CDBG Section 3 Requirements

Community Development Block Grant (CDBG)

SECTION 3 COMPLIANCE

Steps for Compliance

1. Contractors must submit the Section 3 Intent to Comply with all bid documents.

2. Contractors must Include section 3 language in all advertisements for RFQ/RFP and bid documents when soliciting subcontractors.

3. When soliciting subcontractors and hiring, Contractors should check HUD registry for

Section 3 businesses located in the County in which the project is taking place:

https://portalapps.hud.gov/Sec3BusReg/BRegistry/What. Check PennDOT Disadvantaged Business Registry (https://paucp.dbesystem.com/) for potential bidders within the service area and share CDBG bid opportunities with those businesses. Keep documentation of any correspondence with Section 3 businesses.

4. Contractors will post any employment opportunities with local WIOA agency, workforce development programs, public housing authorities, and HUD’s Opportunity Portal. Also, post employment notice in a conspicuous place on the job site. Check the Opportunity Portal for Section 3 Workers when filling open employment opportunities.

5. Contractors will attend all pre-bid and pre-construction meetings to fully understand Section 3 requirements and responsibilities.

6. At the time the recipient and contractor enter an agreement, identify if any employment/training opportunities will result from the CDBG funded project.

7. Contractors will record all labor hours worked on a project by all workers, regardless of Section 3 status. Use of the Contractor’s report can help track Section 3 labor hours.

Contractors should keep track of all new hires and their income or wage rate at time of hire.

8. Utilize sample outreach efforts when hiring new employees to maximize reach to potential Section 3 Workers.

9. Use data collected on the Contractor’s Report to report Section 3 efforts and accomplishments to grantee on a per-project basis.

10. Collect Section 3 Worker Self-Certification and supporting documentation from each employee.

11. Complete Employer Certification for each Section 3 Worker identified.

12. Keep documentation of all Worker, Employer and Business Certifications, as well as outreach efforts to Section 3 Businesses and Section 3 Workers, on file for project monitoring.

https://portalapps.hud.gov/Sec3BusReg/BRegistry/What https://paucp.dbesystem.com/

Section 3 Requirements for Contractors

The goal is that 25% of all work hours on the job be performed by employees designated as Section 3:

A Section 3 worker is any worker who currently fits, or when hired within the past five years fit, at least one of the following categories, as documented:

1. The worker’s income for the previous or annualized calendar year is below the income limit established by HUD;

2. The worker is employed by a Section 3 business concern; or

3. The worker is a YouthBuild participant.

There is a 5% goal (part of the 25% goal) specifically for hirees within the target area

A Section 3 Targeted worker for Housing and Community Development Financial Assistance projects is a Section 3 worker who:

1. is employed by a Section 3 business concern; or

2. currently fits or when hired fit at least one of the following categories, as documented within the past five years:

a. Living within the service area or the neighborhood of the project, (Service area or the neighborhood of the project means an area within one mile of the Section 3 project or, if fewer than 5,000 people live within one mile of a Section 3 project, within a circle centered on the Section 3 project that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census);

or

b. A YouthBuild participant

A Section 3 business concern is a business that meets at least one of the following criteria, documented within the last six-month period:

1. At least 51 percent owned and controlled by low- or very low-income persons;

2. Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or

3. A business at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

Documentation:

For a worker to qualify as a Section 3 worker, one of the following must be maintained:

1. A worker’s self-certification that their income is below the income limit from the prior calendar year or was below the income limit prior to current employment;

2. A worker’s self-certification of participation in a means-tested program such as public housing or Section 8-assisted housing;

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=7f2c89e520a8a5add42a2eb248f34722&term_occur=999&term_src=Title:24:Subtitle:A:Part:75:Subpart:A:75.5 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=7f2c89e520a8a5add42a2eb248f34722&term_occur=999&term_src=Title:24:Subtitle:A:Part:75:Subpart:A:75.5 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=7f2c89e520a8a5add42a2eb248f34722&term_occur=999&term_src=Title:24:Subtitle:A:Part:75:Subpart:A:75.5

3. Certification from a PHA, or the owner or property manager of project-based Section 8- assisted housing, or the administrator of tenant-based Section 8-assisted housing that the worker is a participant in one of their programs;

4. An employer’s certification that the worker’s income from that employer is below the income limit when based on an employer’s calculation of what the worker’s wage rate would translate to if annualized on a full-time basis; or

5. An employer’s certification that the worker is employed by a Section 3 business concern

Targeted worker – (ii) and (iii) above including:

1. An employer’s confirmation that a worker’s residence is within one mile of the work site or, if fewer than 5,000 people live within one mile of a work site, within a circle centered on the work site that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census;

2. An employer’s certification that the worker is employed by a Section 3 business concern; or

3. A worker’s self-certification that the worker is a YouthBuild participant.

A Section 3 workers and Targeted Section 3 workers are eligible for five years from when their certification as a Section 3 worker or Targeted Section 3 worker is established.

How can I find Section 3 business concerns in my area?

