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

Changes from January 11, 2023 to June 6, 2024

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The Minority Business Development Agency:
~~January 11, 2023~~June 6, 2024
An Overview of Its History and Programs
~~Julie M. Lawhorn~~Adam G. Levin
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
Analyst in Economic Analyst in Economic
federal agency dedicated to assisting minority business enterprises (MBEs) in overcoming social federal agency dedicated to assisting minority business enterprises (MBEs) in overcoming social
Development Policy Development Policy
and economic disadvantages that have limited their participation in the nation’s free enterprise and economic disadvantages that have limited their participation in the nation’s free enterprise

system. system. ~~The~~ MBDA’s mission is to support the growth and global competitiveness of the MBDA’s mission is to support the growth and 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
~~other~~ initiatives, initiatives, ~~the~~ MBDA carries out this mission by providing technical and business MBDA carries out this mission by providing technical and business
assistance, support, and resources, as well as advocacy and research on behalf of MBEs. assistance, support, and resources, as well as advocacy and research on behalf of MBEs.
MBDA’s role and its services have shifted over time to address new and emerging challenges and opportunities. The agency MBDA’s role and its services have shifted over time to address new and emerging challenges and opportunities. The agency
was originally established as the Office of Minority Business Enterprise (OMBE) by Executive Order 11458, signed by was originally 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). The Carter Administration also refocused the agency’s efforts on helping Business Development Agency (MBDA). The Carter Administration also refocused the agency’s efforts on helping
businesses of all sizes develop into medium and large-scale businesses, particularly in growth industries. The Reagan businesses of all sizes develop into medium and large-scale businesses, particularly in growth industries. The Reagan
Administration established the Minority Business Development Center program, which became Administration established the Minority Business Development Center program, which became ~~the~~ MBDA’s primary method MBDA’s primary method
for delivering technical and management services to minority businesses. The George H.W. Bush Administration proposed for delivering technical and management services to minority businesses. The George H.W. Bush Administration proposed
eliminating the agency and transferring its mission to the Small Business Administration (SBA), but ultimately continued the eliminating the agency and transferring its mission to the Small Business Administration (SBA), but ultimately continued the
agency as an entity within the Department of Commerce. Successive Administrations have changed the agency’s focus and agency as an entity within the Department of Commerce. Successive Administrations have changed the agency’s focus and
reorganized the delivery of its assistance and services. reorganized the delivery of its assistance and services.
The agency was provided statutory authorization by the Minority Business Development Act of 2021 (Division K The agency was provided statutory authorization by the Minority Business Development Act of 2021 (Division K—
of the Infrastructure Investment and Jobs Act, Infrastructure Investment and Jobs Act, ~~IIJA,~~ P.L. 117-58), enacted on November 15, 2021. In August 2022, P.L. 117-58), enacted on November 15, 2021. In August 2022, ~~Donald R.~~
~~Cravins, Jr. was confirmed by the Senate as~~ the Senate confirmed the first Under Secretary of Commerce for Minority Business Development. the first Under Secretary of Commerce for Minority Business Development.
After fluctuating amounts of funding in its early years, After fluctuating amounts of funding in its early years, ~~the~~ MBDA received annual appropriations of almost $60 million in MBDA received annual appropriations of almost $60 million in
the early 1980s. Its funding then generally declined, including a 27% reduction in annual appropriation between FY1995 and the early 1980s. Its funding then generally declined, including a 27% reduction in annual appropriation between FY1995 and
FY1996. By the late 1990s, MBDA’s annual appropriations had fallen below $30 million, where it largely remained for more FY1996. By the late 1990s, MBDA’s annual appropriations had fallen below $30 million, where it largely remained for more
than a decade. Since FY2013, MBDA’s funding has more than doubled to a high of $73 million in FY2021 before dropping than a decade. Since FY2013, MBDA’s funding has more than doubled to a high of $73 million in FY2021 before dropping
to $55 million in FY2022. The Consolidated Appropriations Act, to $55 million in FY2022. The Consolidated Appropriations Act, ~~2023~~2024 (P.L. (P.L. ~~117-328~~118-42) funded ) funded ~~the~~ MBDA at $MBDA at $7068.25 million. In million. In
FY2020 and FY2021, Congress provided supplemental appropriations to MBDA to assist MBEs in preventing, preparing for, FY2020 and FY2021, Congress provided supplemental appropriations to MBDA to assist MBEs in preventing, preparing for,
and responding to the COVID-19 pandemic. and responding to the COVID-19 pandemic.
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. MBDA clients sector programs, policy, and research. MBDA clients ~~include~~historically included MBEs that are not less than 51% owned by one or more MBEs that are not less than 51% owned by one or more
socially or economically disadvantaged individuals; and the management and daily business operations of which are socially or economically disadvantaged individuals; and the management and daily business operations of which are
controlled by one or more socially or economically disadvantaged individuals. controlled by one or more socially or economically disadvantaged individuals. However, in a March 2024 decision, Nuziard et al. v. Minority Business Development Agency (MBDA) et al., the U.S. District Court for the Northern District of Texas found MBDA’s presumption of social disadvantage for certain program applicants to be unconstitutional and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide. The agency’s response to the court order indicated it will continue to assist businesses owned by socially or economically disadvantaged individuals, but exclude race or ethnicity as criteria for receiving services. Technical and managerial assistance and other Technical and managerial assistance and other
services are principally provided to services are principally provided to ~~MBEs~~businesses through a network of Business Centers, Specialty Centers, and other projects. through a network of Business Centers, Specialty Centers, and other projects. ~~The~~
MBDA also coordinates with other federal agencies, nongovernmental organizations, and private firms to expand contracting MBDA also coordinates with other federal agencies, nongovernmental organizations, and private firms to expand contracting
and export opportunities for and export opportunities for ~~MBEs~~businesses. In recent years, . In recent years, ~~the~~ MBDA has increased the number of access to capital initiatives and MBDA has increased the number of access to capital initiatives and
expanded its entrepreneurship education programs in partnership with historically black colleges and universities (HBCUs), expanded its entrepreneurship education programs in partnership with historically black colleges and universities (HBCUs),
minority-serving institutions (MSIs), and other institutions. In legislation authorizing the agency in statute in FY2022, minority-serving institutions (MSIs), and other institutions. In legislation authorizing the agency in statute in FY2022,
Congress directed Congress directed ~~the~~ MBDA to also establish the Rural Business Center program and regional MBDA offices and to further MBDA to also establish the Rural Business Center program and regional MBDA offices and to further
develop its research and data clearinghouse roles.develop its research and data clearinghouse roles.
Current issues of congressional interest include the agency’s Current issues of congressional interest include the agency’s response to the March 2024 court ruling; its implementation of new programs to reach MBEs, individuals, implementation of new programs to reach MBEs, individuals,
and communities; the agency’s funding; and the integration of existing activities. and communities; the agency’s funding; and the integration of existing activities. ~~The~~ MBDA may seek to hire additional MBDA may seek to hire additional
staff or otherwise increase its capacity to reestablish regional offices, administer existing staff or otherwise increase its capacity to reestablish regional offices, administer existing Congressional Research Service The Minority Business Development Agency: An Overview of Its History and Programs and new programs, and activate and new programs, and activate
additional roles, such as coordination among federal agencies and the development of new areas of technical assistance and additional roles, such as coordination among federal agencies and the development of new areas of technical assistance and
research activities. Congress may be interested in the integration of MBDA activities with other agencies, such as the Small research activities. Congress may be interested in the integration of MBDA activities with other agencies, such as the Small
Business Administration. Congress may also be interested in options for Business Administration. Congress may also be interested in options for ~~the~~ MBDA to take on new or expanded roles, MBDA to take on new or expanded roles,
services, and partnerships, or in reviewing additional coordination opportunities between MBDA and other federal agencies. services, and partnerships, or in reviewing additional coordination opportunities between MBDA and other federal agencies.
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The Minority Business Development Agency: An Overview of Its History and Programs

Introduction
The Department of Commerce’s The Department of Commerce’s (DOC’s) Minority Business Development Agency (MBDA) is the lead 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.1 Numerous congressional hearings, undergirded by historical and current business community.1 Numerous congressional hearings, undergirded by historical and current
academic research, have tried to document the extent to which members of minority groups 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, Congress and many successive presidential challenges, Congress and many successive presidential ~~administrations~~Administrations since the Nixon since the Nixon
Administration have supported national policies intended to address these disparities through 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 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, economic disadvantages that have limited their participation. To these ends, ~~the~~ MBDA is charged 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.
For over 50 years, Congress approved legislation to fund For over 50 years, Congress approved legislation to fund ~~the~~ MBDA without providing the MBDA without providing the
agency statutory authorization. For example, in FY2021, agency statutory authorization. For example, in FY2021, ~~the~~ MBDA received $48 million in MBDA received $48 million in
annual appropriations and an additional $25 million in supplemental appropriations to assist annual appropriations and an additional $25 million in supplemental appropriations to assist
MBEs adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.3 The MBEs adversely affected by the Coronavirus Disease 2019 (COVID-19) pandemic.3 The
Minority Business Development Act of 2021 (Minority Business Development Act of 2021 (~~Division K—~~MBD Act of 2021; Division K of the Infrastructure Investment and Jobs Infrastructure Investment and Jobs
Act, P.L. 117-58) statutorily authorized the agency, codified selected existing Act, P.L. 117-58) statutorily authorized the agency, codified selected existing programs, and added new programs and roles.4 In August 2022, Donald R. Cravins Jr. was confirmed by the Senate as the first Under Secretary of Commerce for Minority Business ~~programs, and~~

1 15 C.F.R. §1400.2 “Determination of Group Eligibility for MBDA Assistance, Definitions” defines Minority 1 15 C.F.R. §1400.2 “Determination of Group Eligibility for MBDA Assistance, Definitions” defines Minority
Business Enterprise as a business that is owned or controlled by one or more socially or economically disadvantaged Business Enterprise as a business that is owned or controlled by one or more socially or economically disadvantaged
persons. Socially disadvantaged persons means those persons who have been subjected to cultural, racial, or ethnic persons. Socially disadvantaged persons means 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. Economically prejudice because of their identity as members of a group without regard to their individual qualities. Economically
disadvantaged persons means those persons whose ability to compete in the free enterprise system has been impaired disadvantaged persons means those persons whose ability to compete in the free enterprise system has been impaired
due to diminished capital and credit opportunities because of their identity as members of a group without regard to due to diminished capital and credit opportunities because of their identity as members of a group without regard to
their individual qualities, as compared to others in the same line of business and competitive market area. Person means their individual qualities, as compared to others in the same line of business and competitive market area. Person means
a citizen of the United States or an alien lawfully admitted for permanent residence. a citizen of the United States or an alien lawfully admitted for permanent residence.
2 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise, 2 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 Congress, 2nd , 96th Congress, 2nd
sess., June 9, 1980, and June 16, 1980 (Washington, DC: GPO, 1980); MBDA, “Demographic Trends Publications,” sess., June 9, 1980, and June 16, 1980 (Washington, DC: GPO, 1980); MBDA, “Demographic Trends Publications,”
https://www.mbda.gov/page/demographic-trends-publications; and Robert W. Fairlie and Alicia M. Robb, https://www.mbda.gov/page/demographic-trends-publications; and Robert W. Fairlie and Alicia M. Robb, Race and
Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States (Cambridge, MA: The MIT (Cambridge, MA: The MIT
Press, 2010). Press, 2010).
3 P.L. 116-260. 3 P.L. 116-260. ~~The~~ MBDA also received $10 million in supplemental appropriations in FY2020. See P.L. 116-136MBDA 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

~~added new programs and roles.4 In August 2022, Donald R. Cravins, Jr. was confirmed by the~~
~~Senate as the first Under Secretary of Commerce for Minority Business Development.5~~
~~MBDA Origins and Authority~~
~~The MBDA was originally established as the Office of Minority Business Enterprise (OMBE) by~~
~~President Richard Nixon with the signing of Executive Order (E.O.) 11458 on March 5, 1969.6~~
~~During the 1968 presidential campaign, then-Republican candidate Nixon embraced the idea of~~
~~“Black Capitalism,” which promoted increasing minority participation as owners and managers in~~
~~the U.S. economy as a means of not only promoting economic advancement and parity, but~~
~~political power as well.7~~Development.5 In January 2024, Under Secretary Cravins stepped down and MBDA reported that Eric Morrissette will temporarily lead the agency.6 Federal District Court Ruling on MBDA Business Center Program In March 2024, the U.S. District Court for the Northern District of Texas found in Nuziard et al. v. Minority Business Development Agency (MBDA) et al. that MBDA’s presumption of social disadvantage for certain program applicants was unconstitutional, and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide.7 MBDA's Business Center program offers technical assistance to minority business enterprises (MBEs) that have “socially or economically disadvantaged" owners. MBDA’s authorizing statute, the MBD Act of 2021, states that the Under Secretary of Commerce for Minority Business Development may presume that “socially or economically disadvantaged individual” includes any individual who is: • Black or African American; • Hispanic or Latino; • American Indian or Alaska Native; • Asian; • Native Hawaiian or other Pacific Islander; or • A member of a group that MBDA determines under Title 15, Part 1400 of the Code of Federal Regulations, is a socially disadvantaged group eligible to receive assistance.8 The MBD Act of 2021 also defined a “socially or economical y disadvantaged individual” as someone who: • Has been subjected to racial or ethnic prejudice or cultural bias 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; or • Has had his or her ability to compete in the free enterprise system impaired due to diminished capital and credit opportunities, as compared to others in the same line of business and competitive market area because of the identity of the individual as a member of a group, without regard to any individual quality of the individual that is unrelated to that identity.9 In October 2023, fol owing a preliminary injunction against the Wisconsin, Orlando, and Dallas-Fort Worth MBDA Business Centers, MBDA issued guidance stating that while the MBD Act of 2021 designated certain racial groups as presumptively socially and economically disadvantaged, “An individual does not need to identify as a member of one of these groups to be a socially or economically disadvantaged individual eligible to receive Business Center services under the” MBD Act of 2021. Rather, an individual can claim to be socially or economically disadvantaged if “their membership in a group has resulted in their subjection to racial or ethnic prejudice or cultural bias or impaired their ability to compete in the free enterprise system.”10 According to news reports, MBDA has continued to offer Business Center services since the March 2024 ruling.11 In April 2024, MBDA issued guidance to its staff that “Business Centers MUST NOT apply” the statutory 5 Congress.gov, “Nomination: Donald R Cravins—Department of Commerce,” PN2062, https://www.congress.gov/nomination/117th-congress/2062?q=%7B%22search%22%3A%22cravins%22%7D. 6 MBDA, “Minority Business Development Agency Announces Departure of Donald R. Cravins, Jr., as First-Ever Under Secretary of Commerce for Minority Business Development,” https://www.mbda.gov/minority-business-development-agency-announces-departure-donald-r-cravins-jr-first-ever-under. 7 Jeffrey Nuziard et al. v. Minority Business Development Agency et al., (United States District Court for the Northern District of Texas, Fort Worth Division 2024). 8 15 U.S.C. §9501(15)(B). 9 15 U.S.C. §9501(15)(A). 10 Donald R. Cravins, Under Secretary for Minority Business Development, Guidance to MBDA Business Center Operators, MBDA, October 23, 2023, https://www.mbda.gov/sites/default/files/2023-10/MBDA%20Guidance%20Memo.pdf. 11 Julian Mark, “To comply with court, federal agency lets White people claim social disadvantage,” The Washington Post, April 3, 2024. Congressional Research Service 2 The Minority Business Development Agency: An Overview of Its History and Programs presumptions of social and economic disadvantage established in the MBD Act of 2021 (emphasis original).12 The guidance went on to state that “All promotion or outreach conducted by a Business Center should make clear that Business Center services are available for individuals of any race or ethnicity who qualify as socially or economically disadvantaged.”13 MBDA also updated its Business Center client engagement form to note that “An individual of any race or ethnicity may meet the definition of socially or economically disadvantaged under the” MBD Act of 2021.14 The form requires the applicant to self-certify that they meet the definition of socially or economically disadvantaged. As of May 2024, MBDA’s website states, “Our clients are mostly U.S. minority business enterprises (MBEs) as defined in the” MBD Act of 2021.15 As a result, this report continues to use the term “MBE.” MBDA Origins and Authority MBDA was originally established as the Office of Minority Business Enterprise (OMBE) by President Richard Nixon with the signing of Executive Order (E.O.) 11458 on March 5, 1969.16 During the 1968 presidential campaign, then-Republican candidate Nixon embraced the idea of “Black Capitalism,” which promoted increasing minority participation as owners and managers in the U.S. economy as a means of not only promoting economic advancement and parity, but political power as well.17 Eager to demonstrate his commitment to these goals and pressed by civil Eager to demonstrate his commitment to these goals and pressed by civil
rights advocates to fulfill his campaign promise, President Nixon chose to bypass Congress and rights advocates to fulfill his campaign promise, President Nixon chose to bypass Congress and
the legislative process, opting to establish a Cabinet-level committee on minority enterprise.the legislative process, opting to establish a Cabinet-level committee on minority enterprise.818
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~~
~~with advising and supporting the Secretary of Commerce on matters affecting the success of~~
~~minority businesses, including recommendations for further actions. During its first two years, the~~
~~ACME played a significant role in shaping the OMBE’s agenda. The ACME also helped develop~~
~~efforts to increase minority participation in franchises.9~~

~~4 P.L. 117-58, 135 Stat. 429, November 15, 2021.~~
~~5 Congress.gov, “Nomination: Donald R Cravins—Department of Commerce,” PN2062, https://www.congress.gov/~~
~~nomination/117th-congress/2062?q=%7B%22search%22%3A%22cravins%22%7D.~~
6 12 Eric Morrissette, Acting Under Secretary for Minority Business Development, Guidance to Minority Business Development Agency (MBDA) Business Center Operators, MBDA, March 20, 2024, https://mbda.gov/sites/default/files/2024-03/MBDA%20Guidance%20Memo%20on%20Eligibility_03%2020%202024_No%20CEF.pdf. 13 Ibid 14 MBDA, MBDA Business Center Client Engagement Form, https://www.mbda.gov/files/mbda-business-center-client-engagement-form. 15 MBDA, Who We Are, https://www.mbda.gov/who-we-are/overview. 16 Executive Order 11458, “Prescribing Arrangements for Developing and Coordinating a National Program for Executive Order 11458, “Prescribing Arrangements for Developing and Coordinating a National Program for
Minority Business Enterprise,” 34Minority Business Enterprise,” 34 Federal Register 4937, March 5, 1969. 4937, March 5, 1969.
717 Dean Kotlowski, “Black Power-Nixon Style: The Nixon Administration and Minority Business Enterprise,” Dean Kotlowski, “Black Power-Nixon Style: The 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.
818 Members of the committee included Secretary of Commerce Maurice Stans, Secretary of Health, Education, and Members of the committee included Secretary of Commerce Maurice Stans, Secretary of Health, Education, and
Welfare Robert H. Finch, Secretary of Housing and Urban Development George Romney, Secretary of Agriculture Welfare Robert H. Finch, Secretary of Housing and Urban Development George Romney, Secretary of Agriculture
Clifford Hardin, and Secretary of Transportation John Volpe. See Dean Kotlowski, “Black Power-Nixon Style: The Clifford Hardin, and Secretary of Transportation John Volpe. See Dean Kotlowski, “Black Power-Nixon Style: The
Nixon Administration and Minority Business Enterprise,” Nixon Administration and Minority Business Enterprise,” The Business History Review, vol. 72, no. 3 (Autumn 1998), , vol. 72, no. 3 (Autumn 1998),
p. 420. p. 420.
~~9 In 1969, eager to demonstrate results, the OMBE co-sponsored with the Small Business Administration (SBA) what~~
~~was dubbed the 25 x 25 x 2 program, which was one of two federal programs focused on increasing minority~~
~~participation in the franchise industry. The plan involved the OMBE, during eight separate rounds, recruiting 25~~
~~national franchisors who each would commit to awarding 25 franchises to minority owners each year for a two-year~~
~~period. See U.S. Congress, Senate Select Committee on Small Business, The Economic Effects of Franchising,~~
~~committee print, prepared for the Small Business Administration by Urban B. Ozanne, D.B.A. and Shelby D. Hunt. Ph.~~
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~
Congressional Research Service 3 The Minority Business Development Agency: An Overview of Its History and Programs E.O. 11458 also established an Advisory Council on Minority Enterprise (ACME), charging it with advising and supporting the Secretary of Commerce on matters affecting the success of minority businesses, including recommendations for further actions. During its first two years, the ACME played a significant role in shaping the OMBE’s agenda. The ACME also helped develop efforts to increase minority participation in franchises.19
Stymied by organizational difficulties, including a lack of cooperation from other Cabinet-level Stymied by organizational difficulties, including a lack of cooperation from other Cabinet-level
departments, an inexperienced staff, and the absence of a dedicated budget, the OMBE struggled departments, an inexperienced staff, and the absence of a dedicated budget, the OMBE struggled
during its first years of operation. It was also said to be handicapped in pursuing its mission by during its first years of operation. It was also said to be handicapped in pursuing its mission by
the Commerce Secretary’s decision “not to become involved in individual cases or with programs the Commerce Secretary’s decision “not to become involved in individual cases or with programs
at the operational level and not to seek to encroach upon existing programs functions of other 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 two years of operations, President Nixon, To address concerns raised during the OMBE’s initial two years of operations, President Nixon,
on October 13, 1971, signed E.O. 11625, Prescribing Additional Arrangements for Developing on October 13, 1971, signed E.O. 11625, Prescribing Additional Arrangements for Developing
and Coordinating a National Program for Minority Business Enterprise.and Coordinating a National Program for Minority Business Enterprise.1020 The new E.O. was 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
concerning minority enterprise and to coordinate the related efforts of all Federal concerning minority enterprise and to coordinate the related efforts of all Federal
departments and agencies. It also directs the departments and agencies to develop departments and agencies. It also directs the departments and agencies 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.cooperate in expanding the overall Federal effort.1121
In addition to reinforcing the original E.O.’s objectives, the new E.O. called for the OMBE to In addition to reinforcing the original E.O.’s objectives, the new E.O. called for the OMBE to
create a network of minority business centers. These centers would be charged with providing 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 principally through the marked an evolution in the agency’s role from an advisory one undertaken principally through the
ACME to an active one, supporting the development of minority business enterprises using 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~~
~~authorizing the agency and its mission.12 In 1979, the Carter Administration reorganized and~~
~~renamed the OMBE as the Minority Business Development Agency (MBDA). The reorganization~~
~~was, in part, a response to reports that characterized the agency’s efforts to support MBEs as~~
~~fragmented, heavily focused on small businesses, and favoring the number of firms assisted rather~~
~~than the quality of assistance provided. The Carter Administration’s efforts were intended to~~
~~refocus the agency on assisting “minority businesses develop into medium- and large-size firms~~

