, the new E.O. ~~called~~cal ed for the OMBE to for the OMBE to
create a network of minority business centers. These centers would be charged with providing 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, managerial and technical assistance to minority businesses and conducting special projects,
including the provision of direct financial assistance to minority businesses. This development 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 marked an evolution in the agency’s role from an advisory one undertaken ~~principally~~principal y through the through the
ACME to an active one, supporting the development of minority business enterprises using ACME to an active one, supporting the development of minority business enterprises using
public-private partnerships. public-private partnerships.
Agency Reorganization
During the Carter Administration, Congress considered, but did not pass, enabling legislation During the Carter Administration, Congress considered, but did not pass, enabling legislation
authorizing the agency and its mission.11 In 1979, the Carter Administration reorganized and authorizing the agency and its mission.11 In 1979, the Carter Administration reorganized and
renamed the OMBE as the Minority Business Development Agency (MBDA). The reorganization 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 was, in part, a response to reports that characterized the agency’s efforts to support MBEs as
fragmented, heavily focused on fragmented, heavily focused on ~~small~~ smal businesses, and favoring the number of firms assisted rather businesses, and favoring the number of firms assisted rather
than the quality of assistance provided. The Carter Administration’s efforts were intended to 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 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 in growth industries that produced jobs, stabilized communities, and improved the ~~overall~~
overal economy.”12 ~~economy.”12~~
~~See “Additional Agency History” Appendix A for information about the MBDA’s history since~~
~~the Carter Administration. See “Legislative Proposals, 96th Congress-117th Congress” in~~
Appendix B for a summary of bills related to the MBDA and its activities.

9 Executive Order 11625, “Prescribing Additional Arrangements for Developing and 9 Executive Order 11625, “Prescribing Additional Arrangements for Developing and ~~Coordinating~~Coor dinating a National Program a National Program
for Minority Businessfor Minority Business Enterprise,” 36 Enterprise,” 36 Federal Register 19967-19970, October 13, 1971. 19967-19970, October 13, 1971.
10 U.S.10 U.S. President (Nixon), “Special MessagePresident (Nixon), “Special Message to the Congress Urgingto the Congress Urging Expansion of the Minority Business Enterprise Expansion of the Minority Business Enterprise
Program,” Program,” Public Papers of the Presidents of the United States: Richard Nixon 1971 , vol. 332 (Washington, vol. 332 (Washington, DC: GPO, : GPO,
1972), pp. 1041-1046. 1972), pp. 1041-1046.
11 For a summary of legislative activities related to the establishment of a Minority Business Development 11 For a summary of legislative activities related to the establishment of a Minority Business Development
Administration in the 96th Congress, 2nd sess.,Administration in the 96th Congress, 2nd sess., see H.Rept. 96-1542, pp. 129-138. see H.Rept. 96-1542, pp. 129-138.
12 U.S. 12 U.S. Congress, HouseCongress, House Committee on Small Business,Committee on Small Business, Subcommittee on GeneralSubcommittee on General Oversight and Minority Enterprise, Oversight and Minority Enterprise,
~~Establishment~~Establishm ent of a Minority Business ~~Development Administration in the Department of Commerce~~Developm ent Adm inistration in the Departm ent of Com m erce, 96th Congress, 2nd , 96th Congress, 2nd
sess.,sess., June 9, 1980, and JuneJune 9, 1980, and June 16, 1980 (Washington16, 1980 (Washington, DC: GPO, 1980), pp. 2: GPO, 1980), pp. 2 -3. -3.
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link to page link to page 728 link to page 38 link to page 38 The Minority Business Development Agency: An Overview of Its History and Programs See “Additional Agency History” Appendix A for information about the MBDA’s history since the Carter Administration. See “Legislative Proposals, 96th Congress-117th Congress” in Appendix C for a summary of bil s related to the MBDA and its activities. Agency Establishment Congress considered proposals to codify the MBDA for decades (see Appendix C) prior to the enactment of the Minority Business Development Act of 2021. The MBDA’s powers and duties are now to be set in accordance with the statute “and without regard to Executive Order 11625 (36 Fed. Reg. 19967; relating to prescribing additional arrangements for developing and coordinating a national program for minority business enterprise).”13 The Minority Business Development Act of 2021 also established within the agency an Office of Business Centers, an Office on Minority Business Development Grants, and regional MBDA offices.14 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 the Department of Commerce (DOC); and  how the agency wil function in relation to the operations carried out by other DOC components.15 The 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.16 The act directs the MBDA and the DOC Office of Inspector General to submit reports on the MBDA’s grants to nonprofit organizations.17 In addition to biennial reports, the act further directs the MBDA to submit reports on its entrepreneurship education activities and the study on alternative financing solutions.18 The Comptroller General of the United States is required to report to Congress on the agency’s programs by no later than November 15, 2025.19 The Minority Business Development Act of 2021 authorized to be appropriated $110 mil ion for the MBDA for each of FY2021 through FY2025. The act directed the MBDA to al ocate the majority of annual appropriations, if approved, to the Business Center program and to reserve $20 mil ion each fiscal year for the Rural Business Center program.20 As mentioned, the MBDA received $73 mil ion in appropriations for FY2021 and is currently operating, as al federal agencies are, under continuing appropriations for FY2022. 13 P.L. 117-58, Division K, T itle VII, Sec. 100707. 14 P.L. 117-58, Sec. 100003, Sec. 100001, and Sec. 100401. 15 P.L. 117-58, Sec. 100003. 16 P.L. 117-58, Sec. 100303 and Sec. 100304. 17 P.L. 117-58, Sec. 100401. 18 P.L. 117-58, Sec. 100705, Sec. 100203, and Sec. 100202. 19 P.L. 117-58, Sec. 100704. 20 P.L. 117-58, Sec. 100708. Congressional Research Service 4 The Minority Business Development Agency: An Overview of Its History and Programs New Programs, Activities and Expanded Roles, Partnerships The Minority Business Development Act of 2021 established new MBDA programs and activities, including:  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 historical y 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 social y and economical y disadvantaged businesses (Title VI). The act established support for—and in some instances expanded the scope of—existing programs and activities, including the MBDA Business Center and Specialty Center programs and the MBDA’s research, evaluation, outreach, and informational activities.21 For instance, the act directed the Under Secretary to ensure center coverage so that the Business Center Program offers services in “al regions of the United States.”22 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.23 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 Minority Business Development Act of 2021 codified the agency’s research, evaluation, and outreach activities, and directed the agency to undertake certain studies and outreach roles.24 For instance, Section 100103 noted that the agency shal conduct research, studies, and surveys, and shal “provide outreach, educational services, and technical assistance in, at a minimum, the five most commonly spoken languages in the 21 P.L. 117-58, Division K, T itle I. 22 P.L. 117-58, Sec. 100111. Additionally, the Under Secretary will develop selection criteria for the MBDA Business Center program. T he Minority Business Development Act of 2 021 provides three options for consideration for the Under Secretary in developing the criteria, including “(i) an area, the population of which is composed of not less than 51 percent socially or economically disadvantaged individuals, as determined in accordance with data collected by the Bureau of the Census; (ii) a federally recognized area of economic distress; or (iii) a State that is underserved with respect to the MBDA Business Center Program, as defined by the Under Secretary.” See P.L. 117-58, Sec. 100114. 23 P.L. 117-58, Division K, T itle III. 24 P.L. 117-58, Sec. 100103. Congressional Research Service 5 link to page 28 The Minority Business Development Agency: An Overview of Its History and Programs United States to ensure that limited English proficient individuals receive cultural y and linguistical y appropriate access to the services and information provided by the Agency.”25 The Minority Business Development Act of 2021 also authorizes the 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 specifical y 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 social y and economical y disadvantaged individuals in the fields of business, management, and entrepreneurship.26 The Minority Business Development Act of 2021 directs the MBDA to make grants to nonprofit organizations in order to support the growth, development, and retention of MBEs. The act specified that the MBDA may consider nonprofit organizations located in a federal y 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 mil ion, and organizations that serve low-income and rural communities).27 Also, once established, the Minority Business Enterprises Advisory Council—composed of both public and private sector members—wil advise the MBDA on plans, programs, and activities that relate to social y or economical y disadvantaged business concerns.28 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.29 For instance, once established, the new Rural Business Centers wil serve lower-density regions that may not have large concentrations of minority populations or MBEs compared to more populous regions or metropolitan areas.30 The re-establishment of regional MBDA offices may further extend the services of the MBDA through their engagement with the local and regional business development partners, lending partners, and federal, state, and local procurement offices.31 Additional y, 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.32 Funding History During the agency’s first 52 years, the MBDA continued to receive annual appropriations while various Administrations considered reorganizing it, authorizing ~~link to page 25~~

~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~Funding History~~
~~Congress has not enacted enabling legislation during the agency’s 52-year history. Congress has~~
~~continued to provide the MBDA appropriations as various Administrations have considered~~
~~reorganizing it, defunding its activities, or~~ it, defunding its activities, or merging it into the merging it into the ~~Small~~ Smal Business Administration Business Administration
(SBA)(SBA).
Figure 1 provides a visual representation of OMBE/MBDA appropriations from FY1970 to
~~FY2021. Table A-1 provides a history of Administrations’ annual budget requests and enacted~~
(see Appendix A). 25 Additionally, the bill encouraged the MBDA to use the common languages spoken by the groups served in their outreach and communication efforts regarding the MBDA Business Centers. See P.L. 117-58, Sec. 100116. 26 P.L. 117-58, Sec. 100203. 27 P.L. 117-58, Division K, T itle IV. 28 P.L. 117-58, Division K, T itle V. 29 P.L. 117-58, Division K, T itle I. 30 P.L. 117-58, Division K, T itle III directs the Rural Business Center program to primarily serve clients that are located 50 miles from an MBDA Business Center. 31 P.L. 117-58, Sec. 100003. 32 P.L. 117-58, Sec. 100102. Congressional Research Service 6 link to page 12 link to page 32 The Minority Business Development Agency: An Overview of Its History and Programs Figure 1 provides a visual representation of OMBE/MBDA appropriations from FY1970 to FY2021. Table A-1 provides a history of Administrations’ annual budget requests and enacted appropriations for the agency since FY1970. appropriations for the agency since FY1970.
Figure 1. OMBE/MBDA Appropriations History: FY1970 to FY2021
(in (in ~~millions of dollars~~mil ions of dol ars) )

Source: Budget Appendices of the United States. Budget Appendices of the United States.
Notes: Includes supplemental appropriations. Includes supplemental appropriations.
FY2020 and FY2021 Appropriations
The Consolidated Appropriations Act, 2020 (P.L. 116-93) funded MBDA at $42 The Consolidated Appropriations Act, 2020 (P.L. 116-93) funded MBDA at $42 ~~million~~mil ion. In the . In the
explanatory statement accompanying the FY2020 agency appropriations report, Congress explanatory statement accompanying the FY2020 agency appropriations report, Congress
directed the MBDAdirected the MBDA ~~to allocate~~ to al ocate no less than $18 no less than $18 ~~million~~ mil ion to the business center and specialty to the business center and specialty
project center program and $7 project center program and $7 ~~million~~mil ion for the Broad Agency Announcements (BAAs). for the Broad Agency Announcements (BAAs).1333 In In
FY2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) FY2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136)

13provided the MBDA an additional $10 mil ion in supplemental funding to assist MBEs with preventing, preparing for, and responding to the COVID-19 pandemic through education, training, and advising grants to minority business centers and minority chambers of commerce.34 33 Rep. Nita Lowey, “Explanatory Statement Submitted by Mrs. Lowey, Chairwoman of the House Committee on Rep. Nita Lowey, “Explanatory Statement Submitted by Mrs. Lowey, Chairwoman of the House Committee on
Appropriations Regarding H.R. 1158, Consolidated Appropriations Act, 2020,” Appropriations Regarding H.R. 1158, Consolidated Appropriations Act, 2020,” Congressional Record, vol. 165, No. , vol. 165, No.
204-Book II (December 17, 2019), p. H10961. 204-Book II (December 17, 2019), p. H10961.
MBDA MBDA may usemay use Broad Agency Agreements (BAAs) to solicit responses to specific challenges or opportunities. Broad Agency Agreements (BAAs) to solicit responses to specific challenges or opportunities.
According to MBDA, a BAAAccording to MBDA, a BAA “ “is a competitive mechanism to encourage new programs, education, outreach, is a competitive mechanism to encourage new programs, education, outreach,
innovative projects or sponsorships that are not addressed through the MBDA businessinnovative projects or sponsorships that are not addressed through the MBDA business center program.center program. ” See MBDA, ” See MBDA,
“Frequently Asked Questions—2018 MBDA Broad“Frequently Asked Questions—2018 MBDA Broad Agency Announcement,” https://www.mbda.gov/sites/default/files/Agency Announcement,” https://www.mbda.gov/sites/default/files/
2018baafrequentlyaskedquestions070918.pdf, and Department of Commerce, 2018baafrequentlyaskedquestions070918.pdf, and Department of Commerce, FY2021 MBDA Congressional Budget
Justification, p. 17, https://www.commerce.gov/sites/default/files/2020-02/, p. 17, https://www.commerce.gov/sites/default/files/2020-02/
fy2021_mbda_congressional_budget_justification.pdf. fy2021_mbda_congressional_budget_justification.pdf.
~~Congressional Research Service~~

4

~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~provided the MBDA an additional $10 million in supplemental funding to assist MBEs with~~
~~preventing, preparing for, and responding to the COVID-19 pandemic through education,~~
~~training, and advising grants to minority business centers and minority chambers of commerce.14~~34 P.L. 116-136. Recipients of MBDA’s CARES Act funding are listed online at https://www.mbda.gov/mbda-and-cares-act-funding. According to the MBDA’s FY2020 Annual Perform ance Sum mary, CARES Act grants supported “education, training, and advising small and minority-owned businesses in their recovery from the effects of the Congressional Research Service 7 The Minority Business Development Agency: An Overview of Its History and Programs
The Consolidated Appropriations Act, 2021 (P.L. 116-260) funded the MBDA at $48 The Consolidated Appropriations Act, 2021 (P.L. 116-260) funded the MBDA at $48 ~~million~~mil ion. In . In
the explanatory statement accompanying the act, Congress directed the agency to the explanatory statement accompanying the act, Congress directed the agency to ~~allocate~~al ocate no less no less
than $18 than $18 ~~million~~ mil ion to the business center and specialty project center program and $9 to the business center and specialty project center program and $9 ~~million~~mil ion for the for the
BAABAA program, with an emphasis on “innovation and entrepreneurship, formerly incarcerated program, with an emphasis on “innovation and entrepreneurship, formerly incarcerated
persons, global women’s empowerment, virtual business development, and access to finance.” persons, global women’s empowerment, virtual business development, and access to finance.”
Congress further directed the agency to Congress further directed the agency to ~~allocate $1.5 million~~al ocate $1.5 mil ion of the BAA of the BAA funding to funding to ~~Historically~~
Historical y Black Colleges and Universities (HBCUs) and Hispanic Serving Institutions (HSIs) Black Colleges and Universities (HBCUs) and Hispanic Serving Institutions (HSIs)
Entrepreneurship Pilot and to “include Tribal Colleges and Universities and Alaska Native and Entrepreneurship Pilot and to “include Tribal Colleges and Universities and Alaska Native and
Native Native ~~Hawaiian~~Hawai an Serving Institutions.” Serving Institutions.”1535 The FY2021 appropriations The FY2021 appropriations ~~bill~~ bil also provided $25 also provided $25
~~million~~ mil ion for business centers to assist MBEs with preventing, preparing for, and responding to the for business centers to assist MBEs with preventing, preparing for, and responding to the
COVID-19 pandemic, including “identifying and accessing local, state and Federal government COVID-19 pandemic, including “identifying and accessing local, state and Federal government
assistance related to such virus.”assistance related to such virus.”16
36 Recent Administration’s Budget Requests and Related Activities
The Biden Administration has proposed increased annual appropriations, a dedicated Assistant The Biden Administration has proposed increased annual appropriations, a dedicated Assistant
Secretary, and expanded programs and activities for the agency. The Biden Administration’s Secretary, and expanded programs and activities for the agency. The Biden Administration’s
FY2022 Budget Request included $70 FY2022 Budget Request included $70 ~~million~~ mil ion for the MBDA, an amount that would be $22 for the MBDA, an amount that would be $22
~~million,~~ mil ion, or almost 46%, above the FY2021 enacted level for annual appropriations.or almost 46%, above the FY2021 enacted level for annual appropriations.~~17 In the~~
~~American Jobs Plan, the Biden Administration has recommended a new $1 billion~~37 The Biden Administration also recommended, as part of its American Jobs Plan, a new $1 bil ion grant program grant program
to assist minority-owned manufacturers access private capital as one of several, proposed to assist minority-owned manufacturers access private capital as one of several, proposed
initiatives to address the racial wealth gap.initiatives to address the racial wealth gap.~~18 The President’s Discretionary Budget, released April~~
~~9, 2021, signaled support for a dedicated Assistant Secretary for MBDA.19 Additionally,~~ 38 Additional y, on May on May
28, 2021, President Biden signed an executive order establishing the White House Initiative on 28, 2021, President Biden signed an executive order establishing the White House Initiative on
Initiative on Asian Initiative on Asian Americans, Native Americans, Native ~~Hawaiians~~Hawai ans, and Pacific Islanders (AA and NHPI), which is designed, in part, to ensure “that AA and NHPI communities are empowered and equitably served by Federal funding, grants, and contracts.”39 COVID-19 crisis.” See https://www.mbda.gov/performance. 35Rep~~, and Pacific Islanders (AA and NHPI), which is~~

