123:2-16-02 Certification criteria.  

  • Text Box: ACTION: Final Text Box: DATE: 01/22/2016 12:55 PM

     

     

     

    123:2-16-02                 Certification criteria.

     

     

     

    (A)     Unless certified pursuant to rule 123:2-16-04 of the Administrative Code, any business seeking certification in the EDGE business development program, established under section 123.152 of the Revised Code, shall first apply to EODthe equal opportunity division of the department of administrative services for certification as an EDGE business enterprise. The application shall be made on forms provided by EODthe division and made in a manner prescribed by EODthe division.

     

    (B)      The state equal employment opportunity coordinator of the department of administrative services mayshall certify a business as an EDGE business enterprise, provided that at least fifty-one percent of the owner or owners of the business demonstrate (but not limited to)all of the following:

     

    (1)   The business is a for-profit business entity and in business for at least one year immediately preceding the date of the business's prior to application for certification.

     

    (2)   The business is at least fifty-one percent owned and controlled by a citizen or citizens of the United States;.

     

    (3)   The business is at least fifty-one percent owned and controlled by a resident or residents of the state;.

     

    (4)   The contributions of capital or expertise used to acquire ownership must be real and substantial, going beyond pro forma ownership, and derived from individually and independently owned resources. Owners must demonstrate that they possess the experience, expertise, and knowledge to operate their particular types of businessThe business is both economically and socially disadvantaged or the business owner is both economically and socially disadvantaged.

     

    (a) Ownership interest obtained through a transfer or gift will be scrutinized to ensure ownership is irrevocable, was obtained for reasons other than obtaining certification into the EDGE program. De facto (on paper) ownership is not sufficient to qualify for the EDGE program. Even when company documents support the basic criteria, certification can be denied if the business operations do not reflect the ownership shown on submitted documents;

     

    (b) Control is comprised of (but not limited to) three parts: operational control, managerial control, and independence. The socially and economically disadvantaged owner or owners must have managerial and technical competence and experience directly related to the type of

     

     

    business in which the business is engaged and the business's overall operations. The fifty-one percent owner or owners must demonstrate that they actually control (but not limited to) the management  and policy decisions, day-to-day operations, and direction of the business. Expertise limited to office management, administration, sales, or bookkeeping functions unrelated to the principal business activities of the business is insufficient to demonstrate control;

    (c) To be viewed as controlling a business, the fifty-one percent owner or owners cannot engage in other business interests that conflict with the management of the certified business day-to-day operations, and prevent the owner or owners from devoting sufficient time and attention to the affairs of the business;

    (d)The business must be independent; its viability cannot solely depend on its relationship with another business or businesses;

    (5) The business's fifty-one percent owner or owners are both economically and socially disadvantaged.

    (C)   To demonstrate that a business applying for EDGE certification meets the criteria set forth in paragraphs (B)(5) (1) to (B)(3) of this rule, the fifty-one percent owner or owners of the business upon request shall must provide EODthe equal opportunity division of the department of administrative services the following information, in the form and detail and manner prescribedas determined by EODthe division:

    (1)   Business structure information;.

    (2)    Previous twothree years of personal federal and state tax returns including all schedules, W-2s, and/or 1099s;.

    (3) When applicable, previous two years of business federal tax returns to include all schedules;

    (3)(4) Corporatecorporate and personnel organizational information;.

    (4)(5) Business sales and tax information;.

    (5)(6) Personal information indicating citizenship and residence.

    (6)(7) Documentation providing proof thatNotarized statement from the owner certifying that the owner meets the program's social and economic disadvantagedefined criteria for economically and socially  disadvantaged, and

    (7)(8) Any other relevant information EODthe division deems necessary.

    (D)   To demonstrate that a business applying for EDGE certification meets the criteria set forth in paragraph (B)(5)(B)(4) of this rule, the fifty-one percent owner or owners of the business upon request shall must provide EODthe equal opportunity division of the department of administrative services the following information, in the detail and manner prescribeddetermined by EODthe division;

    (1)   Financial records representing prior three years of gross receipts of the business and personal indicating the net worth of the fifty-one percent business and personal net worth of the owner or owners. If business is in operation for less than three years; submission of financial records for the period in business;

    (2) If married, financial records of the owner's spouse.

    (3)(2) If applying for a social disadvantage classification based on race, color, ethnic origin, gender, physical disability, long-term residence in an environment isolated from the mainstream of American society, business location in an area of high unemployment, or business location in a qualified census tract or geographic location, information documentation demonstrating membership in the claimed category.

