1. Short title
This Act may be cited as the “Parren Mitchell Minority Business Education and Empowerment Act of 2019”.
Parren Mitchell Minority Business Education and Empowerment Act of 2019
A BILL
To establish a pilot program at the Small Business Administration that grants awards to historically Black colleges and universities establishing an entrepreneurship curriculum and placement of a Small Business Development Center on the physical campus of the institution, and for other purposes.
2. Findings
The Congress finds the following:
As many colleges and universities across the country kept their doors closed to African-American applicants, historically Black colleges and universities (referred to in this section as “HBCUs”) played a central role in ensuring that African Americans could attain an excellent education.
In 1970, Congressman Parren Mitchell became the first African American from Maryland to be elected to the House of Representatives. During his time in Congress, Congressman Mitchell served as the Chairman of the Small Business Committee, was a founding member of the Congressional Black Caucus, and served as a senior member of the then-House Banking, Finance, and Urban Affairs Committee. In these roles, Congressman Mitchell vigorously supported economic empowerment for minority businesses and education as a vehicle for social mobility.
The Bureau of the Census in 2017 indicated that African Americans have a median household income that is 63 percent of the median household income of Whites.
In the first quarter of 2019, the African-American unemployment rate was 7.1 percent, well above the national average of 4.1 percent.
According to the Minority Business Development Agency—
minority firms are more likely to be denied loans at a rate of nearly three times higher than nonminority firms;
minority firms are likely to pay higher interest rates, on average 7.8 percent, while nonminority firms pay on average 6.4 percent;
minority firms are less likely to receive loans and, when approved, receive lower loan amounts;
minority firms secure a lower number and dollar amount of contracts in proportion to the number of available minority firms in the relevant market; and
minority business enterprises represent 29 percent of all firms but only 11 percent have paid employees.
If minority business enterprises were to obtain entrepreneurial parity, the United States economy would realize 13 million more jobs.
Minority-owned businesses are nearly twice as likely to export their products and services as nonminority owned businesses. Minority-owned businesses are three times more likely to generate 100 percent of their revenues from exporting than nonminority owned firms.
Minority-owned businesses expand and diversify the tax base, creating sustainable communities with a steady rate of economic growth.
A 2019 GAO report found that only 18 out of 101 HBCUs are in the Small Business Development Center (SBDC) network, and only 2 serve as “lead” (host organization) SBDCs.
Currently, to be a SBDC host organization, an HBCU must provide matching funds, which has led to only 2 such sites in the history of the program.
The 2019 GAO report stated that, while the Small Business Administration (SBA) is required by Executive order to submit an agency plan on an annual basis to the White House Initiative on HBCUs, GAO was only able to obtain the 2018 agency plan from the 2008–2018 time period and was unable to determine if the SBA had met its goals related to supporting HBCUs.
The 2018 SBA agency plan stated that the SBA would encourage the formation of strategic alliance memorandums between SBA district offices and HBCUs to promote entrepreneurship in underserved markets.
The 2019 GAO report found that, according to SBA officials, strategic alliance memorandums with HBCUs are largely symbolic in nature.
3. Definitions
In this Act—
the term Administrator means the Administrator of the Small Business Administration;
the term historically Black colleges and universities means the institutions that are within the definition given the term part B institution in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061);
the term small business concern has the same meaning as in section 3 of the Small Business Act (15 U.S.C. 632); and
the term small business development center has the same meaning as in section 21 of the Small Business Act (15 U.S.C. 648).
4. Minority entrepreneurship and innovation grants
In general— The Administrator shall make grants to historically Black colleges and universities—
to assist in establishing an entrepreneurship curriculum for undergraduate or graduate studies; and
for placement of a small business development center on the physical campus of the institution.
Curriculum requirement— An institution of higher education receiving a grant under this section shall develop a curriculum that includes training in various skill sets needed by successful entrepreneurs, including—
business management and marketing, financial management and accounting, market analysis and competitive analysis, innovation, and strategic planning; and
additional entrepreneurial skill sets specific to the needs of the student population and the surrounding community, as determined by the institution.
Small business development center requirement— Each institution receiving a grant under this section shall open a small business development center that—
performs studies, research, and counseling concerning the management, financing, and operation of small business concerns;
performs management training and technical assistance regarding the participation of small business concerns in international markets, export promotion and technology transfer, and the delivery or distribution of such services and information;
offers referral services for entrepreneurs and small business concerns to business development, financing, and legal experts;
promotes market-specific innovation, niche marketing, capacity building, international trade, and strategic planning as keys to long-term growth for its small business concern and entrepreneur clients; and
provides free counseling concerning the management, financing, and operation of small business concerns, with an emphasis on providing assistance to student entrepreneurs.
Grant limitations— A grant under this section—
may not exceed $1,000,000 per fiscal year for any 1 historically Black college or university;
may not be used for any purpose other than those associated with the direct costs incurred to develop and implement a curriculum that fosters entrepreneurship and the costs incurred to organize and run a small business development center on the grounds of the institution; and
may not be used for building expenses, administrative travel budgets, or other expenses not directly related to the implementation of the curriculum or activities authorized by this Act.
Authorization of appropriations— There is authorized to be appropriated to carry out this section $8,000,000, to remain available until expended, for each of fiscal years 2020, 2021, and 2022.
Report— Not later than November 1 of each year, the Associate Administrator of Entrepreneurial Development of the Small Business Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, a report evaluating the award and use of grants under this section during the preceding fiscal year, which shall include—
a description of each entrepreneurship program developed with grant funds, the date of the award of such grant, and the number of participants, specifically students, in each such program;
a description of the curriculum developed and how it has been implemented;
data regarding the economic impact of the small business development center counseling provided under a grant under this section; and
the number of small business concerns assisted by each small business development center established with a grant under this section.
Sunset— The Administrator may not make any grants under this section after the end of fiscal year 2022.