Chapter Adm 84

Adm 84.02(43) (43) “Secretary” means the secretary of the department.

Adm 84.02(44) (44) “Securities” means stocks, bonds, notes, convertible debentures, warrants or other documents that represent a share in a business or a debt owed by a business.

Adm 84.02(45) (45) “Shares” means the units into which the proprietary interests in a corporation are divided.

Adm 84.02(46) (46) “Shareholder agreement” means any agreement among shareholders which spells out the rights or future interest in the corporation among the shareholders.

Adm 84.02(47) (47) “Sole proprietorship” means a business in which one person owns all the assets of the business and is solely liable for all the debts of the business.

Adm 84.02(48) (48) “Stock affirmation form” means a form provided by the department and affirmed by the business stating that the stock ownership of the corporation is as presented in the application and in which the applicant agrees to notify the department in the event that additional stock is sold.

Adm 84.02(49) (49) “Stock certificate” means a certificate issued by a corporation certifying that the named person is the owner of a designated number of shares of stock.

Adm 84.02(50) (50) “Subsidiary” means a corporation in which one other corporation owns a majority of the voting shares.

Adm 84.02(51) (51) “Treasury shares” means the shares which have been issued but later re-acquired by a corporation and which have not been canceled or restored to the status of authorized but unissued shares.

Adm 84.02(52) (52) “Unissued shares” means shares which the corporation is authorized to issue but which have not yet been distributed to shareholders or subscribers.

Adm 84.02(53) (53) “Useful business function” has the meaning defined in s. 16.287 (1) (h), Stats.

Adm 84.02(54) (54) “Voting agreement” means an agreement among shareholders regarding the voting of their shares.

Adm 84.02(55) (55) “Voting shares” means those shares which give the holder the right to vote for directors and other matters, in contrast to non-voting shares which simply entitle the holder to dividends, if any.

Adm 84.02(56) (56) “Voting trust” means a written agreement among any number of shareholders to confer upon one or more persons, as trustees(s), the right to vote or otherwise represent their shares under specified terms and conditions.

Adm 84.02(57) (57) “Wisconsin business” means a business which is incorporated under ch. 180, Stats., or which has its principal place of business in Wisconsin.

Adm 84.02 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87; correction in (1), (2), (10), (19), (30), (32), (53) made under s. 13.92 (4) (b) 6., 7., Stats. and renumbering of (10) to (31m) made under s. 13.92 (4) (b) 1., Stats., Register December 2011 No. 672.

Adm 84.03 Adm 84.03 Certification criteria. In order to be certified as a minority business enterprise, a business shall meet the following eligibility standards:

Adm 84.03(1) (1) Be at least 51% owned, controlled and actively managed by one or more minority group members.

Adm 84.03(1)(a) (a) In a sole proprietorship, the sole proprietor shall be a minority.

Adm 84.03(1)(b) (b) In a partnership, the minority owner or owners shall act as general partner, own at least 51% of the partnership interest, and exert at least 51% of the control and management of the partnership.

Adm 84.03(1)(c) (c) In a corporate form of organization, the minority owner or owners shall own at least 51% of all outstanding stock, including voting stock, of the corporation. Any voting agreements, voting trusts, loan agreements, or shareholder agreements among the shareholders shall not dilute the beneficial ownership, the rights or the influence of the minority owners of the stock or classes of stock of the corporation.

Adm 84.03(1)(d) (d) In a joint venture, the minority owned business shall hold at least 51% of the beneficial ownership interest in the joint venture, and shall exert at least 51% of the control and management of the joint venture. The minority owned business partner of the joint venture shall be certified or be eligible for certification as a minority business enterprise.

Adm 84.03(1)(e) (e) In a subsidiary or affiliate, the parent company shall be at least 51% owned by a minority owner or owners.

Adm 84.03(2) (2) Be performing a useful business function.

Adm 84.03 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.04 Adm 84.04 Determination of minority status. The department shall require an individual to provide evidence of ethnic or racial heritage in one or more of the minority groups defined in s. Adm 84.02 (29).

Adm 84.04(1) (1) When available, such evidence shall include one or more of the following:

Adm 84.04(1)(a) (a) Birth certificates, American Indian tribal registrations, naturalization certificates and permanent residence certificates.