~~14 P.L. 116-136. Recipients of MBDA’s CARES Act funding are listed online at https://www.mbda.gov/mbda-and-~~
~~cares-act-funding. According to the MBDA’s FY2020 Annual Performance Summary, CARES Act grants supported~~
~~“education, training, and advising small and minority-owned businesses in their recovery from the effects of the~~
~~COVID-19 crisis.” See https://www.mbda.gov/performance.~~
~~15Rep~~. Nita Lowey, “Explanatory Statement Submitted by Mrs. Lowey, Chairwoman . Nita Lowey, “Explanatory Statement Submitted by Mrs. Lowey, Chairwoman ofo f the House Committee on the House Committee on
Appropriations Regarding H.R. 133, Consolidated Appropriations Act, 2021 (Division B—Commerce, Justice, Appropriations Regarding H.R. 133, Consolidated Appropriations Act, 2021 (Division B—Commerce, Justice,
Science,Science, and Related Agencies),” and Related Agencies),” Congressional Record, vol. 166, No. 218-Book III (December 21, 2020), p. H7923, vol. 166, No. 218-Book III (December 21, 2020), p. H7923 . .
1636 P.L. 116-260. P.L. 116-260.
1737 OMB “Appendix: Budget OMB “Appendix: Budget of the U.S. Government, Fiscal Year 2022” (2021), p. 205, https://www.whitehouse.gov/of the U.S. Government, Fiscal Year 2022” (2021), p. 205, https://www.whitehouse.gov/
wp-content/uploads/2021/05/com_fy22.pdf. In FY2021, P.L. 116-260 provided the MBDA $25 in supplemental wp-content/uploads/2021/05/com_fy22.pdf. In FY2021, P.L. 116-260 provided the MBDA $25 in supplemental
fundingfunding for assistance in response to the COVID-19 pandemic, in addition to $48 million in annual appropriations, for a for assistance in response to the COVID-19 pandemic, in addition to $48 million in annual appropriations, for a
total of $73 million. total of $73 million.
1838 White House, “ White House, “~~FACT SHEET~~ FACT SHEET : Biden-Harris: Biden-Harris Administration Announces New Actions to BuildAdministration Announces New Actions to Build Black Wealth and Black Wealth and
Narrow the Racial Wealth Gap,” June 1, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/Narrow the Racial Wealth Gap,” June 1, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/
06/01/fact06/01/fact -sheet-biden-harris-administration-announces-new-actions-to-build-black-wealth-and-narrow-the-racial--sheet-biden-harris-administration-announces-new-actions-to-build-black-wealth-and-narrow-the-racial-
wealth-gap/. wealth-gap/. ~~The~~T he Appendix to the President’s FY2022 Budget Request Appendix to the President’s FY2022 Budget Request also notes that, “also notes that, “ The American Jobs Plan The American Jobs Plan
proposes $1 billion to support small businessproposes $1 billion to support small business ~~access~~ access to credit, venture capital, and research & development dollars. to credit, venture capital, and research & development dollars.
Ensuring equitableEnsuring equitable ~~access~~ access to capital is essential to supporting the growth ofto capital is essential to supporting the growth of entrepreneurship in communities of color entrepreneurship in communities of color
and undeservedand undeserved communities.” Seecommunities.” See OMB “Appendix: BudgetOMB “Appendix: Budget of the U.S.of the U.S. Government, Fiscal Year 2022” (2021), p. Government, Fiscal Year 2022” (2021), p.
205, https://www.whitehouse.gov/wp-content/uploads/2021/05/com_fy22.pdf. 205, https://www.whitehouse.gov/wp-content/uploads/2021/05/com_fy22.pdf.
~~19 OMB, “The President’s FY 2022 Discretionary Request,” April 9, 2021, https://www.whitehouse.gov/wp-content/~~
~~uploads/2021/04/FY2022-Discretionary-Request.pdf.~~
~~Congressional Research Service~~

539 White House, “FACT SHEET : President Biden Establishes the White House Initiative on Asian Americans, Native Hawaiians, and Pacific Islanders,” May 28, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/28/fact-sheet-president -biden-establishes-the-white-house-initiative-on-asian-americans-native-hawaiians-and-pacific-islanders/. Congressional Research Service 8

The Minority Business Development Agency: An Overview of Its History and Programs

~~designed, in part, to “ensuring that AA and NHPI communities are empowered and equitably~~
~~served by Federal funding, grants, and contracts.”20~~
Agency Overview
Mission and Structure
MBDA’s mission is to foster the economic growth and global competitiveness of MBEs. The 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 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 and private sector programs, policy, and research. Technical and managerial assistance and other
services are services are ~~principally~~principal y provided to MBEs through a network of Business Centers, Specialty provided to MBEs through a network of Business Centers, Specialty
Centers, and other projects and initiatives.Centers, and other projects and initiatives.2240 The MBDA The MBDA and its network partners coordinate with and its network partners coordinate with
other agencies, such as the other agencies, such as the ~~Treasury Department~~Department of the Treasury, Department of Commerce International Trade , Department of Commerce International Trade
Administration, the Export-Import (EXIM) Bank, and other federal agencies, Administration, the Export-Import (EXIM) Bank, and other federal agencies, ~~non-governmental~~
nongovernmental organizations, and private firms to expand capital access and contracting and organizations, and private firms to expand capital access and contracting and export opportunities export opportunities
for MBEs.for MBEs.23
41 Minority Businesses Face Distinct Challenges
According to MBDA and other sources, According to MBDA and other sources, MBEs have unique MBEs have unique ~~challenges~~chal enges in accessing capital, contracts, and other in accessing capital, contracts, and other
areas of business development.areas of business development. Below are findings from a FY2020 MBDA summaryBelow are findings from a FY2020 MBDA summary ~~of key challenges:~~

~~Overall, minority-owned firms are smaller~~ of key chal enges:  Overal , minority-owned firms are smal er in size and scale than their in size and scale than their ~~non-minority~~nonminority counterparts. The gap in counterparts. The gap in
combined gross receipts is 10:1, with only 2% of minoritycombined gross receipts is 10:1, with only 2% of minority ~~firms~~ firms generating gross receiptsgenerating gross receipts of moreof more than $1 than $1
mil ionmil ion and only 11% of minority-ownedand only 11% of minority-owned firms having paid employees. firms having paid employees.
 
In terms of capital access, In terms of capital access, minority firmsminority firms are moreare more ~~likely~~ likely to be denied loans at a rate nearly three times to be denied loans at a rate nearly three times
higher than higher than ~~non-minority firms,~~ nonminority firms, and minorityand minority ~~firms~~ firms are likelyare likely to pay higher interest rates of, on average 7.8%, to pay higher interest rates of, on average 7.8%,
while nonminority firmswhile nonminority firms pay on average 6.4%. pay on average 6.4%. ~~Additionally, minority firms are less likely to receive~~ Additional y, minority firms are less likely to receive loans, and loans, and
when approved, receivewhen approved, receive ~~lower~~ lower loan amounts.loan amounts.
 
In terms of contracts, minority firms In terms of contracts, minority firms ~~secure~~ secure a lower number and dol ar amount of contracts in proportion to a lower number and dol ar amount of contracts in proportion to
the number of available minoritythe number of available minority ~~firms~~ firms in the relevant market.in the relevant market. ~~Additionally,~~ Additional y, studies indicate that market and studies indicate that market and
other barriersother barriers impact minorityimpact minority firms’firms’ access to contracts.access to contracts.2142
Source: MBDA, MBDA, “The Minority Business“The Minority Business ~~Development~~ Development Agency—Vital to Making AmericaAgency—Vital to Making America Great,” Great,”
https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBDAVitaltoMakingAmericaGreat_170330.pdf.https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBDAVitaltoMakingAmericaGreat_170330.pdf.

~~20 White House, “FACT SHEET: President Biden Establishes the White House Initiative on Asian Americans, Native~~
~~Hawaiians, and Pacific Islanders,” May 28, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/~~
~~2021/05/28/fact-sheet-president-biden-establishes-the-white-house-initiative-on-asian-americans-native-hawaiians-and-~~
~~pacific-islanders/.~~
~~21 As noted in MBDA’s summary of key challenges facing minority businesses. See MBDA, “The Minority~~ Before the Minority Business Development Act of 2021’s enactment, the 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.43 The Office of Business Business
~~Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development-~~
~~agency-vital-making-america-great.~~
22Development coordinated the agency’s 40 MBDA, “Overview,” https://www.mbda.gov/who-we-are/overview. MBDA, “Overview,” https://www.mbda.gov/who-we-are/overview.
2341 MBDA, “2020 Year in Review,” MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review; MBDA,https://www.mbda.gov/2020-year-in-review; MBDA, “Global Business:“Global Business: Strategic Strategic
Partners,” https://www.mbda.gov/page/global-business-strategic-partners;Partners,” https://www.mbda.gov/page/global-business-strategic-partners; ~~and Testimony~~ and T estimony of MBDA Director, of MBDA Director,
Alejandra Castillo, in U.S.Alejandra Castillo, in U.S. Congress,Congress, Senate Committee on Indian Affairs, Senate Committee on Indian Affairs, Accessing Capital in Indian Country, 114th 114th
Congress, 1st sess.,Congress, 1st sess., June 17, 2015, S.Hrg. 114-97 (WashingtonJune 17, 2015, S.Hrg. 114-97 (Washington, DC: GPO, 2015), https://www.congress.gov/event/114th-: GPO, 2015), https://www.congress.gov/event/114th-
congress/senate-event/LC34122/text?s=5&r=29. congress/senate-event/LC34122/text?s=5&r=29.
~~The~~T he SBA, SBA, for instance, is a sourcefor instance, is a source of fundingof funding for minority small businesses,for minority small businesses, and it partners with MBDAand it partners with MBDA in providing in providing
assistance to minority firms. assistance to minority firms. ~~Technical~~T echnical and management assistance from MBDA and its partners may facilitate and management assistance from MBDA and its partners may facilitate
minority businessminority business entities to qualify for SBA’sentities to qualify for SBA’s Section (8)(a) small disadvantage businessSection (8)(a) small disadvantage business and other programs. and other programs.
~~Congressional Research Service~~

6

~~link to page 25~~ ~~The~~42 As noted in MBDA’s summary of key challenges facing minority businesses. See MBDA, “ T he Minority Business Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development-agency-vital-making-america-great . 43 U.S. Department of Commerce (DOC), FY2021 MBDA Congressional Budget Justification, p. 2, https://www.commerce.gov/sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf, and MBDA, “Organization Chart,” https://www.mbda.gov/images/organizationchartjpg. Congressional Research Service 9 link to page 9 link to page 9 The Minority Business Development Agency: An Overview of Its History and Programs ~~Development Agency: An Overview of Its History and Programs~~

~~The MBDA is composed of offices focused on business development, Native American business~~
~~development, policy analysis and development, management, administration, and education,~~
~~legislative, and intergovernmental affairs.24 The Office of Business Development coordinates the~~
~~agency’s~~ business center activities, and plans and implements business development strategies business center activities, and plans and implements business development strategies
(e.g., strategies related to access to capital, contracts, emerging domestic and international (e.g., strategies related to access to capital, contracts, emerging domestic and international
markets, and global supply chains).markets, and global supply chains).2544 In 2005, MBDA established the Office of Native American In 2005, MBDA established the Office of Native American
Business Development within the Office of Business Development.Business Development within the Office of Business Development.2645 In FY2020, MBDA In FY2020, MBDA
completed its launch of the Office of Policy Analysis and Development (OPAD). OPAD works 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 with other agencies to expand data, research, analysis, and policy recommendations for minority
business business development based on economic and industry trends.development based on economic and industry trends.27
~~MBDA Clients~~
~~MBDA clients include U.S. minority business enterprises owned or controlled by members of one~~
~~or more of the following groups: African Americans, Asian Americans, Hasidic Jewish~~
~~Americans, Hispanic Americans, Native Americans, and Pacific Islanders.28 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 minority businesses of any size. The MBDA~~
~~primarily focuses its Business Center services on businesses with revenues of at least $500,000~~
~~annually.29~~
~~Programs~~
~~Through annual appropriations, Congress authorizes MBDA to foster, promote, and develop~~
~~MBEs through grants, contracts, and other agreements with public or private organizations.30 The~~
~~agency’s programs and activities focus on addressing MBDA and U.S. Department of Commerce~~
~~(DOC) priorities, and include the Business Center Program, among other projects and~~

~~24 U.S. Department of Commerce (DOC), FY2021 MBDA Congressional Budget Justification, p. 2,~~
~~https://www.commerce.gov/sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf, and~~
~~MBDA, “Organization Chart,” https://www.mbda.gov/images/organizationchartjpg.~~
~~25 MBDA, “Chief of the Office of Business Development,” https://www.mbda.gov/who-we-are/leadership/~~
~~Chief%20of%20the%20Office%20of%20Business%20Development.~~
~~26 DOC, FY2016 MBDA Congressional Budget Justification, p. 17, https://www.osec.doc.gov/bmi/budget/FY16CJ/~~
~~MBDA_FY_2016_CJ_Final.pdf.~~
~~27 Testimony of MBDA Director Henry Childs, in U.S. Congress, Senate Committee on Indian Affairs,~~ ~~Building Out~~
~~Indian Country: Tools for Community Development,~~ ~~116th Cong., 1st sess., April 10, 2019, S.Hrg. 116-16 (Washington,~~
~~DC:~~ 46 The organization and duties of MBDA offices and the location of regional offices wil likely shift following the Minority Business Development Act of 2021’s enactment (see “Agency Establishment”). Additional y, the MBDA wil be led by an Under Secretary of Commerce to be selected by the President and confirmed by the Senate.47 MBDA Clients MBDA clients include U.S. minority business enterprises (MBEs) that are not less than 51% owned by one or more social y or economical y disadvantaged individuals; and the management and daily business operations of which are controlled by one or more social y or economical y disadvantaged individuals. According to the agency’s authorizing statute, the term “social y or economical y 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 oth ers 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.48 The agency’s authorizing statute also noted that the Under Secretary may presume that the term “social y or economical y disadvantaged individual”’ includes any individual who is  Black or African American;  Hispanic or Latino;  American Indian or Alaska Native;  Asian; 44 MBDA, “ Chief of the Office of Business Development,” https://www.mbda.gov/who-we-are/leadership/Chief%20of%20the%20Office%20of%20Business%20Development . 45 DOC, FY2016 MBDA Congressional Budget Justification, p. 17, https://www.osec.doc.gov/bmi/budget/FY16CJ/MBDA_FY_2016_CJ_Final.pdf. 46 T estimony of MBDA Director Henry Childs, in U.S. Congress, Senate Committee on Indian Affairs, Building Out Indian Country: Tools for Com m unity Developm ent, 116th Cong., 1st sess., April 10, 2019, S.Hrg. 116-16 (Washington, DC: GPO, 2019), https://www.congress.gov/event/116th-congress/senate-event/LC63799/text?s=2&r=33. GPO, 2019), https://www.congress.gov/event/116th-congress/senate-event/LC63799/text?s=2&r=33.
In terms of data, MBDA and researchers have noted that existing data on MBEs, which is generally survey In terms of data, MBDA and researchers have noted that existing data on MBEs, which is generally survey -based-based and and
incomplete, is insufficient. Seeincomplete, is insufficient. See MBDA, “MBDA, “ How 11 Million Minority-Owned Firms Can Close the Wealth Gap and Drive How 11 Million Minority-Owned Firms Can Close the Wealth Gap and Drive
the U.S. Economy,” September 16, 2019, https://www.mbda.gov/news/press-releases/2019/09/how-11-million-the U.S. Economy,” September 16, 2019, https://www.mbda.gov/news/press-releases/2019/09/how-11-million-
minority-owned-firms-can-close-wealth-gap-and-drive-us, and Lucasminority-owned-firms-can-close-wealth-gap-and-drive-us, and Lucas Misera, Misera, An Uphill Battle: COVID-19’s Outsized
Toll on Minority-Owned ~~Firms~~Firm s, Federal Federal Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/
newsroom-and-events/publications/community-development-briefs/db-20201008-misera-report.aspx. newsroom-and-events/publications/community-development-briefs/db-20201008-misera-report.aspx.
~~28 Pursuant to Executive Order 11625 and 15 C.F.R. part~~ 47 P.L. 117-58, Sec. 100003. For additional context, see CRS Report RS21412, Temporarily Filling Presidentially Appointed, Senate-Confirm ed Positions, by Henry B. Hogue. 48 P.L. 117-58, Sec. 100002. Congressional Research Service 10 The Minority Business Development Agency: An Overview of Its History and Programs  Native Hawai an 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 social y disadvantaged group eligible to receive assistance.49 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 minority businesses of any size. In its FY2021 Notice of Funding Opportunity (NOFO), the MBDA primarily focused its Business Center services on businesses with revenues of at least $500,000 annual y.50 Programs Congress authorizes MBDA to foster, promote, and develop MBEs through grants, contracts, and other agreements with public or private organizations.51 The agency’s programs and activities focus on addressing MBDA and U.S. Department of Commerce (DOC) priorities, and include the Business Center Program, among other projects and partnerships.52 Through the Business Center network and partnerships, the agency facilitates export opportunities, contracts, and financings for minority clients.53 MBDA does not provide loans or grants for business formation or expansion purposes.54 Business Centers The purpose of the MBDA 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; 49 P.L. 117-58, Sec. 100002. In 15 C.F.R. Part 1400, the term “socially disadvantaged persons” has the meaning of “those persons who have been subjected to cultural, racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.” Prior to the Minority Business Development Act of 2021’s enactment and pursuant to Executive Order 11625, MBDA clients included U.S. minority business enterprises owned or controlled by members of one or more of the following groups: African Americans, Asian Americans, Hasidic Jewish Americans, Hispanic Americans, Native Americans, and Pacific Islanders. See also 15 C.F.R. §§1400.1 and 1400.2, https://ecfr.federalregister.gov/current/1400.1 and 1400.2, https://ecfr.federalregister.gov/current/
title-15/subtitle-B/chapter-XIV/parttitle-15/subtitle-B/chapter-XIV/part -1400-1400,; and MBDA, “ and MBDA, “ Who We Are,” https://www.mbda.gov/who-we-are/overview.Who We Are,” https://www.mbda.gov/who-we-are/overview.
29 50 MBDA, MBDA, MBDA Notice of Funding Opportunity (NOFO)—Business Center Program, FY2021, ,
https://www.grants.gov/web/grants/search-grants.html?keywords=MBDA-OBD-2021-2006809. https://www.grants.gov/web/grants/search-grants.html?keywords=MBDA-OBD-2021-2006809. ~~The~~T he NOFO notes that, NOFO notes that,
““~~This~~T his NOFO is NOFO is focused on capacity buildingfocused on capacity building for firms with revenues of $500,000 or more.” for firms with revenues of $500,000 or more.”
3051 See P.L. 117-58 and P.L. 116-260. 52 T he DOC strategic goals are outlined in the 2018-2022 Strategic Plan, Helping the American Economy Grow, and include (1) accelerating American leadership through commercial space activities, foundational research investments, and protecting intellectual property; (2) enhancing job creation through increased exports and foreign direct investment; (3) strengthening U.S. economic and national security; (4) fulfilling Constitutional requirements and supporting economic activity with reliable data; and (5) excelling in the delivery of customer-centric services. See https://www.commerce.gov/sites/default/files/us_department_of_commerce_2018-2022_strategic_plan.pdf. 53 U.S. Department of Commerce, FY2021 MBDA Congressional Budget Justification, https://www.commerce.gov/sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf. 54 MBDA, “Grants,” https://www.mbda.gov/grants. ~~See Table A-1, and by example, see the Consolidated Appropriations Act of 2021 (P.L. 116-260).~~
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~~partnerships.31 Through the Business Center network and partnerships, the agency facilitates~~
~~export opportunities, contracts, and financings for minority clients.32 MBDA does not provide~~
~~loans or grants for business formation or expansion purposes.33~~
~~Business Centers~~
~~MBDA~~ (2) provide counseling and mentoring to minority business enterprises; and (3) facilitate the growth of minority business enterprises by promoting trade.55 MBDA provides financial assistance to organizations that operate Business Centers. In turn, provides financial assistance to organizations that operate Business Centers. In turn,
MBDAMBDA Business Centers provide management and technical assistance to minority-owned firms Business Centers provide management and technical assistance to minority-owned firms
seeking to expand to new domestic and international markets. According to MBDA’s funding 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 procedures, Business Center services focus on business development and capacity building by
assisting MBEs toassisting MBEs to:
 improve operational efficiencies;  improve operational efficiencies;
 increase resources;  increase resources;
 build scale;  build scale;
 manage risk and increase liability manage risk and increase liability thresholds; thresholds;
 strengthen management teams;  strengthen management teams;
 access and secure financing, equity, and venture capital;  access and secure financing, equity, and venture capital;
 raise online capital;  raise online capital;
 increase profits and owner equity; and  increase profits and owner equity; and
 implement and integrate new technology and equipment.  implement and integrate new technology and equipment.
~~MBDA Business Centers are located in areas with the largest concentration of minority~~
~~populations and the largest number of minority businesses. MBDA Business Centers must serve~~
~~MBEs in any U.S. state or territory, and may provide services on a fee-for-services basis.34~~
~~Applicants eligible~~ Applicants eligible to compete to operate an MBDA Business Center include nonprofit to compete to operate an MBDA Business Center include nonprofit
organizations, for-profit firms, state and local governments, educational institutions, and Native organizations, for-profit firms, state and local governments, educational institutions, and Native
American tribal entities. Operators are expected to contribute nonfederal cost share funding.American tribal entities. Operators are expected to contribute nonfederal cost share funding.56 The The
MBDA’s MBDA’s ~~online~~ “List of MBDA Centers” currently includes “List of MBDA Centers” currently includes 2735 Business Centers in 29 states and Puerto Rico, including nine locations new as of FY2021.57 MBDA Business Centers provide services on a fee-for-services basis.58 In light of the COVID-19 pandemic, MBDA and its network of Business Centers increased or shifted more activities to online events and fora and other virtual communications tools.59 Specialty Centers The MBDA also supports Business Centers that provide specialized business development services and technical assistance (“Specialty Centers”). The Minority Business Development Act of 2021 defines Specialty Centers as MBDA Business Centers that provide specialty services focusing on specific business needs, including assistance relating to 55 P.L. 117-58, Sec. 100111. 56 Operators are expected to contribute one-third of the amount of the financial assistance. Operators may request a reduced cost share requirement based on need. P.L. 117-58, Sec. 100111. 57 For a list of Business Centers, see https://www.mbda.gov/mbda-programs/business-centers. See also ~~Business Centers.35 In FY2021,~~
~~MBDA plans to fund 36 Business Centers in 29 states for a five-year term.36~~

