[House Report 107-211]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    107-211

======================================================================



 
             NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT ACT

                                _______
                                

 September 21, 2001.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Manzullo, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2538]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 2538) to amend the Small Business Act to expand and 
improve the assistance provided by Small Business Development 
Centers to Indian tribe members, Native Alaskans, and Native 
Hawaiians, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                                Purpose

    The purpose of H.R. 2538 is to create jobs, to foster 
entrepreneurship, and to stimulate the economies and foster 
economic development on Indian lands. Further, the purpose of 
the Act is to help in the creation of new small businesses 
owned and managed by Indian tribe members, Native Alaskans, and 
Native Hawaiians and to help expand such small businesses that 
already exist. The Act will provide much needed management, 
technical, and research assistance to small businesses owned by 
Indian tribe members, Native Alaskans, and Native Hawaiians. 
The Act will help to insure that Indian tribe members, Native 
Alaskans, and Native Hawaiians have full access to existing 
counseling and technical assistance provided through the Small 
Business Development Center (SBDC) program. In providing 
entrepreneurial assistance, a State receiving a grant under the 
provisions of the Act is required to seek the advice of local 
Tribal Councils on where small business development assistance 
is needed.

                          Need for Legislation

    Approximately 60 percent of Indian tribe members and Native 
Alaskans live on or in the immediate vicinity of Indian lands 
and suffer from an average unemployment rate of 45 percent. 
Presently, Indian tribe members and Native Alaskans own more 
than 197,000 business enterprises and generate revenues in 
excess of $34 billion.
    The service industry, the largest sector, accounts for 17 
percent of the businesses, and 15.7 percent of the total 
revenues. The second largest sector is construction which 
accounts for 13.9 percent of the businesses and 15.7 percent of 
the total revenues. The third largest sector, the retail 
trades, accounts for 7.5 percent of the businesses and 13.4 
percent of the total revenues.
    The number of businesses owned by Indian tribe members and 
Native Alaskans grew by 84 percent during the period from 1992 
to 1997, while businesses, generally, grew by only seven 
percent. During the same period, the gross receipts for Indian 
tribe members and Native Alaskan business owners increased by 
179 percent, in comparison with the business community, as a 
whole, where the gross receipts for the same period grew only 
by 40 percent.
    In the past, the SBDC program with more than 1000 offices 
throughout the United States has provided cost-effective 
business counseling and technical assistance to small 
businesses. For example, clients receiving long-term counseling 
under the program in 1998 generated additional tax revenues of 
$468 million, which was approximately six times the cost of the 
program to the Federal government.
    By using the existing infrastructure of the SBDC program, 
it is anticipated that small businesses owned by Indian tribe 
members, Native Alaskans, and Native Hawaiians, who receive 
services under the Act, will have a higher survival rate than 
the average small businesses not receiving such services. 
Further, increased assistance through SBDC counseling has in 
the past been able to reduce defaults under Small Business 
Administration (SBA) lending programs.
    The business counseling and technical assistance, provided 
for under this Act, is critical on Indian land where, without 
such assistance, similar services are scarce and expensive. 
Past and current efforts by SBDCs to assist Native American 
populations located on or along reservation lands has proven 
difficult. In addition, the lack of resources makes it 
difficult to raise an equal amount of matching funds to 
specifically assist Native Americans.

