This page is dedicated to archives of documents related to the DBE program. You will find previous rules and regulations on the DBE program as well as various amendments and reports. Updates on the DBE Program are posted routinely. You can Subscribe to automatically receive notification of any new DBE information.
Airport Concession Requirement
- Additional Guidance on Airport Concessions pertaining to statement of personal net worth (6/19/01)
- New SNPRM for DBE airport concessions in Federal Register, September 8, 2000
- FAA Guidance on Airport Concession Requirements Attachment 1
- Setting FY 2001 Concession Goals Under 49 CFR Part 23 - Attachment 1A
- Additional FAA Guidance on Airport Concession Requirements
- Overall DBE Concession Goal
Section 23.3 - Net Worth and the ACDBE Program (ARCHIVED)
Question: In the ACDBE program, what financial obligations may be counted toward the personal net worth exclusions for assets supporting business financing?
Answer: The definition of personal net worth (PNW) in the ACDBE regulation is the following: Personal net worth means the net value of the assets of an individual remaining after total liabilities are deducted. An individual's personal net worth does not include the following:
- The individual's ownership interest in an ACDBE firm or a firm that is applying for ACDBE certification;
- the individual's equity in his or her primary place of residence; and
- other assets that the individual can document are necessary to obtain financing or a franchise agreement for the initiation or expansion of his or her ACDBE firm (or have in fact been encumbered to support existing financing for the individual's ACDBE business), to a maximum of $3 million [emphasis added].
An individual's personal net worth includes only his or her own share of assets held jointly or as community property with the individual's spouse.
Only assets supporting obligations for which the individual is currently liable, which are properly documented, and for which his or her personal assets are encumbered, should be counted toward this exclusion.
EXAMPLE 1: Smith has $3 million line of credit from a bank to initiate an airport concession project for Firm X. His personal assets are pledged as security for the entire $3 million line of credit. At the time the Firm X applies for certification as an ACDBE, Smith has drawn $600,000 from the line of credit. Because his only obligation at the time of application is to repay the $600,000 draw from the line of credit, the proper amount to be excluded from the PMW calculation for Smith is $600,000.
EXAMPLE 2: Two years ago, Jones got a $2 million loan to expand his airport concession business. His personal assets were pledged as security for the loan. Firm Y applied for ACDBE certification at the same time as Jones received his loan, and the $2 million was properly excluded from his PNW certification. By today, however, Jones has paid off $1.2 million of the loan. Only $800,000 is now properly excluded from today’s PNW calculation, if proper documentation is provided. (Annual affidavits should reflect the current balance remaining to be paid on the loan, not the original amount of the loan.)
EXAMPLE 3: Brown received a loan from a bank for $1.5 million in connection with starting a concession. At the time her firm applies for certification, however, the assets securing the loan appear to be those of a concession corporation, as distinct from her own personal assets. The $1.5 million is not properly excluded from Brown’s PNW calculation.
The initiation or expansion of a concession concerning which an owner seeks this exclusion should be real and present rather than a possibility that is speculative or well into the future. For example, assets supporting a loan or line of credit obtained today for a projected expansion of a concession three years from now would not be a reasonable basis for excluding the assets from today’s PNW calculation.
Assets eligible for this exclusion from the PNW calculation are properly excluded from an owner’s PNW calculation regardless of the location of concession for which the financing in question was arranged.
EXAMPLE 1: Williams got a loan of $1 million from Bank X to start a concession business at Airport 1. Her personal assets were pledged as security for the loan. Airport 1 properly excluded $1 million when it calculated Williams’ PNW. Now Williams is starting Firm B at Airport 2. When Firm B applies to Airport 2 for ACDBE certification, $500,000 remains to be paid off on the loan to Bank X. Airport 2 should exclude $500,000 in calculating Williams’ PNW, assuming proper documentation is provided.
