Any business seeking certification for preference under this chapter must present its application on forms provided by the Indian Preference Office and the required documentation to the Indian Preference Office, whose decision on the application shall constitute a final decision for the purpose of satisfying administrative process. Nothing in this chapter shall prohibit any person or entity from reapplying for certification upon proof of cure of the reason for denial of certification. The Indian Preference Office in its sole discretion may reject any application which is oppressive, repetitive, or vexatious. For purposes of this chapter, a certified NHBP-owned business, an NHBP member-owned business, a certified NHBP family-owned business, a certified tribally owned business, and a certified Native American-owned business will collectively be referred to as a "certified preference business."
A complete application for certification as a certified preference business owned by NHBP members, an NHBP family-owned business, or a Native American-owned business shall include:
A. 
Proof that the applicant business owner(s) are enrolled with the NHBP, are NHBP family, or enrolled with another federally recognized Indian tribe (i.e., articles of incorporation; articles of organizations; tribal identification cards for Indian owners; marriage certificates; etc.);
B. 
Documentation that verifies that the business ownership and management, including management of the business operations related to transactions with the Tribe or its subdivision, are controlled, in whole or substantial part, by one or more NHBP members, NHBP family or other Native American(s);
C. 
Documentation of the business's profit arrangement (i.e., operating agreement; partnership; tax returns);
D. 
Documentation verifying that the extent to which the applicant business has the ability to directly perform contractual obligations of the business for which it seeks certification (i.e., number of employees; statement of assets/liabilities; major subcontractors and responsibilities of major subcontractors); and
E. 
Documentation detailing the applicant's business operations (i.e., type of goods produced/sold or services provided).
All joint ventures seeking certification for preference priority as a certified preference business shall submit documentation of the business arrangements of the joint venture in addition to the required documentation for certification.
To become a certified preference business, an applicant shall meet the following criteria:
A. 
Ownership. The business is 60% or more owned by NHBP members, family, or other Native Americans, as established by:
(1) 
Financial ownership. At least 60% ownership is vested in one or more persons who are NHBP members, NHBP family, or other Native Americans. A business that is owned by a combination of NHBP members or family and other Native Americans will qualify for preference as a Native American-owned business if the NHBP members or family owners can demonstrate ownership of at least 60% of the business.
(2) 
Value provided. The NHBP member, NHBP family or Native American owner(s) provide real value commensurate with the value of their ownership share by providing capital, equipment, real property or similar assets, or engineering or professional services.
(3) 
When NHBP member, NHBP family or Native American participants demonstrate that they were unable to borrow from traditional capital sources and therefore were unable to pay real value for their 60% or more Indian ownership, they may satisfy the ownership requirement by demonstrating further that they extended their capital-raising capability as far as possible, such that the preference participants are clearly at risk in the business. It will not be considered real value if the preference owner(s) purchased the ownership share, directly or indirectly, when the ultimate creditor is the non-Indian owner of the firm or an immediate relation thereof.
B. 
Profit distribution. In any profit distribution, the NHBP member, NHBP family or Native American owner(s) receive profits proportional to their ownership interest. If any provision in the organizational agreement of the business gives non-Indian owner(s) a greater share of the profits, in whatever form and under whatever name, such as through management fees, equipment rental fees, or bonuses tied to profits, certification will be denied. The Indian Preference Office shall review salary scales to ensure that salaries are not being used to circumvent the requirement that owners receive salaries proportional to ownership interest.
C. 
Management control.
(1) 
The business must be able to demonstrate to the Indian Preference Office's satisfaction that:
(a) 
The NHBP member or other Native Americans upon whose tribal membership the preference is based control daily operations and have the majority of voting rights and other decisional authority;
(b) 
All significant decisions of the business are made by a majority vote, unless made entirely by the Native American owners except where otherwise required by law;
(c) 
The NHBP member, NHBP family or Native American owner(s) through prior experience or training have substantial ties to the area of business in which the firm is engaged such that they are competent to serve in the senior position;
(d) 
The NHBP members, NHBP family or Native American owner(s) are sufficiently knowledgeable about the firm's activities to be accountable to the Tribe or the subdivision proposing to contract for goods or services for those activities; and
(e) 
The Indian Preference Office shall not consider the management of the business to be Indian if the business subcontracts 65% or more of its work to non-Indian-owned companies, unless subcontracting substantial portions of the work is a normal practice in that particular field of business (i.e., construction). In the case of contracts for construction services, the business seeking Indian preference must provide evidence that it can and will perform not less than 15% of the work with its own employees. In the absence of a determination by the Indian Preference Officer that the subcontracting arrangement disclosed is typical for that field of business, an entity operating thus shall be considered a front which does not qualify for certification as an NHBP member, NHBP family or Native American-owned business and is ineligible for preference.