                          Overview of the Act

    The Act will establish a three-year pilot project providing 
grants to SBDCs for assisting Indian tribe members, Native 
Alaskans, and Native Hawaiian populations with their 
entrepreneurial needs. The purpose, more fully explained in the 
prior part of this report, is to stimulate the economies on 
reservation lands through the creation and expansion of small 
businesses by ensuring the target population has full access to 
important business counseling and technical assistance through 
the SBDC program.
    Any SBDC in a State, whose Indian tribe members, Native 
Alaskan, and Native Hawaiian populations are one percent of the 
State's total population, can apply for a grant from the SBA. 
Such grants must be used to provide SBDC program assistance to 
Native Americans. Grants under the Act are limited to $300,000 
and the amount authorized to be appropriated annually, in each 
of the fiscal years 2002, 2003, and 2004, is $7 million.
    Services by SBDCs are to be provided to benefit the target 
population on tribal lands and reservations, but an individual 
center need not be located on each tribal land location or 
reservation. If the target population is in more than one 
location or reservation within a State, the center should be 
situated in a location that optimizes access by all those 
serviced by the center. The Act does not limit in any way, the 
number of centers or subcenters a state program may implement. 
The Committee expects the Administrator to balance the need for 
multiple sites with the quality of assistance and counseling 
when awarding grants. Consultation with the local Tribal 
Council is required in determining those locations in most need 
and where the best access may be attained.
    SBA is responsible for designing the grant application 
which should provide essential information, but should not be 
burdensome to applicants. At a minimum, the application should 
contain information concerning the applicant's (1) goals and 
objectives, (2) prior experience in providing entrepreneurial 
and technical assistance to small businesses, (3) the ability 
to provide training and services to Indian tribe members, 
Native Alaskans, and Native Hawaiians, and (4) the extent of 
consultation with local Tribal Councils. In addition, the 
applicant should identify the location of a proposed center, 
and the amount of funding required.
    Within 180 days after the enactment of the Act, the 
Administrator is required to issue final regulations, after a 
notice and comment period, that implement the requirements of 
the Act. Such regulations shall include standards for the 
educational, technical, and support services to be provided and 
for a work plan for providing assistance to the targeted 
community.

                            Committee Action


                          hearing on h.r. 2538

    On Thursday, July 19, 2001, the Subcommittee on Workforce, 
Empowerment and Government Programs of the Committee on Small 
Business held a hearing, commencing at 10:00 a.m., to hear 
testimony with regard to H.R. 203, H.R. 2538, and H.R. 2666. 
The Subcommittees received the testimony of eight witnesses. 
Panel 1 included: Congressman John E. Sweeney of New York, 
Congressman Robert A. Brady of Pennsylvania, and Congressman 
Tom Udall of New Mexico. Panel 2 included: Mr. Thomas G. 
Grumbles, CIH, Vice President, American Industrial Hygiene 
Association; Mr. Donald T. Wilson, President and CEO, 
Association of Small Business Development Centers; Mr. Rudolph 
Cartier, Jr., Small Business Ombudsman, State of New Hampshire; 
Mr. Christian Conroy, Associate State Director, Pennsylvania 
Small Business Development Centers; and, Mr. Leonard Lopez, Sun 
Valley Express, Navajo Reservation, Shiprock, New Mexico.
    The hearing showed that some SBDCs were already providing, 
on a limited basis, the services which are the subject of the 
three bills. The hearing evidenced a need for expansion of the 
services to other locations.

                       consideration of h.r. 2538

    At 10:05 a.m. on August 1, 2001, the Committee on Small 
Business met to consider and report four bills, that included 
H.R. 2538. The bill H.R. 2538 was introduced. Chairman Manzullo 
asked unanimous consent that H.R. 2538 be considered as read 
and open for amendment at any point. No amendments were 
offered. Chairman Manzullo then moved to pass H.R. 2538 and to 
report it to the House. At 10:28 a.m., a quorum being present, 
the Committee passed the bill, H.R. 2538, and ordered it 
reported.

                      Section-by-Section Analysis


Section 1. Short title

    The section establishes the short title of the bill as the 
``Native American Small Business Development Act.''

Section 2. Findings and purposes

    Subsection (a) states the findings of Congress that include 
the fact that (1) the average unemployment rate for Indian 
tribe members and Native Alaskans who live on or adjacent to 
Indian lands is 45 percent, (2) Indian tribe members and Native 
Alaskans own more than 197,000 businesses that generate more 
than $34 billion in revenues, (3) for the period 1992-1997, the 
number of businesses owned by Indian tribe members and Native 
Alaskans grew by 84 percent and gross receipts grew by 179 
percent, as compared with seven percent and 40 percent, 
respectively, for businesses generally, (4) the SBDC program is 
cost effective in that additional tax revenues generated by 
businesses counseled under the program in 1998 were 
approximately six times the cost of the program, (5) using the 
existing SBDC infrastructure it is anticipated that those 
receiving services under the Act will have a higher survival 
rate than those not receiving such services, (6) business 
counseling and technical assistance provided on Indian lands is 
critical because such services are presently scarce and where 
available are expensive, and (7) SBDC business counseling has 
proven to be effective in reducing the default rate of 
businesses who have received counseling and who participated in 
one or more SBA loan program. The Committee believes that 
because of the SBDC program's success and proven track record, 
utilizing the existing SBDC network will enhance the success of 
H.R. 2538.
    Subsection (b) states the purpose of the Act which includes 
assisting Indian tribe members, Native Alaskans, and Native 
Hawaiians by: increasing jobs and enhancing economic 
development on Indian lands; creating new small businesses and 
expanding existing ones; providing management, technical, and 
research assistance; seeking the advice of Tribal Councils on 
where business development assistance is most needed; and, 
ensuring full access under the Act to existing business 
counseling and technical assistance available through the SBDC 
program.

