I have had the occasion to officiate for a JV coach in a wheelchair on numerous occasions. He also has coach AAU. Had problems with the AC in one game on the other team. Told that he would need to stay seated, he started whining about back problems. I glanced over to the other bench, and he shut up. He later got a T, though.
Obviously the concern of the officials may have been "What about the other team's AC?" To that I would probably address that in the pre-game and get the opponents on the same page. "The AC will stand in order to request timeouts. Do you have an issue with that?" All other coaching duties can remain with the HC in the wheelchair. That is what 2-3 is for. Nowhere in the rules is there something that deals with a HC confined to a wheelchair. Too bad it had to come to a ruling issued by the state when common sense could have prevailed.
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