~~31 The DOC strategic goals are outlined in the 2018-2022 Strategic Plan, Helping the American Economy Grow, and~~
~~include (1) accelerating American leadership through commercial space activities, foundational research investments,~~
~~and protecting intellectual property; (2) enhancing job creation through increased exports and foreign direct investment;~~
~~(3) strengthening U.S. economic and national security; (4) fulfilling Constitutional requirements and supporting~~
~~economic activity with reliable data; and (5) excelling in the delivery of customer-centric services. See~~
~~https://www.commerce.gov/sites/default/files/us_department_of_commerce_2018-2022_strategic_plan.pdf.~~
~~32 U.S. Department of Commerce, FY2021 MBDA Congressional Budget Justification, https://www.commerce.gov/~~
~~sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf.~~
~~33 MBDA, “Grants,” https://www.mbda.gov/grants.~~
~~34 MBDA,~~ ~~MBDA Notice of Funding Opportunity (NOFO)—MBDA Business Center Program, FY2021, MBDA-OBD-~~
~~2021-2006809, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda.~~
~~35 For a list of Business Centers, see https://www.mbda.gov/mbda-programs.~~
36 MBDA, MBDA, MBDA Notice of Funding Opportunity (NOFO)—MBDA Business Center Program , FY2021, MBDA-OBD-
2021-2006809, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda, ; and MBDA, “and MBDA, “~~Business~~
Business Services,” https://www.mbda.gov/page/business-services.Services,” https://www.mbda.gov/page/business-services. ~~The NOFO states that prospective funding is contingent upon~~
~~the availability of funds from Congress, satisfactory performance, and continued relevance to program objectives (p.~~
~~9).~~
~~Congressional Research Service~~

8 58 P.L. 117-58, Sec. 100111. Prior to the Minority Business Development Act of 2021’s enactment, the FY2021 NOFO for the MBDA Business Center program indicated that programs should be located in areas with the largest concentration of minority populations and the largest number of minority businesses. MBDA Business Centers were directed to serve MBEs in any U.S. state or territory. Following the Minority Business Development Act of 2021, the Under Secretary will develop criteria for selection of MBDA Business Centers. 59 By example, see the online 2021 Minority Enterprise Development Week event, https://www.mbda.gov/medweek-2021. Congressional Research Service 12

The Minority Business Development Agency: An Overview of Its History and Programs
 capital access;  federal procurement;  entrepreneurship;  technology transfer; or  any other area determined necessary or appropriate based on the priorities of the agency.60 In FY2021, MBDA administered
~~Specialty Centers~~
~~MBDA also supports Business Centers that provide specialized business development services~~
~~and technical assistance (“Specialty Centers”). In FY2021, MBDA announced~~ Notices of Funding Notices of Funding
Opportunity for Specialty Centers focused Opportunity for Specialty Centers focused on exports, advanced manufacturing, and federal on exports, advanced manufacturing, and federal
procurement.procurement.3761
  Export Centers seek to expand access to new and global markets and to help seek to expand access to new and global markets and to help
identify, screen, promote, and refer MBEs to exporting resources. identify, screen, promote, and refer MBEs to exporting resources. ~~In FY2020,~~
~~there were four~~ MBDA export centers MBDA export centers are located in located in ~~Chicago, IL; Miami, FL; San~~
~~Antonio, TX; and Sacramento, CA. In FY2021, MBDA plans to fund four export~~
~~centers for a five-year term.38~~
~~ Advanced Manufacturing Centers assist advanced manufacturing MBEs in~~
~~obtaining large scale contracts; accessing established supply chains; supporting~~
~~MBEs in joint ventures, teaming arrangements, mergers, and acquisitions; and~~
~~facilitating entry and large-scale transactions in global markets. In FY2020, there~~
~~were four MBDA advanced manufacturing centers located in Atlanta, GA;~~
~~Detroit, MI; Baltimore, MD; and San Antonio, TX. In FY2021, MBDA plans to~~
~~fund four advanced manufacturing centers for a five-year term.39~~Mesa, AZ; Houston, TX; Miami, FL; and San Antonio, TX.62  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 domestical y and global y.”63 MBDA advanced manufacturing centers are located in East Hartford, CT; Baltimore, MD; Louisvil e, KY; and San Antonio, TX.64
  The Federal Procurement Center provides services designed to generate provides services designed to generate
increased federal procurement and acquisition opportunities for MBEs. In increased federal procurement and acquisition opportunities for MBEs. In
~~FY2020~~FY2021, the federal procurement center was located in , the federal procurement center was located in ~~Alexandria, VA. In~~
~~FY2021, MBDA plans to fund one federal procurement center for a five-year~~
~~term.40~~
~~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~~
~~Section (8)(a) Business Development program for socially and economically disadvantaged small~~
~~businesses (as well as other SBA programs), or to transition from the 8(a) program to the private~~

~~37 For a list of Specialty Centers, see https://www.mbda.gov/mbda-programs.~~
~~38 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs, and MBDA, MBDA~~ Washington, DC.65 60 P.L. 117-58, Sec. 100002. See also MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty-centers. 61 Prior to the announcement of the FY2021 Business Center and Specialty Center awards, there were four MBDA export centers, four MBDA advanced manufacturing centers, and one federal procurement center. Prior to the FY2021 awards,  the export centers were previously located in Chicago, IL; Miami, FL; San Antonio, T X; and Sacramento, CA;  the advanced manufacturing centers were previously located in Atlanta, GA; Detroit, MI; Baltimore, MD; and San Antonio, T X; and  the federal procurement center was located in Alexandria, VA. 62 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA NOFO—Export Project, NOFO—Export Project,
FY2021, MBDA-OBD-2021-2006815, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda.FY2021, MBDA-OBD-2021-2006815, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda. ~~The~~ T he
NOFO states that prospective funding is contingent upon the availability of funds from Congress, satisfactory NOFO states that prospective funding is contingent upon the availability of funds from Congress, satisfactory
performance, and continued relevance to program objectives, and Export Center operators are expected to contribute performance, and continued relevance to program objectives, and Export Center operators are expected to contribute
nonfederal cost share fundingnonfederal cost share funding (pp. 6-7).(pp. 6-7).
39 63 MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty-centers. 64 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs, ; and MBDA, MBDAand MBDA, MBDA NOFO—Advanced NOFO—Advanced
Manufacturing Project, FY2021, MBDA-OBD-2021-2006811, https://www.grants.gov/web/grants/search-grants.html?Manufacturing Project, FY2021, MBDA-OBD-2021-2006811, https://www.grants.gov/web/grants/search-grants.html?
keywords=mbda.keywords=mbda. ~~The~~ T he NOFO states that prospective funding is contingent upon the availability of funds from Congress, NOFO states that prospective funding is contingent upon the availability of funds from Congress,
satisfactory performance, and continued relevance to program objectives, and Advanced Manufacturing Center satisfactory performance, and continued relevance to program objectives, and Advanced Manufacturing Center
operators are not required to contribute nonfederal cost share funding (ppoperators are not required to contribute nonfederal cost share funding (pp . 7-8). . 7-8).
4065 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs, ; and MBDA, MBDAand MBDA, MBDA NOFO—Federal NOFO—Federal
Procurement Project, FY2021, MBDA-OBD-2021-2006824, https://www.grants.gov/web/grants/search-grants.html?Procurement Project, FY2021, MBDA-OBD-2021-2006824, https://www.grants.gov/web/grants/search-grants.html?
keywords=mbda.keywords=mbda. ~~The~~ T he NOFO states that prospective funding is contingent upon the availability of funds from Congress, NOFO states that prospective funding is contingent upon the availability of funds from Congress,
satisfactory performance, and continued relevance to satisfactory performance, and continued relevance to ~~program~~p rogram objectives, and Federal objectives, and Federal Procurement Center operators Procurement Center operators
are expected to contribute nonfederal cost share funding (p. 7). are expected to contribute nonfederal cost share funding (p. 7).
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~~sector.41 MBDA works with other Department of Commerce agencies and the EXIM Bank of the~~
~~United States to encourage MBE participation in international trade, and partners with the~~
~~Department of Energy’s Office of Economic Impact to expand opportunities for MBE business in~~
~~the energy supply chain.42 Through the InVision Tour initiative, MBDA has partnered with~~
~~several agencies to support minority innovation and entrepreneurship in space technology, smart~~
~~cities, satellites~~ Rural Business Centers The Minority Business Development Act of 2021 established a new Rural Business Center program to be implemented by MSIs for services to MBEs in rural areas.66 The program wil 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 skil s, 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 chal enges faced by rural MBEs.67 Entrepreneurship Education Development Activities The Minority Business Development Act of 2021 also authorized new entrepreneurship education development activities, including the Parren J. Mitchel Entrepreneurship Education Grants Program for grants to eligible institutions (e.g., HBCUs, MSIs, tribal colleges or universities, among others). The act also directed the 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 social y or economical y disadvantaged individuals.68 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 Section (8)(a) Business Development program for social y and economical y disadvantaged smal businesses (as wel as other SBA programs), or to transition from the 8(a) program to the private sector.69 MBDA works with other Department of Commerce agencies and the EXIM Bank of the 66 T he Minority Business Development Act of 2021 authorized to be appropriated $20 million to the program each year for FY2021 through FY2025. Rural areas are defined in statute as having the meaning given the term in section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. §1991(a)). See P.L. 117-58, Sec. 100301. 67 P.L. 117-58, Sec. 100302. 68 P.L. 117-58, Sec. 100203. 69 MBDA, “ T he Minority Business Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development -agency-vital-making-america-great. For more information on the SBA’s Section (8)(a) program, see CRS Report R44844, SBA’s “8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger. Congressional Research Service 14 The Minority Business Development Agency: An Overview of Its History and Programs United States to encourage MBE participation in international trade, and partners with the Department of Energy’s Office of Economic Impact to expand opportunities for MBE business in the energy supply chain.70 Through the InVision Tour initiative, MBDA has partnered with several agencies to support minority innovation and entrepreneurship in space technology, smart cities, satel ites, aerospace, and related industries. InVision Tour partners include , aerospace, and related industries. InVision Tour partners include
NASA’s Johnson Space Center, the Environmental Protection Agency (EPA), and agencies of the NASA’s Johnson Space Center, the Environmental Protection Agency (EPA), and agencies of the
Departments of Commerce, Defense, Energy, Health and Human Services, the Interior, and Departments of Commerce, Defense, Energy, Health and Human Services, the Interior, and
Homeland Security, among others.Homeland Security, among others.43
71 Additional Additional ~~MBDA initiatives~~ MBDA initiatives have involved partners such as the U.S. India have involved partners such as the U.S. India ~~Small~~ Smal Medium Medium
Entrepreneurs (SME) Council, the U.S. Pan Asian American Chamber of Commerce Entrepreneurs (SME) Council, the U.S. Pan Asian American Chamber of Commerce
(USPAACC), the National Minority Supplier Development Council, the National Business (USPAACC), the National Minority Supplier Development Council, the National Business
League, U.S. Chamber of Commerce, and others.League, U.S. Chamber of Commerce, and others.4472 MBDA’s participation in interagency groups MBDA’s participation in interagency groups
and commissions includes the President’s Advisory Commission on Asian Americans and Pacific and commissions includes the President’s Advisory Commission on Asian Americans and Pacific
Islanders, among others.Islanders, among others.4573
MBDA MBDA assistance may also address specific assistance may also address specific ~~challenges~~chal enges or opportunities, support proof of concept or opportunities, support proof of concept
program models, meet presidential or departmental priorities, and facilitate the programs and program models, meet presidential or departmental priorities, and facilitate the programs and
~~initiatives~~ initiatives not addressed through the MBDA business center program.not addressed through the MBDA business center program.4674 For instance, in FY2019 For instance, in FY2019
and FY2020, the MBDAand FY2020, the MBDA funded projects designed to increase MBE participation in advanced funded projects designed to increase MBE participation in advanced
technology and innovation sectors. In FY2020, MBDA grants funded a capital formation technology and innovation sectors. In FY2020, MBDA grants funded a capital formation
initiativeinitiative and the Minority Growth Equity Fund Initiative (MGEFI), among others.and the Minority Growth Equity Fund Initiative (MGEFI), among others.4775 Additional, Additional,
targeted MBDA initiativestargeted MBDA initiatives include the Enterprising Women of Color (EWOC) initiativeinclude the Enterprising Women of Color (EWOC) initiative and and
centers, the American Indian, Alaska Native, and Native centers, the American Indian, Alaska Native, and Native ~~Hawaiian~~ Hawai an (AIANNH) projects, the Entrepreneurship Education Programs for Formerly Incarcerated Persons, and the Inner-City Innovation Hub Program.76 70 EXIM Bank, “EXIM Signs Memorandum of Understanding with U.S. ~~(AIANNH) projects, the~~