Section 3. Small Business Development Center assistance to Indian tribe 
        members, Native Alaskans, and Native Hawaiians

    The Small Business Act is amended by adding a new 
subsection providing for an additional grant program to assist 
Indian tribe members, Native Alaskans, and Native Hawaiians. An 
SBDC, located in an eligible State and funded by SBA, may apply 
for an additional grant to be used solely for providing 
services, as set forth in the Small Business Act with respect 
to the SBDC program, to assist with outreach, development, and 
enhancement on Indian lands of small business startups and 
expansions owned by Indian tribe members, Native Alaskans, and 
Native Hawaiians.
    Because the majority of Native Americans live on or 
adjacent to Indian lands, where economic opportunities are 
limited, the Committee expects the SBDCs to be located on or in 
close proximity to Indian lands. Although Native Americans who 
do not live on Indian lands may seek the assistance of these 
centers, the Committee believes that assistance should go to 
aid with outreach, development, and enhancement on Indian lands 
of small business startups and expansions owned by Indian tribe 
members, Native Alaskans, and Native Hawaiians. Native 
Americans located near existing centers or subcenters are 
encouraged to continue to utilize those existing resources.
    An eligible State is defined as a State that has a combined 
population of Indian tribe members, Native Alaskans, and Native 
Hawaiians that comprises at least one percent of the State's 
total population, as shown by the most recent census. Each 
applicant is required to complete a grant application that 
shall include information as to: (1) the applicants ability to 
provide training and services to a representative number of 
Indian tribe members, Native Alaskans, and Native Hawaiians, 
(2) the proposed location of the SBDC site, (3) the amount of 
grant funds needed, and (4) the extent of prior consultation 
with local Tribal Councils.
    No applicant may receive more than $300,000 in any one 
fiscal year, but no matching funds are required. Within 180 
days after the Act is enacted, the Administrator is required to 
issue final regulations with respect to the grant program 
established by the Act. In promulgating the regulations, the 
Administrator must provide notice of the proposed regulations 
and an opportunity for public comment. In addition, the 
Administrator must consult with the Association of Small 
Business Development Centers. The regulation must establish 
standards relating to (1) educational, technical, and support 
services to be provided by SBDCs receiving grants, and (2) any 
work plan that is required to be submitted by an applicant.
    The Committee believes that setting standards will help 
ensure that the grants will be awarded to the most qualified 
State programs and provide a mechanism by which the 
Administrator can evaluate the success of the program.
    The section defines the following terms: ``Associate 
Administrator,'' ``Indian Lands,'' ``Indian Tribe,'' ``Indian 
Tribe Member,'' ``Native Alaskan,'' and ``Native Hawaiian.''
    The section authorizes $7 million to be appropriated for 
each of fiscal years 2002 through 2004. Funds appropriated for 
the program created by the Act are in addition to funds 
appropriated for the SBDC program generally and for other 
particular SBDC programs. The program created under the Act may 
only be funded by monies specifically appropriated for that 
purpose.

Section 4. State consultation with local Tribal Councils

    This section amends section 21(c) of the Small Business Act 
by adding a new subsection (9) that requires that a State 
receiving grants under the program created by the Act shall 
request the advice of local Tribal Councils on how best to 
provide assistance to Indian tribe members, Native Alaskans, 
and Native Hawaiians and where to locate satellite centers to 
provide such assistance.