19 In 1969, eager to demonstrate results, the OMBE co-sponsored with the Small Business Administration (SBA) what was dubbed the 25 x 25 x 2 program, which was one of two federal programs focused on increasing minority participation in the franchise industry. The plan involved the OMBE, during eight separate rounds, recruiting 25 national franchisors who each would commit to awarding 25 franchises to minority owners each year for a two-year period. See U.S. Congress, Senate Select Committee on Small Business, The Economic Effects of Franchising, committee print, prepared for the Small Business Administration by Urban B. Ozanne, D.B.A. and Shelby D. Hunt. Ph. D, Graduate School of Business, the University of Wisconsin, 92nd Cong., 1st sess., September 8, 1971, committee print D, Graduate School of Business, the University of Wisconsin, 92nd Cong., 1st sess., September 8, 1971, committee print
(Washington, DC: GPO, 1971), pp. 51-55 and pp. 187-198. Two years later, the franchising initiatives and SBA’s (Washington, DC: GPO, 1971), pp. 51-55 and pp. 187-198. Two 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. In addition, the OMBE initiated efforts to increase capital assets in minority-controlled Committee on Small Business. In addition, the OMBE initiated efforts to increase capital assets in minority-controlled
banking institutions to be made available to minority businesses. banking institutions to be made available to minority businesses.
1020 Executive Order 11625, “Prescribing Additional Arrangements for Developing and Coordinating a National Program Executive Order 11625, “Prescribing Additional Arrangements for Developing and Coordinating a National Program
for Minority Business Enterprise,” 36 for Minority Business Enterprise,” 36 Federal Register 19967-19970, October 13, 1971. 19967-19970, October 13, 1971.
1121 U.S. President (Nixon), “Special Message to the Congress Urging Expansion of the Minority Business Enterprise U.S. President (Nixon), “Special Message to the Congress Urging Expansion of the Minority Business Enterprise
Program,” Program,” Public Papers of the Presidents of the United States: Richard Nixon 1971, vol. 332 (Washington, DC: GPO, , vol. 332 (Washington, DC: GPO,
1972), pp. 1041-1046. 1972), pp. 1041-1046.
~~12 For a summary of legislative activities related to the establishment of a Minority Business Development~~
~~Administration in the 96th Congress, 2nd sess., see H.Rept. 96-1542, pp. 129-138.~~
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Congressional Research Service 4 link to page 33 link to page 43 link to page 43 The Minority Business Development Agency: An Overview of Its History and Programs Agency Reorganization During the Carter Administration, Congress considered, but did not pass, enabling legislation authorizing the agency and its mission.22 In 1979, the Carter Administration reorganized and renamed the OMBE as the Minority Business Development Agency (MBDA). The reorganization was, in part, a response to reports that characterized the agency’s efforts to support MBEs as fragmented, heavily focused on small businesses, and favoring the number of firms assisted rather than the quality of assistance provided. The Carter Administration’s efforts were intended to refocus the agency on assisting “minority businesses develop into medium- and large-size firms in growth industries that produced jobs, stabilized communities, and improved the overall in growth industries that produced jobs, stabilized communities, and improved the overall
economy.”economy.”1323
See “Additional Agency History” in See “Additional Agency History” in Appendix A for information about for information about ~~the~~ MBDA’s history MBDA’s history
since the Carter Administration. See “Legislative Proposals, 96th Congress-117th Congress” since the Carter Administration. See “Legislative Proposals, 96th Congress-117th Congress” inin
Appendix C for a summary of bills related to for a summary of bills related to ~~the~~ MBDA and its activities. MBDA and its activities.
Agency Establishment
Congress considered proposals to codify Congress considered proposals to codify ~~the~~ MBDA for decades (seeMBDA for decades (see Appendix C) prior to the prior to the
enactment of the enactment of the ~~Minority Business Development~~MBD Act of 2021. Act of 2021. ~~The~~ MBDA’s powers and duties MBDA’s powers and duties
are now to be set in accordance with the statute “and without regard to Executive Order 11625 are now to be set in accordance with the statute “and without regard to Executive Order 11625
(36 (36 Federal Register 19967; relating to prescribing additional arrangements for developing and 19967; relating to prescribing additional arrangements for developing and
coordinating a national program for minority business enterprise).”coordinating a national program for minority business enterprise).”14
~~The Minority Business Development~~24 The MBD Act of 2021 also established within the agency an Office of Act of 2021 also established within the agency an Office of
Business Centers, an Office on Minority Business Development Grants, and regional MBDA Business Centers, an Office on Minority Business Development Grants, and regional MBDA
offices.offices.1525 The act directs the agency to submit a report to Congress by March 15, 2022, that The act directs the agency to submit a report to Congress by March 15, 2022, that
describes describes
• the agency’s organizational structure; the agency’s organizational structure;
• the agency’s organizational position within the agency’s organizational position within ~~the Department of Commerce (DOC);~~
DOC; and and
• how the agency will function in relation to the operations carried out by other how the agency will function in relation to the operations carried out by other
DOC components. DOC components.16
~~The~~ 26 MBDA is also required to submit two reports to Congress by November 15, 2022. The first 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, 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 and recommendations for extending outreach to underserved areas. The second report must
address the ways that MBEs can address gaps in the supply chain.address the ways that MBEs can address gaps in the supply chain.1727 The act directs The act directs ~~the~~ MBDA MBDA
and the DOC Office of Inspector General to submit reports on and the DOC Office of Inspector General to submit reports on ~~the~~ MBDA’s grants to nonprofit MBDA’s grants to nonprofit
organizations.organizations.1828 In addition to biennial reports, the act further directs In addition to biennial reports, the act further directs ~~the~~ MBDA to submit reports MBDA to submit reports
on its entrepreneurship education activities and a study on alternative financing solutions.on its entrepreneurship education activities and a study on alternative financing solutions.~~19 The~~
~~Comptroller General of the United States is required to report to Congress on the agency’s~~
~~programs by no later than November 15, 2025.20~~
~~The Minority Business Development Act of 2021 authorized to be appropriated $110 million for~~
~~the MBDA for each fiscal year, FY2021 through FY2025. The act directed the MBDA to allocate~~
~~the majority of annual appropriations, if approved, to the Business Center program, and to reserve~~

1329 The 22 For a summary of legislative activities related to the establishment of a Minority Business Development Administration in the 96th Congress, 2nd sess., see H.Rept. 96-1542, pp. 129-138. 23 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise, 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 Congress, 2nd , 96th Congress, 2nd
sess., June 9, 1980, and June 16, 1980 (Washington, DC: GPO, 1980), pp. 2-3. sess., June 9, 1980, and June 16, 1980 (Washington, DC: GPO, 1980), pp. 2-3.
1424 P.L. 117-58, Division K, Title VII, Sec. 100707. P.L. 117-58, Division K, Title VII, Sec. 100707.
1525 P.L. 117-58, Sec. 100003, Sec. 100001, and Sec. 100401. P.L. 117-58, Sec. 100003, Sec. 100001, and Sec. 100401.
1626 P.L. 117-58, Sec. 100003. P.L. 117-58, Sec. 100003.
1727 P.L. 117-58, Sec. 100303 and Sec. 100304. P.L. 117-58, Sec. 100303 and Sec. 100304.
1828 P.L. 117-58, Sec. 100401. P.L. 117-58, Sec. 100401.
1929 P.L. 117-58, Sec. 100705, Sec. 100203, and Sec. 100202. P.L. 117-58, Sec. 100705, Sec. 100203, and Sec. 100202.
~~20 P.L. 117-58, Sec. 100704.~~
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Comptroller General of the United States is required to report to Congress on the agency’s programs by no later than November 15, 2025.30 The MBD Act of 2021 authorized to be appropriated $110 million for MBDA for each fiscal year, FY2021 through FY2025. The act directed MBDA to allocate the majority of annual appropriations, if approved, to the Business Center program, and to reserve $20 million each fiscal year for the Rural Business Center program.$20 million each fiscal year for the Rural Business Center program.~~21 The~~31 MBDA received $73 MBDA received $73
~~million in appropriations for FY2021 and $55~~million in appropriations for FY2021, $55 million in appropriations for FY2022, $70 million in appropriations for FY2023, and $68.25 million in appropriations for million in appropriations for ~~FY2022~~FY2024. .
New Programs, Activities and Expanded Roles, Partnerships
The MBD~~The Minority Business Development~~ Act of 2021 established new MBDA programs and Act of 2021 established new MBDA programs and
activities, including the following: activities, including the following:
• Initiatives to promote economic resiliency for minority businesses (Title II), Initiatives to promote economic resiliency for minority businesses (Title II),
including including
• An annual diverse business capital formation forum (Sec. 100201), An annual diverse business capital formation forum (Sec. 100201),
• A study on alternative financing (Sec. 100202), and A study on alternative financing (Sec. 100202), and
• Grants to historically black colleges and universities (HBCUs) and minority- Grants to historically black colleges and universities (HBCUs) and minority-
serving institutions (MSIs) for entrepreneurship curriculum development and serving institutions (MSIs) for entrepreneurship curriculum development and
new partnerships and activities to increase entrepreneurial education and new partnerships and activities to increase entrepreneurial education and
training (Sec. 100203); training (Sec. 100203);
• Rural Business Centers to be operated by MSIs (Title III); Rural Business Centers to be operated by MSIs (Title III);
• Grants to nonprofit organizations to support the development, growth, or Grants to nonprofit organizations to support the development, growth, or
retention of MBEs (Title IV); retention of MBEs (Title IV);
• An MBE Advisory Council (Title V); and An MBE Advisory Council (Title V); and
• Coordination and convening activities among federal agencies regarding socially Coordination and convening activities among federal agencies regarding socially
or economically disadvantaged businesses (Title VI). or economically disadvantaged businesses (Title VI).
The act established support for—and in some instances expanded the scope of—existing The act established support for—and in some instances expanded the scope of—existing
programs and activities, including programs and activities, including ~~the~~ MBDA Business Center and Specialty Center programs MBDA Business Center and Specialty Center programs
and and ~~the~~ MBDA’s research, evaluation, outreach, and informational activities.MBDA’s research, evaluation, outreach, and informational activities.2232 For instance, the For instance, the
act directed the Under Secretary to ensure center coverage so that the Business Center Program act directed the Under Secretary to ensure center coverage so that the Business Center Program
offers services in “all regions of the United States.”offers services in “all regions of the United States.”2333 The act also recommended increased The act also recommended increased
funding for the Business Center program, with the majority of MBDA funding, as appropriated, 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 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 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.MBDA Business Center program to serve MBEs in rural areas.24
~~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~~

2134 30 P.L. 117-58, Sec. 100704. 31 P.L. 117-58, Sec. 100708. P.L. 117-58, Sec. 100708.
2232 P.L. 117-58, Division K, Title I. P.L. 117-58, Division K, Title I.
2333 P.L. 117-58, Sec. 100111. Additionally, the Under Secretary will develop selection criteria for P.L. 117-58, Sec. 100111. Additionally, the Under Secretary will develop selection criteria for ~~the MBDA~~MBDA’s Business Business
Center program. The Center program. The ~~Minority Business Development~~MBD Act of 2021 provides three options for consideration for the Act of 2021 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 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 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 Bureau of the Census; (ii) a federally recognized area of economic distress; or (iii) a State that is underserved with
respect to respect to ~~the MBDA~~ MBDA’s Business Center Program, as defined by the Under Secretary.” See P.L. 117-58, Sec. 100114. Business Center Program, as defined by the Under Secretary.” See P.L. 117-58, Sec. 100114.
24 34 P.L. 117-58, Division K, Title III. P.L. 117-58, Division K, Title III.
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In terms of research, evaluation, and informational activities, Executive Order 11625 previously directed the agency to establish a center for the “development, collection, summarization, and dissemination of information” to promote the establishment and growth of MBEs, among other monitoring, reporting, and evaluation roles. The MBD Act of 2021 codified the agency’s research, evaluation, and outreach activities, and directed the agency to undertake certain studies and outreach roles.undertake certain studies and outreach roles.2535 For instance, Section 100103 noted that the agency For instance, Section 100103 noted that the agency
shall conduct research, studies, and surveys, and shall “provide outreach, educational services, shall conduct research, studies, and surveys, and shall “provide outreach, educational services,
and technical assistance in, at a minimum, the five most commonly spoken languages in the and technical assistance in, at a minimum, the five most commonly spoken languages in the
United States to ensure that limited English proficient individuals receive culturally and United States to ensure that limited English proficient individuals receive culturally and
linguistically appropriate access to the services and information provided by the Agency.”linguistically appropriate access to the services and information provided by the Agency.”26
~~The Minority Business Development~~36 The MBD Act of 2021 also Act of 2021 also ~~authorizes the~~authorized MBDA to implement MBDA to implement
services through partnerships with both private and public sector entities, and directed the agency 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 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 nonprofit organizations, and community-based organizations) on new and existing programs. For
example, the act established new roles and activities to expand entrepreneurial education example, the act established new roles and activities to expand entrepreneurial education
activities specifically with HBCUs and MSIs, among other partners. The entrepreneurial activities specifically with HBCUs and MSIs, among other partners. The entrepreneurial
education activities include a grant program to develop and implement entrepreneurship curricula education activities include a grant program to develop and implement entrepreneurship curricula
and other education and training opportunities for socially or economically disadvantaged and other education and training opportunities for socially or economically disadvantaged
individuals in the fields of business, management, and entrepreneurship.individuals in the fields of business, management, and entrepreneurship.27
~~The Minority Business Development Act of 2021 directs the~~37 While the MBD Act of 2021 granted MBDA specific statutory authority to operate these entrepreneurial education programs, MBDA had previously managed similar programs at the agency’s initiative. For example, in FY2018, MBDA made grants worth a combined total of $2 million to four HBCUs in order to help the schools compete for federal research and development funds, leverage partnerships with federal laboratories and/or technology-related resources, develop and implement STEM entrepreneurship, and compete for federal contracting opportunities.38 The MBD Act of 2021 directs MBDA to make grants to nonprofit MBDA to make grants to nonprofit
organizations in order to support the growth, development, and retention of MBEs. The act organizations in order to support the growth, development, and retention of MBEs. The act
specified that specified that ~~the~~ MBDA may consider nonprofit organizations located in a federally recognized MBDA may consider nonprofit organizations located in a federally recognized
area of economic distress and may award grants with consideration for a diverse array of grantees area of economic distress and may award grants with consideration for a diverse array of grantees
(e.g., community-based organizations, organizations with annual budgets under $1 million, and (e.g., community-based organizations, organizations with annual budgets under $1 million, and
organizations that serve low-income and rural communities).organizations that serve low-income and rural communities).2839 Also, once established, the Also, once established, the
Minority Business Enterprises Advisory Council—composed of both public and private sector Minority Business Enterprises Advisory Council—composed of both public and private sector
members—will advisemembers—will advise ~~the~~ MBDA on plans, programs, and activities that relate to socially or MBDA on plans, programs, and activities that relate to socially or
economically disadvantaged business concerns.economically disadvantaged business concerns.2940
As noted previously, the act expanded the agency’s roles and programs, which may increase 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 awareness of its services and increase access to services by new and previously underserved
~~communities and MBEs.30 For instance, once established, the new Rural Business Centers will~~
~~serve lower-density regions that may not have large concentrations of minority populations or~~
~~MBEs compared to more populous regions or metropolitan areas.31 The reestablishment 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.32 Additionally, the agency’s authorizing statute involves the Under~~
~~Secretary in partnerships, outreach, and other activities with public sector entities in order to~~
~~leverage resources and promote the position of MBEs in local economies.33~~

25 35 P.L. 117-58, Sec. 100103. P.L. 117-58, Sec. 100103.
2636 Additionally, the bill encouraged Additionally, the bill encouraged ~~the~~ MBDA to use the common languages spoken by the groups served in their MBDA to use the common languages spoken by the groups served in their
outreach and communication efforts regarding outreach and communication efforts regarding ~~the MBDA~~MBDA’s Business Centers. See P.L. 117-58, Sec. 100116. Business Centers. See P.L. 117-58, Sec. 100116.
2737 P.L. 117-58, Sec. 100203. P.L. 117-58, Sec. 100203.
~~28 P.L. 117-58, Division K, Title IV.~~
~~29 P.L. 117-58, Division K, Title V.~~
~~30 P.L. 117-58, Division K, Title I.~~
~~31 P.L. 117-58, Division K, Title III directs the Rural Business Center program to primarily serve clients that are~~
~~located 50 miles from an MBDA Business Center.~~
~~32 P.L. 117-58, Sec. 100003.~~
~~33 P.L. 117-58, Sec. 100102.~~
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~~link to page 27 link to page 11 link to page 31~~

38 MBDA, “Minority Business Development Agency Awards Nearly $2 Million to Historically Black Colleges and Universities,” press release, December 3, 2018, https://www.mbda.gov/news/press-releases/2018/12/minority-business-development-agency-awards-nearly-2-million. 39 P.L. 117-58, Division K, Title IV. 40 P.L. 117-58, Division K, Title V. Congressional Research Service 7 link to page 33 link to page 14 link to page 37 The Minority Business Development Agency: An Overview of Its History and Programs communities and MBEs.41 For instance, once established, the new Rural Business Centers will serve lower-density regions that may not have large concentrations of minority populations or MBEs compared to more populous regions or metropolitan areas.42 The reestablishment of regional MBDA offices may further extend MBDA’s services through their engagement with the local and regional business development partners, lending partners, and federal, state, and local procurement offices.43 Additionally, the agency’s authorizing statute involves the Under Secretary in partnerships, outreach, and other activities with public sector entities in order to leverage resources and promote the position of MBEs in local economies.44 ~~The Minority Business Development Agency: An Overview of Its History and Programs~~