~~41 MBDA, “The Minority Business Development Agency: Vital to Making America Great,” https://www.mbda.gov/~~
~~page/minority-business-development-agency-vital-making-america-great.~~
~~For more information on the SBA’s Section (8)(a) program, see CRS Report R44844,~~ ~~SBA’s “8(a) Program”:~~
~~Overview, History, and Current Issues, by Robert Jay Dilger.~~
~~42 EXIM Bank, “EXIM Signs Memorandum of Understanding with U.S.~~ Department of Commerce Minority Business Department of Commerce Minority Business
Development Agency,” September, 14, 2020, https://www.exim.gov/news/exim-signs-memorandum-understanding-Development Agency,” September, 14, 2020, https://www.exim.gov/news/exim-signs-memorandum-understanding-
departmentdepartment -commerce-minority-business-development-commerce-minority-business-development -agency, and MBDA, “-agency, and MBDA, “ 2020 Year in Review,” 2020 Year in Review,”
https://www.mbda.gov/2020-year-in-review. https://www.mbda.gov/2020-year-in-review.
4371 MBDA, “InVision MBDA, “InVision ~~Tour~~T our,” https://www.mbdainvision.com/. ,” https://www.mbdainvision.com/.
4472 MBDA, “2020 Year in Review,” MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review, and Black Enterprise, “Black https://www.mbda.gov/2020-year-in-review, and Black Enterprise, “Black
Enterprise, Minority Business Development Agency Partner to Help Black BusinessesEnterprise, Minority Business Development Agency Partner to Help Black Businesses ~~Gain Access~~ Gain Access to Innovation and to Innovation and
Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-business-development-agency-Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-business-development-agency-
black-businesses/. black-businesses/.
4573 MBDA, “ MBDA, “ White House Initiative on Asian Americans and Pacific Islanders,”White House Initiative on Asian Americans and Pacific Islanders,” https://www.mbda.gov/WHIAAPI,https://www.mbda.gov/WHIAAPI, and and
Black Enterprise, “Black Enterprise, Minority Business Development Agency Partner to Help Black BusinessesBlack Enterprise, “Black Enterprise, Minority Business Development Agency Partner to Help Black Businesses Gain Gain
AccessAccess to Innovation and Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-to Innovation and Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-
business-developmentbusiness-development -agency-black-businesses/. -agency-black-businesses/.
4674 MBDA may use Broad MBDA may use Broad Agency Agreements (BAAs) and unsolicited proposals to respond to specific challenges or Agency Agreements (BAAs) and unsolicited proposals to respond to specific challenges or
opportunities. See MBDA, “Frequently Askedopportunities. See MBDA, “Frequently Asked Questions—2018 MBDA Broad Agency Announcement,” Questions—2018 MBDA Broad Agency Announcement,”
https://www.mbda.gov/sites/default/files/2018baafrequentlyaskedquestions070918.pdf, and Department of Commerce, https://www.mbda.gov/sites/default/files/2018baafrequentlyaskedquestions070918.pdf, and Department of Commerce,
FY2021 MBDA Congressional Budget Justification , p. 17, https://www.commerce.gov/sites/default/files/2020-02/, p. 17, https://www.commerce.gov/sites/default/files/2020-02/
fy2021_mbda_congressional_budget_justification.pdf. fy2021_mbda_congressional_budget_justification.pdf.
4775 MBDA, MBDA, MBDA FY2021 Congressional Budget Justification, pp. 12-20, 23, https://www.commerce.gov/sites/default/, pp. 12-20, 23, https://www.commerce.gov/sites/default/
files/2020-02/fy2021_mbda_congressional_budget_justification.pdf; and MBDA, “files/2020-02/fy2021_mbda_congressional_budget_justification.pdf; and MBDA, “ MBDA AwardsMBDA Awards $5.1 Million in $5.1 Million in
Grants,” October 23, 2020, https://www.mbda.gov/news/news-and-announcements/2020/10/minority-business-Grants,” October 23, 2020, https://www.mbda.gov/news/news-and-announcements/2020/10/minority-business-
developmentdevelopment -agency-awards-51-million-grants. -agency-awards-51-million-grants.
~~The~~T he American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects are also awarded American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects are also awarded ~~through BAAs.~~
through BAAs. 76 MBDA, “MBDA Awards $5.1 Million in Grants,” October 23, 2020, https://www.mbda.gov/news/news-and-announcements/2020/10/minority-business-development -agency-awards-51-million-grants. Congressional Research Service Congressional Research Service

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~~Entrepreneurship Education Programs for Formerly Incarcerated Persons, and the Inner-City~~
~~Innovation Hub Program.48~~
~~Minority~~ Minority Growth Equity Funds Initiative and Equity Multiplier Project
Barriers to capital—including, but not limited to growth capital—limit expansion and scale Barriers to capital—including, but not limited to growth capital—limit expansion and scale
opportunities for many MBEs. In FY2020, an MBDAopportunities for many MBEs. In FY2020, an MBDA award established the Minority Growth award established the Minority Growth
Equity Fund Initiative (MGEFI). The MGEFI is to expand access to capital by facilitating the Equity Fund Initiative (MGEFI). The MGEFI is to expand access to capital by facilitating the
aggregation and deployment of $1 aggregation and deployment of $1 ~~billion~~ bil ion in growth equity capital to MBEs.in growth equity capital to MBEs.4977 In FY2021, MBDA In FY2021, MBDA
announced the Equity Multiplierannounced the Equity Multiplier Project, which Project, which ~~will~~ wil fund technical assistance to expand MBE’s fund technical assistance to expand MBE’s
access to capital. The Equity Multiplier Project focuses on capacity building, venture capital access to capital. The Equity Multiplier Project focuses on capacity building, venture capital
readiness, and increasing access to equity and venture investment and investors.readiness, and increasing access to equity and venture investment and investors.5078
Enterprising Women of Color (EWOC)
Entrepreneurship is often viewed as a strategy for economic growth and individual economic Entrepreneurship is often viewed as a strategy for economic growth and individual economic
independence. Minority women are considered the fastest growing population of entrepreneurs.independence. Minority women are considered the fastest growing population of entrepreneurs.5179
MBDA-supported entrepreneurship programs include activities designed to support minority MBDA-supported entrepreneurship programs include activities designed to support minority
women business owners. Through the Enterprising Women of Color (EWOC) initiative, launched 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 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 professional networks. The EWOC initiative also provided assistance to five projects focused on
minority women business enterprises beginning in FY2020.minority women business enterprises beginning in FY2020.52
80 American Indian Alaska Native / Native Hawaiian (AIANNH) Initiatives
~~MBDA~~ MBDA provides assistance to entities with an expertise in American Indian, Alaska Native, and provides assistance to entities with an expertise in American Indian, Alaska Native, and
Native Native ~~Hawaiian~~ Hawai an (AIANNH)(AIANNH) business for projects that focus on business for projects that focus on ~~job creation and retention and~~
~~economic impact for AIANNH communities and businesses.~~one or more of the following three strategic initiatives: (1) innovation and entrepreneurship; (2) strategic planning; and/or (3) transformative projects.81 AIANNH projects may provide a AIANNH projects may provide a
range of services including, but not limited to: entrepreneurial assistance, training, capital access, range of services including, but not limited to: entrepreneurial assistance, training, capital access,

~~48 MBDA, “MBDA Awards $5.1 Million in Grants,” October 23, 2020, https://www.mbda.gov/news/news-and-~~
~~announcements/2020/10/minority-business-development-agency-awards-51-million-grants.~~
~~49 MBDA, “MBDA Awards NAIC Million Dollar Grant to Raise~~ 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 77 MBDA, “ MBDA Awards NAIC Million Dollar Grant to Raise $1 Billion for Investment in Minority Entrepreneurs,”$1 Billion for Investment in Minority Entrepreneurs,”
October 4, 2019, https://www.mbda.gov/news/press-releases/2019/10/mbda-awards-naic-million-dollar-grantOctober 4, 2019, https://www.mbda.gov/news/press-releases/2019/10/mbda-awards-naic-million-dollar-grant -raise-1--raise-1-
billion-investmentbillion-investment , and MBDA, “, and MBDA, “ 2020 Year in Review,” https://www.mbda.gov/2020-year-in-review. 2020 Year in Review,” https://www.mbda.gov/2020-year-in-review.
5078 MBDA, MBDA, FY2021 Notice of Funding Opportunity—Equity Multiplier Project, MBDA-OBD-2021- 2006868, , MBDA-OBD-2021- 2006868,
https://www.grants.gov/web/grants/search-grants.html?keywords=mbda. https://www.grants.gov/web/grants/search-grants.html?keywords=mbda.
5179 American Express’ American Express’ State of Women-Owned Businesses Report, 2019 (see https://about.americanexpress.com/all-(see https://about.americanexpress.com/all-
news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-On-Average-news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-On-Average-~~Than~~T han-All-Businesses--All-Businesses-
Nationwide/default.aspx). Nationwide/default.aspx). ~~The~~T he report is based report is based on data from the U.S. Censuson data from the U.S. Census ~~Bureau Survey of Business Owners (SBO).~~
~~The~~ Bureau Survey of Business Owners (SBO). T he report noted that although SBO “is conducted every year in years ending in two and report noted that although SBO “is conducted every year in years ending in two and seven. Data from the seven. Data from the ~~2012~~20 12
CensusCensus surveys weresurveys were collated, analyzed and extrapolated forward to 2019, factoring in relative changes in Gross collated, analyzed and extrapolated forward to 2019, factoring in relative changes in Gross
Domestic Product (GDP) not only nationally but also at industry, state and metropolitan statistical area levels. All GDP Domestic Product (GDP) not only nationally but also at industry, state and metropolitan statistical area levels. All GDP
data wasdata was obtained from the U.S. Bureauobtained from the U.S. Bureau of Economic Analysis (bea.gov).” of Economic Analysis (bea.gov).”
5280 MBDA, “Enterprising Women of Color (EWOC),” https://www.mbda.gov/enterprising-women-of-color, and MBDA, “Enterprising Women of Color (EWOC),” https://www.mbda.gov/enterprising-women-of-color, and
MBDA, “MBDA, “ Grant Awards,”Grant Awards,” https://www.mbda.gov/grantawards.https://www.mbda.gov/grantawards.
In the FY2020 EWOC Notice of Funding In the FY2020 EWOC Notice of Funding Opportunity (NOFO), MBDA cited measuresOpportunity (NOFO), MBDA cited measures of growth in levels of minority of growth in levels of minority
women entrepreneurship as reported by American Express’ women entrepreneurship as reported by American Express’ State of ~~Women~~Wom en-Owned Businesses Report, 2019 (see (see
https://about.americanexpress.com/all-news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-https://about.americanexpress.com/all-news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-
On-Average-On-Average-~~Than~~T han-All-Businesses-Nationwide/default.aspx). Highlights include-All-Businesses-Nationwide/default.aspx). Highlights include “ “as of 2019, 6.4 million minority-as of 2019, 6.4 million minority-
ownedowned women businesseswomen businesses employed nearly 2.4 million people and generated $422.5 billion in revenue, andemployed nearly 2.4 million people and generated $422.5 billion in revenue, and women-women-
ownedowned ~~businesses~~ businesses represent 42% of all businesses,represent 42% of all businesses, ~~among others.”~~
among others.” 81 MBDA, “AIANNH Projects,” https://www.mbda.gov/aiannhprojects. Congressional Research Service Congressional Research Service

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~~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, the agency supported 13 entities. In FY2019-FY2021, the agency supported 13
projects designed to address specific needs projects designed to address specific needs of Native American businesses.of Native American businesses.5382 In FY2021, MBDA In FY2021, MBDA
~~plans to fund~~funded 13 AIANNH projects. 13 AIANNH projects.5483
Entrepreneurship Education Programs for Formerly Incarcerated Persons
The Entrepreneurship Education Programs for Formerly Incarcerated Persons are designed to The Entrepreneurship Education Programs for Formerly Incarcerated Persons are designed to
provide individualsprovide individuals with with ~~skills~~skil s and a business network to enable them to start their own business 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 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 and other sources, researchers have linked recidivism to unemployment, education level, and
~~inability~~ inability to reintegrate into communities after prison.to reintegrate into communities after prison.55
84 Inner City Innovation Hub Program
The Inner City Innovation Hub program supports new and established entrepreneurs in inner 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 cities and urban areas with high concentrations of minority populations and MBEs. The program
focuses on entrepreneurship, digital innovation, artificial focuses on entrepreneurship, digital innovation, artificial ~~intelligence~~intel igence, and research and , and research and
technology transfer. Recent awards facilitate the growth of MBEs in technology transfer. Recent awards facilitate the growth of MBEs in ~~regionally~~regional y-specific industry -specific industry
concentrations, such as the aerospace industry, and by providing technical assistance to MBEs concentrations, such as the aerospace industry, and by providing technical assistance to MBEs
through accelerators, incubators, and co-working spaces and university-focused technology, through accelerators, incubators, and co-working spaces and university-focused technology,
artificial artificial ~~intelligence~~intel igence, technology, research, mergers, and acquisitions., technology, research, mergers, and acquisitions.56
85 National ~~Minority~~ Minority Enterprise Development (MED) Week
According to MBDA, since 1983, every president has issued a Presidential Proclamation According to MBDA, since 1983, every president has issued a Presidential Proclamation
designating one week as National Minority Enterprise Development (MED) Week.designating one week as National Minority Enterprise Development (MED) Week.5786 The event The event
highlights the role of minority entrepreneurs in creating jobs, products, and services, and 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 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. conference panel focused on global markets and the National Minority Business Awards Program.

53 82 MBDA, MBDA, FY2019 Notice of Funding Opportunity—AIANNH Projects, MBDA-OBD-2019-2006047, , MBDA-OBD-2019-2006047,
https://www.grants.gov/web/grants/view-opportunity.html?oppId=315200. For a listhttps://www.grants.gov/web/grants/view-opportunity.html?oppId=315200. For a list of current AIANNH projects, see MBDA, “ AIANNH Projects,” https://www.mbda.gov/aiannhprojects. A list and map of prior ~~and map of~~ AIANNH projectsAIANNH projects~~, see~~
is available at https://www.mbda.gov/sites/default/files/aiannh_2.pdf.https://www.mbda.gov/sites/default/files/aiannh_2.pdf. See also MBDA, “See also MBDA, “ Minority Business Development Agency Minority Business Development Agency
~~Awards~~ Awards $3.6 Million for Business$3.6 Million for Business Development in Indian Country,” September 26, 2019, https://www.mbda.gov/news/Development in Indian Country,” September 26, 2019, https://www.mbda.gov/news/
press-releases/2019/09/minority-business-development-agency-awards-36-million-business,press-releases/2019/09/minority-business-development-agency-awards-36-million-business, and “and “ Native American Native American
~~Success~~ Success Stories,” https://www.mbda.gov/native-american-success-stories. Stories,” https://www.mbda.gov/native-american-success-stories.
54 83 MBDA, “AIANNH Projects,” https://www.mbda.gov/aiannhprojects; and MBDA, MBDA, FY2021 Notice of Funding Opportunity—AIANNH Projects,, MBDA-OBD-2021-2006916, MBDA-OBD-2021-2006916,
https://www.grants.gov/web/grants/search-grants.html?keywords=mbda.https://www.grants.gov/web/grants/search-grants.html?keywords=mbda.
55 84 MBDA, MBDA, FY2020 Notice of Funding Opportunity—Entrepreneurship Education Programs for Formerly Incarcerated
Persons, MBDA-OBD-2020-2006457, April 2020, https://www.mbda.gov/sites/default/files/2020-10/, MBDA-OBD-2020-2006457, April 2020, https://www.mbda.gov/sites/default/files/2020-10/
Entrepreneurship%20Education%20Program%20for%20Formerly%20Incarcerated%20Persons_Full%20AnnouncemeEntrepreneurship%20Education%20Program%20for%20Formerly%20Incarcerated%20Persons_Full%20Announceme
nt%20%28April%202020%29.pdf. nt%20%28April%202020%29.pdf.
5685 MBDA, MBDA, Notice of Funding Opportunity—Inner City Innovation Hubs, MBDA-OBD-2020-2006442, April 2020, , MBDA-OBD-2020-2006442, April 2020,
https://www.mbda.gov/sites/default/files/2020-10/https://www.mbda.gov/sites/default/files/2020-10/
Inner%20City%20Innovation%20Hubs_Full%20Announcement%20%28April%202020%29.pdfInner%20City%20Innovation%20Hubs_Full%20Announcement%20%28April%202020%29.pdf , and MBDA, “, and MBDA, “ Grant Grant
Awards,”Awards,” https://www.mbda.gov/grantawards.https://www.mbda.gov/grantawards.
57 86 MBDA, “ MBDA, “ MBDA Announces 2019 National MED Week AwardMBDA Announces 2019 National MED Week Award Winners,” https://medweek.mbda.gov/awards-Winners,” https://medweek.mbda.gov/awards-
program. program.
Congressional Research Service Congressional Research Service

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~~link to page 30~~ 17 The Minority Business Development Agency: An Overview of Its History and Programs