(2) 
Exceptions to management control criteria. The requirements listed above regarding experience, training, occupation requirements, and knowledge of the firm's activities may be waived when the firm is modeled on a publicly held corporation such that it is owned by 10 or more persons, of whom at least 70% are NHBP members, NHBP family or Native American, the chief executive officer and the highest-salaried employee in the firm is/are NHBP members and/or NHBP family or Native American, and a majority of the employees are NHBP members or other Native Americans.
(3) 
Brokers. Brokers will only be certified in two instances:
(a) 
For purposes of RFPs which seek to engage the services of a broker to assist the Purchasing Department in the acquisition of certain goods and/or services; or
(b) 
The broker is a dealer or distributor, which owns, operates, or maintains a store, warehouse, or other establishment in which the commodities being supplied are bought, kept in stock, and sold to the public in the usual course of business, unless the applicant demonstrates that it is usual and customary not to keep the commodities in stock.
D. 
Integrity of structure. In addition to the factors described in § 5.4-24A through C, the Indian Preference Office shall consider the following criteria to determine whether the applicant qualifies for preference:
(1) 
History of the firm. Whether the firm, a portion of the firm, or key actors in the firm were originally associated with a non-Indian-owned business that gained little except eligibility for preference priority in terms of equipment capital or expertise, by adding Native American ownership or by merging with a Native American-owned firm.
(2) 
Employees.
(a) 
Whether key non-Indian employees of the applicant are former employees of the non-Indian firm with which the firm seeking preference certification is or has been affiliated through a joint venture or other arrangement such that there is reason to believe the non-Indian firm controls the applicant.
(b) 
Whether NHBP members or Native Americans are employed in all of the positions for which qualified Indians are available. A high percentage of non-Indian employees in such positions will provide reason to believe that the firm was established primarily to benefit non-Indians.
(3) 
Relative experience and resources. Whether the non-Indian owner's experience, expertise and resources are so much greater than those of the preference owner(s) that there is little reason for the non-Indian to accept a junior role in the firm or venture other than to be able to take advantage of the Indian preference program.
A. 
The Indian Preference Officer shall certify any business entity, which verifies that it is not less than 60% owned by NHBP or one or more other federally recognized Indian tribes.
B. 
Any business seeking certification as an NHBP or tribally owned business under this Act must present its application on forms provided by the Indian Preference Office and the required documentation to the Indian Preference Office.
C. 
Documentation required. A complete application for certification as a certified NHBP or tribally owned preference business shall include:
(1) 
Proof that the applicant business is duly organized under the laws of NHBP, that of another federally recognized Indian tribe, or under applicable federal (i.e. Section 17 Corporation) or state law (i.e., articles of incorporation; articles of organizations; partnership agreement; joint venture agreement);
(2) 
Documentation that verifies that not less than 60% of the equity (shares), membership interests, partnership interests, or joint venture interests, as the case may be, are owned by NHBP, another federally recognized Indian tribe, or one or more Indian tribes (which may include NHBP as partial owner), (i.e., stock ledger/stock certificates; LLC operating agreement; purchase agreement; partnership agreement);
D. 
Documentation of the business's profit arrangement (i.e., operating agreement; partnership; tax returns) to verify that profits from business activities are distributed to owners in relative proportion to their ownership interests or in relation to each respective owner's contribution to revenues (i.e., operating agreement; joint venture agreement);
E. 
Documentation detailing the applicant's business operations (i.e., type of goods produced/sold or services provided).
Certified preference businesses must renew their certification annually in order to remain eligible for the business preference established by this chapter by reporting any material change in the structure, ownership, management, or information submitted required to be submitted under § 5.4-22 or 5.4-25 of this Act.