President Biden’s infrastructure bill creates permanent federal agency to support Black, minority entrepreneurs

President Biden’s infrastructure bill creates permanent federal agency to support Black, minority entrepreneurs

BCN Staff – Nov. 18, 2021 — In a nod to President Joe Biden’s campaign promise to develop a permanent federal agency focused on Black entrepreneurship, U.S. Secretary of Commerce Gina Raimondo on Nov. 15 announced that the Commerce Department’s Minority Business Development Agency (MBDA) will now fit that bill.

Raimondo said MBDA, which has never received statutory recognition from Congress for federal appropriations, will now be fully funded and expanded and elevated with the passage of the $1.2 trillion legislation signed into law by President Bide on Nov. 16. This action allows the agency to increase their programs and outreach to the nation’s more than 9 million minority-owned businesses, officials said.

“President Biden has made clear his commitment to not just rebuilding to how things were before COVID-19, but to building back better and more equitably,” said Raimondo. “The Minority Business Development Agency is ready to step into this historic moment and build on its success – because we recognize that America’s Road to recovery runs through our minority business community. Making MBDA a statutory Agency provides MBDA with the authorities, workforce and resources needed to help level the playing field on behalf of minority businesses and minority entrepreneurs.”

“The Department of Commerce and MBDA play a pivotal role in promoting the growth and competitiveness of minority-owned businesses,” said Commerce Department Deputy Secretary Don Graves. “This legislation is transformative and signifies a new era in minority business development and progress toward addressing the long-standing racial disparities in access to capital, contracts, and business ecosystems.”

Created by an executive order by former President Richard Nixon in 1969, the MBDA today is the only federal agency solely dedicated to the growth and global competitiveness of minority business enterprises. The new act expands the geographic reach of the MBDA by authorizing the creation of regional MBDA offices, rural business centers, and increasing the number and scope of existing programs.

“The Minority Business Development Act of 2021 is one of the most significant pieces of legislation impacting the minority business community in the last 50 year,” said Miguel Estién, the agency’s acting director. “I look forward to helping lead the Agency’s transformation at this critical juncture in our nation’s history.” 

Although Congress has never enacted a statutory authorization for the agency, it has appropriated some funding for MBDA for over 50 years. Considerations for Congress under the infrastructure bill included enabling legislation, the coordination of services for minority business enterprises (MBEs) across federal agencies and resolving disagreements over the agency’s funding.

During the Obama administration, the Department of Commerce placed increased emphasis on quantifying the impact of MBDA activities, increasing the efficient delivery of its services to minority business communities, and strengthening coordination with other federal agencies. The Trump administration, however, proposed in its first budget to close out the agency, and later cut the agency’s budget by approximately 75%.

According to a new report released by the MBDA in September, the strength of the broader U.S. economy is increasingly tied to minority-owned business enterprise (MBEs) performance that are a growing share of U.S. businesses and the workforce. In 2017, report estimates there were nearly 9.2 million employer and non-employer MBEs combined, generating $1.7 trillion in revenue and with employer MBEs providing more than 8.9 million jobs.

The new 100-page Commerce Department study also examines and develops a new baseline estimate for the productivity of employer MBEs and estimates of Gross Domestic Product (GDP) of employer classifiable firms using the latest data available. View the report here.

Under the new infrastructure act, lawmakers included enabling legislation that expands the geographic reach of the MBDA by authorizing the creation of regional MBDA offices, rural business centers, and increasing the number and scope of existing programs. It also

  • Creates a presidentially appointed and Senate-confirmed Under Secretary of Commerce for Minority Business Development to lead the agency.
  • Increases the MBDA’s grant-making capacity to partner with community and national nonprofits engaged in private and public sector development as well as research.
  • Mandates the creation of the Parren J. Mitchel Entrepreneurship Education Grants Program to cultivate the next generation of minority entrepreneurs on the campuses HBCUs and MSIs across the Nation.
  • Creates a council to advise the Under Secretary on supporting MBEs; and
  • Authorizes the Under Secretary to coordinate federal MBE programs.

The MBDA will report on the implementation milestones of the Minority Business Development Act of 2021 through the website, www.MBDA.gov.

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