Funding History
During the agency’s first During the agency’s first 5254 years, years, ~~the~~ MBDA continued to receive annual appropriations while MBDA continued to receive annual appropriations while
various Administrations considered reorganizing it, authorizing it, defunding its activities, or various Administrations considered reorganizing it, authorizing it, defunding its activities, or
merging it into the Small Business Administration (SBA) (semerging it into the Small Business Administration (SBA) (see Appendix A).
Figure 1 provides a visual representation of OMBE/MBDA appropriations from FY1970 to provides a visual representation of OMBE/MBDA appropriations from FY1970 to
~~FY2023~~FY2024. Table A-1 provides a history of Administrations’ annual budget requests and enacted provides a history of Administrations’ annual budget requests and enacted
appropriations for the agency since FY1970. After fluctuating amounts of funding in its early appropriations for the agency since FY1970. After fluctuating amounts of funding in its early
years, years, ~~the~~ MBDA received annual appropriations of almost $60 million in the early 1980s. Its MBDA received annual appropriations of almost $60 million in the early 1980s. Its
funding then generally declined, including a 27% reduction in annual appropriation between funding then generally declined, including a 27% reduction in annual appropriation between
FY1995 and FY1996. By the late 1990s, MBDA’s annual appropriations had fallen below $30 FY1995 and FY1996. By the late 1990s, MBDA’s annual appropriations had fallen below $30
million, where it largely remained for more than a decade. Since FY2013, MBDA’s funding has million, where it largely remained for more than a decade. Since FY2013, MBDA’s funding has
more than doubled to a high of $73 million in FY2021 before dropping to $55 million in FY2022. more than doubled to a high of $73 million in FY2021 before dropping to $55 million in FY2022.
The Consolidated Appropriations Act, The Consolidated Appropriations Act, ~~2023~~2024 (P.L. (P.L. ~~117-328~~118-42) funded ) funded ~~the~~ MBDA at $MBDA at $7068.25 million. In million. In
FY2020 and FY2021, Congress provided supplemental appropriations to MBDA to assist MBEs FY2020 and FY2021, Congress provided supplemental appropriations to MBDA to assist MBEs
in preventing, preparing for, and responding to the COVID-19 pandemic. in preventing, preparing for, and responding to the COVID-19 pandemic.
41 P.L. 117-58, Division K, Title I. 42 P.L. 117-58, Division K, Title III directs the Rural Business Center program to primarily serve clients that are located 50 miles from an MBDA Business Center. 43 P.L. 117-58, Sec. 100003. 44 P.L. 117-58, Sec. 100102. Congressional Research Service 8 The Minority Business Development Agency: An Overview of Its History and Programs Figure 1. OMBE/MBDA Appropriations History: FY1970 to FY2024 ~~Figure 1. OMBE/MBDA Appropriations History: FY1970 to FY2023~~
(in millions of dollars) (in millions of dollars)

Source: Budget Appendices of the United States. Budget Appendices of the United States.
Note: Includes supplemental appropriations. Includes supplemental appropriations.
~~FY2023~~FY2024 Appropriations
The Consolidated Appropriations Act, The Consolidated Appropriations Act, ~~2023~~2024 (P.L. (P.L. ~~117-328~~118-42) funded ) funded ~~the~~ MBDA at $MBDA at $7068.25 million—a million—a
~~27% increase~~2.5% decrease from the agency’s from the agency’s ~~FY2022~~FY2023 funding level of $ funding level of $5570 million. Congress directed the agency to allocate up to $5 million for grants to American Indian, Alaska Native, and Native Hawaiian entities qualified to provide business, financing, and technical assistance services to tribes.45 Recent Administrations’ Budget Requests and Related Activities The Biden Administration’s FY2025 budget request included $80 million for MBDA, an amount that would be 17% more than the FY2024 enacted level for annual appropriations of $68.25 million.46 The Infrastructure Investment and Jobs Act (P.L. 117-58) authorized to be appropriated $110 million to MBDA for each of fiscal years 2021 through 2025. 45 The explanatory statement accompanying P.L. 118-42 adopted “the Senate language under the heading ‘Native Entities’ and encourage[d] MBDA to coordinate with the Department’s Office of Native American Business Development on these efforts.” See explanatory statement accompanying the Consolidated Appropriations Act, 2024 (P.L. 118-42) printed in the March 5, 2024, Congressional Record (p. S1399), vol. 170, no. 39, https://www.congress.gov/118/crec/2024/03/05/170/39/CREC-2024-03-05.pdf; and U.S. Congress, Senate Appropriations Committee, “Report to Accompany S. 2321,” 118th Congress, 1st sess., July 13, 2023, S.Rept. 118-62, p. 16. 46 OMB, “Budget of the U.S. Government, Fiscal Year 2025” (2024), https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf, and “Appendix: Budget of the U.S. Government, Fiscal Year 2023” (2022), p. 186, (continued...) Congressional Research Service 9 The Minority Business Development Agency: An Overview of Its History and Programs In addition to recommending increased appropriations for MBDA, the Biden ~~million. Congress directed the~~
~~agency to allocate up to $5 million and $3 million to the Native American Business Development~~
~~and Minority Serving Institutions Entrepreneurship Pilot initiatives, respectively. Congress also~~
~~provided support for the goal of expanding the Business Center and Specialty Projects Center~~
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~~programs to every state, and expanding the level of service provided by new and existing~~
~~centers.34~~
~~Recent Administration’s Budget Requests and Related Activities~~
~~The Biden Administration proposed appropriations for the MBDA at the full amount authorized~~
~~in the Infrastructure, Investment, and Jobs Act (P.L. 117-58). The Biden Administration’s FY2023~~
~~budget request included $110 million for the MBDA, an amount that would be twice the FY2022~~
~~enacted level for annual appropriations of $55 million.35~~
~~In addition to recommending increased appropriations for MBDA, since FY2021, the Biden~~
Administration has initiated other activities to support small, disadvantaged businesses, including Administration has initiated other activities to support small, disadvantaged businesses, including
MBEs. For MBEs. For example, in March 2024, MBDA signed memorandums of understanding with nine historically black sororities and four minority women’s business organizations to help grow women-owned businesses.47 In October 2023, the Biden Administration announced that, by FY2024, federal agencies should establish a goal of collectively awarding at least 13% of federal contract spending to ~~example, in June 2021, the Biden Administration recommended, as part of its~~
~~American Jobs Plan, a new $1 billion grant program to help minority-owned manufacturers~~
~~access private capital as one of several, proposed initiatives to address the racial wealth gap. At~~
~~the same time, the Administration increased by 50% the goal for the share of contracts going to~~
~~small disadvantaged businesses (including minority-owned businesses) by 2026.36 Additionally,~~
~~on May 28, 2021, President Biden signed an executive order establishing the White House~~
~~Initiative on Asian Americans, Native Hawaiians, 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.”37~~
small disadvantaged businesses (including minority-owned businesses) in order to increase the small disadvantaged business share of federal contract award dollars to 15% by FY2025.48 Agency Overview
Mission and Structure
MBDA’s mission is to foster the economic growth and global competitiveness of MBEs. The 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 principally provided to MBEs through a network of Business Centers, Specialty services are principally provided to MBEs through a network of Business Centers, Specialty

~~34 See explanatory statement accompanying the Consolidated Appropriations Act, 2023 (P.L. 117-328) printed in the~~
~~December 20, 2022, Congressional Record (p. S7899), vol. 168, https://www.congress.gov/117/crec/2022/12/20/168/~~
~~198/CREC-2022-12-20.pdf.~~

~~35 OMB “Budget of the U.S. Government, Fiscal Year 2023” (2022), https://www.whitehouse.gov/wp-content/uploads/~~
~~2022/03/budget_fy2023.pdf, and “Appendix: Budget of the U.S. Government, Fiscal Year 2023” (2022), pp. 202-203,~~
~~https://www.whitehouse.gov/wp-content/uploads/2022/03/com_fy2023.pdf. In FY2022, P.L. 117-103 provided the~~
~~MBDA $55 million in annual appropriations.~~
~~36 White House, “FACT SHEET: Biden-Harris Administration Announces New Actions to Build Black Wealth and~~
~~Narrow the Racial Wealth Gap,” June 1, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/~~
~~06/01/fact-sheet-biden-harris-administration-announces-new-actions-to-build-black-wealth-and-narrow-the-racial-~~
~~wealth-gap/. The Appendix to the President’s FY2022 Budget Request also noted that, “The American Jobs Plan~~
~~proposes $1 billion to support small business access to credit, venture capital, and research and development dollars.~~
~~Ensuring equitable access to capital is essential to supporting the growth of entrepreneurship in communities of color~~
~~and undeserved communities.” See OMB “Appendix: Budget of the U.S. Government, Fiscal Year 2022” (2021), p.~~
~~205, https://www.whitehouse.gov/wp-content/uploads/2021/05/com_fy22.pdf.~~
~~37 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/.~~
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~~Centers, and other projects and initiatives.38 The MBDA and its network partners coordinate with~~
~~other agencies, such as the Department of the Treasury, Department of Commerce International~~
~~Trade Administration, the Export-Import (EXIM) Bank, and other federal agencies,~~
~~nongovernmental organizations, and private firms to expand capital access and contracting and~~
~~export opportunities for MBEs.39~~
Centers, and other projects and initiatives.49 MBDA and its network partners coordinate with other agencies, such as the Department of the Treasury, DOC’s International Trade Administration, the Export-Import (EXIM) Bank, and other federal agencies, nongovernmental organizations, and private firms to expand capital access and contracting and export opportunities for MBEs.50 https://www.whitehouse.gov/wp-content/uploads/2024/03/com_fy2025.pdf. In FY2024, P.L. 118-42 provided MBDA $68.25 million in annual appropriations. 47 MBDA, “The Minority Business Development Agency to Announce Historic Collaboration with Divine Nine Sororities and National Women’s Leadership Organizations,” press release, March 11, 2024, https://www.mbda.gov/news/press-releases/2024/03/minority-business-development-agency-announce-historic-collaboration. 48 Shalanda Young, Increasing the Share of Contract Dollars Awarded to Small Disadvantaged Businesses for Fiscal Year (FY) 2024 and in Subsequent FYs, Executive Office of the President, Office of Management and Budget, M-24-01, October 25, 2023, https://www.whitehouse.gov/wp-content/uploads/2023/10/M-24-01-Increasing-the-Share-of-Contract-Dollars-Awarded-to-Small-Disadvantaged-Businesses_Final.pdf. For more information on federal small business contracting goals, see CRS Report R45576, An Overview of Small Business Contracting, by R. Corinne Blackford. 49 MBDA, “Overview,” https://www.mbda.gov/who-we-are/overview. 50 MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review; MBDA, “Global Business: Strategic Partners,” https://www.mbda.gov/page/global-business-strategic-partners; and Testimony of MBDA Director, Alejandra Castillo, in U.S. Congress, Senate Committee on Indian Affairs, Accessing Capital in Indian Country, 114th Congress, 1st sess., June 17, 2015, S.Hrg. 114-97 (Washington, DC: GPO, 2015), https://www.congress.gov/event/114th-congress/senate-event/LC34122/text?s=5&r=29. The SBA, for instance, is a source of funding for minority small businesses, and it partners with MBDA in providing assistance to minority firms. Technical and management assistance from MBDA and its partners may facilitate minority business entities to qualify for SBA’s Section (8)(a) small disadvantage business and other programs. Congressional Research Service 10 link to page 10 The Minority Business Development Agency: An Overview of Its History and Programs Minority Businesses Face Distinct Challenges
According to MBDA and other sources, MBEs have unique challenges in accessing capital, contracts, and other According to MBDA and other sources, MBEs have unique challenges in accessing capital, contracts, and other
areas of business development. Below are findings from a FY2020 MBDA summary of key challenges: areas of business development. Below are findings from a FY2020 MBDA summary of key challenges:
•
Overall, minority-owned firms are smaller in size and scale than their nonminority counterparts. The gap in Overall, minority-owned firms are smaller in size and scale than their nonminority counterparts. The gap in
combined gross receipts is 10:1, with only 2% of minority firms generating gross receipts of more than $1 combined gross receipts is 10:1, with only 2% of minority firms generating gross receipts of more than $1
mil ion and only 11% of minority-owned firms having paid employees. mil ion and only 11% of minority-owned firms having paid employees.
•
In terms of capital access, minority firms are more likely to be denied loans at a rate nearly three times In terms of capital access, minority firms are more likely to be denied loans at a rate nearly three times
higher than nonminority firms, and minority firms are likely to pay higher interest rates of, on average 7.8%, higher than nonminority firms, and minority firms are likely to pay higher interest rates of, on average 7.8%,
while nonminority firms pay on average 6.4%. Additionally, minority firms are less likely to receive loans, and while nonminority firms pay on average 6.4%. Additionally, minority firms are less likely to receive loans, and
when approved, receive lower loan amounts. when approved, receive lower loan amounts.
•
In terms of contracts, minority firms secure a lower number and dol ar amount of contracts in proportion to In terms of contracts, minority firms secure a lower number and dol ar amount of contracts in proportion to
the number of available minority firms in the relevant market. Additionally, studies indicate that market and the number of available minority firms in the relevant market. Additionally, studies indicate that market and
other barriers impact minority firms’ access to contracts.other barriers impact minority firms’ access to contracts.4051
Source: MBDA, “The Minority Business Development Agency—Vital to Making America Great,” MBDA, “The Minority Business Development Agency—Vital to Making America 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.
Before the Before the ~~Minority Business Development~~MBD Act of 2021’s enactment, Act of 2021’s enactment, ~~the~~ MBDA was composed MBDA was composed
of offices focused on business development, Native American business development, policy of offices focused on business development, Native American business development, policy
analysis and development, management, administration, and education, legislative, and analysis and development, management, administration, and education, legislative, and
intergovernmental affairs.intergovernmental affairs.4152 The Office of Business Development coordinated the agency’s The Office of Business Development coordinated the agency’s
business center activities, and plans and implements business development strategies (e.g., business center activities, and plans and implements business development strategies (e.g.,
strategies related to access to capital, contracts, emerging domestic and international markets, and strategies related to access to capital, contracts, emerging domestic and international markets, and
global supply chains).global supply chains).4253 In 2005, MBDA established the Office of Native American Business In 2005, MBDA established the Office of Native American Business
Development within the Office of Business Development.Development within the Office of Business Development.4354 In FY2020, MBDA completed its In FY2020, MBDA completed its
launch of the Office of Policy launch of the Office of Policy Analysis and Development (OPAD). OPAD works with other agencies to expand data, research, analysis, and policy recommendations for minority business development based on economic and industry trends.55 MBDA’s organization structure shifted following enactment of the MBD Act of 2021 (see “Agency Establishment”). The Office of Business Development is now known as the Office of Business Centers, and OPAD is now known as the Office of Data Research and Evaluation. According to MBDA’s FY2025 congressional budget justification, the agency is proposing further organizational adjustments, primarily by placing the Office of the Chief Operating Officer in 51~~Analysis and Development (OPAD). OPAD works with other~~

~~38 MBDA, “Overview,” https://www.mbda.gov/who-we-are/overview.~~
~~39 MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review; MBDA, “Global Business: Strategic~~
~~Partners,” https://www.mbda.gov/page/global-business-strategic-partners; and Testimony of MBDA Director,~~
~~Alejandra Castillo, in U.S. Congress, Senate Committee on Indian Affairs, Accessing Capital in Indian Country, 114th~~
~~Congress, 1st sess., June 17, 2015, S.Hrg. 114-97 (Washington, DC: GPO, 2015), https://www.congress.gov/event/~~
~~114th-congress/senate-event/LC34122/text?s=5&r=29.~~
~~The SBA, for instance, is a source of funding for minority small businesses, and it partners with MBDA in providing~~
~~assistance to minority firms. Technical and management assistance from MBDA and its partners may facilitate~~
~~minority business entities to qualify for SBA’s Section (8)(a) small disadvantage business and other programs.~~
40 As noted in MBDA’s summary of key challenges facing minority businesses. See MBDA, “The Minority Business As noted in MBDA’s summary of key challenges facing minority businesses. See MBDA, “The Minority Business
Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development-Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development-
agency-vital-making-america-great. agency-vital-making-america-great.
4152 U.S. Department of Commerce (DOC), U.S. Department of Commerce (DOC), FY2021 MBDA Congressional Budget Justification, p. 2, , p. 2,
https://www.commerce.gov/sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf, and 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. MBDA, “Organization Chart,” https://www.mbda.gov/images/organizationchartjpg.
4253 MBDA, “Chief of the Office of Business Development,” https://www.mbda.gov/who-we-are/leadership/ MBDA, “Chief of the Office of Business Development,” https://www.mbda.gov/who-we-are/leadership/
Chief%20of%20the%20Office%20of%20Business%20Development. Chief%20of%20the%20Office%20of%20Business%20Development.
4354 DOC, DOC, FY2016 MBDA Congressional Budget Justification, p. 17, https://www.osec.doc.gov/bmi/budget/FY16CJ/, p. 17, https://www.osec.doc.gov/bmi/budget/FY16CJ/
MBDA_FY_2016_CJ_Final.pdfMBDA_FY_2016_CJ_Final.pdf. 55 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: 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-based and incomplete, is insufficient. See MBDA, “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-minority-owned-firms-can-close-wealth-gap-and-drive-us, and Lucas Misera, An Uphill Battle: COVID-19’s Outsized Toll on Minority-Owned Firms, Federal Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/newsroom-and-events/publications/community-development-briefs/db-20201008-misera-report.aspx. Congressional Research Service 11.
~~Congressional Research Service~~

9

link to page link to page 817 link to page link to page 8 17 The Minority Business Development Agency: An Overview of Its History and Programs

~~agencies to expand data, research, analysis, and policy recommendations for minority business~~
~~development based on economic and industry trends.44~~
~~The organization and duties of MBDA offices and the location of regional offices will likely shift~~
~~due to the enactment of the Minority Business Development Act of 2021 (see~~ ~~“Agency~~
~~Establishment”). Additionally, the MBDA will~~charge of the Offices of Business Centers and Data and Research Evaluation, among other departments.56 Figure 2 and Figure 3 present MBDA’s current and proposed organizational structure. Figure 2. MBDA’s Current Organizational Structure Source: MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 5, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. Figure 3. MBDA’s Proposed Organizational Structure Source: MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 6, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. 56 MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, pp. 5-6, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. Congressional Research Service 12 The Minority Business Development Agency: An Overview of Its History and Programs Additionally, the MBD Act of 2021 specified that MBDA be led by an Under Secretary of Commerce be led by an Under Secretary of Commerce
~~recently~~for Minority Business Development (Under Secretary), selected by the President and confirmed by the Senate. selected by the President and confirmed by the Senate.45 MBDA has not had a Senate-confirmed Under Secretary since early 2024.57
MBDA Clients
MBDA clients MBDA clients ~~include~~have historically included U.S. minority business enterprises (MBEs) that are not less than 51 U.S. minority business enterprises (MBEs) that are not less than 51
percent-owned by one or more socially or economically disadvantaged individuals; and the percent-owned by one or more socially or economically disadvantaged individuals; and the
management and daily business operations of which are controlled by one or more socially or management and daily business operations of which are controlled by one or more socially or
economically disadvantaged individuals.economically disadvantaged individuals.4658 According to the agency’s authorizing statute, the term According to the agency’s authorizing statute, the term
“socially or economically disadvantaged individual” means “socially or economically disadvantaged individual” means
an individual who has been subjected to racial or ethnic prejudice or cultural bias (or the 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 ability of whom to compete in the free enterprise system has been impaired due to
diminished capital and credit opportunities, as compared to others in the same line of diminished capital and credit opportunities, as compared to others in the same line of
business and competitive market area) because of the identity of the individual as a member 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 of a group, without regard to any individual quality of the individual that is unrelated to
that identity.that identity.4759
The agency’s authorizing statute also noted that the Under Secretary The agency’s authorizing statute also noted that the Under Secretary ~~may~~shall presume that the term presume that the term
“socially or economically disadvantaged individual”“socially or economically disadvantaged individual”’ includes any individual who is includes any individual who is
• Black or African American; Black or African American;
• Hispanic or Latino; Hispanic or Latino;
• American Indian or Alaska Native; American Indian or Alaska Native;
• Asian; Asian;
• Native Hawaiian or other Pacific Islander; or Native Hawaiian or other Pacific Islander; or
• A member of a group that the agency determines under part 1400 of title 15, A member of a group that the agency determines under part 1400 of title 15,
Code of Federal Regulations, as in effect on November 23, 1984, is a socially Code of Federal Regulations, as in effect on November 23, 1984, is a socially
disadvantaged group eligible to receive assistance.disadvantaged group eligible to receive assistance.48