    (4)(3) If applying for a social disadvantage classification based on personal disadvantage not common to same or similarother small businesses, statement and supporting evidentiary documentation proving social disadvantaged as defined in rule 123:2-16-01 of the Administrative Code;information indicating the impediment to be considered and how the impediment has restricted professional acceptance, employment, or access to capital and credit, and

    (5)(4) Any other relevant information EODthe division deems necessary.

    (E)   The coordinator willequal employment opportunity coordinator of the department of administrative services shall consider all of the following (but not limited to) to determine whether a business owner applying for EDGE certification meets the personal net worth threshold of paragraph (E)(1) of rule 123:2-16-01 of the Administrative Code:

    (1)    The fifty-one percent owner or business owner's personal income for the two years prior to application;.

    (2)    The fair market value of all the fifty-one percentbusiness owner or owners

    assets, whether encumbered or not;.

    (3)    Asset transfers within the two years prior to of application including (but not limited to) transfers to members of the owner or owners immediate family, the economically disadvantaged business, trust accounts, and others as determine by the coordinator;.

    (4)   Assets of the owner or owner's spouse; if applicable.

    (5)    Similar factors considered by the United States small business administration when making individual determinations of economic and social disadvantage pursuant to federal disadvantage business enterprise programs.

    Upon consideration of the above factors, the coordinator finds that the business owner meets the criteria set forth in paragraph (E)(1) of rule 123:2-16-01 of the Administrative Code, the coordinator shall determine that the owner is economically disadvantaged.

    (6) Any other relevant information EOD deems necessary.

    (F)   The coordinator mayequal employment opportunity coordinator of the department of administrative services shall compare and consider the following factors to determine whether the business of the owner or owners applying for EDGE certification is economically disadvantaged comparedcompare to similar business enterprises, as described in paragraph (D) of rule 123:2-16-01 of the Administrative Code:

    (1)   AnnualThe annual accounts receivable;

    (2)   Total assets;

    (3) Gross receipts for three years immediately prior to the date of the application for certification;

    (3)(4) Net sales for three years immediately prior to the date of the application for certification;

    (4)(5) Pre-tax profit;

    (5)(6) Sales versus working capital ratio;

    (6)(7) Any other relevant information EOD deems necessary.Business net worth

    If upon consideration of the above factors, the coordinator finds that the business meets the criteria set forth in this chapter, the coordinator shall determine that the business is economically disadvantaged.

    (G) If upon consideration of this rule and other factors as determined by the coordinator, the coordinator finds that the business meets the criteria set forth in this chapter, the coordinator may determine that the business is economically disadvantaged.

    (G)(H) The equal employment opportunity coordinator of the department of administrative services shall determine that the fifty-one percent a business owner or owners applying for EDGE certification is socially disadvantaged, if the business owner demonstrates personal disadvantage, as described in paragraph (P) (J) of rule 123:2-16-01 of the Administrative Code, and the coordinator determines that the distinguishing feature or demonstrated disadvantage significantly inhibited the fifty-one percent owner or owners business owner's business success, the coordinator may determine that the fifty-one percent owner or owners is a socially disadvantaged person.

    (H)(I) The coordinator mayequal opportunity division shall administer the certification of the EDGE program in accordance to the general "disadvantaged business enterprise" certification guidelines issued by the United States small business administration in Title 13 of the Code of Federal Regulations, unless expressly stated otherwise.

    (J) The coordinator may determine the length of the EDGE certification issued pursuant to this chapter, however, no certification shall exceed two-years from the date of certification, provided that the EDGE business enterprise remains in compliance and is not decertified pursuant to rule 123:2-16-06 of the Administrative Code.

    Effective:                                                             02/01/2016

    Five Year Review (FYR) Dates:                         11/05/2015 and 11/20/2020

    CERTIFIED ELECTRONICALLY

    Certification

    01/22/2016

    Date

    Promulgated Under:                           119.03

    Statutory Authority:                           R.C. 123.152

    Rule Amplifies:                                  R.C. 123.152

    Prior Effective Dates:                         11/26/2004

Document Information

Effective Date:
2/1/2016
File Date:
2016-01-22
Last Day in Effect:
2016-02-01
Five Year Review:
Yes
Rule File:
123$2-16-02_PH_FF_A_RU_20160122_1255.pdf
Related Chapter/Rule NO.: (1)
Ill. Adm. Code 123:2-16-02. Certification criteria