OFFICE OF MINORITY AND

WOMEN'S BUSINESS ENTERPRISES

[Filed April 18, 2025, 3:40 p.m.]

Preproposal statement of inquiry was filed as WSR 25-06-059.

Title of Rule and Other Identifying Information: WAC 326-20-048 Presumption of disadvantage, and 326-20-088 LGBTQ[+] certification program.

Hearing Location(s): On May 29, 2025, at 10:00 a.m., virtually at https://bit.ly/LGBTQ-certification-hearing.

Date of Intended Adoption: July 1, 2025.

Submit Written Comments to: Julie Bracken, 1110 Capitol Way South, Suite 150, Olympia, WA, email rules@omwbe.wa.gov, fax 360-586-7070, beginning the date and time of this filing, by May 27, 2025.

Assistance for Persons with Disabilities: Contact Tim Kenney, 1110 Capitol Way South, Suite 150, Olympia, WA, fax 360-586-7079, email Tim.Kenney@omwbe.wa.gov, by May 27, 2025.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The office of minority and women's business enterprises (OMWBE) proposes to amend WAC 326-20-048 to include LGBTQ[+] individuals as presumptively socially disadvantaged. This will provide rule clarity and ensure qualifications, procedures, and guidelines for determining eligibility for the LGBTQ[+] certification are aligned with OMWBE's portfolio of programs ensuring balance and equity.

OMWBE proposes to adopt WAC 326-20-088 to implement the LGBTQ[+] certification program in accordance with SB [ESSB] 5950.

Reasons Supporting Proposal: Current rules do not include LGBTQ[+] individuals as part of the presumptive disadvantage group despite documented evidence of systemic discrimination and barriers faced by this community. This exclusion creates inequitable access to contracting and other revenue driven opportunities and perpetuates existing disparities. The proposed rule amendment seeks to address this inequity by:


•	Recognizing the historical and ongoing discrimination faced by LGBTQ+ individuals;
•	Providing equal opportunity and access to contracting and other revenue generating opportunities;
•	Promoting inclusivity and diversity within state and federal bidding process;
•	Aligning with the evolving landscape of social disadvantage; and
•	Addressing disparities that exist within state and federal contracting processes and opportunities.

Statutory Authority for Adoption: The proposed rule amendment is made possible through the authority granted to the OMWBE director by RCW 39.19.030 and WAC 326-02-010.

Rule is not necessitated by federal law, federal or state court decision.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: OMWBE intends to follow the state procedures for rule change/amendment, inclusive of public hearings and incorporation of comments.

Name of Proponent: OMWBE, governmental.

Name of Agency Personnel Responsible for Drafting, Implementation, and Enforcement: Phyllis Martin, 1110 Capitol Way South, Suite 150, Olympia, WA, 360-664-9750.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. A cost-benefit analysis is not required under RCW 34.05.328 because the subject of proposed amendment does not qualify as a significant legislative amendment/rule requiring a cost benefit analysis.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(3) as the rules relate only to internal governmental operations that are not subject to violation by a nongovernment party.

Scope of exemption for rule proposal:

Public Records Officer

AMENDATORY SECTION(Amending WSR 25-01-023, filed 12/6/24, effective 1/6/25)

WAC 326-20-048Presumption of disadvantage.

(1) Social disadvantage. The agency rebuttably presumes the following persons are socially disadvantaged individuals for the purposes of certification, consistent with 49 C.F.R. Section 26.67: Women; persons who are Black/African American, Hispanic/Latino, Native American, Asian, Pacific Islander, Native Hawaiian, and Alaska Native; and other minorities found disadvantaged by the small business association. Additionally, the agency rebuttably presumes that LGBTQ+ individuals are socially disadvantaged individuals for the purposes of certification.

(2) Each presumptively socially disadvantaged applicant must submit a signed declaration of eligibility (DOE), as provided by the office, that they are socially and economically disadvantaged.

(3)(a) Economic disadvantage. Each owner of a firm applying for state certification must sign a declaration that they have a personal net worth that does not exceed $2,047,000, per WAC 326-20-049. The office will adjust the personal net worth cap routinely.

(b) Rebuttal of economic disadvantage. If the statement of personal net worth that an individual submits under this section shows that the individual's personal net worth exceeds $2,047,000 or a reasonable person would not consider the person economically disadvantaged, the individual's economic disadvantage is rebutted, and the individual is not deemed to be economically disadvantaged. Such an individual is no longer eligible to participate in the program and cannot regain eligibility by making an individual showing of disadvantage. The office is not required to have a proceeding under this section to rebut the presumption of economic disadvantage in this case.

(4) Individual determinations of social and economic disadvantage. Firms owned and controlled by individuals who are not presumed to be socially and economically disadvantaged may apply for Socially and Economically Disadvantaged Business Enterprise (SEDBE) certification. The office makes a case-by-case determination of whether each individual whose ownership and control are relied upon for SEDBE certification is socially and economically disadvantaged. In such a proceeding, the applicant firm has the burden of demonstrating to the office, 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 $2,047,000 shall not be deemed to be economically disadvantaged. In making these determinations, the office uses WAC 326-20-046 and 326-20-047. The office requires that applicants provide sufficient information to permit determinations under WAC 326-20-046 and 326-20-047.

WAC 326-20-088LGBTQ+ enterprises.

(1) To foster small business participation, and in an attempt to promote equity in state contracting while further recognizing the protected class status of LGBTQ+, an LGBTQ+ certification program is created.

(2) LGBTQ+ enterprise certification program will require all other criteria included in state certification programs, including social disadvantage, economic disadvantage, ownership, control, and business size.

(3) Whenever issues arise regarding eligibility based on personal net worth, business size, ownership, and control which cannot be resolved by reference to these regulations, 49 C.F.R. Part 26 shall provide guidance to resolve such issues.