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 EOD
theequal opportunity division of the department of administrative servicesfor certification as an EDGE business enterprise. The application shall be made on forms provided by EODthe divisionand made in a manner prescribed by EODthedivision.(B) The state equal employment opportunity coordinator of the department of administrative services may
shallcertify 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 ofthe 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 toapplication 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 business
The business is both economically and sociallydisadvantaged or the business owner is both economically and sociallydisadvantaged.(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 shallmustprovide EODthe equal opportunitydivision of the department of administrative servicesthe following information, in theform anddetail and manner prescribedas determinedby EODthe division:(1) Business structure information;.
(2) Previous two
threeyears 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) Corporatecorporateand 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 fromthe ownercertifying that the ownermeets the program's social and economic disadvantagedefinedcriteriafor economically and socially disadvantaged, and(7)(8) Any other relevant information EODthe divisiondeems 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 shallmustprovide EODthe equal opportunity divisionof the department of administrative servicesthe following information, in the detail and manner prescribeddeterminedby EODthe division;(1) Financial records representing prior three years of gross receipts of the business and personal
indicating thenet worth of the fifty-one percentbusiness andpersonal net worth of theowner 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 tractor geographic location,informationdocumentation demonstrating membership in the claimed category.(4)(3) If applying for a social disadvantage classification based on personal disadvantage not common to same or similarothersmall businesses, statement and supporting evidentiary documentation proving social disadvantaged as defined in rule 123:2-16-01 of the Administrative Code;informationindicating the impediment to be considered and how the impediment hasrestricted professional acceptance, employment, or access to capital andcredit,and(5)(4) Any other relevant information EODthe divisiondeems necessary.(E) The coordinator will
equal employment opportunity coordinator of the department ofadministrative services shallconsider 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
businessowner's personal income for the two years prior to application;.(2) The fair market value of all the fifty-one percent
businessowner or ownersassets, whether encumbered or not;.
(3) Asset transfers within the two years prior to
ofapplication 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 thebusiness owner meets the criteria set forth in paragraph (E)(1) of rule123:2-16-01 of the Administrative Code, the coordinator shall determine thatthe owner is economically disadvantaged.(6) Any other relevant information EOD deems necessary.
(F) The coordinator may
equal employment opportunity coordinator of the department ofadministrative services shallcompare and consider the following factors to determine whether the business of the owner or owners applying for EDGE certification is economically disadvantaged comparedcompareto similar business enterprises, as described in paragraph (D) of rule 123:2-16-01 of the Administrative Code:(1) Annual
The annualaccounts 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 worthIf upon consideration of the above factors, the coordinator finds that thebusiness meets the criteria set forth in this chapter, the coordinator shalldetermine 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) Theequal employment opportunitycoordinatorof the department ofadministrative servicesshall determine that the fifty-one percenta businessowner 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 businessowner's businesssuccess, the coordinator may determine that the fifty-one percent owner or owners is a socially disadvantaged person.(H)(I) The coordinator mayequal opportunity division shalladminister 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