Section 20.283 - Evaluation 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 this subsection, the comptroller will consider actual roles and responsibilities of the qualifying 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 qualifying 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 qualifying owner;(4) whether any licenses, certificates, or permits required to operate the business are held by or in the name of the qualifying owner, and whether the qualifying owner is qualified to hold such licenses or permits pursuant to applicable laws and regulations;(5) the percentages of profit and risk available to the qualifying 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 qualifying owner;(7) whether the qualifying 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 qualifying owner actively participates in the bidding of the contract or the performance of the work;(9) the period of time a qualifying 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 an applicant as a HUB.(c) Qualifying owners must be able to make independent and unilateral business decisions which guide the future and destiny of the business, and must be proportionately responsible for the direction and management of the business. Absentee or titular ownership by qualifying owners who do not take an active role in controlling and participating in the business is not consistent with the definition of a HUB.34 Tex. Admin. Code § 20.283
Adopted by Texas Register, Volume 42, Number 03, January 20, 2017, TexReg 235, eff. 1/24/2017; Amended by Texas Register, Volume 48, Number 31, August 4, 2023, TexReg 4268, eff. 8/9/2023