~~44 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: 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-based and~~
~~incomplete, is insufficient. See MBDA, “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-~~
~~minority-owned-firms-can-close-wealth-gap-and-drive-us, and Lucas Misera,~~ ~~An Uphill Battle: COVID-19’s Outsized~~
~~Toll on Minority-Owned Firms,~~ ~~Federal Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/~~
~~newsroom-and-events/publications/community-development-briefs/db-20201008-misera-report.aspx.~~
4560 The agency provides services to MBEs through a network of business centers and other programs and initiatives. The agency’s events and referral services are available to businesses of any size. In its FY2021 Notice of Funding Opportunity (NOFO), MBDA primarily focused its Business 57 P.L. 117-58, Sec. 100003. For additional context, see CRS Report RS21412, P.L. 117-58, Sec. 100003. For additional context, see CRS Report RS21412, Temporarily Filling Presidentially
Appointed, Senate-Confirmed Positions, by Henry B. Hogue. As noted, in August 2022, Donald R. Cravins, by Henry B. Hogue. As noted, in August 2022, Donald R. Cravins, Jr. was Jr. was
confirmed by the Senate as the first Under Secretary of Commerce for Minority Business Developmentconfirmed by the Senate as the first Under Secretary of Commerce for Minority Business Development.
~~46 The~~, but stepped down in early 2024. See MBDA, “Minority Business Development Agency Announces Departure of Donald R. Cravins, Jr., as First-Ever Under Secretary of Commerce for Minority Business Development,” press release, January 12, 2024, https://www.mbda.gov/minority-business-development-agency-announces-departure-donald-r-cravins-jr-first-ever-under. 58 MBDA’s establishing statute defines MBEs at 15 U.S.C. §9501 (9). MBDA’s establishing statute defines MBEs at 15 U.S.C. §9501 (9).
4759 P.L. 117-58, Sec. 100002. P.L. 117-58, Sec. 100002.
4860 P.L. 117-58, Sec. 100002. In 15 C.F.R. Part 1400, the term “socially disadvantaged persons” has the meaning of 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 “those persons who have been subjected to cultural, racial or ethnic prejudice because of their identity as members of a
~~Congressional Research Service~~

10

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

~~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 annually.49~~
~~Programs~~
~~Congress authorizes MBDA to foster, promote, and develop MBEs through grants, contracts, and~~
~~other agreements with public or private organizations.50 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.51 Through the Business Center~~
~~network and partnerships, the agency facilitates export opportunities, contracts, and financings for~~
~~minority clients.52 MBDA does not provide loans or grants for business formation or expansion~~
~~purposes.53~~
~~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;~~
~~(2) provide counseling and mentoring to minority business enterprises; and~~
~~(3) facilitate the growth of minority business enterprises by promoting trade.54~~
~~MBDA provides financial assistance to organizations that operate Business Centers. In turn,~~
~~MBDA 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~~

~~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/title-15/subtitle-B/~~
~~chapter-XIV/part-1400; and MBDA, “Who We Are,” https://www.mbda.gov/who-we-are/overview.~~
49group without regard to their individual qualities.” Prior to the MBD 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/title-15/subtitle-B/chapter-XIV/part-1400; and MBDA, “Who We Are,” https://www.mbda.gov/who-we-are/overview. Congressional Research Service 13 link to page 6 The Minority Business Development Agency: An Overview of Its History and Programs Center services on businesses with revenues of at least $500,000 annually, although MBDA does not always include such revenue targets in its NOFOs.61 March 2024 Court Order As noted, in March 2024, the U.S. District Court for the Northern District of Texas found in Nuziard et al. v. Minority Business Development Agency (MBDA) et al. that MBDA’s presumption of social disadvantage for certain program applicants was unconstitutional, and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide (see “Introduction”). MBDA has continued providing services to business owners that self-certify to the definition of “socially or economically disadvantaged individual” as established in the MBD Act of 2021, regardless of the business owner’s race.62 Moreover, MBDA instructed its staff to not use the racial and ethnic categories that were previously presumed to be socially or economically disadvantaged in determining eligibility for MBDA services.63 Programs Congress authorizes MBDA to foster, promote, and develop MBEs through grants, contracts, and other agreements with public or private organizations.64 The agency’s programs and activities focus on addressing MBDA and DOC priorities, and include the Business Center program, among other projects and partnerships.65 Through the Business Center network and partnerships, the agency facilitates export opportunities, contracts, and financings for minority clients.66 MBDA does not provide loans or grants for business formation or expansion purposes.67 According to MBDA’s 2023 Year In Review, there were 131 Business Centers in FY2023, including Specialty Centers and other similar projects.68 61 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. The NOFO notes that, https://www.grants.gov/web/grants/search-grants.html?keywords=MBDA-OBD-2021-2006809. The NOFO notes that,
“This NOFO is focused on capacity building for firms with revenues of $500,000 or more.” “This NOFO is focused on capacity building for firms with revenues of $500,000 or more.”
~~50 See P.L. 117-58 and P.L. 116-260.~~
5162 15 U.S.C. §9501(15)(A). 63 Eric Morrissette, Acting Under Secretary for Minority Business Development, Guidance to Minority Business Development Agency (MBDA) Business Center Operators, MBDA, March 20, 2024, https://mbda.gov/sites/default/files/2024-03/MBDA%20Guidance%20Memo%20on%20Eligibility_03%2020%202024_No%20CEF.pdf. 64 See P.L. 117-58 and P.L. 116-260. 65 The DOC strategic goals are outlined in the 2018-2022 Strategic Plan, The DOC strategic goals are outlined in the 2018-2022 Strategic Plan, Helping the American Economy Grow, and , and
include (1) accelerating American leadership through commercial space activities, foundational research investments, 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; 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 (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 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. https://www.commerce.gov/sites/default/files/us_department_of_commerce_2018-2022_strategic_plan.pdf.
~~52 U.S. Department of Commerce~~66 DOC, , FY2021 MBDA Congressional Budget Justification, https://www.commerce.gov/, https://www.commerce.gov/
sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf. sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf.
5367 MBDA, “Grants,” https://www.mbda.gov/grants. MBDA, “Grants,” https://www.mbda.gov/grants.
~~54 P.L. 117-58, Sec. 100111.~~
~~Congressional Research Service~~

1168 MBDA, 2023 Year in Review, https://www.mbda.gov/2023yearinreview. For an online directory of Business Centers, see MBDA, Business Centers, https://www.mbda.gov/mbda-programs/business-centers. Prior to the MBD Act of 2021’s enactment, the FY2021 NOFO for MBDA’s 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 MBD Act of 2021, the Under Secretary will develop criteria for selection of MBDA Business Centers. See also MBDA, MBDA Notice of Funding Opportunity (NOFO)—MBDA Business Center Program, FY2021, MBDA-OBD-(continued...) Congressional Research Service 14 The Minority Business Development Agency: An Overview of Its History and Programs Business Centers The purpose of MBDA’s Business Center Program is to create a national network of public-private partnerships that— (1) assist minority business enterprises in— (A) accessing capital, contracts, and grants; and (B) creating and maintaining jobs; (2) provide counseling and mentoring to minority business enterprises; and (3) facilitate the growth of minority business enterprises by promoting trade.69 MBDA provides financial assistance to organizations that operate Business Centers. In turn, MBDA Business Centers provide management and technical assistance to MBEs seeking to expand to new domestic and international markets. According to MBDA’s funding

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

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 to assisting MBEs to
• improve operational efficiencies; improve operational efficiencies;
• increase resources; increase resources;
• build scale; build scale;
• manage risk and increase liability thresholds; manage risk and increase liability 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.
Applicants eligible to compete to operate an MBDA Business Center include nonprofit Applicants eligible 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.~~55 The~~
~~MBDA’s “List of MBDA Centers” currently includes 35~~70 MBDA lists 40 Business Centers in Business Centers in 2732 states and Puerto states and Puerto
~~Rico, including nine locations new as of FY2021.56~~ Rico.71 MBDA Business Centers may provide MBDA Business Centers may provide
services on a fee-for-services basis.services on a fee-for-services basis.5772 In light of the COVID-19 pandemic, MBDA and its In light of the COVID-19 pandemic, MBDA and its
network of Business Centers increased or shifted more activities to online events and through network of Business Centers increased or shifted more activities to online events and through
~~other virtual communications tools.58 In FY2022, MBDA published Notices of Funding~~
~~Opportunity for organizations to operate additional MBDA Business Centers in six states:~~
~~Arkansas, Indiana, Oregon, South Carolina, Wisconsin, and Utah.59 In FY2022, MBDA also~~
~~provided $2.6 million of additional funding to “26 existing business center operators to bolster~~
~~their procurement services, which will help expand MBEs’ access to federal contracts.”60~~

~~55 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.~~
~~56 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. For a list of Business Centers, see~~other virtual communications tools.73 2021-2006809, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda; and MBDA, “Business Services,” https://www.mbda.gov/page/business-services. 69 P.L. 117-58, Sec. 100111. 70 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. 71 MBDA, Business Centers, https://www.mbda.gov/ https://www.mbda.gov/
~~mbda-programs/business-centers. See also 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; and MBDA, “Business Services,” https://www.mbda.gov/page/business-services.~~
57mbda-programs/business-centers. 72 See P.L. 117-58, Sec. 100114. See P.L. 117-58, Sec. 100114.
5873 By example, see the online 2021 Minority Enterprise Development Week event, https://www.mbda.gov/medweek- By example, see the online 2021 Minority Enterprise Development Week event, https://www.mbda.gov/medweek-
2021. 2021.
~~59 MBDA, MBDA Notice of Funding Opportunity (NOFO)—MBDA Business Center Program, MBDA-OBD-2022-~~
~~2007282, https://www.grants.gov/web/grants/search-grants.html?keywords=~~
~~minority%20business%20development%20center. In September 2022, MBDA announced the grantees for the FY2022~~
~~round of MBDA Business Center funding. See MBDA, “Commerce Department’s Minority Business Development~~
~~Agency Awards $4.7 Million in Funding to Strengthen Business Centers Across U.S.,” September 21, 2022,~~
~~https://www.mbda.gov/news/press-releases/2022/09/commerce-departments-minority-business-development-agency-~~
~~awards-47.~~
~~60 Ibid.~~
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Specialty Centers
~~The~~ MBDA also supports Business Centers that provide specialized business development MBDA also supports Business Centers that provide specialized business development
services and technical assistance (“Specialty Centers”). The services and technical assistance (“Specialty Centers”). The ~~Minority Business Development~~MBD Act Act
of 2021 defines Specialty Centers as MBDA Business Centers that provide specialty services of 2021 defines Specialty Centers as MBDA Business Centers that provide specialty services
focusing on specific business needs, including assistance related to focusing on specific business needs, including assistance related to
• capital access; capital access;
• federal procurement; federal procurement;
• entrepreneurship; entrepreneurship;
• technology transfer; or technology transfer; or
• any other area determined necessary or appropriate based on the priorities of the any other area determined necessary or appropriate based on the priorities of the
agency. agency.6174
In FY2021, MBDA published Notices of Funding Opportunity for Specialty Centers focused on In FY2021, MBDA published Notices of Funding Opportunity for Specialty Centers focused on
exports, advanced manufacturing, and federal procurement.exports, advanced manufacturing, and federal procurement.6275
• 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. MBDA export identify, screen, promote, and refer MBEs to exporting resources. MBDA export
centers are located in Mesa, AZ; Houston, TX; Miami, FL; and San Antonio, centers are located in Mesa, AZ; Houston, TX; Miami, FL; and San Antonio,
TX.TX.63
76 • Advanced Manufacturing Centers provide “[t]argeted assistance for provide “[t]argeted assistance for
manufacturers that aim to employ new technologies to increase the number of manufacturers that aim to employ new technologies to increase the number of
“Made in America” products that can be sold domestically and globally.”“Made in America” products that can be sold domestically and globally.”6477
MBDA advanced manufacturing centers are located in East Hartford, CT; MBDA advanced manufacturing centers are located in East Hartford, CT;
Baltimore, MD; Louisville, KY; and San Antonio, TX.Baltimore, MD; Louisville, KY; and San Antonio, TX.65

6178 74 P.L. 117-58, Sec. 100002. See also MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty- P.L. 117-58, Sec. 100002. See also MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty-
centers. centers.
6275 Prior to the announcement of the FY2021 Business Center and Specialty Center awards, there were four MBDA 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 export centers, four MBDA advanced manufacturing centers, and one federal procurement center. Prior to the FY2021
awards, awards,
•
the export centers were previously located in Chicago, IL; Miami, FL; San Antonio, TX; and Sacramento, the export centers were previously located in Chicago, IL; Miami, FL; San Antonio, TX; and Sacramento,
CA; CA;
•
the advanced manufacturing centers were previously located in Atlanta, GA; Detroit, MI; Baltimore, MD; the advanced manufacturing centers were previously located in Atlanta, GA; Detroit, MI; Baltimore, MD;
and San Antonio, TX; and and San Antonio, TX; and
•
the federal procurement center was located in Alexandria, VA. the federal procurement center was located in Alexandria, VA.
6376 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA NOFO—Export Project, MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA NOFO—Export Project,
FY2021, MBDA-OBD-2021-2006815, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda. The FY2021, MBDA-OBD-2021-2006815, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda. The
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 funding (pp. 6-7). nonfederal cost share funding (pp. 6-7).
6477 MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty-centers. MBDA, “Specialty Centers,” https://www.mbda.gov/mbda-programs/specialty-centers.
6578 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA NOFO—Advanced MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA 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. The NOFO states that prospective funding is contingent upon the availability of funds from Congress, keywords=mbda. The 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 (pp. 7-8). operators are not required to contribute nonfederal cost share funding (pp. 7-8).
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• 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
FY2021, the federal procurement center was located in Washington, DC.FY2021, the federal procurement center was located in Washington, DC.6679 MBDA lists 16 Specialty Centers operating in 11 states, Puerto Rico, and Washington, DC.80 MBDA’s FY025 congressional budget justification noted that the agency’s priorities include establishing additional Specialty Centers focused on women-, native- and indigenous-, and veteran-owned businesses.81 The budget justification requested $1.96 million to strengthen the existing network of MBDA Business Centers and Specialty Centers.82 Rural Business Centers The MBD
~~Rural Business Centers~~
~~The Minority Business Development~~ Act of 2021 established a new Rural Business Center Act of 2021 established a new Rural Business Center
program to be implemented by MSIs for services to MBEs in rural areas.program to be implemented by MSIs for services to MBEs in rural areas.6783 The program will The program will
provide education, training, and legal, financial, and technical assistance to MBEs with a focus on provide education, training, and legal, financial, and technical assistance to MBEs with a focus on
issues relating to issues relating to
• the adoption of broadband internet access service, digital literacy skills, and e- the adoption of broadband internet access service, digital literacy skills, and e-
commerce; commerce;
• advanced manufacturing; advanced manufacturing;
• the promotion of manufacturing in the United States; the promotion of manufacturing in the United States;
• ways for MBEs to meet gaps in the supply chain for 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; improving the connectivity of rural MBEs through transportation and logistics;
• promoting trade and export opportunities; promoting trade and export opportunities;
• securing financial capital; securing financial capital;
• facilitating entrepreneurship in rural areas; facilitating entrepreneurship in rural areas;
• creating jobs in rural areas; and creating jobs in rural areas; and
• any other issue relating to the unique challenges faced by rural MBEs. any other issue relating to the unique challenges faced by rural MBEs.6884 MBDA launched a pilot Rural Business Center program in FY2023 by providing $3.8 million in supplemental grants to eligible existing Business or Specialty Centers to establish new Rural Business Centers. Business or Specialty Centers were eligible to receive funding if they were located in a state with: • a rural minority population of at least 200,000; • a rural population that is at least 20% minority; or 79
~~Entrepreneurship Education Development Activities~~
~~The Minority Business Development Act of 2021 also authorized new entrepreneurship education~~
~~development activities, including the Parren J. Mitchell Entrepreneurship Education Grants~~
~~Program for grants to eligible institutions (e.g., HBCUs, MSIs, tribal colleges or universities,~~
~~among others). The act also directed 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 socially or~~
~~economically disadvantaged individuals.69 In FY2022, MBDA announced a Broad Agency~~
~~Announcement (BAA) to develop entrepreneurship programs for students at Minority Serving~~
~~Institutions (MSIs).70~~

66 MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA NOFO—Federal MBDA, “MBDA Programs,” https://www.mbda.gov/mbda-programs; and MBDA, MBDA 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. The NOFO states that prospective funding is contingent upon the availability of funds from Congress, keywords=mbda. The NOFO states that prospective funding is contingent upon the availability of funds from Congress,
satisfactory performance, and continued relevance to program objectives, and Federal Procurement Center operators satisfactory performance, and continued relevance to program objectives, and Federal Procurement Center operators
are expected to contribute nonfederal cost share funding (p. 7). are expected to contribute nonfederal cost share funding (p. 7).
~~67 The Minority Business Development~~80 MBDA, Specialty Centers, https://www.mbda.gov/mbda-programs/specialty-centers. 81 MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 27, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. 82 Ibid., p. 29. 83 The MBD Act of 2021 authorized to be appropriated $20 million to the program each year 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) 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. of the Consolidated Farm and Rural Development Act (7 U.S.C. §1991(a)). See P.L. 117-58, Sec. 100301.
6884 P.L. 117-58, Sec. 100302. Congressional Research Service 17 The Minority Business Development Agency: An Overview of Its History and Programs • at least one rural majority-minority county based on U.S. Census Bureau data.85 Business or Specialty Centers that received funding to establish a Rural Business Center are expected to provide technical assistance to rural MBEs in their state. As of FY2024, MBDA has funded 19 Rural Business Centers.86 MBDA’S FY2025 congressional budget justification listed broadening the Rural Business Center program as an agency priority, and requested $3.182 million to expand the reach of existing Rural Business Centers and potentially establish additional Rural Business Centers.87 Entrepreneurship Education Development Activities The MBD Act of 2021 also authorized new entrepreneurship education development activities, including the Parren J. Mitchell Entrepreneurship Education Grants program for grants to eligible institutions (e.g., HBCUs, MSIs, tribal colleges or universities, among others). The act also directed MBDA to partner with public and private sector entities and educational institutions to support opportunities for business and management education, apprenticeships, entrepreneurship training, and related activities for the benefit of socially or economically disadvantaged individuals.88 MBDA may use broad agency announcements (BAAs) and unsolicited proposals to respond to specific challenges or opportunities. In recent years, MBDA has issued several BAAs to develop entrepreneurship programs for students at Minority Serving Institutions (MSIs) before and after the enactment of the MBD Act of 2021.89 For instance, in April 2022, MBDA announced a BAA to develop entrepreneurship programs for students at MSIs.90 The BAA resulted in a total of $1.75 million in grants to seven awardees.91 ~~P.L. 117-58, Sec. 100302.~~
~~69 P.L. 117-58, Sec. 100203.~~
~~70 MBDA, “Minority Business Development Agency Announces $1.8 Million Grant Opportunity to Develop~~
~~Entrepreneurship Programs at Minority Serving Institutions,” May 4, 2022, https://www.mbda.gov/news/news-and-~~
~~announcements/2022/05/minority-business-development-agency-announces-18-million-grant.~~
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Related Initiatives, Events, and Partnerships
To further increase MBE’s access to capital, contracts, and markets, MBDA partners with other 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 federal agencies and private sector partners on business development services, cross-sector
initiatives, annual events, and interagency groups and commissions. For instance, technical and 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 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~~8(a) contracting preference program for small businesses owned by socially- and economically-disadvantaged individuals (as well as other SBA programs), or to transition from the 8(a) program to the private (as well as other SBA programs), or to transition from the 8(a) program to the private
sector.sector.7192 MBDA works with other MBDA works with other ~~Department of Commerce~~DOC agencies and the EXIM Bank agencies and the EXIM Bank ~~of the~~
~~United States to encourage~~ to encourage 85 MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 24, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. 86 Ibid. 87 MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, pp. 7-8, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. 88 P.L. 117-58, Sec. 100203. 89 MBDA, Minority Colleges and Universities Programs, https://www.mbda.gov/centers-projects/minority-colleges-and-universities-programs. 90 MBDA, Notice of Federal Funding, Minority Colleges and Universities, April 25, 2022, https://www.grants.gov/search-results-detail/339798. 91 MBDA, “MBDA Announces $1.75 Million in Grants for Minority Colleges and Universities,” press release, October 18, 2022, https://www.mbda.gov/news/press-releases/2022/10/mbda-announces-175-million-grants-minority-colleges-and-universities. 92 MBDA, “The Minority Business Development Agency: Vital to Making America Great,” https://www.mbda.gov/page/minority-business-development-agency-vital-making-america-great. (continued...) Congressional Research Service 18 The Minority Business Development Agency: An Overview of Its History and Programs MBE participation in international trade, and partners with the MBE participation in international trade, and partners with the
Department of Energy’s Office of Economic Impact to expand opportunities for MBE Department of Energy’s Office of Economic Impact to expand opportunities for MBE ~~business~~participation in in
the energy supply chain.the energy supply chain.72 93 Through the InVision Tour initiative, MBDA has partnered with Through the InVision Tour initiative, MBDA has partnered with
several agencies to support minority innovation and entrepreneurship in space technology, smart several agencies to support minority innovation and entrepreneurship in space technology, smart
cities, satellites, aerospace, and related industries. InVision Tour partners include NASA’s cities, satellites, aerospace, and related industries. InVision Tour partners include NASA’s
Johnson Space Center, the Environmental Protection Agency (EPA), and agencies of the Johnson Space Center, the Environmental Protection Agency (EPA), and agencies of the
Departments of Commerce, Defense, Energy, Health and Human Services, Departments of Commerce, Defense, Energy, Health and Human Services, ~~the~~ Interior, and Interior, and
Homeland Security, among others.Homeland Security, among others.7394
Additional MBDA initiatives have involved partners such as the U.S. India Small Medium Additional MBDA initiatives have involved partners such as the U.S. India Small Medium
EntrepreneursEntrepreneurs ~~(SME)~~ Council, the U.S. Pan Asian American Chamber of Commerce Council, the U.S. Pan Asian American Chamber of Commerce
~~(USPAACC)~~, the National Minority Supplier Development Council, the National Business , 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.7495 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.7596
MBDA assistance may also address specific challenges or opportunities, support proof of concept MBDA assistance may also address specific challenges or opportunities, support proof of concept
program models, meet presidential or departmental priorities, and facilitate the programs and program models, meet presidential or departmental priorities, and facilitate the programs and
initiatives not addressed through initiatives not addressed through ~~the MBDA business center program.76~~MBDA’s Business Center program.97 For instance, in FY2019 For instance, in FY2019
and FY2020, and FY2020, ~~the~~ MBDA funded projects designed to increase MBE participation in advanced MBDA funded projects designed to increase MBE participation in advanced