MBDA MBDA also coordinates, sponsors, and participates in other national events, such as Buy Minority also coordinates, sponsors, and participates in other national events, such as Buy Minority
Business Enterprises Day, among others.Business Enterprises Day, among others.5887
Other Initiatives
~~Additional initiatives~~ The Minority Business Development 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 the MBDA mission and priorities of the Department and activities support the MBDA mission and priorities of the Department
of Commerce. For instance, MBDA initiativesof Commerce. For instance, MBDA initiatives include global and domestic Business-to-Business include global and domestic Business-to-Business
(B2B) efforts to expand MBE access to domestic and global markets. In March 2020, in (B2B) efforts to expand MBE access to domestic and global markets. In March 2020, in
collaboration with Amazon Business, the MBDAcollaboration with Amazon Business, the MBDA launched the Minority Business and Technology launched the Minority Business and Technology
Initiative,Initiative, to expand MBE participation in e-commerce and the use of digital technology for to expand MBE participation in e-commerce and the use of digital technology for
domestic and international sales.domestic and international sales.5988 MBDA MBDA and Business Center partners participate in Global and Business Center partners participate in Global
B2BB2B efforts in Africa, Asia, Latin America, and the Caribbean. MBDAefforts in Africa, Asia, Latin America, and the Caribbean. MBDA has also joined trade has also joined trade
missions and partnered with the Department of Commerce International Trade Administration, the missions and partnered with the Department of Commerce International Trade Administration, the
EXIM Bank, and other agencies and organizations to expand export opportunities for MBEs.EXIM Bank, and other agencies and organizations to expand export opportunities for MBEs.6089
Performance Metrics
The MBDAThe MBDA uses several performance metrics to measure its effectiveness, includinguses several performance metrics to measure its effectiveness, including:
 dollar value of contracts secured for MBDA clients,  dollar value of contracts secured for MBDA clients,
 dollar value of capital secured for MBDA clients,  dollar value of capital secured for MBDA clients,
 number of jobs created, and  number of jobs created, and
 number of jobs retained.  number of jobs retained.
According to the latest data available, in FY2020, the MBDA According to the latest data available, in FY2020, the MBDA reported 27,317 jobs were created reported 27,317 jobs were created
or retained with the assistance of MBDA resources.or retained with the assistance of MBDA resources.6190 MBDA’s measure of jobs created or 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 retained included the number of new full-time and/or part-time positions reported on the client’s
payroll, and positions MBDApayroll, and positions MBDA clients would have eliminated without the contract and/or financing clients would have eliminated without the contract and/or financing
obtained with the MBDA’s help.obtained with the MBDA’s help.6291 Although the value of contracts measures both public and Although the value of contracts measures both public and
private sector activity, in FY2020, approximately 70% of contracts that MBDA helped MBEs to private sector activity, in FY2020, approximately 70% of contracts that MBDA helped MBEs to
~~secure were for private sector deals.63 See Appendix C for a summary of assessments and~~
~~evaluations of the agency.~~

~~58 U.S.~~ 87 U.S. Department of Commerce, “Minority Business Development Agency: Agency Information Collection Department of Commerce, “Minority Business Development Agency: Agency Information Collection
Activities; SubmissionActivities; Submission to the to the ~~Ofice~~Office of Management and Budget of Management and Budget (OMB) for Review(OMB) for Review and Approval; Comment Request; and Approval; Comment Request;
National Minority Business Awards,”National Minority Business Awards,” 86 86 Federal Register 10544-10545, February 22, 2021, and MBDA, “Minority 10544-10545, February 22, 2021, and MBDA, “Minority
Enterprise Development Week,” https://www.mbda.gov/MEDWeek. Enterprise Development Week,” https://www.mbda.gov/MEDWeek.
5988 MBDA, “ MBDA, “ Minority Business and Minority Business and ~~Technology~~T echnology Initiative,” https://www.mbda.gov/page/minority-business-and- Initiative,” https://www.mbda.gov/page/minority-business-and-
technology-initiative, and “technology-initiative, and “ The Minority Business Development Agency Launches the ‘Minority Business and The Minority Business Development Agency Launches the ‘Minority Business and
~~Technology~~T echnology Initiative’ with Amazon Business,” March 17, 2020, https://www.mbda.gov/news/press-releases/2020/03/ Initiative’ with Amazon Business,” March 17, 2020, https://www.mbda.gov/news/press-releases/2020/03/
minority-business-developmentminority-business-development -agency-launches-minority-business-and. -agency-launches-minority-business-and.
6089 DOC, DOC, FY2020-2022 Annual Performance Plan and Report, p. 61, https://www.commerce.gov/sites/default/files/, p. 61, https://www.commerce.gov/sites/default/files/
2021-01/DOC-FY20-22-APPR-Final.pdf, and MBDA, “2021-01/DOC-FY20-22-APPR-Final.pdf, and MBDA, “~~Global~~ Global Business:Business: Strategic Partners,” https://www.mbda.gov/Strategic Partners,” https://www.mbda.gov/
page/global-business-strategic-partners. page/global-business-strategic-partners.
6190 MBDA, “Annual Performance Summary, FY2021,” https://www.mbda.gov/sites/default/files/2021-04/ MBDA, “Annual Performance Summary, FY2021,” https://www.mbda.gov/sites/default/files/2021-04/
MBDA_FY%202020%20APR%20Summary_042121.pdfMBDA_FY%202020%20APR%20Summary_042121.pdf . .
6291 For definitions of MBDA For definitions of MBDA measures, seemeasures, see “MBDA Performance Metrics,” https://www.mbda.gov/sites/default/files/“MBDA Performance Metrics,” https://www.mbda.gov/sites/default/files/
2020-11/MBDA%20Performance%20Metrics.pdf. 2020-11/MBDA%20Performance%20Metrics.pdf.
~~63 David Byrd, National Director, MBDA, “Meeting Notes—President’s Advisory Commission on Asian Americans~~
~~and Pacific Islanders Fourth Quarterly Meeting and AAPI Town Hall,” January 13, 2021, https://www.commerce.gov/~~
~~sites/default/files/2021-02/PAC-~~
~~AAPI%20Fourth%20Quarterly%20Meeting%20Minutes%20Final_January%2013%202021.pdf.~~
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

Congressional Research Service 18 link to page 35 link to page 32 The Minority Business Development Agency: An Overview of Its History and Programs secure were for private sector deals.92 See Appendix B for a summary of assessments and evaluations of the agency. Table 1. MBDA Performance Metrics, FY2016–FY2020

FY2016
FY2017
FY2018
FY2019
FY2020
Total Value of Contracts Total Value of Contracts
$1.4 bil ion $1.4 bil ion
$3 bil ion $3 bil ion
$3.4 bil ion $3.4 bil ion
$3.1 bil ion $3.1 bil ion
$6.9 bil ion $6.9 bil ion
Total Value of Capital Total Value of Capital
$1.3 bil ion $1.3 bil ion
$4.9 bil ion $4.9 bil ion
$1.2 bil ion $1.2 bil ion
$1.8 bil ion $1.8 bil ion
$967 mil ion $967 mil ion
Jobs Created Jobs Created
5,784 5,784
10,191 10,191
10,196 10,196
10,366 10,366
11,597 11,597
Jobs Retained Jobs Retained
5,689 5,689
8,364 8,364
9,277 9,277
11,764 11,764
15,720 15,720
Source: MBDA,MBDA, “MBDA Annual Performance“MBDA Annual Performance Reports,”Reports,” https://www.mbda.gov/performance. https://www.mbda.gov/performance.
Notes: The source of data regarding contracts, financial transactions, and jobs created/retained are reported by The source of data regarding contracts, financial transactions, and jobs created/retained are reported by
MBDA BusinessMBDA Business Centers and are verifiedCenters and are verified by MBDA headquarters staff. The performance data date of retrieval by MBDA headquarters staff. The performance data date of retrieval
was Aprilwas April 30, 2021.30, 2021.
Considerations for Congress In considering the Minority Business Development Act of 2021’s implementation, Congress may continue its oversight role, focusing on the new and expanded activities authorized by the agency’s enabling legislation. Congress may also consider appropriations legislation and the confirmation of an Under Secretary of the MBDA. A perennial issue of congressional interest involves ~~Considerations for Congress~~
~~MBDA’s role and its services have shifted over time to address new and emerging challenges and~~
~~opportunities. Two perennial issues of congressional interest are (1) the absence of enabling~~
~~legislation and (2)~~ debates about the agency’s role in supplementing (or duplicating) other forms debates about the agency’s role in supplementing (or duplicating) other forms
of federal of federal assistance for businesses. In addition, there has been continued interest in developing assistance for businesses. In addition, there has been continued interest in developing
strategies to use the MBDAstrategies to use the MBDA to promote individualto promote individual economic mobility, as economic mobility, as ~~well~~ wel as broader national as broader national
economic growth, economic growth, ~~especially~~especial y with regard to reducing inequities and advancing minority with regard to reducing inequities and advancing minority
entrepreneurship, entrepreneurship, innovation, and business expansion activities. innovation, and business expansion activities.
~~Absence~~Implementation of Enabling Legislation As mentioned, the Minority Business Development Act of 2021 created several new programs and reporting requirements for the agency and authorized the appropriation of $110 mil ion each fiscal year from FY2021 through FY2025 (see Table A-1 for recent MBDA appropriations). Pending appropriations legislation, MBDA may seek to hire additional staff or otherwise increase its capacity to re-establish 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 wil have an opportunity to oversee al of these activities. For example, Congress may seek to monitor key milestones and engage with MBDA as it implements new structures, roles, and programs.93 Congress may also seek to monitor the 92 David Byrd, National Director, MBDA, “Meeting Notes—President’s Advisory Commission on Asian Americans and Pacific Islanders Fourth Quart erly Meeting and AAPI T own Hall,” January 13, 2021, https://www.commerce.gov/sites/default/files/2021-02/PAC-AAPI%20Fourth%20Quarterly%20Meeting%20Minutes%20Final_January%2013%202021.pdf . 93 P.L. 117-58, Sec. 100003 and Sec. 100401. Congressional Research Service 19 link to page 15 link to page 9 The Minority Business Development Agency: An Overview of Its History and Programs agency’s performance metrics, which may be revised to reflect expanded service areas and/or different types of outcomes.94 Additional y, the Senate may receive and consider a presidential nominee for the MBDA’s Under Secretary position. 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”).  the MBDA’s efforts to coordinate with other federal agencies in the “establishment, preservation, and strengthening of social y or economical y disadvantaged business concerns.”95  the MBDA’s required reports (see “Agency Establishment”). The MBDA is further tasked with evaluating the impact of federal support of social y or economical y disadvantaged business concerns.96 Duplication of SBA Activities Whether the MBDA complements or duplicates the SBA’s programs, especial y those programs targeted to minority populations (e.g., the Microloan program97) or the social y and economical y disadvantaged (e.g., the 8(a) Business Development Program98), has been a perennial issue of congressional interest. There have been several proposals in the past to terminate the MBDA and transfer its activities to the SBA. There have also been proposals ~~of Enabling Legislation~~
~~The MBDA was created by executive order. There have been a number of proposals over the~~
~~years to statutorily authorize the MBDA; none of these proposals have become law. Absent~~
~~specific statutory requirements, the President may exercise authority to effectively terminate the~~
~~MDBA’s discretionary activities at any time without congressional consultation or consent.~~
~~Nevertheless, Congress may (and has from time to time) appropriated funds to carry out specific~~
~~activities, and potentially supersede presidential discretion.64 In addition, Congress could revoke~~
~~or modify the executive order, potentially eliminating, expanding, or restricting the agency.~~
~~Alternatively, Congress could codify the order (and thus the agency) by enacting a statute. The~~
~~statute could modify the agency and its powers (subject to the usual constraints on congressional~~
~~action), and reduce or eliminate the President’s ability to terminate its functions.65~~

~~64 In general, when Congress appropriates a specific amount of budget authority for a specific purpose, the President~~
~~has only limited authority to order executive branch agencies to reduce or withhold funds. Decisions by federal courts,~~
~~including a unanimous decision by the Supreme Court in Train v City of New York, 420 U.S. 35 (1975), and the~~
~~enactment of the Congressional Budget and Impoundment Control Act of 1974, P.L. 93-344, clarified this. Specifically,~~
~~under ICA, the President can withhold funds for a limited time if he complies with specific reporting requirements to~~
~~Congress, but he cannot permanently prevent the obligation or expenditure of funds provided in law unless Congress~~
~~agrees.~~
~~65 For a discussion of congressional revocation and modification of executive orders see CRS Report R46738,~~
Executive Orders: An Introduction, by Kevin T. Richards.
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~Duplication of SBA Activities~~
~~Whether the MBDA complements or duplicates the SBA’s programs, especially those programs~~
~~targeted to minority populations (e.g., the Microloan program66) or the socially and economically~~
~~disadvantaged (e.g., the 8(a) Business Development Program67), has been a perennial issue.~~
~~Although there have been several calls for the MBDA’s termination and the transfer of its~~
~~activities to the SBA, there have also been suggestions~~ to transfer SBA programs that support to transfer SBA programs that support
minority business development to the MBDA (or a reorganized version of the agency within the minority business development to the MBDA (or a reorganized version of the agency within the
Department of Commerce).Department of Commerce).6899 MBDA’s proponents have argued that the agency complements MBDA’s proponents have argued that the agency complements
rather than conflicts with the SBA’s programs. The SBA focuses on rather than conflicts with the SBA’s programs. The SBA focuses on ~~small~~ smal businesses. The MBDA businesses. The MBDA
does not restrict its activities, referrals, or events based on business size. However, MBDAdoes not restrict its activities, referrals, or events based on business size. However, MBDA
BusinessBusiness Centers Centers ~~focus~~have recently focused on providing technical and business development services to minority on providing technical and business development services to minority
~~firms with employees and revenues that exceed $500,000.69~~
~~Proposals to Establish, Transfer, or Eliminate the Agency~~
~~Executive branch and legislative proposals have sought to transfer, eliminate, or—alternatively—~~
~~statutorily authorize the agency. Transferring or providing the agency statutory authorization~~
~~could change the agency’s role and visibility. Several reorganization plans from the late 1970s~~
~~through the 1990s from the executive branch would have moved the MBDA out of the~~
~~Department of Commerce.70 For instance, the George H.W. Bush Administration proposed to~~

66firms with employees and revenues that exceed $500,000.100 94 T he Minority Business Development Act of 2021 requires a report on the organizational structure of the agency and reports on other activities. 95 P.L. 117-58, Division K, T itle IV. 96 Ibid. 97 For further information and analysis of the Microloan program, see CRS For further information and analysis of the Microloan program, see CRS Report R41057, Report R41057, Small Business
~~Administration~~Adm inistration Microloan Program , by Robert Jay Dilger. , by Robert Jay Dilger.
6798 For further information and analysis of the 8(a) Business For further information and analysis of the 8(a) Business Development program, see CRSDevelopment program, see CRS Report R44844, Report R44844, SBA’s
“8(a) Program”: Overview, History, and Current Issues,, by Robert Jay Dilger, SBA’s “8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger. by Robert Jay Dilger.
6899 See See U.S.U.S. Commission on Minority BusinessCommission on Minority Business Development (CMBD), Development (CMBD), Final Report, 1992 (Washington, 1992 (Washington, ~~D. C.:~~
~~Government Printing Office)~~ DC: GPO) and U.S.and U.S. Congress, HouseCongress, House Committee on Small Business,Committee on Small Business, Minority Business Developm ent~~Minority Business~~
~~Development~~, H102-91, 102nd Cong., 2nd sess.,, H102-91, 102nd Cong., 2nd sess., September 24, 1992, pp. 7-8, 16 (WashingtonSeptember 24, 1992, pp. 7-8, 16 (Washington, DC: GPO, 1992). : GPO, 1992). ~~The~~
~~Commission~~T he commission was established was established by P.L. 100-656 to assessby P.L. 100-656 to assess and review federal programs designedand review federal programs designed to promote minority to promote minority
business development. business development.
69100 MBDA, MBDA, MBDA Notice of Funding Opportunity—Business Center Program, FY2021, https://www.grants.gov/web/, https://www.grants.gov/web/
grants/search-grants.html?keywords=MBDA-OBD-2021-2006809. grants/search-grants.html?keywords=MBDA-OBD-2021-2006809.
~~70 For example, in the 95th Congress, the Senate Committee on Appropriations urged “the Office of Management and~~
~~Budget to consider the merger of OMBE into SBA’s programs of assistance to minority businesses so that a unified~~
~~program will be available for consideration in the 1980 budget review.” See S.Rept. 95-1043.~~
~~In the 98th Congress, the Department of International Trade and Industry Act of 1983 (S. 121) proposed a transfer of~~
~~the MBDA to the SBA as one of several aspects of a reorganization plan for the Department of Commerce. See S.Rept.~~
~~98-374. Later, during the Reagan Administration, a memo from the Secretary of Commerce, James Baker, outlined a~~
~~proposal to reorganize the Department of Commerce and establish the Department of International Trade and Industry.~~
~~Included in the proposal are references to efforts to consolidate government and the following proposed action:~~
~~“Disposition of other elements of the Department of Commerce will be identical to the Administration proposal of the~~
~~98th Congress approved by OMB, except that PTO [Patent and Trademark Office] would go to Justice and MBDA~~
~~would go to HUD (unless SBA receives continued funding).” See Memo, Malcolm Baldrige to Edwin Meese, James~~
~~Baker, Richard Darman, January 5, 1985, folder “Cabinet Affairs (1)” box 6, James Baker Files, Ronald Reagan~~
~~Library. (At the time, Malcolm Baldrige was Secretary of the Department of Commerce, Edwin Meese was Counselor~~
~~to the President, and Richard Darman was Assistant to the President and Deputy to the Chief of Staff.)~~
~~In the 104th Congress, the Commerce Department Termination and Government Reorganization Act of 1995 (S. 929,~~
~~S.Rept. 104-164) and the Department of Commerce Dismantling Act (H.R. 1756, H.Rept. 104-260) proposed to~~
~~eliminate several Commerce agencies, including the MBDA. S. 929 and H.R. 1756 are noted in the analysis of trade~~
~~reorganization in CRS Report R42555, Trade Reorganization: Overview and Issues for Congress, by Shayerah I.~~
~~Akhtar.~~
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~~transfer the MBDA into the SBA in FY1989 and FY1990.71 In FY2018, the Trump~~
~~Administration recommended a $6 million budget for MBDA, to be used to close out the~~
~~agency.72 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.73~~
~~As previously noted, Congress has continued to provide the MBDA appropriations even as~~
~~various Administrations and legislative proposals have considered reorganizing the agency,~~
~~defunding the agency’s activities, or merging it into the SBA. Legislative proposals to transfer or~~
~~establish the MBDA and its programs are included in Appendix B and Table A-1 provides a~~
~~history of Administrations’ annual budget requests and enacted appropriations for the agency~~
~~since FY1970.~~
~~Additional Policy Proposals~~
~~Due to the unique set of challenges and circumstances faced by minority business owners, some~~
~~analysts and policymakers have called for new or expanded roles, services, and partnerships for~~
~~the MBDA, including ways for MBDA to respond to the economic impact of the COVID-19~~
~~pandemic.74~~