EXAMPLE 2: Williams also got a $1.3 million loan from Bank Y to help finance the concession at Airport 2. Her personal assets, above and beyond those pledged as security for the $1 million loan from Bank X, are pledged as security for the loan from Bank Y. Airport 2 would properly exclude $1.3 million in calculating Williams’ PNW, in addition to the $500,000 excluded in Example 1, for a total of $1.8 million. The total assets excluded under this provision of the rule could never exceed $3 million.
Since an ACDBE applicant bears the burden of demonstrating its eligibility, it is reasonable for recipients to request all supporting documentation for each financial obligation claimed by the applicant, including loan agreements, supporting lien and/or letter of credit documents, and specification of the assets used to secure a loan or line of credit.
Recipients should pay particular attention to the terms of a financial obligation, determine the extent to which the individual owner, as distinct from a corporation or other party, is obligated to repay, or is repaying, the obligation. The recipient should make appropriate inquiries into whether there are any additional borrowers or other factors that may affect the size or duration of the individual owner’s debt.
NOTE: The guidance in this Q &A applies only to 49 CFR Part 23. It does not apply to 49 CFR Part 26.
- SAFETEA-LU DBE program reauthorization Provision (Archived 4/17/13)
- Submission of Uniform Certification Programs (UCPs)
- Procedural Guidance for implementing the SBA/DOT MOU prior to the publication of a Final Rule.
- MOU with SBA on DBE/SDB Certification
1999 DBE Rule and Subsequent Amendments
On April 8, 2009 the Department of Transportation (DOT) issued a Notice of Proposed Rulemaking (NPRM) to improve administration of the Disadvantaged Business Enterprise (DBE) program and an Advance Notice of Proposed Rulemaking (ANPRM) that provides interested parties with the opportunity to comment on several matters of interest to participants in the DOT's DBE program.
DATES: Separate comments on both issuances must be received by July 7, 2009.
- Disadvantaged Business Enterprise Program; Potential Program Improvements, 15904–15910 [E9–7903]
- Disadvantaged Business Enterprise; Overall Goal Schedule and Substitution, 15910–15911 [E9–7904]
- Paving the Road to Equal Opportunity - Key issues in the new rule
- The New DOT DBE Rule is Narrowly Tailored - Meeting the Adarand Test
- What's New in the New DOT DBE Rule - A Summary of Key Changes
- Existing DBE Legislative Requirement in TEA-21
- Sample No Change Declaration For Concessionaires [49 CFR § 26.83(j)] (4/08/04)
- Sample No Change Affidavit For Concessionaires [49 CFR § 26.83(j)] Word / PDF (4/08/04)
- Amendment to DOT's Regulations for the DBE Program (49 CFR Part 26) Federal Register, June 16, 2003
- DBE Notice of Proposed Rulemaking (NPRM) in Federal Register, May 8, 2001
- Interim Final Rule Pertaining to Threshold Requirements and Other Technical Revisions. Federal Register, November 15, 2000
- New SNPRM for DBE airport concessions Federal Register, September 8, 2000
- DBE size cap raised to $17,420,000 Federal Register, August 29, 2000
- Correction to the DOT DBE Final Rule Federal Register, June 28, 1999
- New DBE Rule, (49 CFR 26), Federal Register, February 2, 1999. Indexed HTML / HTML / PDF
- You can search the Federal Register at https://www.federalregister.gov/.
- For your convenience, view or download individual sections:
- Summary and Contact Information
- Background and Key Points
- Section-By-Section Analysis
- Regulatory Analyses and Notices
- 49 CFR 26 - Regulatory Text
- Appendix A to Part 26 -- Guidance Concerning Good Faith Efforts
- Appendix B to Part 26 -- Forms [Reserved] No Data
- Appendix C to Part 26 -- DBE Business Development Program Guidelines
- Appendix D to Part 26 -- Mentor-Protege Program Guidelines
- Appendix E to Part 26 -- Individual Determinations of Social and Economic Disadvantage