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1 1 (December 11, 2024)

handle is hein.crs/goverpp0001 and id is 1 raw text is: Con re &cnaI fles~ h arming I len I ivede a 3rch Service since 1914 December 11, 2024 The Minority Business Development Agency's Rural Business Center Program According to the Department of Commerce's Minority Business Development Agency (MBDA), there are over 544,000 minority business enterprises (MBEs) in rural parts of the United States. MBEs are defined statutorily as businesses majority-owned and managed by socially or economically disadvantaged individuals. To help these businesses access technical, legal, and educational assistance, MBDA has since FY2023 operated the Rural Business Center (RBC) program, an expansion of the agency's flagship Business Center program. Congress provided specific authorization for the RBC program in the Minority Business Development Act of 2021 (MBD Act of 2021; Division K of the Infrastructure Investment and Jobs Act, P.L. 117-58). This In Focus discusses legislative provisions concerning the RBC program, program eligibility and activity, and selected issues for Congress. HIstory and Leislative Pro sons Executive branch interest in having MBDA provide services to rural MBEs dates to at least the 1990s. The Clinton Administration supported substantial increases to MBDA's budget to create a system of what would have been called Rural Business Development Centers. (MBDA Business Centers are generally located in urban areas.) Congress considered legislation for a specific MBDA program for rural MBEs several decades later. In the 117th Congress, multiple bills-including the Minority Business Resiliency Act of 2021 in both the House (H.R. 2689) and Senate (S. 1255) and the Reaching America's Rural Minority Businesses Act of 2021 (S. 1749)-would have authorized MBDA to establish a program to provide services to rural MBEs. Congress ultimately included aspects of these bills, including the RBC program's authorization, in the MBD Act of 2021. The MBD Act of 2021 authorized MBDA to fund RBCs to be operated by minority-serving institutions (institutions of higher education that serve concentrations of minority students). The law further directed RBCs to primarily serve MBEs located at least 50 miles from an existing MBDA Business Center or that are in a rural area, defined as any area other than (1) a city or town with greater than 50,000 inhabitants or (2) an urbanized area adjacent to such a city or town. The MBD Act of 2021 specified that RBCs would generally be required to contribute matching funds worth 20% of the amount awarded by MBDA. (RBCs that lack sufficient resources may be permitted to provide a lower cost share, subject to a determination of substantial need by MBDA.) The initial award period for an RBC is at least three years. In selecting organizations for an RBC program award, Congress authorized MBDA to prioritize entities that, among other things, are located in states or regions with a significant population of socially or economically disadvantaged individuals or entities that have a history of serving socially or economically disadvantaged individuals. The MBD Act of 2021 further defined a socially or economically 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. The MBD Act of 2021 included a list of racial groups which MBDA could presume to be socially disadvantaged. However, a 2024 ruling in the U.S. District Court for the Northern District of Texas found that MBDA's presumption of social disadvantage for those groups was unconstitutional. Since the ruling, MBDA has offered its services to individuals of any race that self-certify that they meet the above definitions of socially or economically disadvantaged. (See CRS Report R45015, Minority Business Development Agency: An Overview of Its History and Current Issues, for more details.) Unlike MBDA Business Centers, which under the MBD Act of 2021 are specifically authorized to charge fees for their assistance, RBCs do not have specific authorization to charge fees for services. However, the MBD Act of 2021 also did not specifically prohibit RBCs from charging for fees. Other similar programs, such as the Small Business Administration's (SBA's) Small Business Development Center program, are statutorily prohibited from charging fees. The technical assistance provided by RBCs is statutorily required to focus on: increasing broadband internet access service, digital literacy skills, and e-commerce; 0

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