Section 3 business concerns that have registered in the Section 3 Business Registry are also available at: https://portalapps.hud.gov/Sec3BusReg/BRegistry/BRegistryHome https://portalapps.hud.gov/Sec3BusReg/BRegistry/BRegistryHome

Worker Certification

A Section 3 Worker seeking preference in training and employment must certify by residency and household income. Please certify below and submit documentation of eligibility to the recipient contractor or subcontractor.

I, , am a legal resident of

(Worker Name) (Community Name)

☐ My household income was less than the limits as shown below (by household size) at the time of my current employment on (date)___________________ (must be within the last 5 years);

or ☐ My current household income is less than the limit shown below (by household size)

Please check below the size and income limit that apply to your household

Number in Household

Low Income Under 80% of Area Median Income

☐ 1 individual ☐ 2 individuals

☐ 3 individuals

☐ 4 individuals

☐ 5 individuals

☐ 6 individuals

☐ 7 individuals

☐ 8 individuals

My permanent address is:

I have attached the following Section 3 Worker documentation:

Copy of lease/mortgage or other acceptable verification indicating current address Copy of receipt of public housing or Section 8 assistance Copy of public assistance documentation Copy of annual income documentation Other:

I affirm that the information contained in this report, including the above statements, are true, complete, and correct to the best of my knowledge and belief. Any false statements made knowingly and willfully may subject the signer to penalties under Section 1010 of Title 18 of the United States Code.

Worker’s Signature Date

Employer’s Certification

On behalf of ____________________________ (name of company); I certify that the following workers qualify as Section 3 workers and/or Targeted Workers.

The worker’s income from that employer is below the income limit as shown below based on a calculation of what the worker’s wage rate would translate to if annualized on a full-time basis.

Name of Worker Annualized Income

(rate x 2,080 hours)

Targeted workers

(living within 1 mile of the job site)

I affirm that the information contained in this report, including the above statements, are true, complete, and correct to the best of my knowledge and belief. Any false statements made knowingly and willfully may subject the signer to penalties under Section 1010 of Title 18 of the United States Code.

Employer’s Signature Date

Section 3 Business Certification

To be completed by the business claiming Section 3 business status.

All contracts and subcontracts awarded on Section 3 covered projects must be reported in aggregate on the Section 3 Summary Report. For all businesses reported as being Section 3 Businesses, documentation of their status must be retained in the project files. IEDA considers this form adequate documentation of Section 3 status.

Projects that receive $200,000 or more in HUD funds are “Section 3 projects”. Contractors are required to report on all contracts they make both with Section 3 Businesses and with businesses that are not Section 3 Businesses.

This form is a tool to determine and document the Section 3 Business status. Documentation of the status of Section 3 Businesses should be retained in the project files.

Business being certified:

Company:

Address:

Project information:

Project Name:

Project Address:

Section 3 determination

1. Is your business owned (51% or more) by individuals whose household incomes are NO GREATER THAN 80% of Area Median Income (AMI)* OR by individuals that are current public housing residents or current residents of Section 8-assisted housing?

*Please reference http://iowaeconomicdevelopment/community/community/default.aspx (under recipient income and census information) to determine if employee is less than 80% of the current area median income.

( )Yes ( )No

2. Within the last three months, have 75% of all labor hours performed been performed by individuals whose household incomes are no greater than 80% of Area Median Income (AMI)?

( )Yes ( )No http://iowaeconomicdevelopment/community/community/default.aspx

If any of the questions above are marked “yes”, the business qualifies as a Section 3 business.

I certify that the above statements are true, complete, and correct to the best of my knowledge and belief.

Signature:

Print Name:

Date:

OUTREACH EFFORTS

Indicate the efforts made to direct the employment and other economic opportunities generated by HUD financial assistance for housing and community development programs, to the greatest extent feasible, toward low-and very low-income persons, particularly those who are recipients of government assistance for housing. (Check all that apply.)

☐ Attempted to recruit low-income residents through: local advertising media, signs prominently displayed at the project site, public housing units/common areas, contracts with the community organizations and public or private agencies operating within the metropolitan area (or nonmetropolitan county) in which the Section 3 covered program or project is located, or similar methods.

☐ Notified local HCV program voucher holders in the service area of opportunities for training and employment.

☐ Posted employment opportunities to the HUD Opportunity Portal

☐ Utilized Section 3 Business Registry to identify Section 3 Businesses and/or Workers in the project’s service area

☐ Referred Section 3 workers to employment organizations (including One Stops) and programs that offer resume building, interview preparation, job search and placement, financial literacy or other services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, child care).

☐ Conducted job interviews at the housing development or developments where Section 3 workers reside, or at a location within the neighborhood or service area of the section 3 project.

☐ Contacted agencies administering HUD Youthbuild programs, and requesting their assistance in recruiting HUD Youthbuild program participants for any training and employment opportunities.

☐ Held one or more job fairs targeting Section 3 Workers

I affirm that the information contained in this report, including the above statements, are true, complete, and correct to the best of my knowledge and belief. Any false statements made knowingly and willfully may subject the signer to penalties under Section 1010 of Title 18 of the United States Code.

Contractor Signature:

Date: