As part of the mandatory recertification of all Disadvantaged Business Enterprises (DBE) and Airport Concession DBEs (ACDBE), all disadvantaged owners must submit a new personal net worth statement (in addition to the personal narrative). Here are five tips to make that process move smoothly and reduce or eliminate follow up questions or scrutiny involving your personal net worth (PNW) statement.
1. Make Sure to Use the Current PNW Form
As part of the revamping of the DBE/ACDBE regulations in 2024, the USDOT issued a new personal net worth form. If you do not use the current form, it is likely that your recertification paperwork will be returned to you. Also, the new PNW form accounts for the latest calculation rules that are advantageous to you. For example, while you have to provide information about your retirement accounts in worksheet 13, those funds no longer count towards your PNW calculation.
2. Do Not Use Your Old PNW Statement
Several clients have asked if they can just resubmit their most recently submitted PNW statement- they may have gone through a certification review a few months ago. Unfortunately, every disadvantaged owner must submit a new PNW statement as part of the recertification process, and it must be current as of when it is submitted.
You can use your prior PNW as a starting point, but you will need to update your balances.
3. Make Sure to Properly Categorize Your Assets
As noted above, qualified requirement accounts no longer count towards your PNW calculation. However, I have noticed many clients listing their retirement accounts in worksheet 2 (investment accounts and individual securities) and including them in their personal net worth calculation. This is not the proper place to list retirement accounts- they are to be provided in worksheet 13 and should not be included in your calculation. You still have to list them for informational purposes, but they do not count towards the $2.047 million limit.
4. Include Supporting Documents
Certifiers have emphasized that disadvantaged owners should include supporting documentation for their PNW statements. A straightforward way of doing that is to include your most recent bank statements, Zillow estimates (for real estate value), or other proof of the amounts that you list.
5. Be Careful How You List Joint Assets
For an asset that you hold jointly with someone else (whether that is a spouse, sibling, or other individual), you should indicate that the asset is held jointly, the percentage that you own, and then list that percentage of the value. For instance, if you have a joint account with a spouse that has a $100,000 balance, you should list it as XYZ Bank Checking Account- Joint w/Spouse – 50% and then list $50,000 towards your personal net worth calculation. If you own a piece of real estate with two siblings (each of you holding a 1/3 ownership) valued at $300,000, you will say: “245 Main Street, jointly owned with Sally Smith and Susan Smith, 1/3 ownership” and list your portion of the value as $100,000.
Completing the personal net worth statement can be tricky. Consider working with a knowledgeable attorney or accountant to ensure that you list everything correctly.
If your company needs assistance with DBE or ACDBE certification or recertification (including drafting your personal narrative), please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.
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