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 14, 2001.
Hon. Donald Manzullo, 
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2538, the Native 
American Small Business Development Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson.
            Sincerely,
                                          Dan L. Crippen, Director.
    Enclosure.

               congressional budget office cost estimate

H.R. 2538--Native American Small Business Development Act

    Summary: H.R. 2538 would authorize the Small Business 
Administration (SBA) to issue grants to small business 
development centers (SBDCs) for new programs that assist Native 
Americans who are starting or expanding small businesses on 
tribal lands. SBDCs are jointly funded by the private sector, 
schools, and federal, state, and local governments to provide 
management assistance to current and prospective small business 
owners.
    H.R. 2538 would authorize the appropriation of $7 million a 
year during the 2002-2004 period to fund the new program. Based 
on the SBA's historical spending patterns, CBO estimates that 
implementing the bill would cost $20 million over the 2002-2006 
period, assuming the appropriation of the necessary amounts. 
The bill would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply.
    H.R. 2538 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would benefit tribally owned small businesses to the 
extent that they receive services from SBDCs. The bill would 
impose no significant costs on state or local governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2538 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................................        7        7        7        0        0
Estimated Outlays..................................................        5        6        7        2    (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ =Less than $500,000.

    Pay as you go considerations: None.
    Intergovernmental and private-sector impact: H.R. 2538 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit tribally owned small 
businesses to the extent that they receive services from SBDCs. 
The bill would impose no significant costs on state or local 
governments.
    Estimate prepared by: Federal costs: Ken Johnson; impact on 
State, local, and tribal governments: Susan Sieg Tompkins; 
impact on the private sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Committee Estimate of Costs

    Pursuant to the Congressional Budget Act of 1974, the 
Committee estimates that the amendments to the Small Business 
Act contained in H.R. 2538 will increase appropriations by no 
more than $7 million annually over the next three fiscal years, 
i.e., 2002 through 2004. Furthermore, pursuant to clause 
3(d)(2)(A) of rule XIII of the Rules of the House of 
Representatives, the Committee estimates that implementation of 
the H.R. 2538 will not significantly increase the 
administrative costs. This concurs with the estimate of the 
Congressional Budget Office.

                           Oversight Findings

    In accordance with clause 4(c)(2) of rule X of the Rules of 
the House of Representatives, the Committee states that no 
oversight findings or recommendations have been made by the 
Committee on Government Reform with respect to the subject 
matter contained in H.R. 2538.
    In accordance with clause 2(b)(1) of rule X of the Rules of 
the House of Representatives, the oversight findings and 
recommendations of the Committee on Small Business with respect 
to the subject matter contained in H.R. 2538 are contained in 
the descriptive portions of this report.

                 Statement of Constitutional Authority

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, Clause 18 of the 
Constitution of the United States.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                  SECTION 21 OF THE SMALL BUSINESS ACT