~~71 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~~ technology and innovation sectors. In FY2020, MBDA grants funded a capital formation initiative and the Minority Growth Equity Fund Initiative (MGEFI), among others.98 Additional, targeted MBDA initiatives include the Enterprising Women of Color (EWOC) initiative and centers, the American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects, the Entrepreneurship Education Programs for Formerly Incarcerated Persons, and the Inner-City For more information on the SBA’s (8)(a) program, see CRS Report R44844, (8)(a) program, see CRS Report R44844, SBA’s “8(a) Program”:
Overview, History, and Current Issues, by Robert Jay Dilger, by Robert Jay Dilger and R. Corinne Blackford. 93.
72 EXIM Bank, “EXIM Signs Memorandum of Understanding with U.S. Department of Commerce Minority Business EXIM Bank, “EXIM Signs Memorandum of Understanding with U.S. 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-
department-commerce-minority-business-development-agency, and MBDA, “2020 Year in Review,” department-commerce-minority-business-development-agency, and MBDA, “2020 Year in Review,”
https://www.mbda.gov/2020-year-in-review. https://www.mbda.gov/2020-year-in-review.
7394 MBDA, “InVision Tour,” https://www.mbdainvision.com/. MBDA, “InVision Tour,” https://www.mbdainvision.com/.
7495 MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review, and Black Enterprise, “Black MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review, and Black Enterprise, “Black
Enterprise, Minority Business Development Agency Partner to Help Black Businesses Gain Access to Innovation and Enterprise, Minority Business Development Agency Partner to Help Black Businesses Gain Access 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/.
7596 MBDA, “White House Initiative on Asian Americans and Pacific Islanders,” MBDA, “White House Initiative on Asian Americans and Pacific Islanders,” https://www.mbda.gov/WHIAAPI, and https://www.mbda.gov/WHIAAPI, and
Black Enterprise, “Black Enterprise, Minority Business Development Agency Partner to Help Black Businesses Gain Black Enterprise, “Black Enterprise, Minority Business Development Agency Partner to Help Black Businesses Gain
Access to Innovation and Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-Access to Innovation and Financing,” April 19, 2019, https://www.blackenterprise.com/black-enterprise-minority-
business-development-agency-black-businesses/. business-development-agency-black-businesses/.
7697 MBDA may use Broad Agency Agreements (BAAs) and unsolicited proposals to respond to specific challenges or MBDA may use Broad Agency Agreements (BAAs) and unsolicited proposals to respond to specific challenges or
opportunities. See MBDA, “Frequently Asked Questions—2018 MBDA Broad Agency Announcement,” opportunities. See MBDA, “Frequently Asked Questions—2018 MBDA Broad Agency Announcement,”
https://www.mbda.gov/sites/default/files/2018baafrequentlyaskedquestions070918.pdf, and https://www.mbda.gov/sites/default/files/2018baafrequentlyaskedquestions070918.pdf, and ~~Department of Commerce~~DOC, ,
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.
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~~technology and innovation sectors. In FY2020, MBDA grants funded a capital formation~~
~~initiative and the Minority Growth Equity Fund Initiative (MGEFI), among others.77 Additional,~~
~~targeted MBDA initiatives include the Enterprising Women of Color (EWOC) initiative and~~
~~centers, the American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects, the~~
~~Entrepreneurship Education Programs for Formerly Incarcerated Persons, and the Inner-City~~
~~Innovation Hub Program.78 In FY2022, the~~ 98 MBDA, MBDA FY2021 Congressional Budget Justification, pp. 12-20, 23, https://www.commerce.gov/sites/default/files/2020-02/fy2021_mbda_congressional_budget_justification.pdf; and 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. The American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects are also awarded through BAAs. Congressional Research Service 19 The Minority Business Development Agency: An Overview of Its History and Programs Innovation Hub Program.99 In FY2022, MBDA solicited proposals under a BAA for the MBDA solicited proposals under a BAA for the
Access to Capital/Innovative Finance initiative.Access to Capital/Innovative Finance initiative.79100
Capital Access Initiatives
Barriers to capital—includingBarriers to capital—including, but not limited to growth capital—limit expansion and scale but not limited to growth capital—limit expansion and scale
opportunities for many MBEs. In FY2020, an MBDA award established the opportunities for many MBEs. In FY2020, an MBDA award established the ~~Minority Growth~~
~~Equity Fund Initiative (MGEFI). The MGEFI~~MGEFI. The MGEFI’s goal is to expand access to capital by facilitating the is to expand access to capital by facilitating the
aggregation and deployment of $1 billion in growth equity capital to MBEs.aggregation and deployment of $1 billion in growth equity capital to MBEs.80101 In FY2021, MBDA In FY2021, MBDA
announced the Equity Multiplier Project, which will fund technical assistance to expand MBE’s announced the Equity Multiplier Project, which will fund technical assistance to expand MBE’s
access to capital. The Equity Multiplier Project focuses on capacity building, venture capital 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.81102 In FY2022, In FY2022,
MBDA issued a NOFO for the Access to Capital: Innovative Finance initiative, which was MBDA issued a NOFO for the Access to Capital: Innovative Finance initiative, which was
designed to leverage non-traditional financial resources to address barriers to capital access for designed to leverage non-traditional financial resources to address barriers to capital access for
MBEs.MBEs.82103 In FY2023, MBDA announced a NOFO designed to fund technical assistance providers In FY2023, MBDA announced a NOFO designed to fund technical assistance providers
that would help entrepreneurs build capacity and expand access to capital opportunities through that would help entrepreneurs build capacity and expand access to capital opportunities through
the Capital Readiness Program. The program focuses on assistance for entrepreneurs who are the Capital Readiness Program. The program focuses on assistance for entrepreneurs who are
socially and economically disadvantaged individuals (SEDI).socially and economically disadvantaged individuals (SEDI).83

~~77 MBDA, MBDA FY2021 Congressional Budget Justification, pp. 12-20, 23, https://www.commerce.gov/sites/default/~~
~~files/2020-02/fy2021_mbda_congressional_budget_justification.pdf; and 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.~~
~~The American Indian, Alaska Native, and Native Hawaiian (AIANNH) projects are also awarded through BAAs.~~
78104 Enterprising Women of Color (EWOC) Entrepreneurship is often viewed as a strategy for economic growth and individual economic independence. Minority women are considered the fastest growing population of entrepreneurs.105 MBDA-supported entrepreneurship programs include activities designed to support minority women business owners. Through the Enterprising Women of Color (EWOC) initiative, launched 99 MBDA, “MBDA Awards $5.1 Million in Grants,” October 23, 2020, https://www.mbda.gov/news/news-and- 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. announcements/2020/10/minority-business-development-agency-awards-51-million-grants.
79100 MBDA, “MBDA Announces Grant Competition to Fund Innovative Access Capital Project for Minority-Owned MBDA, “MBDA Announces Grant Competition to Fund Innovative Access Capital Project for Minority-Owned
Businesses,” May 5, 2022, https://www.mbda.gov/news/news-and-announcements/2022/05/mbda-announces-grant-Businesses,” May 5, 2022, https://www.mbda.gov/news/news-and-announcements/2022/05/mbda-announces-grant-
competition-fund-innovative-access-capital. competition-fund-innovative-access-capital.
80101 MBDA, “MBDA Awards NAIC Million Dollar Grant to Raise $1 Billion for Investment in Minority Entrepreneurs,” MBDA, “MBDA Awards NAIC Million Dollar Grant to Raise $1 Billion for Investment in Minority Entrepreneurs,”
October 4, 2019, https://www.mbda.gov/news/press-releases/2019/10/mbda-awards-naic-million-dollar-grant-raise-1-October 4, 2019, https://www.mbda.gov/news/press-releases/2019/10/mbda-awards-naic-million-dollar-grant-raise-1-
billion-investment, and MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review. billion-investment, and MBDA, “2020 Year in Review,” https://www.mbda.gov/2020-year-in-review.
81102 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.
82103 MBDA, MBDA, FY2022 Notice of Funding Opportunity—Broad Agency Announcement—Access to Capital: Innovative
Finance, MBDA-OBD-2022-2007329, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda; and , MBDA-OBD-2022-2007329, https://www.grants.gov/web/grants/search-grants.html?keywords=mbda; and
MBDA, “Minority Business Development Agency Awards $1.68 Million to Fund Innovative Access to Capital Projects MBDA, “Minority Business Development Agency Awards $1.68 Million to Fund Innovative Access to Capital Projects
for Minority-Owned Businesses,” September 20, 2022, https://www.mbda.gov/news/press-releases/2022/09/minority-for Minority-Owned Businesses,” September 20, 2022, https://www.mbda.gov/news/press-releases/2022/09/minority-
business-development-agency-awards-168-million-fund-innovative. business-development-agency-awards-168-million-fund-innovative.
83104 MBDA, MBDA, FY2023 Notice of Funding Opportunity—Capital Readiness Program, MBDA-OBD-2023-2007775, , MBDA-OBD-2023-2007775,
https://www.grants.gov/web/grants/search-grants.html?keywords=mbda; https://www.grants.gov/web/grants/search-grants.html?keywords=mbda; ~~and~~ MBDA, “Commerce Department’s MBDA, “Commerce Department’s
Minority Business Development Agency Announces Nearly $100 Million to Expand Opportunities for Underserved Minority Business Development Agency Announces Nearly $100 Million to Expand Opportunities for Underserved
Entrepreneurs,” December 21, 2022, https://www.mbda.gov/news/press-releases/2022/12/commerce-departments-Entrepreneurs,” December 21, 2022, https://www.mbda.gov/news/press-releases/2022/12/commerce-departments-
minority-business-development-agency-announces.minority-business-development-agency-announces.
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~~Enterprising Women of Color (EWOC)~~
~~Entrepreneurship is often viewed as a strategy for economic growth and individual economic~~
~~independence. Minority women are considered the fastest growing population of entrepreneurs.84~~
~~MBDA-supported entrepreneurship programs include activities designed to support minority~~
~~women business owners. Through the Enterprising Women of Color (EWOC) initiative, launched~~
105 American Express’ State of Women-Owned Businesses Report, 2019 (see https://about.americanexpress.com/all-news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-On-Average-Than-All-Businesses-Nationwide/default.aspx). The report is based on data from the U.S. Census Bureau Survey of Business Owners (SBO). The report noted that although SBO “is conducted every year in years ending in two and seven. Data from the 2012 Census surveys were 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 data was obtained from the U.S. Bureau of Economic Analysis (bea.gov).” Congressional Research Service 20 The Minority Business Development Agency: An Overview of Its History and Programs 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 FY2020.85106
American Indian Alaska Native / Native Hawaiian (AIANNH) Initiatives and
Reports
MBDA provides assistance to entities with an expertise in American Indian, Alaska Native, and MBDA provides assistance to entities with an expertise in American Indian, Alaska Native, and
Native Hawaiian (AIANNH) business for projects that focus on one or more of the following Native Hawaiian (AIANNH) business for projects that focus on one or more of the following
three strategic initiatives: (1) innovation and entrepreneurship; (2) strategic planning; and/or (3) three strategic initiatives: (1) innovation and entrepreneurship; (2) strategic planning; and/or (3)
transformative projects.transformative projects.86107 AIANNH projects may provide a range of services including, but not AIANNH projects may provide a range of services including, but not
limited to: entrepreneurial assistance, training, capital access, federal procurement assistance, limited to: entrepreneurial assistance, training, capital access, federal procurement assistance,
networking and relationship management, deal sourcing, joint ventures and partnerships, strategic networking and relationship management, deal sourcing, joint ventures and partnerships, strategic
infrastructure and economic planning assistance, and education for entrepreneurial and tribal infrastructure and economic planning assistance, and education for entrepreneurial and tribal
entities. In FY2019-FY2021, entities. In FY2019-FY2021, ~~the agency~~MBDA supported 13 projects designed to address specific needs supported 13 projects designed to address specific needs
of Native American businesses.of Native American businesses.87108 In FY2021, MBDA funded 13 AIANNH projects. In FY2021, MBDA funded 13 AIANNH projects.~~88 In FY2022,~~

~~84 American Express’ State of Women-Owned Businesses Report, 2019 (see https://about.americanexpress.com/all-~~
~~news/news-details/2019/Woman-Owned-Businesses-Are-Growing-2X-Faster-On-Average-Than-All-Businesses-~~
~~Nationwide/default.aspx). The report is based on data from the U.S. Census Bureau Survey of Business Owners (SBO).~~
~~The report noted that although SBO “is conducted every year in years ending in two and seven. Data from the 2012~~
~~Census surveys were 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~~
~~data was obtained from the U.S. Bureau of Economic Analysis (bea.gov).”~~
85109 In FY2022, MBDA’s OPAD published a report on business development and economic growth in tribal communities.110 Entrepreneurship Education Programs for Formerly Incarcerated Persons The Entrepreneurship Education Programs for Formerly Incarcerated Persons are designed to provide individuals with skills and a business network to enable them to start their own business after incarceration. The programs also aim to reduce the rates of recidivism. According to MBDA and other sources, researchers have linked recidivism to unemployment, education level, and inability to reintegrate into communities after prison.111 106 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, “Grant Awards,” https://www.mbda.gov/grantawards. MBDA, “Grant Awards,” https://www.mbda.gov/grantawards.
In the FY2020 EWOC Notice of Funding Opportunity (NOFO), MBDA cited measures of growth in levels of minority In the FY2020 EWOC Notice of Funding Opportunity (NOFO), MBDA cited measures of growth in levels of minority
women entrepreneurship as reported by American Express’ women entrepreneurship as reported by American Express’ State of Women-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-Than-All-Businesses-Nationwide/default.aspx). Highlights include “as of 2019, 6.4 million minority-On-Average-Than-All-Businesses-Nationwide/default.aspx). Highlights include “as of 2019, 6.4 million minority-
owned women businesses employed nearly 2.4 million people and generated $422.5 billion in revenue, and women-owned women businesses employed nearly 2.4 million people and generated $422.5 billion in revenue, and women-
owned businesses represent 42% of all businesses, among others.” owned businesses represent 42% of all businesses, among others.”
86107 MBDA, “AIANNH Projects,” https://www.mbda.gov/aiannhprojects. MBDA, “AIANNH Projects,” https://www.mbda.gov/aiannhprojects.
87108 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 list of current AIANNH projects, see https://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. MBDA, “AIANNH Projects,” https://www.mbda.gov/aiannhprojects.
A list and map of prior AIANNH projects is available at https://www.mbda.gov/sites/default/files/aiannh_2.pdf. See A list and map of prior AIANNH projects is available at https://www.mbda.gov/sites/default/files/aiannh_2.pdf. See
also MBDA, “Minority Business Development Agency Awards $3.6 Million for Business Development in Indian also MBDA, “Minority Business Development Agency Awards $3.6 Million for Business Development in Indian
Country,” September 26, 2019, https://www.mbda.gov/news/press-releases/2019/09/minority-business-development-Country,” September 26, 2019, https://www.mbda.gov/news/press-releases/2019/09/minority-business-development-
agency-awards-36-million-business, and “Native American Success Stories,” https://www.mbda.gov/native-american-agency-awards-36-million-business, and “Native American Success Stories,” https://www.mbda.gov/native-american-
success-stories. success-stories.
88109 MBDA, “AIANNH Projects,” https://www.mbda.gov/mbda-programs/aiannhprojects; and MBDA, MBDA, “AIANNH Projects,” https://www.mbda.gov/mbda-programs/aiannhprojects; and MBDA, FY2021 Notice of
Funding Opportunity—AIANNH Projects, MBDA-OBD-2021-2006916, https://www.grants.gov/web/grants/search-, MBDA-OBD-2021-2006916, https://www.grants.gov/web/grants/search-
grants.html?keywords=mbda. grants.html?keywords=mbda.
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~~MBDA’s OPAD published a report on business development and economic growth in tribal~~
~~communities.89~~
~~Entrepreneurship Education Programs for Formerly Incarcerated Persons~~
~~The Entrepreneurship Education Programs for Formerly Incarcerated Persons are designed to~~
~~provide individuals with skills and a business network to enable them to start their own business~~
~~after incarceration. The programs also aim to reduce the rates of recidivism. According to MBDA~~
~~and other sources, researchers have linked recidivism to unemployment, education level, and~~
~~inability to reintegrate into communities after prison.90~~
~~Inner City Innovation Hub Program~~
110 Ashley Winston et al., “Keys to Unlocking Business Development in Indian Country,” MBDA Research Report, August 2021, https://www.mbda.gov/files/keys-unlocking-business-development-indian-country. 111 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/Entrepreneurship%20Education%20Program%20for%20Formerly%20Incarcerated%20Persons_Full%20Announcement%20%28April%202020%29.pdf. Congressional Research Service 21 The Minority Business Development Agency: An Overview of Its History and Programs 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 intelligence, and research and focuses on entrepreneurship, digital innovation, artificial intelligence, and research and
technology transfer. Recent awards facilitate the growth of MBEs in regionally-specific industry technology transfer. Recent awards facilitate the growth of MBEs in regionally-specific industry
concentrations, such as the aerospace industry, and by providing technical assistance to MBEs 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 intelligence, technology, research, mergers, and acquisitions.artificial intelligence, technology, research, mergers, and acquisitions.91112
National Minority Enterprise Development (MED) Week
According to MBDA, since 1983, every According to MBDA, since 1983, every ~~president~~President has issued a Presidential Proclamation 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.92113 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.
MBDA also coordinates, sponsors, and participates in other national events, such as Buy Minority MBDA also coordinates, sponsors, and participates in other national events, such as Buy Minority
Business Enterprises Day, among others.Business Enterprises Day, among others.93