Adm 84.04(1)(b) (b) Birth certificate or official record of blood parent or grandparent claimed in substantiation of the minority status of the individual.

Adm 84.04(2) (2) When evidence under sub. (1) is not available, the department may accept the following:

Adm 84.04(2)(a) (a) Evidence that the individual is commonly recognized as a minority group member. This may include, but is not limited to, a combination of the following: driver’s license, draft registration or other official records which document ethnic or racial heritage; whether the individual’s birth surname is commonly recognized as a minority surname; and notarized third party statements.

Adm 84.04(2)(b) (b) An individual who is visibly identifiable as a minority group member may not be required to provide documentation of his or her ethnic or racial heritage but shall be required to submit an unaltered photograph.

Adm 84.04 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87; correction in (intro.) made under s. 13.92 (4) (b) 7., Stats., Register December 2011 No. 672.

Adm 84.05 Adm 84.05 Determination of ownership. An applicant shall meet the following standards in order to satisfy the ownership requirement:

Adm 84.05(1) (1) Minority persons must legitimately hold at least 51% of the beneficial ownership interests in the business.

Adm 84.05(2) (2) The minority ownership’s interest in the firm shall be real, substantial and continuing. Such interest shall include:

Adm 84.05(2)(a) (a) A risk of loss and share of profit commensurate with the proportional ownership; and,

Adm 84.05(2)(b) (b) Receipt of the customary incidents of ownership, such as salary, rights to dividends, ownership of assets and ownership of intangible assets such as copyrights and patents.

Adm 84.05(3) (3) The contributions of capital and expertise by the minority owner or owners to acquire his or her interest in the firm shall be real and substantial. Contributions of personal or professional services alone shall not be considered real and substantial for the purposes of this section, although they shall receive consideration when given in conjunction with other tangible forms of investment.

Adm 84.05(4) (4) All securities and ownership interests which constitute ownership or control of the firm for the purposes of establishing it as a minority business enterprise shall be held directly by the minority owner or owners. No securities or ownership interest held in trust, or by any guardian for a minor, shall be considered as being held by the minority owner or owners in determining ownership and control of the business. The right to purchase stock in the business in the future shall not be considered as being held by the minority owner or owners in determining ownership and control of the business.

Adm 84.05(5) (5) An ownership interest arising in a nonapplicant nonminority spouse solely because of the operation of marital property laws shall not disqualify the applicant minority spouse from certification if both spouses certify that only the minority spouse participates in the control and management of the business.

Adm 84.05 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.06 Adm 84.06 Documentation of ownership. The department shall require documentation of the ownership of at least 51% of the business by a minority owner or owners:

Adm 84.06(1) (1) Documentation may include, but is not limited to, the following: current business income tax return, current business financial statement, business licenses, buy-out agreements and financial agreements.

Adm 84.06(1)(a) (a) In the case of a sole proprietorship, additional documentation may include, but is not limited to, canceled checks used to purchase ownership.

Adm 84.06(1)(b) (b) In the case of a partnership, additional documentation may include, but is not limited to, partnership agreements, purchase agreements, salary and profit sharing records.

Adm 84.06(1)(c) (c) In the case of a corporation, additional documentation may include, but is not limited to, articles of incorporation, corporate by-laws, corporate borrowing resolution, stock certificates, stock affirmation forms, salary and profit sharing records.

Adm 84.06 Note Note: A stock affirmation form may be obtained, at no charge, from: WI Supplier Diversity Program, Department of Administration, P.O. Box 7970, Madison, WI 53707-7970.

Adm 84.06(1)(d) (d) In the case of a joint venture, additional documentation may include, but is not limited to, a joint venture agreement which is written and signed by all of the joint venturers. Each joint venture agreement shall specify:

Adm 84.06(1)(d)1. 1. The capital contribution made by each joint venturer; the control each will exercise; and the distribution of profit and loss. Each of these elements must be allocated in proportion to their contribution; and

Adm 84.06(1)(d)2. 2. The useful business function the joint venture will perform and the part of the work each joint venturer will do.

Adm 84.06(2) (2) The department may require documentation showing how and when the minority owner’s or owners’ interest in the business was acquired.

