Section 82.32. Determination of active management.

  Factors that the department may consider in determining whether one or more disabled veteran owners or their duly authorized representatives actively manage a business include the following:

(1)   Direct operational management.

(a) The operational management of the disabled veteran owner or his or her duly authorized representative is the demonstrated extent to which the disabled veteran owner or his or her duly authorized representative actually operates the day-to-day business.

(b) Departmental assessments of operational management shall rest upon the peculiarities of the industry of which the business is a part. In order to clarify the level of operational management of the disabled veteran owner or his or her duly authorized representative, the department may consider each of the following:

1. `Experience.' The disabled veteran owner or his or her duly authorized representative has education, demonstrable working knowledge or experience in the area of specialty or industry claimed in the application.

2. `Responsibility for decision-making.'

a. The disabled veteran owner or his or her duly authorized representative makes basic decisions pertaining to the daily operation of the business, such as the purchase of goods, equipment, business inventory and services.

b. The disabled veteran owner or his or her duly authorized representative supervises the business's employees.

3. `Technical competence.'

a. The disabled veteran owner or his or her duly authorized representative has technical competence in the industry or specialty of the business or a working knowledge of the technical requirements of the business sufficient to critically evaluate the work of subordinates.

b. The disabled veteran owner or his or her duly authorized representative has the ability to perform in his or her area of specialty or expertise without substantial reliance upon finances and resources – such as equipment, automobiles and facilities – of entities that are not owned by disabled veterans.

4. `Connection to the principal place of business.' The disabled veteran owner or his or her duly authorized representative is not substantially removed from the principal place of business, such as by being incarcerated.

(2)   Delegated operational management. Where the actual day-to-day operational management is delegated to a person other than a disabled veteran owner or his or her duly authorized representative, the active-management requirements may be met if the disabled veteran owner or his or her duly authorized representative has the ultimate power to hire and fire that person.

(3)   Potential constraints on operational management. In reviewing governance documents and issues, the department shall give special attention to the extent to which all of the following aspects affect the ability of the disabled veteran owner or his or her duly authorized representative to direct the management and policies of the business:

(a) The composition of the business's governing body.

(b) The functioning of the governing body.

(c) The content of shareholder's agreements, bylaws, or state incorporation statutes.

History: EmR1041 : emerg. cr., eff. 11-14-10; CR 11-004 : cr. Register September 2011 No. 669 , eff. 10-1-11.