~~89 Ashley Winston et al., “Keys to Unlocking Business Development in Indian Country,” MBDA Research Report,~~
~~August 2021, https://www.mbda.gov/files/keys-unlocking-business-development-indian-country.~~
~~90 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/~~
~~Entrepreneurship%20Education%20Program%20for%20Formerly%20Incarcerated%20Persons_Full%20Announceme~~
~~nt%20%28April%202020%29.pdf.~~
91114 Capital Readiness Program The American Rescue Plan Act of 2021 (P.L. 117-2) reauthorized the State Small Business Credit Initiative (SSBCI). SSBCI, which is administered by the U.S. Department of the Treasury (Treasury), offered states, the District of Columbia, U.S. territories, and tribal governments a formula-allocated share of $10 billion to help expand access to capital for small businesses. The funding was designed to support activities related to setting up venture capital programs, loan participation programs, and loan guarantee programs, as well as technical assistance. In terms of technical assistance, P.L. 117-2 directed Treasury to transfer funding to MBDA so that MBDA “may use such amounts in a manner the Agency determines appropriate, including through contracting with third parties, to provide technical assistance to business enterprises owned and controlled by socially and economically disadvantaged individuals.”115 In December 2022, DOC announced a grant award competition for funding for entities to provide technical assistance to help SSBCI applicants.116 The program was called the Capital Readiness Program (CRP). In August 2023, the Biden Administration announced that MBDA had made 43 112 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.pdf, and MBDA, “Grant Inner%20City%20Innovation%20Hubs_Full%20Announcement%20%28April%202020%29.pdf, and MBDA, “Grant
Awards,” https://www.mbda.gov/grantawards. Awards,” https://www.mbda.gov/grantawards.
92113 MBDA, “MBDA Announces 2019 National MED Week Award Winners,” https://medweek.mbda.gov/awards- MBDA, “MBDA Announces 2019 National MED Week Award Winners,” https://medweek.mbda.gov/awards-
program. program.
~~93 U.S. Department of Commerce~~114 DOC, “Minority Business Development Agency: Agency Information Collection , “Minority Business Development Agency: Agency Information Collection
Activities; Submission to the Office of Management and Budget (OMB) for Review and Approval; Comment Request; Activities; Submission to the Office of Management and Budget (OMB) for Review and Approval; Comment Request;
National Minority Business Awards,” 86 National Minority Business Awards,” 86 Federal Register 10544-10545, February 22, 2021, and MBDA, “Minority 10544-10545, February 22, 2021, and MBDA, “Minority
Enterprise Development Enterprise Development Week,” https://www.mbda.gov/MEDWeek. 115 Section 3301 of P.L. 117-2. 116 DOC, “Commerce Department’s Minority Business Development Agency Announces Nearly $100 Million to Expand Opportunities for Underserved Entrepreneurs,” press release, December 21, 2022, https://www.commerce.gov/news/press-releases/2022/12/commerce-departments-minority-business-development-agency-announces. ~~Week,” https://www.mbda.gov/MEDWeek.~~
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CRP awards worth a total of $125 million.117 To help implement and evaluate CRP, MBDA’s FY2025 congressional budget justification requested $2.063 million for MBDA’s Office of Data Research, and Evaluation.118 Other Initiatives The MBD~~Other Initiatives~~
~~The Minority Business Development~~ Act of 2021 established a Minority Business Enterprise Act of 2021 established a Minority Business Enterprise
Advisory Council and authorized the Under Secretary to coordinate on matters relating to federal 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. MBE programs. The act also authorized grants to nonprofit organizations to support MBEs.
Additional initiatives and activities support Additional initiatives and activities support ~~the MBDA~~MBDA’s mission and priorities of mission and priorities of ~~the Department~~
~~of Commerce~~DOC. For instance, MBDA initiatives include global and domestic Business-to-Business . For instance, MBDA initiatives include global and domestic Business-to-Business
(B2B) efforts to expand MBE access to domestic and global markets. In March 2020, in (B2B) efforts to expand MBE access to domestic and global markets. In March 2020, in
collaboration with Amazon Business, collaboration with Amazon Business, ~~the~~ MBDA launched the Minority Business and Technology MBDA launched the Minority Business and Technology
Initiative, to expand MBE participation in e-commerce and the use of digital technology for Initiative, to expand MBE participation in e-commerce and the use of digital technology for
domestic and international sales.domestic and international sales.94119 MBDA and Business Center partners participate in Global MBDA and Business Center partners participate in Global
B2B efforts in Africa, Asia, Latin America, and the Caribbean. MBDA has also joined trade B2B efforts in Africa, Asia, Latin America, and the Caribbean. MBDA has also joined trade
missions and partnered with missions and partnered with ~~the Department of Commerce~~DOC’s International Trade Administration, the 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.95120
Performance Metrics
~~The~~ MBDA uses several performance metrics to measure its effectiveness, including MBDA uses 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 number of jobs created,; and and
• number of jobs retained. number of jobs retained.
According to the latest data available, in According to the latest data available, in ~~FY2020, the~~FY2022, MBDA reported MBDA reported ~~27,317~~15,418 jobs were created jobs were created
or retained with the assistance of MBDA resources.or retained with the assistance of MBDA resources.96121 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 MBDA clients would have eliminated without the contract and/or financing payroll, and positions MBDA clients would have eliminated without the contract and/or financing
obtained with obtained with ~~the~~ MBDA’s help.MBDA’s help.97122 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.98 See Table 1 for a summary of assessments and evaluations~~
~~of the agency.~~

94secure 117 MBDA, “Biden-Harris Administration Announces Competition Winners for the Minority Business Development Agency’s Capital Readiness Program,” press release, August 3, 2023, https://www.mbda.gov/biden-harris-administration-announces-competition-winners-minority-business-development-agencys. 118 MBDA, Minority Business Development Agency Fiscal Year 2025 Congressional Budget Justification, p. 8, https://www.commerce.gov/sites/default/files/2024-03/MBDA-FY2025-Congressional-Budget-Submission.pdf. 119 MBDA, “Minority Business and Technology Initiative,” https://www.mbda.gov/page/minority-business-and- MBDA, “Minority Business and Technology Initiative,” https://www.mbda.gov/page/minority-business-and-
technology-initiative, and “The Minority Business Development Agency Launches the ‘Minority Business and technology-initiative, and “The Minority Business Development Agency Launches the ‘Minority Business and
Technology Initiative’ with Amazon Business,” March 17, 2020, https://www.mbda.gov/news/press-releases/2020/03/Technology Initiative’ with Amazon Business,” March 17, 2020, https://www.mbda.gov/news/press-releases/2020/03/
minority-business-development-agency-launches-minority-business-and. minority-business-development-agency-launches-minority-business-and.
95120 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, “Global Business: Strategic Partners,” https://www.mbda.gov/2021-01/DOC-FY20-22-APPR-Final.pdf, and MBDA, “Global Business: Strategic Partners,” https://www.mbda.gov/
page/global-business-strategic-partners. page/global-business-strategic-partners.
96121 MBDA, “Annual Performance Summary, MBDA, “Annual Performance Summary, ~~FY2021~~FY2022,” https://www.mbda.gov/sites/default/files/,” https://www.mbda.gov/sites/default/files/~~2021-04/~~
~~MBDA_FY%202020%20APR%20Summary_042121.pdf.~~
972023-08/MBDA_FY%202022APR%20Summary_062323_1230pm.pdf. 122 For definitions of MBDA measures, see “MBDA Performance Metrics,” https://www.mbda.gov/sites/default/files/ For definitions of MBDA measures, see “MBDA Performance Metrics,” https://www.mbda.gov/sites/default/files/
2020-11/MBDA%20Performance%20Metrics.pdf. 2020-11/MBDA%20Performance%20Metrics.pdf.
~~98 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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were for private sector deals.123 See Table 1 for a summary of assessments and evaluations of the agency. Table 1. MBDA Performance Metrics, FY2016–~~FY2021~~FY2022

FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Total Value of Total Value of
$1.4 bil ion $1.4 bil ion
$3 bil ion $3 bil ion
$3.4 $3.4
$3.1 $3.1
$6.9 $6.9
$2.8 $2.8
$1.6 Contracts Contracts
bil ion bil ion
bil ion bil ion
bil ion bil ion
bil ion bil ion bil ion
Total Value of Total Value of
$1.3 bil ion $4.9 $1.3 bil ion $4.9
$1.2 $1.2
$1.8 $1.8
$967 $967
$709 $709
$1.2 Capital Capital
bil ion bil ion
bil ion bil ion
bil ion bil ion
mil ion mil ion
mil ion mil ion bil 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
6,265 6,265 7,904
Jobs Retained Jobs Retained
5,689 5,689
8,364 8,364
9,277 9,277
11,764 11,764
15,720 15,720
7,478 7,478 7,514
Source: MBDA, “MBDA Annual Performance Reports,” https://www.mbda.gov/performance. MBDA, “MBDA Annual Performance Reports,” 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 Business Centers and are verified by MBDA headquarters staff. The performance data date of retrieval MBDA Business Centers and are verified by MBDA headquarters staff. The performance data date of retrieval
was was ~~August 22, 2022~~April 15, 2024. .
Considerations for Congress
In considering the In considering the ~~Minority Business Development~~MBD Act of 2021’s implementation, Congress may Act of 2021’s implementation, Congress may
focus its oversight role on the new and expanded activities authorized by the agency’s enabling focus its oversight role on the new and expanded activities authorized by the agency’s enabling
legislation. A perennial issue of congressional interest involves debates about the agency’s role in legislation. A perennial issue of congressional interest involves debates about the agency’s role in
supplementing (or duplicating) other forms of federal assistance for businesses. In addition, there supplementing (or duplicating) other forms of federal assistance for businesses. In addition, there
has been continued interest in developing strategies to use has been continued interest in developing strategies to use ~~the~~ MBDA to promote individual MBDA to promote individual
economic mobility, as well as broader national economic growth, especially with regard to economic mobility, as well as broader national economic growth, especially with regard to
reducing inequities and advancing minority entrepreneurship, innovation, and business expansion reducing inequities and advancing minority entrepreneurship, innovation, and business expansion
~~activities.~~
~~Implementation of Enabling Legislation~~
~~As mentioned, the Minority Business Development~~activities. March 2024 District Court Order In a March 2024 decision, Nuziard et al. v. Minority Business Development Agency (MBDA) et al., the U.S. District Court for the Northern District of Texas found MBDA’s presumption of social disadvantage for certain program applicants to be unconstitutional and ordered the agency to discontinue using race or ethnicity as criteria for receiving MBDA Business Center services nationwide. (See “Introduction” for more information.) MBDA has been allowing businesses to receive Business Center services if a business owner self-certifies that they are socially or economically disadvantaged, regardless of race. Congress may consider requiring a procedure other than self-certification for MBDA clients to demonstrate social or economic disadvantage. This could include requiring members of the racial and ethnic groups that were previously presumed to be disadvantaged—as well as all other businesses interested in Business Center services—to demonstrate social or economic disadvantage. One way to accomplish this could be by requiring a written narrative explaining why the applicant is socially or economically disadvantaged. The Small Business Administration has taken this approach with applicants to its 8(a) Business Development Program, which in July 2023 was the subject of a similar court ruling as MBDA’s Business Centers. (For more information on 8(a), see 123 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. Congressional Research Service 24 link to page 37 link to page 18 link to page 10 The Minority Business Development Agency: An Overview of Its History and Programs CRS In Focus IF12458, The SBA’s 8(a) Business Development Program, by R. Corinne Blackford.) MBDA may choose to appeal the ruling, allow the ruling to stand as is, or opt for another approach. The agency could evaluate how private lenders take actions to remove barriers to credit for underserved or socially or economically disadvantaged business owners; the ruling does not appear to prevent the MBDA from conducting studies. Implementation of Enabling Legislation As mentioned, the MBD Act of 2021 created several new programs Act of 2021 created several new programs
and reporting requirements for the agency and authorized the appropriation of $110 million each and reporting requirements for the agency and authorized the appropriation of $110 million each
fiscal year from FY2021 through FY2025 (fiscal year from FY2021 through FY2025 (seesee Table A-1 for recent MBDA appropriations). for recent MBDA appropriations).
MBDA may seek to hire additional staff or otherwise increase its capacity to reestablish regional MBDA may seek to hire additional staff or otherwise increase its capacity to reestablish regional
offices, administer existing and new programs, and activate additional roles, such as coordination 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 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). development services, supply chain opportunities, and other priorities outlined in the act).
Congress will have an opportunity to oversee all of these activities. For example, Congress may Congress will have an opportunity to oversee all of these activities. For example, Congress may
seek to monitor key milestones and engage with MBDA as it implements new structures, roles, seek to monitor key milestones and engage with MBDA as it implements new structures, roles,
and programs.and programs.99 124 Congress may also seek to monitor the agency’s performance metrics, which Congress may also seek to monitor the agency’s performance metrics, which
may be revised to reflect expanded service areas and/or different types of outcomes.may be revised to reflect expanded service areas and/or different types of outcomes.~~100~~125
Other issues of congressional interest include Other issues of congressional interest include
• the degree to which MBDA services may be available to previously unserved or 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 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 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 criteria to define MBEs, and Congress may be interested in the impact of a

~~99 P.L. 117-58, Sec. 100003 and Sec. 100401.~~
~~100 The Minority Business Development Act of 2021 requires a report on the organizational structure of the agency and~~
~~reports on other activities.~~
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revised MBE definition on the agency’s outreach and program activities (see 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 MBDA’s efforts to coordinate with other federal agencies in the
“establishment, “establishment, preservation, and strengthening of socially or economically preservation, and strengthening of socially or economically
disadvantaged business concerns.”disadvantaged business concerns.”~~101~~
~~ the~~ 126 • MBDA’s required reports (seeMBDA’s required reports (see “Agency Establishment”). ).
~~The~~ MBDA is further tasked with evaluating the impact of federal support of socially or MBDA is further tasked with evaluating the impact of federal support of socially or
economically disadvantaged business concerns.economically disadvantaged business concerns.~~102~~127
Duplication of SBA Activities
Whether Whether ~~the~~ MBDA complements or duplicates the SBA’s programs, especially those programs MBDA complements or duplicates the SBA’s programs, especially those programs
targeted to minority populations (e.g., the Microloan targeted to minority populations (e.g., the Microloan ~~program103)~~program)128 or the socially and economically or the socially and economically
disadvantaged (e.g., the 8(a) Business Development disadvantaged (e.g., the 8(a) Business Development ~~Program104)~~Program)129, has been a perennial issue of 124 P.L. 117-58, Sec. 100003 and Sec. 100401. 125 The MBD Act of 2021 requires a report on the organizational structure of the agency and reports on other activities. 126 P.L. 117-58, Division K, Title IV. 127 Ibid. 128 For further information and analysis of the Microloan program, see CRS Report R41057, Small Business Administration Microloan Program, by Robert Jay Dilger. 129 For further information and analysis of the 8(a) Business Development program, see CRS Report R44844, SBA’s “8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger. Congressional Research Service 25 The Minority Business Development Agency: An Overview of Its History and Programs ~~, has been a perennial issue of~~
congressional interest. There have been several proposals in the past to terminate congressional interest. There have been several proposals in the past to terminate ~~the~~ MBDA and MBDA and
transfer its activities to the SBA. There have also been proposals to transfer SBA programs that transfer its activities to the SBA. There have also been proposals to transfer SBA programs that
support minority business development to support minority business development to ~~the~~ MBDA (or a reorganized version of the agency MBDA (or a reorganized version of the agency
~~within the Department of Commerce).105~~within DOC).130 MBDA’s proponents have argued that the agency MBDA’s proponents have argued that the agency
complements rather than conflicts with the SBA’s programs. The SBA focuses on small complements rather than conflicts with the SBA’s programs. The SBA focuses on small
businesses. businesses. ~~The~~ MBDA does not restrict its activities, referrals, or events based on business size. MBDA does not restrict its activities, referrals, or events based on business size.
However, MBDA Business Centers have recently focused on providing technical and business However, MBDA Business Centers have recently focused on providing technical and business
development services to minority firms with employees and revenues that exceed $500,000.development services to minority firms with employees and revenues that exceed $500,000.~~106~~
131 Additionally, Title VI of the Additionally, Title VI of the ~~Minority Business Development~~MBD Act of 2021 directs the Under Act of 2021 directs the Under
Secretary “to ensure consistency with program goals and to avoid duplication” by reviewing all Secretary “to ensure consistency with program goals and to avoid duplication” by reviewing all
proposed federal training and technical assistance activities in direct support of the programs 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.carried out under the Business Center program and the Rural Business Center program.~~107~~132
Additional Considerations
Over the years, due to the unique set of challenges and circumstances faced by minority business Over the years, due to the unique set of challenges and circumstances faced by minority business
owners, some analysts and policymakers have called for owners, some analysts and policymakers have called for ~~the~~ MBDA to take on new or expanded MBDA to take on new or expanded
roles, services, and partnerships. The roles, services, and partnerships. The ~~Minority Business Development~~MBD Act of 2021 expanded Act of 2021 expanded ~~the~~
MBDA’s scope of activities by providing it several new roles and programs. As Congress reviews MBDA’s scope of activities by providing it several new roles and programs. As Congress reviews
options to support economic development, options to support economic development, ~~the~~ MBDA may continue to offer existing and MBDA may continue to offer existing and
potentially new avenues for providing financial and technical assistance to MBEs. For instance, potentially new avenues for providing financial and technical assistance to MBEs. For instance,

~~101 P.L. 117-58, Division K, Title IV.~~
~~102 Ibid.~~
~~103 For further information and analysis of the Microloan program, see CRS Report R41057,~~ ~~Small Business~~
~~Administration Microloan Program, by Robert Jay Dilger.~~
~~104 For further information and analysis of the 8(a) Business Development program, see CRS Report R44844,~~ ~~SBA’s~~
~~“8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger.~~
~~105~~in light of COVID-19’s disproportionate impact on MBEs, Congress may further consider economic recovery policy options to address the unique challenges faced by MBEs as well as other options to involve MBDA in additional convening, coordinating, and assistance roles.133 130 See U.S. Commission on Minority Business Development (CMBD), See U.S. Commission on Minority Business Development (CMBD), Final Report, 1992 (Washington, DC: GPO) 1992 (Washington, DC: GPO)
and U.S. Congress, House Committee on Small Business, and U.S. Congress, House Committee on Small Business, Minority Business Development, H102-91, 102nd Cong., 2nd , H102-91, 102nd Cong., 2nd
sess., September 24, 1992, pp. 7-8, 16 (Washington, DC: GPO, 1992). The commission was established by P.L. 100-sess., September 24, 1992, pp. 7-8, 16 (Washington, DC: GPO, 1992). The commission was established by P.L. 100-
656 to assess and review federal programs designed to promote minority business development. 656 to assess and review federal programs designed to promote minority business development.
~~106~~131 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.
~~107~~132 P.L. 117-58, Division K, Title IV. 133 ~~P.L. 117-58, Division K, Title IV.~~
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~~in light of COVID-19’s disproportionate impact on MBEs, Congress may further consider~~
~~economic recovery policy options to address the unique challenges faced by MBEs as well as~~
~~other options to involve MBDA in additional convening, coordinating, and assistance roles.108~~

