[Code of Federal Regulations]
[Title 49, Volume 1]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR26.67]

[Page 282-284]
 
                        TITLE 49--TRANSPORTATION
 
          Subtitle A--Office of the Secretary of Transportation
 
PART 26_PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN DEPARTMENT 
OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS--Table of Contents
 
                    Subpart D_Certification Standards
 
Sec. 26.67  What rules determine social and economic disadvantage?

    (a) Presumption of disadvantage. (1) You must rebuttably presume 
that citizens of the United States (or lawfully admitted permanent 
residents) who are women, Black Americans, Hispanic Americans, Native 
Americans, Asian-Pacific Americans, Subcontinent Asian Americans, or 
other minorities found to be disadvantaged by the SBA, are socially and 
economically disadvantaged individuals. You must require applicants to 
submit a signed, notarized certification that each presumptively 
disadvantaged owner is, in fact, socially and economically 
disadvantaged.
    (2) (i) You must require each individual owner of a firm applying to 
participate as a DBE (except a firm applying to participate as a DBE 
airport concessionaire) whose ownership and control are relied upon for 
DBE certification to certify that he or she has a personal net worth 
that does not exceed $750,000.

[[Page 283]]

    (ii) You must require each individual who makes this certification 
to support it with a signed, notarized statement of personal net worth, 
with appropriate supporting documentation. This statement and 
documentation must not be unduly lengthy, burdensome, or intrusive.
    (iii) In determining an individual's net worth, you must observe the 
following requirements:
    (A) Exclude an individual's ownership interest in the applicant 
firm;
    (B) Exclude the individual's equity in his or her primary residence 
(except any portion of such equity that is attributable to excessive 
withdrawals from the applicant firm).
    (C) Do not use a contingent liability to reduce an individual's net 
worth.
    (D) With respect to assets held in vested pension plans, Individual 
Retirement Accounts, 401(k) accounts, or other retirement savings or 
investment programs in which the assets cannot be distributed to the 
individual at the present time without significant adverse tax or 
interest consequences, include only the present value of such assets, 
less the tax and interest penalties that would accrue if the asset were 
distributed at the present time.
    (iv) Notwithstanding any provision of Federal or state law, you must 
not release an individual's personal net worth statement nor any 
documentation supporting it to any third party without the written 
consent of the submitter. Provided, that you must transmit this 
information to DOT in any certification appeal proceeding under Sec. 
26.89 in which the disadvantaged status of the individual is in 
question.
    (b) Rebuttal of presumption of disadvantage. (1) If the statement of 
personal net worth that an individual submits under paragraph (a)(2) of 
this section shows that the individual's personal net worth exceeds 
$750,000, the individual's presumption of economic disadvantage is 
rebutted. You are not required to have a proceeding under paragraph 
(b)(2) of this section in order to rebut the presumption of economic 
disadvantage in this case.
    (2) If you have a reasonable basis to believe that an individual who 
is a member of one of the designated groups is not, in fact, socially 
and/or economically disadvantaged you may, at any time, start a 
proceeding to determine whether the presumption should be regarded as 
rebutted with respect to that individual. Your proceeding must follow 
the procedures of Sec. 26.87.
    (3) In such a proceeding, you have the burden of demonstrating, by a 
preponderance of the evidence, that the individual is not socially and 
economically disadvantaged. You may require the individual to produce 
information relevant to the determination of his or her disadvantage.
    (4) When an individual's presumption of social and/or economic 
disadvantage has been rebutted, his or her ownership and control of the 
firm in question cannot be used for purposes of DBE eligibility under 
this subpart unless and until he or she makes an individual showing of 
social and/or economic disadvantage. If the basis for rebutting the 
presumption is a determination that the individual's personal net worth 
exceeds $750,000, the individual is no longer eligible for participation 
in the program and cannot regain eligibility by making an individual 
showing of disadvantage.
    (c) [Reserved]
    (d) Individual determinations of social and economic disadvantage. 
Firms owned and controlled by individuals who are not presumed to be 
socially and economically disadvantaged (including individuals whose 
presumed disadvantage has been rebutted) may apply for DBE 
certification. You must make a case-by-case determination of whether 
each individual whose ownership and control are relied upon for DBE 
certification is socially and economically disadvantaged. In such a 
proceeding, the applicant firm has the burden of demonstrating to you, 
by a preponderance of the evidence, that the individuals who own and 
control it are socially and economically disadvantaged. An individual 
whose personal net worth exceeds $750,000 shall not be deemed to be 
economically disadvantaged. In making these determinations, use the 
guidance found in Appendix E of this part. You must require that 
applicants provide sufficient information

[[Page 284]]

to permit determinations under the guidance of Appendix E of this part.

[64 FR 5126, Feb. 2, 1999, as amended at 64 FR 34570, June 28, 1999; 68 
FR 35554, June 16, 2003]