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RULE §20.283Evaluation of Active Participation in the Control, Operation, and Management of Entities

(a) In determining the extent of "active participation in the control, operation and management" necessary for qualification as a HUB, the comptroller may consider all relevant evidence. In considering and applying the factors set forth in paragraphs (1) - (10) of this subsection, the comptroller will consider actual roles and responsibilities of the eligible owners, rather than titles or statements of intention regarding the owners' role. Factors which may be considered include, but are not limited to:

  (1) appearance and relative scope of responsibility of HUB-eligible owners in articles of incorporation or partnership formation documents;

  (2) duties and rights of shareholders or partners relative to operational decisions affecting the short term and long term goals of the business;

  (3) any restrictive language in articles of incorporation or partnership agreements applicable to HUB eligible owner;

  (4) whether any licenses, certificates, or permits required to operate the business are held by or in the name of the HUB eligible owner, and whether the eligible owner is qualified to hold such licenses or permits pursuant to applicable laws and regulations;

  (5) the percentage of profit and/or risk available to the HUB eligible owner under the corporate or partnership agreements;

  (6) ability of other owners or partners to dilute either the ownership percentage or operational powers of the HUB eligible owner;

  (7) whether the HUB eligible owner has full time employment elsewhere that might conflict with full participation in operation of the business;

  (8) the percentage of government versus non-government contracts performed by the business where the HUB eligible owner actively participates in the bidding of the contract or the performance of the work;

  (9) the period of time a HUB eligible owner participated in the active management and operation of the business prior to the business seeking HUB status; and

  (10) whether and to what extent the HUB business shares management, board members, partners, employees, or other resources with another business in amounts or ways which might indicate that they are related or affiliated businesses.

(b) The comptroller may request any additional information it considers necessary to evaluate any or all of the factors in subsection (a)(1) - (10) of this section prior to a decision to certify an applicant as a HUB.

Source Note: The provisions of this §20.283 adopted to be effective January 24, 2017, 42 TexReg 235

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