~~108~~ Prior to the COVID-19 pandemic, researchers identified challenges and outcomes that are unique to MBEs and Prior to the COVID-19 pandemic, researchers identified challenges and outcomes that are unique to MBEs and
small MBEs in particular. For reports on aspects of minority business ownership, including capital access and small MBEs in particular. For reports on aspects of minority business ownership, including capital access and
entrepreneurship, see MBDA, “Demographic Trends Publications,” https://www.mbda.gov/page/demographic-trends-entrepreneurship, see MBDA, “Demographic Trends Publications,” https://www.mbda.gov/page/demographic-trends-
publications; Robert W. Fairlie, Alicia Robb, and David T. Robinson, “Black and White: Access to Capital Among publications; Robert W. Fairlie, Alicia Robb, and David T. Robinson, “Black and White: Access to Capital Among
Minority-Owned Startups,” NBER Working Paper No. 28154 (November 2020); V. Hwang, S. Desai, and R. Baird, Minority-Owned Startups,” NBER Working Paper No. 28154 (November 2020); V. Hwang, S. Desai, and R. Baird,
“Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas City (2019). “Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas City (2019).
Timothy Bates, W.D. Bradford, and Robert Seamans, “Minority Entrepreneurship in Twenty-First Century America,” Timothy Bates, W.D. Bradford, and Robert Seamans, “Minority Entrepreneurship in Twenty-First Century America,”
Small Business Economics, 50, pp., 50, pp. 415-427 (2018); Robert W. Fairlie and Alicia M. Robb, 415-427 (2018); Robert W. Fairlie and Alicia M. Robb, Race and Entrepreneurial
Success: Black-, Asian-, and White-Owned Businesses in the United States (Cambridge, MA: The MIT Press, 2010); (Cambridge, MA: The MIT Press, 2010);
and Robert W. Fairlie, Alicia M. Robb, and David Hinson, “Disparities in Capital Access Between Minority and Non-and Robert W. Fairlie, Alicia M. Robb, and David Hinson, “Disparities in Capital Access Between Minority and Non-
Minority-Owned Businesses,” Minority Business Development Agency (2010), https://www.mbda.gov/sites/default/Minority-Owned Businesses,” Minority Business Development Agency (2010), https://www.mbda.gov/sites/default/
files/migrated/files-attachments/DisparitiesinCapitalAccessReport.pdf. files/migrated/files-attachments/DisparitiesinCapitalAccessReport.pdf.
Studies indicate that the economic impact of the coronavirus pandemic has affected minority business owners more Studies indicate that the economic impact of the coronavirus pandemic has affected minority business owners more
severely than nonminority business owners. For a summary of research on the economic impact of the coronavirus severely than nonminority business owners. For a summary of research on the economic impact of the coronavirus
pandemic on MBEs, see Lucas Misera, pandemic on MBEs, see Lucas Misera, An Uphill Battle: COVID-19’s Outsized Toll on Minority-Owned Firms,
Federal Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/newsroom-and-events/Federal Reserve Bank of Cleveland, October 8, 2020, https://www.clevelandfed.org/newsroom-and-events/
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 For analysis of metrics related to small businesses, including disparities between small MBEs and small nonminority
firms, see firms, see Small Business Credit Survey: 2021 Report on Employer Firms, Federal Reserve Banks, February 2021, , Federal Reserve Banks, February 2021,
https://www.fedsmallbusiness.org/survey/2021/report-on-employer-firms; and Mels de Zeeuw, https://www.fedsmallbusiness.org/survey/2021/report-on-employer-firms; and Mels de Zeeuw, Small Business Credit
(continued...) Congressional Research Service 26 The Minority Business Development Agency: An Overview of Its History and Programs Survey: 2019 Report on Minority-Owned Firms, Federal Reserve Bank of Atlanta, December 2019, , Federal Reserve Bank of Atlanta, December 2019,
https://www.fedsmallbusiness.org/survey/2019/report-on-minority-owned-firms, among others. 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 small For additional analysis of the economic impact of the coronavirus pandemic on small businesses, see Daniel Wilmoth, businesses, see Daniel Wilmoth,
“The Effects of the COVID-19 Pandemic on Small Businesses,” SBA, Office of Advocacy, Issue Brief Number 16, “The Effects of the COVID-19 Pandemic on Small Businesses,” SBA, Office of Advocacy, Issue 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; Robert Fairlie, Business.pdf; Robert Fairlie, The Impact of COVID-19 on Small 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/w27309; and Alexander W. Bartik, et al.,doi.org/10.3386/w27309; and Alexander W. Bartik, et al., How Are Small Businesses Adjusting to COVID-19? Early
Evidence from a Survey, National Bureau of Economic Research, Working Paper 26989, 2020, , National Bureau 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 suggest that MBDA resources could be directed to focus on minority serving-institutions (MSIs) that would Some suggest that MBDA resources could be directed to focus on minority serving-institutions (MSIs) that would
administer business incubators and accelerators or operate business centers; administer an equity grant program to fund administer business incubators and accelerators or operate business centers; administer an equity grant program to fund
municipal capital projects; and develop and administer a minority business investment company (MBIC)—similar to municipal capital projects; and develop and administer a minority business investment company (MBIC)—similar to
the SBA’s small business investment company (SBIC) program—to allow the agency to license lenders and lend the SBA’s small business investment company (SBIC) program—to allow the agency to license lenders and lend
capital for business investments, among other activities. For an example of these perspectives, see Connor Maxwell, capital for business investments, among other activities. For an example of these perspectives, see Connor Maxwell,
Darrick Hamilton, Andre M. Perry, and Danyelle Solomon, “A Blueprint for Revamping the Minority Business Darrick Hamilton, Andre M. Perry, and Danyelle Solomon, “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/
blueprint-revamping-minority-business-development-agency/. blueprint-revamping-minority-business-development-agency/.
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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. Beginning in FY2017, the Trump Administration proposed cuts to the business initiatives. Beginning in FY2017, the Trump Administration proposed cuts to the
agency’s budget and proposed orienting the agency’s initiatives away from services for individual 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 agency. Assistant Secretary, and expanded programs and activities for the agency.
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 program (MBDC), which became ~~the~~ MBDA’s primary method for delivering technical and 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.~~109~~134 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 transferring its mission to the SBA, but ultimately continued the agency as an entity within ~~the~~
~~Department of Commerce.110~~DOC.135
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..~~111~~136 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 socially and economically disadvantaged individuals, black contracts for businesses owned by socially and economically 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 substantial increases in the agency’s budget. In seeking to expand ~~the~~MBDA’s reach and capacity reach and capacity ~~of the~~
~~MBDA,~~ , the Clinton Administration sought increases to fund the establishment of Rural Business 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
CBES’s goal was “to enable MBDA to enter into strategic alliances, coordinating the delivery of CBES’s goal was “to enable MBDA to enter into strategic alliances, coordinating the delivery of

~~109~~ 134 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.
~~110~~135 U.S. Congress, House Committee on Appropriations, Subcommittee on the Departments of Commerce, Justice, and U.S. Congress, House Committee on Appropriations, Subcommittee on the Departments of Commerce, Justice, and
State, the Judiciary, and Related Agencies, State, the Judiciary, and Related Agencies, Departments of Commerce, Justice, And State, The Judiciary, and Related
Agencies Appropriations for 1990, H181-26, 101st Cong., 2nd sess., March 14-17, 20-22, 1989 (Washington, DC: GPO, H181-26, 101st Cong., 2nd sess., March 14-17, 20-22, 1989 (Washington, DC: GPO,
1989). 1989).
~~111~~136 Executive Order 12928, “Promoting Procurement with Small Businesses Owned and Controlled by Socially and Executive Order 12928, “Promoting Procurement with Small Businesses Owned and Controlled by Socially and
Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions,” 59 Economically Disadvantaged Individuals, Historically Black Colleges and Universities, and Minority Institutions,” 59
Federal Register 48377, September 20, 1994. 48377, September 20, 1994.
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its services with those of other entities capable of assisting in minority and/or small and its services with those of other entities capable of assisting in minority and/or small and
disadvantaged business development in a particular market.”disadvantaged business development in a particular market.”~~112~~137
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.~~113~~138 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.~~114~~139
Under the George W. Bush Administration, Under the George W. Bush Administration, ~~the~~ MBDA continued efforts to coordinate its MBDA 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.~~115~~140
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 growth MBDCs, which provided consultant services to firms with significant growth
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.

~~112 U.S. Department of Commerce~~ Global Competitiveness Starting in the 1990s, the agency began to focus on assisting minority firms enter and compete in the global economy. A 2003 MBDA study explored issues and opportunities for minority 137 DOC, “Minority Business Development Agency: Implementation of Pilot Community-, “Minority Business Development Agency: Implementation of Pilot Community-
Based Enhanced Services (CBES) Initiative in Baltimore, Maryland, and the Identification of Other Markets To Be Based Enhanced Services (CBES) Initiative in Baltimore, Maryland, and the Identification of Other Markets To Be
Considered as Alternatives to the Minority Business Development Center Program for the Delivery of Management Considered as Alternatives to the Minority Business Development Center Program for the Delivery of Management
and Technical Assistance to Minority Firms and Entrepreneurs,” 61 and Technical Assistance to Minority Firms and Entrepreneurs,” 61 Federal Register 8919-8920, March 6, 1996. 8919-8920, March 6, 1996.
~~113 U.S. Department of Commerce~~138 DOC, Office of Inspector General, , Office of Inspector General, Minority Business Development Agency Community-
Based Enhanced Services Pilot Project Award Not Effectively Monitored, Final Audit Report No. EDD-9406-8-0002, , Final Audit Report No. EDD-9406-8-0002,
Washington, DC, May 1998, pp. i-ii. Washington, DC, May 1998, pp. i-ii.
~~114~~139 Ibid. p. 8. Ibid. p. 8.
~~115 U.S. Department of Commerce~~140 DOC, Minority Business Development Agency, , Minority Business Development Agency, The State of Minority Business
Enterprises, An Overview of the 2002 Survey of Business Owners, Washington, DC, August 2006, p. 30, , Washington, DC, August 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 were more likely to have paid employees compared to minority firms larger percentage of all minority revenues and were more likely to have paid employees compared to minority firms
with annual gross receipts under $500,000. See Sumiye “Sue” Obuko and Mark Planting, with annual gross receipts under $500,000. See Sumiye “Sue” Obuko and Mark Planting, The State of Minority
Business Enterprises: An Overview of the 2007 Survey of Business Owners, U.S. Department of Commerce, Minority , U.S. Department of Commerce, Minority
Business Development Agency, Washington, DC, 2015, p. 36 (footnote), https://archive.mbda.gov/sites/mbda.gov/Business 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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~~Global Competitiveness~~
~~Starting in the 1990s, the agency began to focus on assisting minority firms enter and compete in~~
~~the global economy. A 2003 MBDA study explored issues and opportunities for minority~~
businesses seeking international opportunities. The preliminary study’s key findings included the 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 on their unique competitive strengths, especially in developing By capitalizing on their unique competitive strengths, especially in developing
countries, minority-business enterprises (MBEs) can compete with larger countries, minority-business enterprises (MBEs) can compete with larger
multinational companies. multinational 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.~~116~~141
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 MBDA activities, increasing the efficient delivery of services to minority business impact of MBDA activities, increasing the efficient delivery of services to minority business
communities, and increasing coordination with other federal agencies. Federal agencies that have 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.
Proposals to Establish, Transfer, or Eliminate the Agency
Executive branch and legislative proposals have sought to transfer, eliminate, or—alternatively— Executive branch and legislative proposals have sought to transfer, eliminate, or—alternatively—
statutorily authorize the agency.statutorily authorize the agency.
~~The~~ MBDA was originally created by executive order. Prior to the MBDA was originally created by executive order. Prior to the ~~Minority Business~~
~~Development~~MBD Act of 2021’s enactment in 2021, there were a number of proposals over the years Act of 2021’s enactment in 2021, there were a number of proposals over the years
to statutorily authorizeto statutorily authorize ~~the~~ MBDA. Absent specific statutory requirements, the President could MBDA. Absent specific statutory requirements, the President could
have exercised authority to effectively terminate have exercised authority to effectively terminate ~~the~~ MBDA’s discretionary activities at any time MBDA’s discretionary activities at any time
without congressional consultation or consent. Nevertheless, during this time, Congress could 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 have (and has from time to time) appropriated funds to carry out specific activities, and
potentially supersede presidential discretion.potentially supersede presidential discretion.~~117~~142 In addition, Congress could have revoked or In addition, Congress could have revoked or
modified the executive order, potentially eliminating, expanding, or restricting the agency. modified the executive order, potentially eliminating, expanding, or restricting the agency.

~~116~~ Transferring the agency would have changed the agency’s role and visibility. Several reorganization plans from the late 1970s through the 1990s from the executive branch would have moved MBDA out of DOC.143 For instance, the George H.W. Bush Administration proposed to 141 John Owens and Robert Pazornik, 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, , Preliminary Study, Washington, DC, September 28, 2003, p. 1,
https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBEintheGlobalEconomy.pdf. https://www.mbda.gov/sites/default/files/migrated/files-attachments/MBEintheGlobalEconomy.pdf.
~~117~~142 In general, when Congress appropriates a specific amount of budget authority for a specific purpose, the President 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, 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 including a unanimous decision by the Supreme Court in Train v City of New York, 420 U.S. 35 (1975), and the , 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, 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 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 Congress, but he cannot permanently prevent the obligation or expenditure of funds provided in law unless Congress
agrees. agrees.
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~~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.118 For instance, the George H.W. Bush~~
~~Administration proposed to transfer the MBDA into the SBA in FY1989 and FY1990.119 In~~
143 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. (continued...) Congressional Research Service 30 The Minority Business Development Agency: An Overview of Its History and Programs transfer MBDA into the SBA in FY1989 and FY1990.144 In FY2018, the Trump Administration recommended a $6 million budget for MBDA, to be used to FY2018, the Trump Administration recommended a $6 million budget for MBDA, to be used to
close out the agency.close out the agency.~~120~~145 The Trump Administration’s budgets in FY2019, FY2020, and FY2021 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 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 change the focus of MBDA services from assisting individual MBEs to efforts to address issues
facing the broader minority business community.facing the broader minority business community.~~121~~146
The Trump Administration’s first budget request (for FY2018) proposed to eliminate the agency, The Trump Administration’s first budget request (for FY2018) proposed to eliminate the agency,
and later budget requests proposed reductions to the agency’s budget by approximately 75%. For and later budget requests proposed reductions to the agency’s budget by approximately 75%. For
example, the Trump Administration sought to reduce the agency’s budget to $10.3 million for example, the Trump Administration sought to reduce the agency’s budget to $10.3 million for
FY2021, with the intent of redirecting resources away from services for individual businesses.FY2021, with the intent of redirecting resources away from services for individual businesses.~~122~~147
According to budget documents, the Trump Administration supported the termination of According to budget documents, the Trump Administration supported the termination of ~~the~~
MBDA and its programs as part of its wider efforts to reduce federal spending and to redefine the MBDA and its programs as part of its wider efforts to reduce federal spending and to redefine the
role of the federal government in domestic affairs. MBDA and its activities are among a number 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.of federal programs that support private sector job creation.~~123~~148 The Administration’s opposition may have been rooted in a view of federalism which argues that these kinds of activities are the responsibilities of state and local governments and the private and nonprofit sectors, not the ~~The Administration’s opposition~~

~~118 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 In the 98th Congress, the Department of International Trade and Industry Act of 1983 (S. 121) proposed ~~a transfer of~~
~~the~~ transferring MBDA to the SBA as one of several aspects of a reorganization plan for MBDA to the SBA as one of several aspects of a reorganization plan for ~~the Department of Commerce~~DOC. See S.Rept. . See S.Rept.
98-374. Later, during the Reagan Administration, a memo from the Secretary of Commerce, James Baker, outlined a 98-374. Later, during the Reagan Administration, a memo from the Secretary of Commerce, James Baker, outlined a
proposal to reorganize proposal to reorganize ~~the Department of Commerce~~DOC and establish the Department of International Trade and Industry. 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: Included in the proposal are references to efforts to consolidate government and the following proposed action:
“Disposition of other elements of “Disposition of other elements of ~~the Department of Commerce~~DOC will be identical to the Administration proposal of the 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 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 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 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 Library. (At the time, Malcolm Baldrige was Secretary of ~~the Department of Commerce~~DOC, Edwin Meese was Counselor , Edwin Meese was Counselor
to the President, and Richard Darman was Assistant to the President and Deputy to the Chief of Staff.) 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, 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 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 eliminate several Commerce agencies, including ~~the~~ MBDA. S. 929 and H.R. 1756 are noted in the analysis of trade MBDA. S. 929 and H.R. 1756 are noted in the analysis of trade
reorganization in CRS Report R42555, reorganization in CRS Report R42555, Trade Reorganization: Overview and Issues for Congress, by Shayerah I. , by Shayerah I.
Akhtar. Akhtar.
~~119~~144 OMB, “Budget of the U.S. Government - FY1989,” pp. 5-69 and 5-70, available at https://fraser.stlouisfed.org/title/ 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/18995; and “Budget of the U.S. Government—FY1990,” p. 5-78, available at https://fraser.stlouisfed.org/title/
54/item/18996. 54/item/18996.
~~120~~145 OMB “Appendix: Budget of the U.S. Government, Fiscal Year 2018” (2017), p. 190, https://www.govinfo.gov/ 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. content/pkg/BUDGET-2018-APP/pdf/BUDGET-2018-APP.pdf.
~~121~~146 OMB, “Budget of the United States Government, Fiscal Year 2019,” (2018), p. 31, https://www.govinfo.gov/ 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 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/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, 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 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-the United States Government, Fiscal Year 2021” (2020), p. 198, https://www.govinfo.gov/content/pkg/BUDGET-
2021-APP/pdf/BUDGET-2021-APP.pdf. 2021-APP/pdf/BUDGET-2021-APP.pdf.
~~122~~147 U.S. Office of Management and Budget (OMB), “A Budget for America’s Future—Appendix,” FY2021 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-Congressional Budget Justification, p. 198, https://www.govinfo.gov/content/pkg/BUDGET-2021-APP/pdf/BUDGET-
2021-APP.pdf. 2021-APP.pdf.
~~123~~148 Other agencies and programs that support private job creation and economic development include the SBA; 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. Congressional Research Service 31 ~~Congressional Research Service~~

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link to page link to page 3743 link to page link to page 3137 link to page link to page 3137 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~~federal government. MBDA supporters contend that the agency’s mission is critical to the contend that the agency’s mission is critical to the
nation’s economic future and that the agency’s programs and services address a number of nation’s economic future and that the agency’s programs and services address a number of
deficiencies and impediments faced by minority entrepreneurs. deficiencies and impediments faced by minority entrepreneurs.
As previously noted, Congress continued to provide As previously noted, Congress continued to provide ~~the~~ MBDA appropriations even as various MBDA appropriations even as various
Administrations and legislative proposals considered reorganizing the agency, defunding the 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 agency’s activities, or merging it into the SBA. Legislative proposals to transfer or establish ~~the~~
MBDA and its programs are included iMBDA and its programs are included in Appendix C, and Table A-1 provides a history of provides a history of
Administrations’ annual budget requests and enacted appropriations for the agency since FY1970. Administrations’ annual budget requests and enacted appropriations for the agency since FY1970.
MBDA Annual Budget Requests and Enacted Appropriations, FY1970–~~FY2022~~FY2024
Table A-1 provides a history of annual budget requests and enacted appropriations for provides a history of annual budget requests and enacted appropriations for ~~the~~ MBDA MBDA
since FY1970. since FY1970.
Table A-1. MBDA Appropriations, FY1970–~~FY2023~~FY2024
(in millions of dollars) (in millions of dollars)
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
40.0 40.0
40.0 40.0
1973 1973
63.6 63.6
63.9 63.9
1974 1974
74.5 74.5
35.6 35.6
1975 1975
52.0 52.0
52.0 52.0
1976 1976
52.6 52.6
49.8 49.8
1977 1977
0.0 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
50.0 50.0
47.3 47.3
1984 1984
54.0 54.0
53.9 53.9
1985 1985
49.6 49.6
49.6 49.6
1986 1986
44.8 44.8
43.0 43.0

~~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.~~ 1987 45.4 39.8 1988 4.6 39.7 1989 0.0 39.7 1990 0.0 39.7 1991 46.2 41.1 1992 0 42.6
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Fiscal Year
Admin. Request
Enacted
~~1987~~
~~45.4~~
~~39.8~~
~~1988~~
~~4.6~~
~~39.7~~
~~1989~~
~~0.0~~
~~39.7~~
~~1990~~
~~0.0~~
~~39.7~~
~~1991~~
~~46.2~~
~~41.1~~
~~1992~~
0
~~42.6~~
1993 1993
37.9 37.9
37.9 37.9
1994 1994
46.0 46.0
44.1 44.1
1995 1995
46.2 46.2
43.8 43.8
1996 1996
47.9 47.9
32.0 32.0
1997 1997
34.0 34.0
28.0 28.0
1998 1998
28.0 28.0
25.0 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
30.0 30.0
2007 2007
29.6 29.6
30.0 30.0
2008 2008
28.7 28.7
28.6 28.6
2009 2009
29.0 29.0
29.8 29.8
2010 2010
31.0 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
28.0 28.0
2015 2015
28.3 28.3
30.0 30.0
2016 2016
30.0 30.0
32.0 32.0
2017 2017
35.6 35.6
34.0 34.0
2018 2018
6.0 6.0
39.0 39.0
2019 2019
10.0 10.0
40.0 40.0
2020 2020
10.0 10.0
52.0 52.0
2021 2021
10.3 10.3
73.0 73.0
2022 2022
70.0 70.0
55.0 55.0
2023 2023
110.0 110.0
70.0 70.0
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~~The Minority Business Development Agency: An Overview of Its History and Programs~~

2024 110.0 68.25 2025 80.0 Source: Budget Appendices of the United States, FY1970- Budget Appendices of the United States, FY1970-~~FY2023~~FY2025. .
Notes: In FY2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) provided In FY2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) provided
~~the~~ MBDA an additional $10 mil ion in supplemental funding in addition to $42 mil ion in annual appropriations, MBDA an additional $10 mil ion in supplemental funding in addition to $42 mil ion in annual appropriations,
for a total of $52 mil ion. The supplemental funding was to assist MBEs with preventing, preparing for, and for a total of $52 mil ion. 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 minority business responding to the COVID-19 pandemic through education, training, and advising grants to minority business
centers and minority chambers of commerce. In FY2021, the Consolidated Appropriations Actcenters and minority chambers of commerce. In FY2021, the Consolidated Appropriations Act (P.L. 116-260) (P.L. 116-260)
~~provided the MBDA with $25 mil ion in supplemental funding, in addition to $48 mil ion in annual appropriations.~~
~~Congressional Research Service~~

29provided Congressional Research Service 33 The Minority Business Development Agency: An Overview of Its History and Programs MBDA with $25 mil ion in supplemental funding, in addition to $48 mil ion in annual appropriations. The table does not include funding provided by the American Rescue Plan Act of 2021 (P.L. 117-2, Title III, Subtitle C, Section 3301) provided funding for the Department of the Treasury’s State Small Business Credit Initiative (SSBCI), part of which was later transferred to MBDA. See “Error! Reference source not found..” Congressional Research Service 34

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 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, 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 performance measures used to gauge progress in achieving agency objectives, and program
management and duplication issues. 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 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 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 by the Obama Administration in 2010, was a voluntary body comprised of representatives from
business and public sectors. The final recommendations included the following: business and public sectors. The final recommendations included the following:
• centralizing and consolidating federal MBE development efforts into one single centralizing and consolidating federal MBE development efforts into one single
well-funded agency; well-funded agency;
• assisting MBEs’ development of long-term contractual relations with larger assisting MBEs’ development of long-term contractual relations with larger
businesses to facilitate integration; businesses to facilitate integration;
• expanding MBE access to capital by establishing new sources of capital through 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 the use of tax credits in exchange for equity capital investments in MBEs or by
an enterprise bond fund; an enterprise bond fund;
• establishing an MBE Academy to provide ongoing education to MBE owners establishing an MBE Academy to provide ongoing education to MBE owners
through a public private partnership; and through a public private partnership; and
• building a comprehensive longitudinal database to support long-term policy building a comprehensive longitudinal database to support long-term policy
analysis of the issues and opportunities. analysis of the issues and opportunities.~~124~~149
PART Evaluation 2007
Starting in 2002, the George W. Bush Administration initiated its Program Assessment Rating 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 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; 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 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 2007 found MBDA performance to be Adequate with high marks for program purpose and design
(80%); strategic planning (75%); and program management (100%).(80%); strategic planning (75%); and program management (100%).~~125~~150 Among the highlights, the Among the highlights, the
evaluation noted the following: evaluation noted the following:
• The program has developed appropriate annual and long-term measures that The program has developed appropriate annual and long-term measures that
focus on the direct impact of its assistance on business clients. However, more 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 research and evaluation needs to be conducted on the long-term impact of MBDA
assistance. assistance.

