On September 21, the Senate Committee on Indian Affairs considered two bills to increase economic opportunity and resources in Indian Country.

Growing Businesses from Ideas

Business ideas can come at any time – whenever a product or a service doesn’t work the way it should, or whenever imagination strikes and it seems possible to create something entirely new. 

But turning great ideas into a business is another matter, and getting a business started in Indian country carries an additional set of challenges. No matter how brilliant his or her idea, a new entrepreneur usually needs a boost to bring it market.

In July, Senators Tester, Cantwell and Udall introduced a bill to encourage Native entrepreneurs to develop their creations and ideas and to ease their entry into the market place: the “Native American Business Incubators Program Act” - S. 3261. The Senate Committee on Indian Affairs held a hearing on the bill on September 7 and Senator Murkowski joined as a co-sponsor. On September 21, the Committee approved the bill; it is now ready for the Senate floor.

A “business incubator” provides a range of tangible and intangible supports for new startups and established businesses, including physical workspace and facilities, access to capital, business education, counseling and mentoring, and networking with others in similar businesses or stages in business development.

The bill would provide 3-year grants, on a competitive basis, to qualified organizations that set up incubators for Native businesses. A qualified organization could be an Indian tribe; a tribal college or university or other higher education institution; or a private or tribal non-profit. To qualify, an organization would have to demonstrate some experience and effectiveness in providing business and financial technical assistance, and be able to provide the physical workspace, equipment, and connectivity necessary to launch and support Native businesses and Native entrepreneurs. Except for tribes, other qualifying organizations must have projects that been in operation for at least a year, and must commit to serve one or more reservation communities. The bill would authorize appropriations of $5 million per year for five years, and “such sums as necessary” after 2022. The program would operate out of the Office of Indian Energy and Economic Development in the Department of the Interior.

Creating and Strengthening Structures for Economic Development

Also in July, Senator Barrasso, chair of the Senate Committee on Indian Affairs (SCIA), introduced S.3234, the Indian Community Economic Enhancement Act of 2016. The committee reviewed the bill earlier this month and approved it on September 21. S. 3234 focuses on building tribal capacities for economic development. Noting that lack of access to capital is one of the major impediments to tribally-sponsored economic development efforts, the bill proposes amendments to several existing laws to strengthen or create new financial infrastructures for Indian tribes.

The bill establishes a Director of Native American Business Development in the Department of Commerce, and calls for collaboration among the Departments of Commerce, Interior and the Treasury on certain objectives, including

• Promoting and educating about the BIA loan guarantee program, and programs using the Community Development Financial Institutions Fund and other capital development funds;
• Examining and developing alternatives to qualify as collateral for loans;
• Providing entrepreneur and other training in economic development through tribally-controlled colleges;
• Identifying legal and regulatory barriers to private investment including qualifying collateral structures in Indian communities; and
• Ensuring consultation with Indian tribes regarding increasing investment in their communities.

The bill establishes the Indian Economic Development Fund in the Treasury Department, which the Secretary of the Interior would administer. Indian tribes may deposit amounts in the fund. The fund would then be used to support existing credit subsidies for the loan guarantee program of the Bureau of Indian Affairs, and would create a credit subsidy for a community development financial institution that applies for financing for bonds and notes for eligible community or economic development purposes and invests in a reservation or a tribe. Economic development assistance made available through the Native American Programs Assistance Act of 1974 would be granted on a priority basis to support capacity building for tribes, such as writing or updating tribal commercial codes enhancing court systems, training court personnel, or developing non-profit subsidiaries or other tribal structures. Priority would also be given to the development and maintenance of a community development financial institution, and to the creation of a tribal master plan for community and economic development