~~71 OMB, “Budget of the U.S. Government - FY1989,” pp. 5-69 and 5-70, available at https://fraser.stlouisfed.org/title/~~
~~54/item/18995; and “Budget of the U.S. Government—FY1990,” p. 5-78, available at https://fraser.stlouisfed.org/title/~~
~~54/item/18996.~~
~~72 OMB “Appendix: Budget of the U.S. Government, Fiscal Year 2018” (2017), p. 190, https://www.govinfo.gov/~~
~~content/pkg/BUDGET-2018-APP/pdf/BUDGET-2018-APP.pdf.~~
~~73 OMB, “Budget of the United States Government, Fiscal Year 2019,” (2018), p. 31, https://www.govinfo.gov/content/~~
~~pkg/BUDGET-2019-BUD/pdf/BUDGET-2019-BUD.pdf, and “Appendix: Budget of the United States Government,~~
~~Fiscal Year 2019” (2018), p. 189, https://www.govinfo.gov/content/pkg/BUDGET-2019-APP/pdf/BUDGET-2019-~~
~~APP.pdf; “Appendix: Budget of the United States Government, Fiscal Year 2020” (2019), p. 187,~~
~~https://www.govinfo.gov/content/pkg/BUDGET-2020-APP/pdf/BUDGET-2020-APP.pdf; and “Appendix: Budget of~~
~~the United States Government, Fiscal Year 2021” (2020), p. 198, https://www.govinfo.gov/content/pkg/BUDGET-~~
~~2021-APP/pdf/BUDGET-2021-APP.pdf.~~
~~74 Prior to the COVID-19 pandemic, researchers identified challenges~~ Congressional Research Service 20 The Minority Business Development Agency: An Overview of Its History and Programs Additional y, Title VI of the Minority Business Development Act of 2021 directs the Under Secretary “to ensure consistency with program goals and to avoid duplication” by reviewing al 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.101 Additional Considerations MBDA financial and technical assistance has been designed to build wealth, expand employment opportunities, and increase MBE capital access and economic activity in order to improve individual outcomes and build local and national economies. Over the years, due to the unique set of chal enges and circumstances faced by minority business owners, some analysts and policymakers have cal ed for the MBDA to take on new or expanded roles, services, and partnerships. The Minority Business Development Act of 2021 expanded the MBDA’s scope of activities by providing it several new roles and programs. As Congress reviews options to support economic development, the MBDA may continue to offer existing and potential y 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 chal enges faced by MBEs as wel as other options to involve MBDA in additional convening, coordinating, and assistance roles.102 101 P.L. 117-58, Division K, T itle IV. 102 Prior to the COVID-19 pandemic, researchers identified challenges and outcomes that are unique to MBEs and small and outcomes that are unique to MBEs and small
~~MBEs~~ MBEs in particular. For reports on aspects of minority businessin particular. For reports on aspects of minority business ownership, includingownership, including capital accesscapital access and and
entrepreneurship, see MBDA, “Demographic entrepreneurship, see MBDA, “Demographic ~~Trends~~T rends Publications,” https://www.mbda.gov/page/demographic-trends- Publications,” https://www.mbda.gov/page/demographic-trends-
publications; Robert W. Fairlie, Alicia Robb,publications; Robert W. Fairlie, Alicia Robb, and David Tand David T . Robinson, “. Robinson, “ Black and White: Access to Capital Among Black and White: Access to Capital Among
Minority-Owned Startups,” NBER Working Paper No. 28154 (November 2020); V. Hwang,Minority-Owned Startups,” NBER Working Paper No. 28154 (November 2020); V. Hwang, S. S. Desai, and R. Baird, Desai, and R. Baird,
“Access to Capital for Entrepreneurs: Removing Barriers,” Ewing“Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas CityMarion Kauffman Foundation: Kansas City (2019). (2019).
~~Timothy~~T imothy Bates, W.D. Bradford, and Robert Seamans, Bates, W.D. Bradford, and Robert Seamans, “ “Minority Entrepreneurship in Minority Entrepreneurship in ~~Twenty~~T wenty-First Century America,” -First Century America,”
~~Small Business Economics~~Sm all Business Econom ics, 50, pp., 50, pp. 415415–-427 (2018); Robert W. Fairlie and Alicia M. Robb,427 (2018); Robert W. Fairlie and Alicia M. Robb, Race and Entrepreneurial
Success: Black-, Asian-, and White-Owned Businesses in the United States (Cambridge, (Cambridge, MA: MA: ~~The~~T he MIT MIT Press, 2010); Press, 2010);
and Robert W. Fairlie, Alicia M. Robb,and Robert W. Fairlie, Alicia M. Robb, and David Hinson, “and David Hinson, “ Disparities in Capital Access Between Minority and Non-Disparities in Capital Access Between Minority and Non-
Minority-Owned Businesses,”Minority-Owned Businesses,” Minority BusinessMinority Business Development Agency (2010), https://www.mbda.gov/sites/default/Development Agency (2010), https://www.mbda.gov/sites/default/
files/migrated/files-attachments/DisparitiesinCapitalAccessReport.pdf. files/migrated/files-attachments/DisparitiesinCapitalAccessReport.pdf.
~~For analysis of metrics related to small businesses, including disparities between small MBEs and small non-minority~~
~~firms, see Small Business Credit Survey: 2021 Report on Employer Firms, Federal Reserve Banks, February 2021,~~
~~https://www.fedsmallbusiness.org/survey/2021/report-on-employer-firms, and Mels de Zeeuw,~~ ~~Small Business Credit~~
~~Survey: 2019 Report on Minority-Owned Firms, Federal Reserve Bank of Atlanta, December 2019,~~
~~https://www.fedsmallbusiness.org/survey/2019/report-on-minority-owned-firms, among others.~~
~~Studies~~ Studies indicate that the economic impact of the coronavirus pandemic hasindicate that the economic impact of the coronavirus pandemic has affected minority business owners more affected minority business owners more
severely than severely than ~~non-minority~~nonminority business owners. For a summary of research on the economic impact of the coronavirus business owners. For a summary of research on the economic impact of the coronavirus
pandemic on MBEs, see Lucaspandemic on MBEs, see Lucas Misera, Misera, An Uphill Battle: COVID-19’s Outsized Toll on Minority-Owned ~~Firms~~Firm s,
FederalFederal Reserve Bank of Cleveland,Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/newsroom-and-events/October 8, 2020, https://www.clevelandfed.org/newsroom-and-events/
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~In committee reports and legislation proposed during the 116th and 117th Congresses, new,~~
~~renewed, or expanded MBDA roles and services included:~~
~~ Increasing resources for the Business Center Program.75~~
~~ Conducting an annual diverse business forum on capital formation; administering~~
~~an agency study on alternative financing options; expanding educational~~
~~development relating to management and entrepreneurship; and expanding the~~
~~agency’s role in research and analysis and as a clearinghouse for data related to~~
~~MBEs.76~~
~~ Establishing rural business centers at Historically Black Colleges and~~
~~Universities (HBCUs) or entrepreneurship programs at Minority Serving~~
~~Institutions (MSIs).77~~
~~ Authorizing MBDA to provide grants to nonprofit economic development~~
~~organizations in order to offer services to low- and moderate-income business~~
~~owners78 and expanding business assistance services in response to the~~
~~coronavirus pandemic.79~~
~~ Authorizing a role for MBDA in selecting innovation centers through the Inner~~
~~City Innovation Hub program.80~~

~~publications/community-development-briefs/db-20201008-misera-report.aspx.~~
publications/community-development-briefs/db-20201008-misera-report.aspx. For analysis of metrics related to small businesses, including disparities between small MBEs and small nonminority firms, see Sm all Business Credit Survey: 2021 Report on Em ployer Firm s, Federal Reserve Banks, February 2021, https://www.fedsmallbusiness.org/survey/2021/report -on-employer-firms; and Mels de Zeeuw, Sm all Business Credit Survey: 2019 Report on Minority-Owned Firm s, Federal Reserve Bank of Atlanta, December 2019, https://www.fedsmallbusiness.org/survey/2019/report -on-minority-owned-firms, among others. For additional analysis of the economic impact of the coronavirus pandemic on For additional analysis of the economic impact of the coronavirus pandemic on small businesses,businesses, see Daniel Wilmoth, see Daniel Wilmoth,
““~~The~~T he Effects of the COVID-19 Pandemic on Small Businesses,” Effects of the COVID-19 Pandemic on Small Businesses,” SBA,SBA, Office of Advocacy, IssueOffice of Advocacy, Issue Brief Number 16, Brief Number 16,
March 2021, https://cdn.advocacy.sba.gov/wp-content/uploads/2021/03/02112318/COVID-19-Impact-On-Small-March 2021, https://cdn.advocacy.sba.gov/wp-content/uploads/2021/03/02112318/COVID-19-Impact-On-Small-
Business.pdf;Business.pdf; Robert Fairlie, Robert Fairlie, The ~~Impact~~Im pact of COVID-19 on ~~Small~~Sm all Business Owners: Evidence of Early-Stage Losses
from the April 2020 Current Population Survey, National Bureau of Economic Research, Working Paper 27309, 2020, , National Bureau of Economic Research, Working Paper 27309, 2020,
doi.org/10.3386/w27309doi.org/10.3386/w27309,; and Alexander W. Bartik, et al., and Alexander W. Bartik, et al., How Are ~~Small~~ Sm all Businesses Adjusting to COVID-19? Early
Evidence from a Survey, National Bureau, National Bureau of Economic Research, Working Paper 26989, 2020, of Economic Research, Working Paper 26989, 2020,
doi.org/10.3386/w26989, among others. doi.org/10.3386/w26989, among others.
Researchers have also proposed additional roles, services, outreach, and partnerships for the agency in recent years. Researchers have also proposed additional roles, services, outreach, and partnerships for the agency in recent years.
Some suggestSome suggest that MBDA resourcesthat MBDA resources could becould be directed to focus on minority serving-institutions (MSIs) that would directed to focus on minority serving-institutions (MSIs) that would
Congressional Research Service 21 The Minority Business Development Agency: An Overview of Its History and Programs administer business ~~administer business~~ incubators and accelerators or operate businessincubators and accelerators or operate business centers; administer an equity grant program to fund centers; administer an equity grant program to fund
municipal capital projects; and develop and administer a minority business investment company (MBIC)municipal capital projects; and develop and administer a minority business investment company (MBIC) —similar to —similar to
the SBA’sthe SBA’s ~~small business~~ small business investment company (SBIC) program—to allow the agency to license lenders and lend investment company (SBIC) program—to allow the agency to license lenders and lend
capital for businesscapital for business investments, among other activities. For an example of these perspectives, see Connor Maxwell, investments, among other activities. For an example of these perspectives, see Connor Maxwell,
Darrick Hamilton, Andre M. Perry, and Danyelle SolomonDarrick Hamilton, Andre M. Perry, and Danyelle Solomon , “, “ A Blueprint for Revamping the Minority Business A Blueprint for Revamping the Minority Business
Development Agency,” July 31, 2020, https://www.americanprogress.org/issues/race/reports/2020/07/31/488423/Development Agency,” July 31, 2020, https://www.americanprogress.org/issues/race/reports/2020/07/31/488423/
blueprintblueprint -revamping-minority-business-development-revamping-minority-business-development -agency/. Congressional Research Service 22 The Minority Business Development Agency: An Overview of Its History and Programs ~~-agency/.~~
~~75 U.S. House Small Business Committee, The State of Black-Owned Small Businesses in America, 117th Cong., 1st~~
~~sess., p. 8, https://smallbusiness.house.gov/uploadedfiles/bob_report_final.pdf.~~
~~76 The Minority Business Resiliency Act of 2020 (H.R. 6869 and S. 4208), 116th Congress, and the Heroes Small~~
~~Business Lifeline Act (S. 4818), 116th Congress.~~
~~77 The Reaching America’s Rural Minority Businesses Act of 2020 (S. 4873, H.Rept. 116-4550), 116th Congress; the~~
~~Minority Entrepreneurship Grant Program Act of 2021 (S. 1109); and A bill to authorize MBDA to establish business~~
~~centers at HBCUs, and for other purposes (S. 1749), 117th Congress.~~
~~78 The Community Economic Development Center Support Act of 2020 (H.R. 7844), 116th Congress.~~
~~79 The Workforce Emergency Response Act of 2020 (H.R. 6379), the Delivering Immediate Relief to America’s~~
~~Families, Schools and Small Businesses Act (S. 4775), the Continuing the Paycheck Protection Program Act (S. 4773),~~
~~the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136), 116th Congress, and the~~
~~American Rescue Plan of 2021 Act (H.R. 1319, P.L. 117-2), 117th Congress.~~
~~80 The Innovation Centers Acceleration Acts (S. 4624 and H.R. 8745), 116th Congress, and the Innovation Centers~~
~~Acceleration Acts (S. 871 and H.R. 476), 117th Congress.~~
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~ Authorizing a grant to capitalize a growth equity fund for MBEs.81~~
~~Financial and technical assistance provided by MBDA and its partners has been designed to build~~
~~wealth, expand employment opportunities, and increase MBE capital access and economic~~
~~activity in order to improve individual outcomes and build local and national economies. As~~
~~Congress reviews options to support economic development, the MBDA offers existing and~~
~~potentially new avenues for providing financial and technical assistance to MBEs. 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.~~

~~81 Financial Protections and Assistance for America’s Consumers, States, Businesses, and Vulnerable Populations Act~~
~~(H.R. 6321), To fully implement the Initiative to Build Growth Equity Funds for Minority Businesses, and for other~~
~~purposes (H.R. 6348), and the Workforce Emergency Response Act of 2020 (H.R. 6379), 116th Congress.~~
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Appendix A. Additional Agency History
Successive Administrations since the Carter Administration have changed the agency’s focus and 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 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 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 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 agency continued to enhance global competitiveness and coordinated inter-agency minority
business initiatives. Beginningbusiness initiatives. Beginning in FY2017, the Trump Administration proposed cuts to the in FY2017, the Trump Administration proposed cuts to the
agency’s budget and proposed orienting the agency’s initiatives away from services for individual 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 businesses. The Biden Administration has proposed increased annual appropriations, a dedicated
Assistant Secretary, and expanded programs and activities for the agencyAssistant Secretary, and expanded programs and activities for the agency~~. Table A-1 provides a~~
~~history of Administrations’ annual budget requests and enacted appropriations for the agency~~
~~since FY1970~~. .
Evolving Delivery System
In 1981, the Reagan Administration established the Minority Business Development Center In 1981, the Reagan Administration established the Minority Business Development Center
program (MBDC), which became the MBDA’s primary method for delivering technical and program (MBDC), which became the MBDA’s primary method for delivering technical and
management services to minority businesses. The centers, located in metropolitan areas, were 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 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 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 business with minority firms, including creating a directory of minority firms and their
capabilities. President Ronald Reagan also issued E.O. 12432, capabilities. President Ronald Reagan also issued E.O. 12432, Minority Business Enterprise
Development, which required federal agencies with substantial procurement and grant-making , which required federal agencies with substantial procurement and grant-making
authority to develop plans that encourage minority business participation in federal procurement, authority to develop plans that encourage minority business participation in federal procurement,
contracts, and grants.contracts, and grants.82103 President George H.W. Bush proposed eliminating the agency and 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 the transferring its mission to the SBA, but ultimately continued the agency as an entity within the
Department of Commerce.Department of Commerce.83104
In 1994, President Clinton issued E.O. 12928, 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..84105 Although E.O. 12928 did not Although E.O. 12928 did not
directly reference E.O. 11625, it reiterated support for expanding access to federal procurement directly reference E.O. 11625, it reiterated support for expanding access to federal procurement
contracts for businesses owned by contracts for businesses owned by ~~socially and economically~~social y and economical y disadvantaged individuals, black disadvantaged individuals, black
colleges and universities, and other minority institutions. The Clinton Administration supported colleges and universities, and other minority institutions. The Clinton Administration supported
substantial increases in the agency’s budget. In seeking to expand the reach and capacity of the substantial increases in the agency’s budget. In seeking to expand the reach and capacity of the
MBDA, the Clinton Administration sought increases to fund the establishment of Rural Business MBDA, the Clinton Administration sought increases to fund the establishment of Rural Business
Development Centers, and the activities of the MBDCs and Minority Business Opportunity Development Centers, and the activities of the MBDCs and Minority Business Opportunity
Committees (MBOC). Committees (MBOC).
In 1996, the agency announced the initiation of a pilot program, the Community Based In 1996, the agency announced the initiation of a pilot program, the Community Based
Enhancement Services (CBES). According to the Enhancement Services (CBES). According to the Federal Register Notice on March 6, 1996, the on March 6, 1996, the