~~124 Department of Commerce~~ • 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. 149 DOC, , National Advisory Council on Minority Business Enterprise Recommendations, ,
Washington, DC, December 2013, https://www.mbda.gov/sites/default/files/migrated/files-attachments/Washington, DC, December 2013, https://www.mbda.gov/sites/default/files/migrated/files-attachments/
NACMBEFinalReport041314.PDF. NACMBEFinalReport041314.PDF.
~~125~~150 U.S. Office of Management and Budget (OMB), 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/Washington, DC, 2007, https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/omb/expectmore/
summary/10000034.2007.html. summary/10000034.2007.html.
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~~ 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 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 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 level. At the federal level, the SBA provides similar assistance through its
entrepreneurial development programs.entrepreneurial development programs.~~126~~151
Office of Inspector General Reports
Past reports of the Commerce Department’s Office of Inspector General (IG) examined various 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.aspects of the agency and its operations. Three of these reports are summarized below.~~127~~152
• A 2017 report by A 2017 report by ~~the Department of Commerce~~DOC IG reviewed MBDA’s IG reviewed MBDA’s
management of cooperative management of cooperative agreements for the Minority Business Center agreements for the Minority Business Center
Program and found no significant problems. The MBDA director concurred with Program and found no significant problems. The MBDA director concurred with
the report’s recommendations, which directed MBDA to enforce existing and the report’s recommendations, which directed MBDA to enforce existing and
implement new procedures related to oversight, reporting policies and implement new procedures related to oversight, reporting policies and
procedures, and the agency’s methodology for verifying select performance procedures, and the agency’s methodology for verifying select performance
measures.measures.~~128~~
153 • A 2006 report by A 2006 report by ~~the~~DOC IG found that MBDA performance measures were IG found that MBDA performance measures were
undermined by inappropriately combining results for three different programs undermined by inappropriately combining results for three different programs
and unreliable performance data. The report was initiated after the agency and unreliable performance data. The report was initiated after the agency
reported a 300% increase in the number of clients assisted during the 2004 reported a 300% increase in the number of clients assisted during the 2004
program year by MBOCs despite a decrease in FY2004 appropriations. The program year by MBOCs despite a decrease in FY2004 appropriations. The
report found that MBDA, in reporting FY2004 results, inappropriately combined report found that MBDA, in reporting FY2004 results, inappropriately combined
results for MBOCs with two other programs—Business Development Centers results for MBOCs with two other programs—Business Development Centers
and the Phoenix program—resulting in the inflation of the number of clients and the Phoenix program—resulting in the inflation of the number of clients
served by MBOCs.served by MBOCs.~~129~~154 The MBDA director concurred with the recommendations The MBDA director concurred with the recommendations
of the report, which directed of the report, which directed ~~the~~ MBDA to define clearly key performance MBDA to define clearly key performance
measures and the types of actions that may be counted toward measuring the measures and the types of actions that may be counted toward measuring the
“dollar value of contract awards obtained,” and report performance measures of “dollar value of contract awards obtained,” and report performance measures of
its programs separately. its programs separately.
• A 1998 audit report by A 1998 audit report by ~~the~~DOC IG identified deficiencies in the process MBDA IG identified deficiencies in the process MBDA used to monitor the used to monitor the
performance of a pilot project that would test the viability of the Community-Based Enhancement 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 Services initiatives as an alternative to the Minority Business Development Center. The IG report report
found that MBDA’s monitoring of the pilot project failed to follow the agency’s written policies 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. and procedures and thus was ineffective in its assessment of the program. ~~The MBDA concurred~~

~~126 Ibid.~~
~~127~~MBDA concurred with the report’s findings and committed to incorporating the recommendations put forth by the report, which included assigning staff with appropriate expertise who will follow MBDA policies and procedures; and 151 Ibid. 152 Another report of note is the U.S. Government Accountability Office, 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. , RCED-91-114, April 16, 1991, http://www.gao.gov/products/RCED-91-114.
~~128 Department of Commerce~~153 DOC, Office of Inspector General, , 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/, 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. OIGPublications/2017-09-05_MBDA-Business-Centers_final-report-Secured.pdf.
~~129 Department of Commerce~~154 DOC, Office of Inspector General, , 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/, FSD-17252-5-0001, Washington, DC, September 2005, https://www.oig.doc.gov/
OIGPublications/MBDA-FSD-17252-5-0001-09-2005.pdf. OIGPublications/MBDA-FSD-17252-5-0001-09-2005.pdf.
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~~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 developing project specific performance measures and specific reporting
requirements to reflect the specific nature of the project.requirements to reflect the specific nature of the project.~~130~~

~~130 U.S. Department of Commerce~~155 155 DOC, Office of the Inspector General, , Office of the Inspector General, Minority Business Development Agency
Community-Based Enhancement Services Pilot Project Award Not Effectively Monitored, EDD-9406-8-0002, , EDD-9406-8-0002,
Washington, DC, June 1998, p. 8, https://www.oig.doc.gov/OIGPublications/MBDA-EDD-9406-2-06-1998.pdf. Washington, DC, June 1998, p. 8, https://www.oig.doc.gov/OIGPublications/MBDA-EDD-9406-2-06-1998.pdf.
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Appendix C. Legislative Proposals, 96th Congress-
~~117th~~118th Congress
Since Since ~~the~~ MBDA’s inception, a number of bills have been introduced that would have “codified” 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; 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 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 functions. The following bills—introduced in the 96th -117th Congresses—address the agency’s
statutory authority or its activities. statutory authority or its activities.
• The 96th Congress considered, but did not pass, legislative proposals to provide The 96th Congress considered, but did not pass, legislative proposals to provide
~~the~~ MBDA statutory authorization. The House Committee on Small Business MBDA statutory authorization. The House Committee on Small Business
held hearings on bills (H.R. 6904 and S. 2565) that would have established a held hearings on bills (H.R. 6904 and S. 2565) that would have established a
permanent MBDA within permanent MBDA within ~~the Department of Commerce.131~~DOC.156 The House bill, The House bill,
introduced by Representatives Parren Mitchell and Joseph Addabbo, would have 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 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 the agency’s mission, including equity financing of minority business; financial
and technical assistance in penetrating domestic and foreign markets; and and technical assistance in penetrating domestic and foreign markets; and
minority business management education. A Senate bill, S. 2565, introduced by minority business management education. A Senate bill, S. 2565, introduced by
Senator Abraham Ribicoff and backed by the Carter Administration, would have Senator Abraham Ribicoff and backed by the Carter Administration, would have
authorized the creation of a Minority Business Development Agency focused on authorized the creation of a Minority Business Development Agency focused on
the provision of technical assistance to minority firms. The Senate bill included the provision of technical assistance to minority firms. The Senate bill included
much of the language of E.O. 11625. much of the language of E.O. 11625.
• In the 98th Congress, Senator William Roth introduced the Department of In the 98th Congress, Senator William Roth introduced the Department of
International Trade and Industry Act of 1983 (S. 121), which proposed International Trade and Industry Act of 1983 (S. 121), which proposed ~~a transfer~~
~~of the~~transferring MBDA to the SBA as one of several aspects of an executive branch agency MBDA to the SBA as one of several aspects of an executive branch agency
reorganization plan.reorganization plan.~~132~~157
• During the 99th Congress, Representative Parren Mitchell introduced H.R. 4632, During the 99th Congress, Representative Parren Mitchell introduced H.R. 4632,
a bill that would have denied any appropriations to a bill that would have denied any appropriations to ~~the~~ MBDA to avoid potential MBDA to avoid potential
duplication of services with the SBA’s Associate Administrator for Minority duplication of services with the SBA’s Associate Administrator for Minority
Small Business and Capital Ownership Development. Small Business and Capital Ownership Development. ~~The activities of the~~
~~MBDA~~MBDA’s activities, as well as any unexpended balances, would have been transferred to the , as well as any unexpended balances, would have been transferred to the
SBA Associate Administrator for Minority Small Business and Capital SBA Associate Administrator for Minority Small Business and Capital
Ownership Development. Ownership Development.
• During the 101st through the 104th Congresses, Representative Kweisi Mfume 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) 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 that would have redesignated MBDA as the Minority Business Development
Administration. The bill would have directed Administration. The bill would have directed ~~the~~ MBDA to assist disadvantaged MBDA to assist disadvantaged
businesses penetrate domestic and foreign markets, encourage firms to form joint businesses penetrate domestic and foreign markets, encourage firms to form joint
ventures to increase their share of the market, provide financial assistance to 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 public and private entities in support of the mission of MBDA, conduct pilot
projects that would assist disadvantaged businesses obtain and expand access to projects that would assist disadvantaged businesses obtain and expand access to
capital; support management education efforts, and conduct research to advance capital; support management education efforts, and conduct research to advance

~~131~~ 156 U.S. Congress, House Committee on Small Business, Subcommittee on General Oversight and Minority Enterprise, 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 Establishment of a Minority Business Development Administration in the Department of Commerce, 96th Cong., 2nd
sess., June 9 and 16, 1980 (Washington, DC: GPO, 1980). sess., June 9 and 16, 1980 (Washington, DC: GPO, 1980).
~~132~~157 S. 121 would have established a new Cabinet-level agency and eliminated S. 121 would have established a new Cabinet-level agency and eliminated ~~the Department of Commerce~~DOC. See U.S. . See U.S.
Congress, Senate Committee on Government Affairs, Report on the Trade Reorganization Act of 1983, 98th Cong., 2nd 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, DC: GPO, 1984). sess., April 3, 1984, S.Rept. 98-374 (Washington, DC: GPO, 1984).
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the nation’s understanding of the issues and opportunities surrounding minority the nation’s understanding of the issues and opportunities surrounding minority
business enterprises. business enterprises.
• During the 111th Congress, Senator Bob Casey introduced S. 4026, the Minority During the 111th Congress, Senator Bob Casey introduced S. 4026, the Minority
Business Development Improvements Act of 2010. This bill would have required Business Development Improvements Act of 2010. This bill would have required
~~the~~ MBDA to establish the Minority Business Development Program and charged MBDA to establish the Minority Business Development Program and charged
it with providing qualified minority businesses with technical assistance and it with providing qualified minority businesses with technical assistance and
contract procurement assistance. This bill would have also outlined minority contract procurement assistance. This bill would have also outlined minority
business qualification requirements for the program. It would have required that business qualification requirements for the program. It would have required that
(1) not less than 51% of the qualified minority business is directly and (1) not less than 51% of the qualified minority business is directly and
unconditionally owned or controlled by historically disadvantaged individuals; unconditionally owned or controlled by historically disadvantaged individuals;
and (2) each officer or other individual exercising control over regular operations and (2) each officer or other individual exercising control over regular operations
would meet the definition of a historically disadvantaged individual. would meet the definition of a historically disadvantaged individual.
Additionally, the bill would have authorized the program to provide technical Additionally, the bill would have authorized the program to provide technical
assistance to qualified disadvantaged businesses and support efforts to expand assistance to qualified disadvantaged businesses and support efforts to expand
federal procurement opportunities for disadvantaged businesses. federal procurement opportunities for disadvantaged businesses.
 • Also during the 111th Congress, Representative Bobby Rush introduced H.R. Also during the 111th Congress, Representative Bobby Rush introduced H.R.
4343, the Minority Business Development Improvements Act of 2009, which 4343, the Minority Business Development Improvements Act of 2009, which
would have required the National Director of the Minority Business would have required the National Director of the Minority Business
Development Agency to establish and administer a Minority Business Development Agency to establish and administer a Minority Business
Development Program focused on providing loan guarantees, technical Development Program focused on providing loan guarantees, technical
assistance, and contract procurement assistance to qualified minority businesses. assistance, and contract procurement assistance to qualified minority businesses.
The bill would have defined a qualified minority business as a business that is at 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. least 51% directly owned or controlled by historically disadvantaged individuals.
In addition, the net worth of each principal of the minority business could not In addition, the net worth of each principal of the minority business could not
exceed $2 million. The bill would have directed exceed $2 million. The bill would have directed ~~the~~ MBDA’s National Director MBDA’s National Director
to (1) establish a database to assist prime contractors in identifying historically to (1) establish a database to assist prime contractors in identifying historically
disadvantaged firms for subcontracting, (2) enter into agreements to provide set-disadvantaged firms for subcontracting, (2) enter into agreements to provide set-
aside contracting opportunities to minority businesses, and (3) terminate a aside contracting opportunities to minority businesses, and (3) terminate a
minority business from the program for specified violations. Representative Rush minority business from the program for specified violations. Representative Rush
also introduced H.R. 4929, Expanding Opportunities for Main Street Act of 2010. 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 This bill included a provision that would have required MBDA to establish a
Minority Business Development Program with the objective of providing Minority Business Development Program with the objective of providing
technical assistance, loan guarantees, and contract procurement assistance to technical assistance, loan guarantees, and contract procurement assistance to
minority businesses. This bill would have also authorized MBDA to (1) enter into minority businesses. This bill would have also authorized MBDA to (1) enter into
agreements to provide set-aside contracting opportunities to minority businesses; agreements to provide set-aside contracting opportunities to minority businesses;
and (2) terminate a minority business from the program for specified violations. 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 This bill would have also required MBDA to establish a database to assist prime
contractors in identifying historically disadvantaged firms for subcontracting. contractors in identifying historically disadvantaged firms for subcontracting.
• During the 112th Congress, Senator Tom Udall introduced S. 1334, Expanding 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 Opportunities for Main Street Act of 2011. An identical bill (H.R. 2424) was
introduced by Representative Bobby Rush. Both bills’ MBDA provisions are introduced by Representative Bobby Rush. Both bills’ MBDA provisions are
identical to provisions included in H.R. 4929, introduced by Representative Rush identical to provisions included in H.R. 4929, introduced by Representative Rush
during the 111th Congress. during the 111th Congress.
• During the 113th Congress, Representative Bobby Rush introduced H.R. 2551, During the 113th Congress, Representative Bobby Rush introduced H.R. 2551,
Expanding Opportunities for Main Street Act. Title II of the bill deals exclusively Expanding Opportunities for Main Street Act. Title II of the bill deals exclusively
with with ~~the~~ MBDA and includes the same provisions included in H.R. 4343, MBDA and includes the same provisions included in H.R. 4343,
introduced during the 111th Congress. introduced during the 111th Congress.
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• During the 114th and 115th Congresses, no bills were introduced to formally During the 114th and 115th Congresses, no bills were introduced to formally
establish the agency and its duties by statute. establish the agency and its duties by statute.
• During the 116th Congress, Representative Jerry McNerney introduced H.R. During the 116th Congress, Representative Jerry McNerney introduced H.R.
1432, the Minority Business Development Act of 2019, to redesignate and 1432, the Minority Business Development Act of 2019, to redesignate and
establish establish ~~the~~ MBDA as the Minority Business Development Administration. MBDA as the Minority Business Development Administration.
Later in the 116th Congress, Representative Al Green introduced H.R. 6869 and Later in the 116th Congress, Representative Al Green introduced H.R. 6869 and
Senator Benjamin Cardin introduced S. 4208, both titled the Minority Business Senator Benjamin Cardin introduced S. 4208, both titled the Minority Business
Resiliency Act of 2020. Both bills were designed to codify the agency by Resiliency Act of 2020. Both bills were designed to codify the agency by
providing it statutory authorization and provide additional funding to help MBEs providing it statutory authorization and provide additional funding to help MBEs
recover from the COVID-19 pandemic, among other activities. Later in 2020, recover from the COVID-19 pandemic, among other activities. Later in 2020,
Senator Benjamin Cardin introduced the Heroes Small Business Lifeline Act (S. 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 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 of the larger bill. Representative Karen Bass introduced H.R. 8352 and Senator
Charles Schumer introduced S. 5065, which both included the Minority Business 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, 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 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 establish the agency and fund emergency grants for nonprofit organizations and
MBEs impacted by the COVID-19 pandemic, among other activities. Also during MBEs impacted by the COVID-19 pandemic, among other activities. Also during
the 116th Congress, Senator Kelly Loeffler introduced S. 5011 to codify the 116th Congress, Senator Kelly Loeffler introduced S. 5011 to codify ~~the~~
MBDA and establish an Office of African American Affairs within the agency. MBDA and establish an Office of African American Affairs within the agency.
• During the 117th Congress, Senator Benjamin Cardin introduced two versions of 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 the Minority Business Resiliency Act of 2021 (S. 1255 in April 2021 and S. 2068
in June 2021) to make permanent and expand in June 2021) to make permanent and expand ~~the activities of the MBDA.~~
MBDA’s activities. Representative Al Green introduced companion legislation in the House (H.R. Representative Al Green introduced companion legislation in the House (H.R.
2689). Senator Roger Wicker also introduced the Reaching America’s Rural 2689). Senator Roger Wicker also introduced the Reaching America’s Rural
Minority Businesses Act of 2021 (S. 1749). The Minority Business Development 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), 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. enacted on November 15, 2021, provided statutory authorization for the agency.

~~Author Information~~

~~Julie M. Lawhorn~~

~~Analyst in Economic Development Policy~~

~~Acknowledgments~~
~~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~~
~~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.~~
~~Congressional Research Service~~

35 • During the 118th Congress, Representative Haley Stevens introduced H.R. 4499, the IDEA Act of 2023. The bill would require MBDA to establish a grant program for business accelerators, which would then help MBEs access capital and provide MBEs with networking opportunities. Representative Emanuel Cleaver introduced the Endowment Transparency Act (H.R. 4405), which would require MBDA to report on recommended changes for substantially increasing the use of MBEs or women-owned businesses in the investment and bond transactions of institutions of higher education. A companion Senate bill (S. 2187) was introduced by Senator Cory Booker. Author Information Adam G. Levin Analyst in Economic Development Policy Congressional Research Service 40 The Minority Business Development Agency: An Overview of Its History and Programs Acknowledgments This report was previously maintained by Julie Lawhorn, CRS Analyst in Economic Development Policy. Readers may direct questions to the current author.

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

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