Section_3_-_New_Definitions_and_Benchmarks.pdf

CITY OF TUCSON | Section 3 Benchmarks 7/1/2023

SECTION 3 NEW DEFINITIONS & BENCHMARKS

EFFECTIVE JULY 1, 2021

OVERVIEW OF TITLE 24 CFR Part 75

• New definitions for Section 3 Workers AND Business Concerns

• Income Limits - no longer include total household income for individuals to qualify, therefore many more employees should qualify as Section 3 Workers

• New benchmarks for compliance tracking labor hours

• Prioritization in hiring depending upon funding source (PHA vs. PCD)

NEW DEFINITIONS

A SECTION 3 WORKER is any resident who currently meets, or when hired (since Dec. 1, 2020) met at least one of the following criteria:

1. The worker’s individual income for the previous or annualized calendar year is at or below $45,500 (Income Limit effective 6/15/2023).

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

3. The worker is a YouthBuild participant.

A TARGETED SECTION 3 WORKER for Public Housing Projects is a Section 3 Worker who:

1. Is employed by a Section 3 Business concern, or

2. Who currently meets, or when hired (since Dec. 1, 2020) met at least one of the following:

a. Lives in HUD Public Housing or HUD Section 8-Assisted Housing

b. Lives in other Public Housing or Assisted Housing managed by the Public Housing Authority (PHA).

c. Is a YouthBuild participant

A TARGETED SECTION 3 WORKER for Planning and Community Development Projects is a Section 3 Worker who:

1. Is employed by a Section 3 Business concern, or

2. Who currently meets, or when hired (since Dec. 1, 2020) met at least one of the following:

a. Lives within the service area or the neighborhood of the project as defined in 24 CFR 75.5

b. A YouthBuild participant

A SECTION 3 BUSINESS CONCERN is a business concern which meets one of the below criteria, documented within the last six-month period:

1. The business is at least 51% owned and controlled by low-income residents of Tucson (each owner earns no more than $45,500 annually).

2. Over 75% of the labor hours performed over the past three-month period were performed by Section 3 workers.

3. The business is at least 51% owned and controlled by current residents of HUD public housing or HUD-assisted housing (Section 8 housing).

CITY OF TUCSON | Section 3 Benchmarks 7/1/2023

To be certified as a Section 3 Business Concern under one of the three options, this is what must be provided:

Section 3 Business Category Additional Required Data

1. It is at least 51 percent owned by low-income persons.

Proof of ownership showing all owners and their percentages and a completed Section 3 Individual Certification form for all low-income owners.

2. Over 75 percent of the labor hours performed for the business are performed by low-income persons.

Provide the last 90 days full payrolls for the entire company, make a list of the names from the payrolls of the Section 3 workers, and provide a completed Section 3 Individual Certification for all low-income workers you list.*

3. It is a business at least 51 percent owned by current public housing residents or residents who currently live in Section 8-assisted housing.

Proof of ownership showing all owners and their percentages and a Section 3 Individual Certification for all public housing and/or Section 8 owners

*If a business concern doesn’t have a time and attendance system in place, then a good-faith estimate will be accepted.

NEW BENCHMARKS

Contractors must report all labor hours worked, labor hours worked by Section 3 Workers, labor hours worked by Targeted Section 3 Workers, and new hires.

To be considered in compliance with Section 3:

• 25% or more of all labor hours worked must be performed by Section 3 Workers.

• 5% or more of all labor hours worked must be performed by Targeted Section 3 Workers (this is a subset of the 25% Section 3 Workers).

For example, if a project takes 1000 total labor hours to complete, then the benchmarks to be met are 250 labor hours (25%) are worked by Section 3 Workers, and 50 labor hours (5%) are worked by Targeted Section 3 Workers.

To calculate, divide the total labor hours worked by Sec 3 Workers by the total number of labor hours worked by all workers to see if the 25% benchmark has been met. To calculate for Targeted Section 3 Workers, divide the total of all labor hours worked by Targeted Workers by the total number of labor hours worked by all workers to see if the 5% benchmark has been met.

JOB OPPORTUNITIES

If the need to hire presents itself there is a HUD-required prioritization of effort, to the greatest extent feasible, to hire/subcontract according to 24 CFR 75.9 for PHA (Public Housing Authority) projects, and according to 24 CFR 75.19 for PCD (Planning & Community Development) projects. Please refer to these regulations for further detail.

DISCLAIMER: This document is a brief overview of the main changes regarding the new Section 3 regulations;

it is NOT comprehensive. Please review the complete regulations at 24 CFR Part 75.