82CBES’s goal was “to enable MBDA to enter into strategic al iances, coordinating the delivery of 103 Executive Order 12432, “Minority Business Enterprise Development,” 48 Executive Order 12432, “Minority Business Enterprise Development,” 48 Federal Register 32551, July 14, 1983. 32551, July 14, 1983.
83104 U.S. U.S. Congress, HouseCongress, House Committee on Appropriations, Subcommittee on the Departments of Commerce, Justice, and Committee on Appropriations, Subcommittee on the Departments of Commerce, Justice, and
State, the Judiciary,State, the Judiciary, and Related Agencies, and Related Agencies, ~~Departments of Commerce~~Departm ents of Com m erce, Justice, And State, The Judiciary, and Related
Agencies Appropriations for 1990, H181-26, 101st Cong., 2nd sess., March 14-17, 20-22, 1989 (Washington H181-26, 101st Cong., 2nd sess., March 14-17, 20-22, 1989 (Washington, DC: GPO, : GPO,
1989). 1989).
84105 Executive Order 12928, “Promoting Procurement with Small Businesses Executive Order 12928, “Promoting Procurement with Small Businesses ~~Owned~~ Owned and Controlled by Sociallyand Controlled by Socially and and
Economically Disadvantaged Individuals,Economically Disadvantaged Individuals, Historically Black CollegesHistorically Black Colleges and Universities, and Universities, ~~and~~a nd Minority Institutions,” 59 Minority Institutions,” 59
Federal Register 48377, September 20, 1994. 48377, September 20, 1994.
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~~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 its services with those of other entities capable of assisting in minority and/or ~~small~~ smal and and
disadvantaged business development in a particular market.”disadvantaged business development in a particular market.”85
106 An audit of the pilot program found significant deficiencies in MBDA’s administration of the 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 pilot project, noting that MBDA failed to monitor and assess the grantees’ performance in accord
with its own handbook.with its own handbook.86107 The report recommended that MBDA develop project-specific The report recommended that MBDA develop project-specific
performance measures to reflect the nature of the project, assign staff with adequate technical and 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 business expertise to monitor project activities, and undertake timely and thorough evaluation to
determine program effectiveness.determine program effectiveness.87
108 Under the George W. Bush Administration, the MBDA Under the George W. Bush Administration, the MBDA continued efforts to coordinate its continued efforts to coordinate its
programs with the programs of the SBA supporting minority and disadvantaged firms. The Bush 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 Administration, based on research findings, pledged to focus its resources on minority firms with
$500,000 or more in annual revenues.$500,000 or more in annual revenues.88
109 The agency funded programs and services including The agency funded programs and services including
 National Enterprise Centers staffed by MBDC personnel who provided support  National Enterprise Centers staffed by MBDC personnel who provided support
services, including referrals and marketing services, to business entities of services, including referrals and marketing services, to business entities of
significant size and capacity; significant size and capacity;
 MBDCs, which provided consultant services to firms with significant  MBDCs, which provided consultant services to firms with significant ~~growth~~grow th
potential; and potential; and
 MBOCs that provided consulting services, including identifying potential sources  MBOCs that provided consulting services, including identifying potential sources
of equity and working capital, assisting minority entrepreneurs gain access to of equity and working capital, assisting minority entrepreneurs gain access to
profitable markets. profitable markets.
The agency also funded a number of projects intended to address communities with special needs The agency also funded a number of projects intended to address communities with special needs
(Special Projects). Other activities included supporting youth entrepreneurship (Emerging (Special Projects). Other activities included supporting youth entrepreneurship (Emerging
Minority Business Leaders Program), improving access to capital (Equity Capital Access Minority Business Leaders Program), improving access to capital (Equity Capital Access
Committee), and the continued development of an online database of potential procurement and Committee), and the continued development of an online database of potential procurement and
contracting opportunities. contracting opportunities.

~~85 U.S.~~ 106 U.S. Department of Commerce, “Minority Business Development Agency: Implementation of Pilot CommunityDepartment of Commerce, “Minority Business Development Agency: Implementation of Pilot Community --
BasedBased Enhanced ServicesEnhanced Services (CBES)(CBES) Initiative in Baltimore, Maryland, and the Initiative in Baltimore, Maryland, and the ~~Identification~~Iden tification of Other Markets of Other Markets ToT o Be Be
ConsideredConsidered as Alternatives to the Minority Business Development Center Program for the Delivery of Management as Alternatives to the Minority Business Development Center Program for the Delivery of Management
and and ~~Technical~~T echnical Assistance to Minority Firms and Entrepreneurs,” 61 Assistance to Minority Firms and Entrepreneurs,” 61 Federal Register 8919-8920, March 6, 1996. 8919-8920, March 6, 1996.
86107 U.S. U.S. Department of Commerce, Office of Inspector General, Department of Commerce, Office of Inspector General, Minority Business Development Agency Community-
Based Enhanced Services Pilot Project Award Not Effectively Monitored , Final Audit, Final Audit Report No. EDD-9406-8-0002, Report No. EDD-9406-8-0002,
Washington, DC, May 1998, pp. i-ii. Washington, DC, May 1998, pp. i-ii.
87108 Ibid. Ibid. p. 8. p. 8.
88109 U.S. U.S. Department of Commerce, Minority Business Development Agency, Department of Commerce, Minority Business Development Agency, The State of Minority Business
Enterprises, An Overview of the 2002 Survey of Business Owners,, Washington, DC, AugustWashington, DC, August 2006, p. 30, 2006, p. 30,
https://archive.mbda.gov/sites/mbda.gov/files/migrated/files-attachments/https://archive.mbda.gov/sites/mbda.gov/files/migrated/files-attachments/
StateofMinorityBusiness2002SurveyofBusinessOwners.pdf. StateofMinorityBusiness2002SurveyofBusinessOwners.pdf.
Later, a 2015 report also noted that minority firms with gross annual receipts of $500,000 or more generated a much Later, a 2015 report also noted that minority firms with gross annual receipts of $500,000 or more generated a much
larger percentage of all minority revenues and werelarger percentage of all minority revenues and were more likely to have paid employees compared to minority firms more likely to have paid employees compared to minority firms
with annual gross receipts under $500,000with annual gross receipts under $500,000 . See Sumiye. See Sumiye ~~“Sue” Obuko~~ “ Sue” Obuko and Mark Planting, and Mark Planting, The State of Minority
Business Enterprises: An Overview of the 2007 Survey of Business Owners,, U.S.U.S. Department of Commerce, Minority Department of Commerce, Minority
BusinessBusiness Development Agency, Washington, DC, 2015, p. 36 (footnote), https://archive.mbda.gov/sites/mbda.gov/Development Agency, Washington, DC, 2015, p. 36 (footnote), https://archive.mbda.gov/sites/mbda.gov/
files/migrated/files-attachments/State_Minority_Business_Enterprises_2007Data.pdf. files/migrated/files-attachments/State_Minority_Business_Enterprises_2007Data.pdf.
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The Minority Business Development Agency: An Overview of Its History and Programs

Global Competitiveness
Starting in the 1990s, the agency began to focus on assisting minority firms enter and compete in Starting in the 1990s, the agency began to focus on assisting minority firms enter and compete in
the global economy. A 2003 MBDAthe global economy. A 2003 MBDA study explored issues and opportunities for minority study explored issues and opportunities for minority
businesses seeking international opportunities. The preliminary study’s key findings included the businesses seeking international opportunities. The preliminary study’s key findings included the
following observations: following observations:
 Minority businesses may not be able to compete directly with massive U.S.  Minority businesses may not be able to compete directly with massive U.S.
companies that have already established a multinational presence in developed companies that have already established a multinational presence in developed
economies. economies.
 By capitalizing  By capitalizing on their unique competitive strengths, on their unique competitive strengths, ~~especially~~especial y in developing in developing
countries, minority-business enterprises (MBEs) can compete with larger countries, minority-business enterprises (MBEs) can compete with larger
multinationalmultinational companies. companies.
 A secondary conclusion is that the quality of information about MBE interaction  A secondary conclusion is that the quality of information about MBE interaction
with the international economy is badly outdated, and further research must be with the international economy is badly outdated, and further research must be
conducted. Given the need to design successful policies and programs to support 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 MBE international expansion, this lack of data is a critical hurdle that must be
overcome.overcome.89
110 During the Obama Administration, in addition to a focus on facilitating entry or expansion of 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 minority firms into the global market place, increased emphasis was placed on quantifying the
impact of MBDAimpact of MBDA activities, increasing the efficient delivery of services to minority business activities, increasing the efficient delivery of services to minority business
communities, and increasing coordination with other federal agencies. Federal agencies that have communities, and increasing coordination with other federal agencies. Federal agencies that have
partnered with MBDA include the SBA, the International Trade Administration, the Export-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 Import Bank, the National Institute of Standards and Technology, and the Economic Development
Administration. Administration.
~~As mentioned, the~~Proposals to Establish, Transfer, or Eliminate the Agency Executive branch and legislative proposals have sought to transfer, eliminate, or—alternatively— statutorily authorize the agency. The MBDA was original y created by executive order. Prior to the Minority Business Development Act of 2021’s enactment in 2021, there were a number of proposals over the years to statutorily authorize the MBDA. Absent specific statutory requirements, the President could have exercised authority to effectively terminate the MDBA’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 potential y supersede presidential discretion.111 In addition, Congress could have revoked or modified the executive order, potential y eliminating, expanding, or restricting the agency. 110 John Owens and Robert Pazornik, Globalization and Minority-Owned Businesses in the United States: Assessment and Prospects, Minority Business Developm ent Agency, Preliminary Study, Washington, DC, September 28, 2003, p. 1, https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBEintheGlobalEconomy.pdf. 111 In general, when Congress appropriates a specific amount of budget authority for a specific purpose, the President has only limited authority to order executive branch agencies to reduce or withhold funds. Decisions by federal courts, including a unanimous decision by the Supreme Court in Train v City of New York, 420 U.S. 35 (1975), and the enactment of the Congressional Budget and Impoundment Control Act of 1974, P.L. 93-344, clarified this. Specifically, under ICA, the President can withhold funds for a limited time if he complies with specific reporting requirements to Congress, but he cannot permanently prevent the obligation or expenditure of funds provided in law unless Congress agrees. Congressional Research Service 25 The Minority Business Development Agency: An Overview of Its History and Programs 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 the MBDA out of the Department of Commerce.112 For instance, the George H.W. Bush Administration proposed to transfer the MBDA into the SBA in FY1989 and FY1990.113 In FY2018, the Trump Administration recommended a $6 mil ion budget for MBDA, to be used to close out the agency.114 The Trump Administration’s budgets in FY2019, FY2020, and FY2021 would have reduced the agency’s annual funding to approximately $10 mil ion and proposed to change the focus of MBDA services from assisting individual MBEs to efforts to address issues facing the broader minority business community.115 The Trump Administration’s first budget request (for FY2018) proposed to 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 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 approximately 75%. For example, the Trump Administration sought to reduce the agency’s
budget to $10.3 budget to $10.3 ~~million~~mil ion for FY2021, with the intent of redirecting resources away from services for FY2021, with the intent of redirecting resources away from services
for individual businesses.for individual businesses.90 116 According to budget documents, the Trump Administration supported According to budget documents, the Trump Administration supported
the termination of the the termination of the ~~MDBA~~ MDBA and its programs as part of its wider efforts to reduce federal 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 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.activities are among a number of federal programs that support private sector job creation.91117 The The
Administration’s opposition 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. Supporters of the MBDA contend that the agency’s~~

~~89 John Owens and Robert Pazornik,~~ ~~Globalization and Minority-Owned Businesses in the United States: Assessment~~
~~and Prospects, Minority Business Development Agency, Preliminary Study, Washington, DC, September 28, 2003, p. 1,~~
~~https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBEintheGlobalEconomy.pdf.~~
~~90 U.S. Office of Management and Budget (OMB), “A Budget for America’s Future—Appendix,” FY2021~~
~~Congressional Budget Justification, p. 198~~ 112 For example, in the 95th Congress, the Senate Committee on Appropriations urged “the Office of Management and Budget to consider the merger of OMBE into SBA’s programs of assistance to minority businesses so that a unified program will be available for consideration in the 1980 budget review.” See S.Rept. 95-1043. In the 98th Congress, the Department of International T rade and Industry Act of 1983 (S. 121) proposed a transfer of the MBDA to the SBA as one of several aspects of a reorganization plan for the Department of Commerce. See S.Rept. 98-374. Later, during the Reagan Administration, a memo from the Secretary of Commerce, James Baker, outlined a proposal to reorganize the Department of Commerce and establish the Department of International T rade and Industry. Included in the proposal are references to efforts to consolidate government and the following proposed action: “Disposition of other elements of the Department of Commerce will be identical to the Administration proposal of the 98th Congress approved by OMB, except that PTO [Patent and T rademark Office] would go to Justice and MBDA would go to HUD (unless SBA receives continued funding).” See Memo, Malcolm Baldrige to Edwin Meese, James Baker, Richard Darman, January 5, 1985, folder “ Cabinet Affairs (1)” box 6, James Baker Files, Ronald Reagan Library. (At the time, Malcolm Baldrige was Secretary of the Department of Commerce, Edwin Meese was Counselor to the President, and Richard Darman was Assistant to the President and Deputy to the Chief of Staff.) In the 104th Congress, the Commerce Department Termination and Government Reorganization Act of 1995 (S. 929, S.Rept. 104-164) and the Department of Commerce Dismantling Act (H.R. 1756, H.Rept. 104-260) proposed to eliminate several Commerce agencies, including the MBDA. S. 929 and H.R. 1756 are noted in the analysis of trade reorganization in CRS Report R42555, Trade Reorganization: Overview and Issues for Congress, by Shayerah I. Akhtar. 113 OMB, “Budget of the U.S. Government —FY1989,” pp. 5-69 and 5-70, available at https://fraser.stlouisfed.org/title/54/item/18995; and “ Budget of the U.S. Government —FY1990,” p. 5-78, available at https://fraser.stlouisfed.org/title/54/item/18996. 114 OMB “ Appendix: Budget of the U.S. Government, Fiscal Year 2018” (2017), p. 190, https://www.govinfo.gov/content/pkg/BUDGET, https://www.govinfo.gov/content/pkg/BUDGET~~-2021~~ -2018-APP/pdf/BUDGET-APP/pdf/BUDGET-
~~2021-APP.pdf.~~
~~91 Other agencies and programs that support private job creation and economic development include the SBA; federally~~
~~chartered regional economic development agencies, including the Appalachian Regional Commission, the Delta~~
~~Regional Authority, the Northern Border Regional Commission, and the Denali Commission; the Economic~~
~~Development Administration and its programs; the rural development programs administered by the Rural~~
~~Development Administration of the Department of Agriculture; and the Community Development Block Grant~~
~~program administered by the Department of Housing and Urban Development. See CRS Report R46683,~~ ~~Federal~~
~~Resources for State and Local Economic Development, by Julie M. Lawhorn.~~
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~~link to page 25~~ ~~The Minority Business Development Agency: An Overview of Its History and Programs~~

