[Code of Federal Regulations] [Title 13, Volume 1] [Revised as of January 1, 2007] From the U.S. Government Printing Office via GPO Access [CITE: 13CFR126.200] [Page 452-454] TITLE 13--BUSINESS CREDIT AND ASSISTANCE CHAPTER I--SMALL BUSINESS ADMINISTRATION PART 126_HUBZONE PROGRAM--Table of Contents Subpart B_Requirements to be a Qualified HUBZone SBC Sec. 126.200 What requirements must a concern meet to receive SBA certification as a qualified HUBZone SBC? (a) Concerns owned by Indian Tribal Governments--(1) Ownership. (i) The concern must be wholly owned by one or more Indian Tribal Governments; (ii) The concern must be wholly owned by a corporation that is wholly owned by one or more Indian Tribal Governments; (iii) The concern must be owned in part by one or more Indian Tribal Governments and all other owners are either United States citizens or SBCs; or (iv) The concern must be owned in part by a corporation, which is wholly owned by one or more Indian Tribal Governments, and all other owners are either United States citizens or SBCs. (2) Size. The concern, with its affiliates, must meet the size standard corresponding to its primary industry classification as defined in part 121 of this chapter. (3) Other Requirements. The concern must either: (i) Maintain a principal office located in a HUBZone and ensure that at least 35% of its employees reside in a [[Page 453]] HUBZone as provided in paragraph (b)(4) of this section; or (ii) Certify that when performing a HUBZone contract, at least 35% of its employees engaged in performing that contract will reside within any Indian reservation governed by one or more of the Indian Tribal Government owners, or reside within any HUBZone adjoining such Indian reservation. A HUBZone and Indian reservation are adjoining when the two areas are next to and in contact with each other; and (iii) The concern will ``attempt to maintain'' (see Sec. 126.103) that applicable employment percentage stated above during the performance of any HUBZone contract it receives. (b) Concerns owned by U.S. citizens, ANCs or CDCs--(1) Ownership. (i) The concern must be at least 51% unconditionally and directly owned and controlled by persons who are United States citizens; Example: A concern that is a partnership owned 50% by an individual who is a United States citizen and 50% by someone who is not, is not an eligible concern because it is not at least 51% owned by United States citizens. (ii) The concern must be an ANC owned and controlled by Natives (determined pursuant to section 29(e)(1) of the ANCSA); or a direct or indirect subsidiary corporation, joint venture, or partnership of an ANC qualifying pursuant to section 29(e)(1) of ANCSA, if that subsidiary, joint venture, or partnership is owned and controlled by Natives (determined pursuant to section 29(e)(2)) of the ANCSA); or (iii) The concern must be wholly owned by a CDC, or owned in part by one or more CDCs, if all other owners are either United States citizens or SBCs; (2) Size. The concern, together with its affiliates, must qualify as a small business under the size standard corresponding to its primary industry classification as defined in part 121 of this chapter. (3) Principal office. The concern's principal office must be located in a HUBZone. (4) Employees. At least 35% of the concern's employees must reside in a HUBZone. When determining the percentage of employees that reside in a HUBZone, if the percentage results in a fraction, round up to the nearest whole number; Example 1: A concern has 25 employees, 35% or 8.75 employees must reside in a HUBZone. Thus, 9 employees must reside in a HUBZone. Example 2: A concern has 95 employees, 35% or 33.25 employees must reside in a HUBZone. Thus, 34 employees must reside in a HUBZone. (5) Contract Performance. The concern must represent, as provided in the application, that it will ``attempt to maintain'' (see Sec. 126.103) having 35% of its employees reside in a HUBZone during the performance of any HUBZone contract it receives. (6) Subcontracting. The concern must represent, as provided in the application, that it will ensure that it will comply with certain contract performance requirements in connection with contracts awarded to it as a qualified HUBZone SBC, as set forth in Sec. 126.700. (c) Concerns owned by small agricultural cooperatives--(1) Ownership. (i) A small agricultural cooperative organized or incorporated in the United States; (ii) A small business concern wholly owned by one or more small agricultural cooperatives organized or incorporated in the United States; or (iii) A small business concern owned in part by one or more small agricultural cooperatives organized or incorporated in the United States, provided that all other owners are small business concerns or United States citizens. (2) Size. The small agricultural cooperative must meet the size standard corresponding to its primary industry classification as defined in part 121 of this chapter. However, in determining such size, an agricultural cooperative is treated as a ``business concern'' and its member shareholders are not considered affiliated with the cooperative by virtue of their membership in the cooperative. (3) Principal office. The cooperative's principal office must be located in a HUBZone. (4) Employees. At least 35% of the cooperative's employees must reside in a [[Page 454]] HUBZone. When determining the percentage of employees that reside in a HUBZone, if the percentage results in a fraction, round up to the nearest whole number. (5) Contract Performance. The concern must represent, as provided in the application, that it will ``attempt to maintain'' (see Sec. 126.103) having 35% of its employees reside in a HUBZone during the performance of any HUBZone contract it receives. (d) Subcontracting. The concern must represent, as provided in the application, that it will ensure that it will comply with certain contract performance requirements in connection with contracts awarded to it as a qualified HUBZone SBC, as set forth in Sec. 126.700. [69 FR 29422, May 24, 2004, as amended at 70 FR 51249, Aug. 30, 2005]