  Sec. 21. (a)(1)  * * *

           *       *       *       *       *       *       *

          (7) Additional grant to assist indian tribe members, 
        native alaskans, and native hawaiians.--
                  (A) In general.--Any applicant in an eligible 
                State that is funded by the Administration as a 
                Small Business Development Center may apply for 
                an additional grant to be used solely to 
                provide services described in subsection (c)(3) 
                to assist with outreach, development, and 
                enhancement on Indian lands of small business 
                startups and expansions owned by Indian tribe 
                members, Native Alaskans, and Native Hawaiians.
                  (B) Eligible states.--For purposes of 
                subparagraph (A), an eligible State is a State 
                that has a combined population of Indian tribe 
                members, Native Alaskans, and Native Hawaiians 
                that comprises at least 1 percent of the 
                State's total population, as shown by the 
                latest available census.
                  (C) Grant applications.--An applicant for a 
                grant under subparagraph (A) shall submit to 
                the Associate Administrator an application that 
                is in such form as the Associate Administrator 
                may require. The application shall include 
                information regarding the applicant's goals and 
                objectives for the services to be provided 
                using the grant, including--
                          (i) the capability of the applicant 
                        to provide training and services to a 
                        representative number of Indian tribe 
                        members, Native Alaskans, and Native 
                        Hawaiians;
                          (ii) the location of the Small 
                        Business Development Center site 
                        proposed by the applicant;
                          (iii) the required amount of grant 
                        funding needed by the applicant to 
                        implement the program; and
                          (iv) the extent to which the 
                        applicant has consulted with local 
                        Tribal Councils.
                  (D) Applicability of grant requirements.--An 
                applicant for a grant under subparagraph (A) 
                shall comply with all of the requirements of 
                this section, except that the matching funds 
                requirements of paragraph (4)(A) shall not 
                apply.
                  (E) Maximum amount of grants.--No applicant 
                may receive more than $300,000 in grants under 
                this paragraph in a fiscal year.
                  (F) Regulations.--After providing notice and 
                an opportunity for comment and after consulting 
                with the Association recognized by the 
                Administration pursuant to paragraph (3)(A) 
                (but not later than 180 days after the date of 
                enactment of this paragraph), the Administrator 
                shall issue final regulations to carry out this 
                paragraph, including regulations that 
                establish--
                          (i) standards relating to 
                        educational, technical, and support 
                        services to be provided by Small 
                        Business Development Centers receiving 
                        assistance under this paragraph; and
                          (ii) standards relating to any work 
                        plan that the Associate Administrator 
                        may require a Small Business 
                        Development Center receiving assistance 
                        under this paragraph to develop.
                  (G) Definitions.--In this paragraph, the 
                following definitions apply:
                          (i) Associate administrator.--The 
                        term ``Associate Administrator'' means 
                        the Associate Administrator for Small 
                        Business Development Centers.
                          (ii) Indian lands.--The term ``Indian 
                        lands'' has the meaning given the term 
                        ``Indian country'' in section 1151 of 
                        title 18, United States Code, the 
                        meaning given the term ``Indian 
                        reservation'' in section 151.2 of title 
                        25, Code of Federal Regulations (as in 
                        effect on the date of enactment of this 
                        paragraph), and the meaning given the 
                        term ``reservation'' in section 4 of 
                        the Indian Child Welfare Act of 1978 
                        (25 U.S.C. 1903).
                          (iii) Indian tribe.--The term 
                        ``Indian tribe'' has the meaning given 
                        such term in section 8(a)(13).
                          (iv) Indian tribe member.--The term 
                        ``Indian tribe member'' means a member 
                        of an Indian tribe (other than a Native 
                        Alaskan).
                          (v) Native alaskan.--The term 
                        ``Native Alaskan'' has the meaning 
                        given the term ``Native'' in section 
                        3(b) of the Alaska Native Claims 
                        Settlement Act (43 U.S.C. 1602(b)).
                          (vi) Native hawaiian.--The term 
                        ``Native Hawaiian'' means any 
                        individual who is a descendant of the 
                        aboriginal people, who prior to 1778, 
                        occupied and exercised sovereignty in 
                        the area that now constitutes the State 
                        of Hawaii.
                  (H) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this paragraph $7,000,000 for each of fiscal 
                years 2002 through 2004.
                  (I) Funding limitations.--
                          (i) Nonapplicability of certain 
                        limitations.--Funding under this 
                        paragraph shall be in addition to the 
                        dollar program limitations specified in 
                        paragraph (4).
                          (ii) Limitation on use of funds.--The 
                        Administration may carry out this 
                        paragraph only with amounts 
                        appropriated in advance specifically to 
                        carry out this paragraph.

           *       *       *       *       *       *       *

  (c)(1)  * * *

           *       *       *       *       *       *       *

          (9) Advice of local tribal councils.--A State 
        receiving grants under this section shall request the 
        advice of local Tribal Councils on how best to provide 
        assistance to Indian tribe members, Native Alaskans, 
        and Native Hawaiians and where to locate satellite 
        centers to provide such assistance.