-2018-APP.pdf. 115 OMB, “Budget of the United States Government, Fiscal Year 2019,” (2018), p. 31, https://www.govinfo.gov/content/pkg/BUDGET -2019-BUD/pdf/BUDGET -2019-BUD.pdf, and “ Appendix: Budget of the United States Government, Fiscal Year 2019” (2018), p. 189, https://www.govinfo.gov/content/pkg/BUDGET -2019-APP/pdf/BUDGET -2019-APP.pdf; “ Appendix: Budget of the United States Government, Fiscal Year 2020” (2019), p. 187, https://www.govinfo.gov/content/pkg/BUDGET -2020-APP/pdf/BUDGET -2020-APP.pdf; and “ Appendix: Budget of the United States Government, Fiscal Year 2021” (2020), p. 198, https://www.govinfo.gov/content/pkg/BUDGET -2021-APP/pdf/BUDGET -2021-APP.pdf. 116 U.S. Office of Management and Budget (OMB), “ A Budget for America’s Future—Appendix,” FY2021 Congressional Budget Justification, p. 198, https://www.govinfo.gov/content/pkg/BUDGET -2021-APP/pdf/BUDGET -2021-APP.pdf. 117 Other agencies and programs that support private job creation and economic development include the SBA; Congressional Research Service 26 link to page 38 link to page 32 link to page 32 The Minority Business Development Agency: An Overview of Its History and Programs 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. Supporters of the MBDA contend that the agency’s mission is critical to the nation’s economic future and that the agency’s programs and services mission is critical to the nation’s economic future and that the agency’s programs and services
address a number of address a number of deficiencies and impediments faced by minority entrepreneurs. deficiencies and impediments faced by minority entrepreneurs.
~~Administrations’~~As previously noted, Congress continued to provide the 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 the 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–FY2021
Table A-1 provides a history of provides a history of ~~Administrations’~~ annual budget requests and enacted annual budget requests and enacted
appropriations for the appropriations for the ~~agency~~ MBDA since FY1970. since FY1970.
Table A-1. MBDA Appropriations, FY1970–FY2021
(in (in ~~millions of dollars~~mil ions of dol ars) )
Fiscal Year
Admin. Request
Enacted
1970 1970
1.5 1.5
1.2 1.2
1971 1971
1.8 1.8
2.1 2.1
1972 1972
3.5 3.5
43.6 43.6
1972supplemental 1972supplemental
40 40.0
40 40.0
1973 1973
63.6 63.6
63.9 63.9
1974 1974
74.5 74.5
35.6 35.6
1975 1975
52 52.0
52 52.0
1976 1976
52.6 52.6
49.8 49.8
1977 1977
0 0.0
50.3 50.3
1978 1978
50.3 50.3
49.4 49.4
1979 1979
60.6 60.6
57.9 57.9
1980 1980
58.8 58.8
58.9 58.9
1981 1981
62.9 62.9
59.6 59.6
1982 1982
65.4 65.4
56.6 56.6
1983 1983
50 50.0
47.3 47.3
1984 1984
54 54.0 53.9 1985 49.6 49.6 1986 44.8 43.0 federally chartered regional economic development agencies, includin g the Appalachian Regional Commission, the Delta Regional Authority, the Northern Border Regional Commission, and the Denali Commission ; the Economic Development Administration and its programs; the rural development programs administered by the Rural Development Administration of the Department of Agriculture; and the Community Development Block Grant program administered by the Department of Housing and Urban Development. See CRS Report R46683, Federal Resources for State and Local Econom ic Developm ent, by Julie M. Lawhorn. Congressional Research Service 27 The Minority Business Development Agency: An Overview of Its History and Programs Fiscal Year Admin. Request Enacted
~~53.9~~
~~1985~~
~~49.6~~
~~49.6~~
~~1986~~
~~44.8~~
43
1987 1987
45.4 45.4
39.8 39.8
1988 1988
4.6 4.6
39.7 39.7
1989 1989
0 0.0
39.7 39.7
1990 1990
0 0.0
39.7 39.7
1991 1991
46.2 46.2
41.1 41.1
1992 1992
0 0
42.6 42.6
1993 1993
37.9 37.9
37.9 37.9
1994 1994
46 46.0
44.1 44.1
1995 1995
46.2 46.2
43.8 43.8
1996 1996
47.9 47.9
32 32
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~Fiscal Year~~
~~Admin. Request~~
~~Enacted~~.0
1997 1997
34 34.0
28 28.0
1998 1998
28 28.0
25 25.0
1999 1999
28.1 28.1
27.3 27.3
2000 2000
27.6 27.6
27.3 27.3
2001 2001
28.2 28.2
27.3 27.3
2002 2002
28.4 28.4
28.3 28.3
2003 2003
29.8 29.8
28.9 28.9
2004 2004
29.5 29.5
28.9 28.9
2005 2005
34.5 34.5
29.9 29.9
2006 2006
30.7 30.7
30 30.0
2007 2007
29.6 29.6
30 30.0
2008 2008
28.7 28.7
28.6 28.6
2009 2009
29 29.0
29.8 29.8
2010 2010
31 31.0
31.5 31.5
2011 2011
32.3 32.3
30.3 30.3
2012 2012
32.3 32.3
30.3 30.3
2013 2013
28.7 28.7
27.5 27.5
2014 2014
29.3 29.3
28 28.0
2015 2015
28.3 28.3
30 30.0
2016 2016
30 30.0
32 32.0
2017 2017
35.6 35.6
34 34.0
2018 2018
6 6.0
39 39.0
2019 2019
10 10.0
40 40.0
2020 2020
10 10.0
52 52.0
2021 2021
10.3 10.3
73 73.0
2022 2022
70 70

.0 NA Source: Budget Appendices of the United States Budget Appendices of the United States~~. The FY2022 Administration Request amount is from the~~
~~President’s request for FY2022 discretionary funding.~~
; FY1970-FY2022. Congressional Research Service 28 The Minority Business Development Agency: An Overview of Its History and Programs Notes: In FY2020, the Coronavirus Aid, Relief, In FY2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act,and Economic Security Act (CARES Act, P.L. 116-136) provided P.L. 116-136) provided
the MBDA an additional $10 mil ionthe MBDA an additional $10 mil ion in supplemental funding in addition to $42 mil ionin supplemental funding in addition to $42 mil ion in annual appropriations, in annual appropriations,
for a total of $52 mil ion.for a total of $52 mil ion. The supplemental funding was to assist MBEs with preventing, preparing for, and The supplemental funding was to assist MBEs with preventing, preparing for, and
responding to the COVID-19 pandemic through education, training, and advising grants to minorityresponding to the COVID-19 pandemic through education, training, and advising grants to minority business business
centers and minoritycenters and minority chambers of commerce.chambers of commerce. In FY2021, the Consolidated Appropriations ActIn FY2021, the Consolidated Appropriations Act (P.L. 116-260) (P.L. 116-260)
provided the MBDA with $25 provided the MBDA with $25 mil ion in supplemental funding, in addition to $48 mil ionin supplemental funding, in addition to $48 mil ion ~~in annual appropriations, for a~~
~~total of $73 mil ion.~~
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~~Appendix B. Legislative Proposals, 96th Congress-~~
~~117th Congress~~
~~Since the 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 96th -117th Congresses—address the agency’s~~
~~statutory authority or its activities.~~
~~ The 96th Congress considered, but did not pass, legislative proposals to provide~~
~~the 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 the Department of Commerce.92 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 98th Congress, Senator William Roth introduced the Department of~~
~~International Trade and Industry Act of 1983 (S. 121), which proposed a transfer~~
~~of the MBDA to the SBA as one of several aspects of an executive branch agency~~
~~reorganization plan.93~~
~~ During the 99th Congress, Representative Parren Mitchell introduced H.R. 4632,~~
~~a bill that would have denied any appropriations to the MBDA to avoid potential~~
~~duplication of services with the SBA’s Associate Administrator for Minority~~
~~Small Business and Capital Ownership Development. The activities of the~~
~~MBDA, 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 101st through the 104th 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 the 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~~

~~92 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise,~~
~~Establishment of a Minority Business Development Administration in the Department of Commerce, 96th Cong., 2nd~~
~~sess., June 9 and 16, 1980 (Washington: GPO, 1980).~~
~~93 S. 121 would have established a new cabinet level agency and eliminated the Department of Commerce. See U.S.~~
~~Congress, Senate Committee on Government Affairs, Report on the Trade Reorganization Act of 1983, 98th Cong., 2nd~~
~~sess., April 3, 1984, S.Rept. 98-374 (Washington: GPO, 1984).~~
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~the nation’s understanding of the issues and opportunities surrounding minority~~
~~business enterprises.~~
~~ During the 111th Congress, Senator Bob Casey introduced S. 4026, the Minority~~
~~Business Development Improvements Act of 2010. This bill would have required~~
~~the 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 111th 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 the 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 112th 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 111th Congress.~~
~~ During the 113th Congress, Representative Bobby Rush introduced H.R. 2551,~~
~~Expanding Opportunities for Main Street Act. Title II of the bill deals exclusively~~
~~with the MBDA and includes the same provisions included in H.R. 4343,~~
~~introduced during the 111th Congress.~~
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~ During the 114th and 115th Congresses, no bills were introduced to formally~~
~~establish the agency and its duties by statute.~~
~~ During the 116th Congress, Representative Jerry McNerney introduced H.R.~~
~~1432, the Minority Business Development Act of 2019, to redesignate and~~
~~establish the MBDA as the Minority Business Development Administration.~~
~~Later in the 116th 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 116th 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 non-profit organizations and~~
~~MBEs impacted by the coronavirus pandemic, among other activities. Also~~
~~during the 116th Congress, Senator Kelly Loeffler introduced S. 5011 to codify~~
~~the MBDA and establish an Office of African American Affairs within the~~
~~agency.~~
~~ During the 117th Congress, Senator Benjamin Cardin introduced the Minority~~
~~Business Resiliency Act of 2021 (S. 1255~~ in annual appropriations. Congressional Research Service 29 The Minority Business Development Agency: An Overview of Its History and Programs 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 wel -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.118 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%).119 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. 118 Department of Commerce, National Advisory Council on Minority Business Enterprise Recommendations, Washington, DC, December 2013, https://www.mbda.gov/sites/default/files/migrated/files-attachments/NACMBEFinalReport041314.PDF. 119 U.S. Office of Management and Budget (OMB), Program Assessment: Minority Business Development Agency, Washington, DC, 2007, https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/omb/expectmore/summary/10000034.2007.html. Congressional Research Service 30 The Minority Business Development Agency: An Overview of Its History and Programs  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 smal 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.120 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.121  A 2017 report by the Department of Commerce 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.122  A 2006 report by the 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.123 The MBDA director concurred with the recommendations of the report, which directed the 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 the 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 IG 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. The MBDA concurred 120 Ibid. 121 Another report of note is the U.S. Government Accountability Office, Minority Business Development Agency Needs to Address Program Weaknesses, RCED-91-114, April 16, 1991, http://www.gao.gov/products/RCED-91-114. 122 Department of Commerce, Office of Inspector General, MBDA Can Improve Processes to More Effectively Monitor Cooperative Agreem ents, Final Report OIG-17-029-A, Washington, DC, September 2017, https://www.oig.doc.gov/OIGPublications/2017-09-05_MBDA-Business-Centers_final-report-Secured.pdf. 123 Department of Commerce, Office of Inspector General, Minority Business Development Agency Value of MBDA Perform ance Measures Is Underm ined by Inappropriate Com bining of Program Results and Unreliable Perform ance Data from MBOC Program , FSD-17252-5-0001, Washington, DC, September 2005, https://www.oig.doc.gov/OIGPublications/MBDA-FSD-17252-5-0001-09-2005.pdf. Congressional Research Service 31 The Minority Business Development Agency: An Overview of Its History and Programs with the report’s findings and committed to incorporating the recommendations put forth by the report, which included assigning staff with appropriate expertise who wil follow MBDA policies and procedures; and developing project specific performance measures and specific reporting requirements to reflect the specific nature of the project.124 124 U.S. Department of Commerce, Office of the Inspector General, Minority Business Development Agency Com m unity-Based Enhancement Services Pilot Project Award Not Effectively Monitored , EDD-9406-8-0002, Washington, DC, June 1998, p. 8, https://www.oig.doc.gov/OIGPublications/MBDA-EDD-9406-2-06-1998.pdf. Congressional Research Service 32 The Minority Business Development Agency: An Overview of Its History and Programs Appendix C. Legislative Proposals, 96th Congress-117th Congress Since the MBDA’s inception, a number of bil s 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 bil s—introduced in the 96th -117th Congresses—address the agency’s statutory authority or its activities.  The 96th Congress considered, but did not pass, legislative proposals to provide the MBDA statutory authorization. The House Committee on Smal Business held hearings on bil s (H.R. 6904 and S. 2565) that would have established a permanent MBDA within the Department of Commerce.125 The House bil , introduced by Representatives Parren Mitchel 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 bil , 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 bil included much of the language of E.O. 11625.  In the 98th Congress, Senator Wil iam Roth introduced the Department of International Trade and Industry Act of 1983 (S. 121), which proposed a transfer of the MBDA to the SBA as one of several aspects of an executive branch agency reorganization plan.126  During the 99th Congress, Representative Parren Mitchel introduced H.R. 4632, a bil that would have denied any appropriations to the MBDA to avoid potential duplication of services with the SBA’s Associate Administrator for Minority Smal Business and Capital Ownership Development. The activities of the MBDA, as wel as any unexpended balances, would have been transferred to the SBA Associate Administrator for Minority Smal Business and Capital Ownership Development.  During the 101st through the 104th 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 bil would have directed the 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 125 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise, Establishment of a Minority Business Development Administration in the Department of Commerce, 96 th Cong., 2nd sess., June 9 and 16, 1980 (Washington, DC: GPO, 1980). 126 S. 121 would have established a new Cabinet -level agency and eliminated the Department of Commerce. See U.S. Congress, Senate Committee on Government Affairs, Report on the T rade Reorganization Act o f 1983, 98th Cong., 2nd sess., April 3, 1984, S.Rept. 98-374 (Washington, DC: GPO, 1984). Congressional Research Service 33 The Minority Business Development Agency: An Overview of Its History and Programs the nation’s understanding of the issues and opportunities surrounding minority business enterprises.  During the 111th Congress, Senator Bob Casey introduced S. 4026, the Minority Business Development Improvements Act of 2010. This bil would have required the MBDA to establish the Minority Business Development Program and charged it with providing qualified minority businesses with technical assistance and contract procurement assistance. This bil 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 unconditional y owned or controlled by historical y disadvantaged individuals; and (2) each officer or other individual exercising control over regular operations would meet the definition of a historical y disadvantaged individual. Additional y, the bil 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 111th 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 bil would have defined a qualified minority business as a business that is at least 51% directly owned or controlled by historical y disadvantaged individuals. In addition, the net worth of each principal of the minority business could not exceed $2 mil ion. The bil would have directed the MBDA’s National Director to (1) establish a database to assist prime contractors in identifying historical y 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 bil 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 bil 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 bil would have also required MBDA to establish a database to assist prime contractors in identifying historical y disadvantaged firms for subcontracting.  During the 112th Congress, Senator Tom Udal introduced S. 1334, Expanding Opportunities for Main Street Act of 2011. An identical bil (H.R. 2424) was introduced by Representative Bobby Rush. Both bil s’ MBDA provisions are identical to provisions included in H.R. 4929, introduced by Representative Rush during the 111th Congress.  During the 113th Congress, Representative Bobby Rush introduced H.R. 2551, Expanding Opportunities for Main Street Act. Title II of the bil deals exclusively with the MBDA and includes the same provisions included in H.R. 4343, introduced during the 111th Congress. Congressional Research Service 34 The Minority Business Development Agency: An Overview of Its History and Programs  During the 114th and 115th Congresses, no bil s were introduced to formal y establish the agency and its duties by statute.  During the 116th Congress, Representative Jerry McNerney introduced H.R. 1432, the Minority Business Development Act of 2019, to redesignate and establish the MBDA as the Minority Business Development Administration. Later in the 116th 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 bil s 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 Smal Business Lifeline Act (S. 4818), and it included the Minority Business Resiliency Act of 2020 as a subtitle of the larger bil . 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 bil . During the 116th 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 coronavirus pandemic, among other activities. Also during the 116th Congress, Senator Kel y Loeffler introduced S. 5011 to codify the MBDA and establish an Office of African American Affairs within the agency.  During the 117th 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 the ) to make permanent and expand the
activities of the MBDA. activities of the MBDA. Representative AlRepresentative Al Green introduced companion Green introduced companion
legislation in the House (H.R. 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. ~~2689).~~
~~Congressional Research Service~~

26

~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~Appendix C. 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.94~~
~~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%).95 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.~~

~~94 Department of Commerce, National Advisory Council on Minority Business Enterprise Recommendations,~~
~~Washington, DC, December 2013, https://www.mbda.gov/sites/default/files/migrated/files-attachments/~~
~~NACMBEFinalReport041314.PDF.~~
~~95 U.S. Office of Management and Budget (OMB), Program Assessment: Minority Business Development Agency,~~
~~Washington, DC, 2007, https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/omb/expectmore/~~
~~summary/10000034.2007.html.~~
~~Congressional Research Service~~

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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~ 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.96~~
~~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.97~~
~~ A 2017 report by the Department of Commerce 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.98~~
~~ A 2006 report by the 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.99 The MBDA director concurred with the recommendations~~
~~of the report, which directed the 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 the 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 IG 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. The MBDA concurred~~

~~96 Ibid.~~
~~97 Another report of note is the U.S. Government Accountability Office,~~ ~~Minority Business Development Agency Needs~~
~~to Address Program Weaknesses, RCED-91-114, April 16, 1991, http://www.gao.gov/products/RCED-91-114.~~
~~98 Department of Commerce, Office of Inspector General,~~ ~~MBDA Can Improve Processes to More Effectively Monitor~~
~~Cooperative Agreements, Final Report OIG-17-029-A, Washington, DC, September 2017, https://www.oig.doc.gov/~~
~~OIGPublications/2017-09-05_MBDA-Business-Centers_final-report-Secured.pdf.~~
~~99 Department of Commerce, Office of Inspector General,~~ ~~Minority Business Development Agency Value of MBDA~~
~~Performance Measures Is Undermined by Inappropriate Combining of Program Results and Unreliable Performance~~
~~Data from MBOC Program, FSD-17252-5-0001, Washington, DC, September 2005, https://www.oig.doc.gov/~~
~~OIGPublications/MBDA-FSD-17252-5-0001-09-2005.pdf.~~
~~Congressional Research Service~~

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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

~~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.100~~

Author Information

Julie M. Lawhorn Julie M. Lawhorn

Analyst in Economic Development Policy Analyst in Economic Development Policy

Acknowledgments
Retired CRS analyst Eugene Boyd was the original author of CRS Report R45015, Minority Business Retired CRS analyst Eugene Boyd was the original author of CRS Report R45015, Minority Business
Development Agency: An Overview of Its History and Current Issues, which was published in November Development Agency: An Overview of Its History and Current Issues, which was published in November
2017. Several sections of Mr. Boyd’s report are included in this report. Mr. Boyd received research support 2017. Several sections of Mr. Boyd’s report are included in this report. Mr. Boyd received research support
from Christina Miracle Finch in the preparation of R45015.from Christina Miracle Finch in the preparation of R45015.
Congressional Research Service 35 The Minority Business Development Agency: An Overview of Its History and Programs
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should under the direction of Congress. Information in a CRS Report should ~~not~~n ot be relied upon for purposes other be relied upon for purposes other
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~~100 United States Department of Commerce, Office of the Inspector General,~~ ~~Minority Business Development Agency~~
~~Community-Based Enhancement Services Pilot Project Award Not Effectively Monitored, EDD-9406-8-0002,~~
~~Washington, DC, June 1998, p. 8, https://www.oig.doc.gov/OIGPublications/MBDA-EDD-9406-2-06-1998.pdf.~~
Congressional Research Service Congressional Research Service
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