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SBA Decides to Not Impose a Community Benefit Requirement On Native-Owned Entities

October 6, 2022

Overview

On October 5, 2022, during the Tribal Consultation session in Washington, D.C., the Small Business Administration stated that it will not pursue its attempt to impose a Community Benefit Plan requirement on Alaska Native Corporations and their 8(a) companies as originally contemplated in the Notice, “Tribal Consultation for Ownership and Control and Contractual Assistance; Requirements for the 8(a) Business Development (BD) Program and other Planned 8(a) BD Program Regulatory Proposals,” published in the Federal Register on August 6, 2022.

Although the Small Business Administration was clearly overstepping its authority and attempting to do so with no reasonable explanation, their decision to move away from this requirement is excellent news as its implementation not only would have unnecessarily burdened Alaska Native Corporations, but also restricted their flexibility in carrying out their self-directed objectives of providing benefits to their represented communities.

Alaska Native Corporations (ANC) and Tribes may still want to submit comments to the Small Business Association (SBA) opposing the Community Benefit Plan requirement, although the comments can be significantly truncated and can instead thank the SBA for withdrawing those provisions. Native-owned entities may also want to consider proposing changes to the entity-owned benefit reporting form, in order to better highlight the significant benefits that ANCs and Tribes provide to their communities. Improvements in highlighting and explaining the substantive benefits provided by ANCs and Tribes to their communities may reduce the likelihood that SBA (or Congress) revisits this issue in the future.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.

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