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    Democrats strongly support providing assistance for the 
development of small businesses on Native American lands. Under 
H.R. 2538, the U.S. Small Business Administration's Small 
Business Development Center (SBDC) Program can and will create 
more jobs, foster more entrepreneurship, and stimulate economic 
development on Native American lands. New small businesses 
located on reservation lands will grow and existing ones will 
continue to expand.
    H.R. 2538 will establish a three-year pilot project 
providing grants to State SBDC Programs, which can then 
establish Native American SBDCs to assist Indian Tribe Members, 
Native Alaskan, and Native Hawaiian populations, with their 
small business development needs. Under the new section 
21(a)(7)(C)(i), established under Section 3 of the Act, State 
SBDC Programs with the largest population of Indian Tribe 
Members, Native Alaskans, and Native Hawaiians, will receive 
priority when awarding grants. In addition, the one-percent 
population requirement, can be either one percent of any of the 
three populations, or any combination thereof.
    The grants must be used to establish one or more Native 
American SBDCs, on or near Native American lands. H.R. 2538 
does not limit, in any way, the number of centers or subcenters 
a state program may propose to implement. We expect the 
Administrator to balance the need of multiple sites with 
quality assistance and counseling when awarding grants. This is 
where consultation with the local Tribal Councils will be 
essential in maximizing the benefits resulting from the 
program.
    H.R. 2538 provides that each State SBDC Program ``receiving 
grants shall request the advice of local Tribal Councils on how 
best to provide assistance to Indian Tribe Members, Native 
Alaskans, and Native Hawaiians and where to locate satellite 
centers to provide such assistance.'' However, the report 
language fails to emphasize the important role these groups 
will play as advisors to the SBDC Program. The cooperative 
nature of the relationship between the State SBDC Program and 
the Native American population should be a priority and is 
essential to the success of the program.
    Not only will Indian Tribe Members, Native Alaskans, and 
Native Hawaiians have access to counseling and technical 
assistance provided through the pilot program, they will be an 
integral part in developing that assistance. Other Federal 
assistance programs have fallen short either because the 
infrastructure of the delivery system did not exist, or the 
targeted population had little, if any, involvement in 
developing the type of assistance to be provided. We believe 
that a significant factor in developing a successful Federal 
assistance program for a targeted population, is participation 
by that population.
    In addition, State SBDC Programs are required to complete a 
grant application that shall include information on the extent 
of prior consultation with local Tribal Councils. We believe 
that this requirement is necessary to ensure that the State 
SBDC Programs seek the recommendations and suggestions of the 
targeted populations. We also believe that Section 4 of the Act 
requires these recommendations and suggestions to be given 
substantial weight in the Administrator's decisionmaking when 
awarding grants. We cannot stress enough the importance of the 
participation by Indian Tribe Members, Native Alaskan, and 
Native Hawaiian populations, in successfully fulfilling these 
requirements.
    It is also important to emphasize the role the Association 
for Small Business Development Centers will play in 
promulgating the regulations required under H.R. 2538. The U.S. 
Small Business Administration must consult with the Association 
of Small Business Development Centers in establishing standards 
relating to (1) educational, technical, and support services to 
be provided by SBDCs receiving grant monies, and (2) any work 
plan that is required to be submitted by an applicant. Setting 
standards will help ensure that grants will be awarded to the 
most qualified state programs and provide a mechanism by which 
the Administrator can evaluate the success of the program. In 
addition, we believe the Administrator must give the 
Association's recommendations substantial weight.
    Lastly, we believe that fees must not be charged in 
conjunction with this pilot project. Although the SBDCs are 
permitted to charge fees under limited circumstances, one-on-
one counseling is provided free of charge. Current and past 
Administrations have attempted to implement a fee-for-service 
structure for SBDC services that are, and have been, 
historically free. Implementing such a structure would not only 
be detrimental to the pilot program, but to the entire SBDC 
Program. Democrats have consistently opposed such a move and 
will continue to oppose future attempts.
    Although initial efforts to assist Native American 
populations has proven successful, barriers limiting further 
expansion and development still exist. Difficulties arise 
because of minimal resources and provisions requiring State 
SBDC Programs to match their Federal dollars with private 
funds. In the past, SBDCs have found it difficult to raise 
matching funds for targeted ventures.
    However, we believe that under this pilot program, the 
Native American SBDCs can provide an effective mechanism for 
providing counseling and management assistance to small 
business owners on Native American lands. Utilizing the 
existing SBDC network can, and will, ensure the success of this 
pilot program. Therefore, we support this pilot program and the 
entrepreneurial assistance it will provide.

                                                Nydia M. Velazquez.

                                  
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