Attachment_D_-_Section_3_Information.pdf

County of Volusia Community Assistance

121 W. Rich Avenue DeLand, FL 32720

Section 3 Information What is Section 3?

Section 3 is a provision of the Housing and Urban Development Act of 1968. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State and local laws and regulations, be directed to low- and very low income persons; particularly those who are recipients of government assistance for housing or residents of the community in which the Federal assistance is provided.

What is a Section 3 Business Concern?

A business concern meeting at least one of the following criteria, documented within the last six-month period:

• Owned and controlled by at least 51% low- or very low-income persons;

• Over 75% of the labor hours performed for the business over the prior three-month period performed by Section 3 workers;

• Owned and controlled by at least 51% current public housing residents or residents currently living in Section-8 assisted housing What is a Section 3 Worker?

A Section 3 worker is any worker who currently fits, or if hired on or after 11/30/20 fit, one the following categories, as documented:

• A worker whose annual income is at or below the 80% income limit as established by HUD

• A worker employed by a documented Section 3 Business Concern

• A worker that is a YouthBuild participant

What is a Targeted Section 3 Worker?

For Community Development funded projects, a Targeted Section 3 worker is:

• A worker employed by a documented Section 3 Business Concern; or

• A worker who currently fits, or if hired on or after 11/30/20 fit, one the following categories, as documented:

o A worker living within the service area of the project, as defined at §75.5; or o A worker that is a YouthBuild participant

Are there contract provisions related to Section 3?

Yes; all contracts for Section 3 covered projects must include language applying Section 3 requirements to any subrecipient agreement or contract for a Section 3 project. Sub-recipients, contractors and subcontractors for a Section 3 project must meet the requirements of §75.19, regardless of whether Section 3 language is included in related agreements or contracts.

What information is required for Section 3 Reporting?

For Community Development funded projects, the following may be required:

• Section 3 Business Concern Certification

• Section 3 Project Workforce form

• Section 3 Certification form, when applicable

• Supporting documents for those claiming status as of Section 3 Business Concerns, Section 3

Worker, and/or Section 3 Targeted Worker

• Any other information requested by Volusia County to ensure Section 3 compliance

What is a Section 3 project?

Section 3 projects are housing rehabilitation, housing construction, and other public construction projects assisted under HUD programs that provide housing and community development financial assistance when the total amount of assistance to the project exceeds $200,000 of housing and community development financial assistance. If the $200,000 threshold is met the entire project must be compliant with the Section 3 provisions.

What are the required thresholds for section 3 projects?

• Twenty-five (25) percent or more of the total number of labor hours worked by all workers on a Section 3 project are Section 3 workers; (Section 3 Labor Hours/Total Labor Hours = 25%)

AND

• Five (5) percent or more of the total number of labor hours worked by all workers on a Section 3 project are Targeted Section 3 workers, as defined at 24 CFR Part 75.21. (Targeted Section 3 Labor Hours/Total Labor Hours = 5%)

What are the requirements of Prime Contractors for Section 3 projects?

• Contractors are required to submit monthly activity reports to CDBG by the 10th of each month o These reports may be in the form of a letter, signed and on company letterhead o The report should include, Explanation of all efforts made to meet the required thresholds (see below for examples)

Total labor hours for Section 3 workers and Targeted Section 3 workers for the preceding month

Estimate of Section 3 thresholds at the end of the project (is the project expected to meet the required thresholds as defined? If yes, what is the estimated percentage? If no, what is the estimated percentage and what efforts are being made to increase it?

Section 3 Labor Hours Tracking Form (template will be provided)

• Once the project is completed, prime contractors must submit a final Section 3 cumulative report

• All efforts to find section 3 employees must be documented. Some example methods are, o Outreach, marketing materials, and communications (Ex: flyers, emails, text marketing messages, bill inserts, door hangers, social media, website) o Promoting resident interest in opportunities (Ex: flyers, interest forms, workshop attendance records) o Efforts made to coordinate with partner agencies to refer residents to programs and services (Ex: number and types of referrals made, list of actions taken to coordinate with partners) o Resident placement into Section 3-related training or employment opportunities (Ex:

referral records, case management records) o Referrals made to employers for employment opportunities (Ex: referral records, emails, payroll records from contractors) o Engaging in outreach efforts to generate job applicants who are Targeted Section 3 workers (Ex: flyers, emails, text marketing messages, bill inserts, door hangers, social media, website) o Providing training or apprenticeship opportunities

County of Volusia Community Assistance

121 W. Rich Avenue DeLand, FL 32720

Section 3 Project Requirements