Adm 84.06(3) (3) In those instances when an ownership interest arises in a nonapplicant nonminority spouse because of the operation of marital property laws, the department may request a signed marital property waiver form in which both spouses certify that only the minority spouse controls and manages the business or an affidavit stating that a marital property agreement has been signed in which the nonminority spouse relinquishes control and management of the business.

Adm 84.06 Note Note: A marital property waiver form may be obtained, at no charge, from: WI Supplier Diversity Program, Department of Administration, P.O. Box 7970, Madison, WI 53707-7970.

Adm 84.06 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.07 Adm 84.07 Determination of control.

Adm 84.07(1) (1) Factors which shall be considered in determining whether the applicant meets the control requirement include, but are not limited to, the following:

Adm 84.07(1)(a) (a) Authority and restrictions as indicated in the articles of incorporation, by-laws, minutes of corporate meetings, bank signature cards, partnership and joint venture agreements and other business agreements and documents.

Adm 84.07(1)(b) (b) Membership of minority persons on the board of directors.

Adm 84.07(1)(c) (c) Holdings by minority persons of the voting interests in the firm.

Adm 84.07(1)(d) (d) The managerial experience, knowledge and expertise of the minority owner or owners in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.07(1)(e) (e) Whether the minority owner or owners have the authority to make policy decisions in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.07(1)(f) (f) The existence of working agreements with nonminority firms.

Adm 84.07(1)(g) (g) The existence of restrictive financing agreements with nonminority firms or financial institutions which impose undue limitations on the minority firm.

Adm 84.07(2) (2) Absentee ownership or titular ownership by an individual who does not take an active role in controlling the business is not consistent with the eligibility criteria for certification as a minority business enterprise.

Adm 84.07 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.08 Adm 84.08 Documentation of control. The department shall require evidence that the minority owner or owners have at least 51% control over the business. Such evidence may include, but is not limited to, the following:

Adm 84.08(1) (1) Documentation that the minority owner or owners have the authority to:

Adm 84.08(1)(a) (a) Solicit, negotiate and sign bids and contracts.

Adm 84.08(1)(b) (b) Incur liabilities for the firm.

Adm 84.08(1)(c) (c) Make final staffing decisions.

Adm 84.08(1)(d) (d) Control savings, checking and other financial accounts.

Adm 84.08(2) (2) Documentation, such as a resume, that the minority owner or owners have managerial experience, knowledge and expertise in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.08(3) (3) Documentation that the minority owner’s or owners’ authority to control the business is not restricted in any way.

Adm 84.08 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.09 Adm 84.09 Determination of active management.

Adm 84.09(1) (1) Factors which shall be considered in determining whether the applicant meets the active management requirement include, but are not limited to, the following:

Adm 84.09(1)(a) (a) Whether the minority owner or owners are responsible for making business decisions affecting the day-to-day operations of the firm, such as the purchase of goods, equipment, business inventory and services.

Adm 84.09(1)(b) (b) Whether the minority owner or owners have the responsibility for the supervision of the firm’s employees.

Adm 84.09(1)(c) (c) Whether the minority owner or owners have a working knowledge of the technical requirements of the business.

Adm 84.09(2) (2) Where the actual day-to-day management is delegated to a nonminority individual, the minority management requirement may be met if the minority owner or owners have the ultimate power to hire and fire the manager.

Adm 84.09 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.10 Adm 84.10 Documentation of active management.

Adm 84.10(1) (1) The department shall require evidence that the minority owner or owners actively manage the business. Such evidence may include, but is not limited to, the following:

Adm 84.10(1)(a) (a) Signed purchase orders, invoices and contracts.

Adm 84.10(1)(b) (b) Evidence that the minority owner or owners have delegated work assignments to the firm’s employees.

Adm 84.10(1)(c) (c) Documentation, such as a resume, that the minority owner or owners have the education or work experience in the skill areas required to produce the product or service provided by the business.

Adm 84.10(2) (2) Where the actual day-to-day management is delegated to a nonminority individual, documentation, such as a signed contract, that the minority owner or owners have the ultimate power to hire and fire the manager.

Adm 84.10 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.