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NIBA challenges Native small business development bill

WASHINGTON ? Congress thought it was helping small business in Indian country, but the result, says a leading Indian business group, was the opposite.

In December, the U.S. House of Representatives passed legislation it thought would stimulate reservation economies through the creation and expansion of small businesses. The bill, the Native American Small Business Development Act, introduced by Rep. Tom Udall (D-N.M.), authorized a reshuffling of Native program operations within the Commerce Department's Small Business Administration, or SBA. But the National Indian Business Association (NIBA) says certain provisions undermine what might have been an important tool to increase Native business ownership.

Under the bill, state Small Business Development Centers, or SBDC's, would be allowed to apply for federal grants to establish "Native American Small Business Development Centers". Grants for each project would be limited to $300,000, with total funding authorized at $7 million. The Native development centers would then be required to deliver the same services as the current state centers.

Currently, such assistance is provided through Tribal Business Information Centers, which are designed to provide culturally centered business development assistance to current and interested Native American business owners. The information centers are run through a partnership agreement between a tribe or tribal college and the SBA. These centers offer a variety of resources and guidance tools at a number of

reservation locations.

The SBA established an Office of Native American Affairs in 1992, authorized to administer all Indian programs in the SBA. In 1996, the SBA established and funded 18 Tribal Business Information Centers in 17 states through the Office of Native American Affairs.

Pete Homer Jr., president of NIBA, says the replacement of these programs came as a shock since they were a key step toward truly extending SBA services to Native communities. "To our astonishment, and without any consultation, SBA recommended that the House designate the SBA Small Business Development Center Office to administer the funds authorized for Native Americans rather than the SBA Office of Native American Affairs," Homer said. "Worse, SBA recommended that the training and technical assistance targeted to Native Americans be delivered through state centers rather than through Tribal Business Information Centers. To our great disappointment, this recommendation was followed by the House."

However, Rep. Udall said he introduced his legislation because, unlike the SBA's Small Business Development Center program's proven track record, the Tribal Business Information Centers have had a minimal level of success. Concerns have been raised about the quality of services offered to Native American populations. Udall says this may be due to inadequate funding and the lack of specific requirements that ensure the delivery of quality assistance.

Homer says that any problems have resulted from inadequate funding and vacancies in staffing. He also said that the state Small Business Development Centers once had the authority proposed under the new bill, but failed to deliver an adequate level of services.

"The services will never reach the intended beneficiaries and Native Americans will once again constitute the neediest but most underserved population," Homer said. The bill, H.R. 2538, is an amendment to the Small Business Act and has now been referred to the U.S. Senate for consideration.

According to a 1997 Economic Census report, American Indians and Alaska Natives owned over 197,000 businesses, employing almost 300,000 people and generating over $34 billion in revenues. The number of American Indian and Alaska Native owned businesses grew 84 percent from 1992 to 1997, and gross receipts grew by 179 percent. This is compared to all businesses which grew at a rate of seven percent during the same period, with total gross receipts growing by 40 percent.