Section%203%20Overview,%20Section%203%20Business%20Registry,%20and%20Reporting%20System

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Section 3 Overview, Section 3 Business Registry,
and Reporting System
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What is Section 3

• Section 3 of the Housing and Urban Development
  Act of 1968 ensures that employment, training and
  contracting generated by certain HUD financial
  assistance shall, to the greatest extent
  feasible, be directed to low- and very low-income
  personsand to business concerns which provide
  economic opportunities to (those) persons.
• 24 CFR 135

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Section 3 and its connection to HUD funding

• HUD funds are one of the largest sources of
  federal investment in distressed communities
• HUD funds typically result in new employment,
  training, and contracting opportunities
• Section 3 is designed to direct HUD-funded
  economic opportunities to local low-income
  residents.

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Section 3

• More than 5,000 recipients.
• 40 of HUDs annual budget.
• Between 2009-2012 190,000 new jobs created
  almost half 93,400 section 3 residents.
• FY 2013 expenditures of HUD generated
  approximately 61,600 new jobs, nearly 27,200
  (44) went to Section 3 residents.
• FY 2013 more than 5,600 Section 3 businesses
  received construction related contracts for
  883.4 million.

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What programs are covered?

• Section 3 applies to HUD funded Public and Indian
  Housing Assistance for development, operating,
  and modernization expenditures. Covered projects
  can also include lead based paint abatement.
• Section 3 also applies to certain HUD funded
  Housing and Community Development projects that
  complete housing rehabilitation, housing
  construction, and other public construction.
• U.S. Department of Housing and Urban Development

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PHA Recipient and Contractor Responsibilities

• No dollar amount thresholds for Public and Indian
  Housing Authority Section 3 covered assisted
  projects.
• Since PHAs do not have thresholds, the
  requirements of Section 3 apply to all Section 3
  covered PHA projects regardless of the amount of
  assistance provided.
• The Section 3 requirements also apply to all
  contractors and subcontractors performing work in
  connection with Section 3.

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Thresholds for Community Development Assistance

• Section 3 applies when recipients receive more
  than 200,000 combined from all sources in any
  one year. Section 3 covers the expenditures of
  any portion of those funds for any activity that
  involves housing construction, rehab and public
  construction.
• Thresholds for Contractors and Subcontractors
  performing work on Section 3 covered projects.
  Contracts over 100,000 the recipient can make
  the contractor and sub-contractor responsible for
  Section 3 requirements.
• Recipients still responsible for Section 3
  requirements on Section 3 covered projects even
  if there isnt a contracts over 100,000.

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State and Counties

• State and counties that distribute funds to other
  units of local government must attempt to achieve
  compliance regardless of the number of
  sub-recipients receiving covered funding.

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State and Counties

• Inform sub-recipients of covered funding about
  their obligations
• Assist with their compliance and
• Monitor their performance and the performance of
  their covered contractors.

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Intended Beneficiaries

• SECTION 3 RESIDENTS
• Public Housing residents.
• Low- or very low-income persons residing in
  metropolitan area or non-metropolitan county
  where Section 3 covered assistance expended.
• 80 of area median income.

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Utah Incomes

• State of Utah
• 80 family of 4 55,200
• 50 family of 4 34,500
• Salt Lake County MSA
• 80 family of 4 59,050
• 50 family of 4 36,900

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Intended Beneficiaries

• SECTION 3 BUSINESSES
• 51 or more owned by Section 3 Residents or
• Substantially employs (30 or more) Section 3
  residents or
• Can provide evidence of a commitment to award 25
  of dollar amount of subcontracts to businesses in
  categories 1 2 above.
• Section 3 residents and businesses must meet the
  qualifications for the job or contract they are
  seeking.

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Minimum Numerical Goals

• 30 of new hires
• 10 of the dollar amount of Construction
  Contracts
• 3 of the dollar amount of Non-Construction
  Contracts
• Section 3 regulations do not require hiring or
  subcontracting unless it is necessary to complete
  the project.

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To the Greatest Extent Feasible

• Grantees and their developers/contractors must
  make every effort to recruit, target, and direct
  economic opportunities to Section 3 residents and
  businesses.
• Affirmative/Proactive measurese.g., more than
  advertising in local newspapers.

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Section 3 Proposed Rule

• No news on when new rule will be implemented.
• New Rule needed since operating under Interim
  Rule since 1994.
• Clarification needed regarding obligations of
  PHAs and other grantees.
• Incorporate new HUD programs created since
  publication of current regulation.
• Codify best practices of successful employment
  and contracting opportunities.

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New Tool to Assist with Compliance

• Notify Covered developers/contractors about
  Section 3 opportunities.
• By Using the National Section 3 Registry.

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Section 3 Business Registry

• National Section 3 Registry online system that
  allow businesses to self-certify that they meet
  one of the definitions of Section 3 business.
• Registry facilitates the notification of HUD
  funded contracts to eligible firms.
• Can use preference for Section 3 businesses.

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Added benefits

• Reduce Administrative burdens for those
  recipients that had own procedures for locating
  businesses.
• Provide uniform self-certification procedures.
• Increase pool of Section 3 businesses that may
  submit bids for HUD funded contracts.
• Assist in meeting goals by increasing HUD funded
  contracts awarded to Section 3 Businesses.

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• Section 3 National Registry
• How Does it Work?

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Section 3 Business Registry
www.hud.gov/sec3biz
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Section 3 Reporting SystemSPEARS

• SPEARS Section 3 Performance and Registry
  System.
• New system to submit Section 3 reports the HUD
  60002 form.
• Must submit electronically.
• Requires registration in HUDs Web Access Secure
  System (WASS).
• New system interfaces with LOCCS

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SPEARS System

• 2013 and 2014 were due by December 15, 2015.
• Depending on Fiscal or Reporting Year 2015
  reports may be due now.
• Disbursement Entity Agency and Amount displayed
  first.
• Report similar to previous system. Section 1
  information on new hires. Section 2
  Contracting and Section 3 Summary of efforts to
  comply.
• Reports submitted for each program area, i.e.
  operation, modernization and development.

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Update to SPEARS System

• System no longer uses program codes but will list
  program areas.
• Agencies that do not need to report on a
  particular program can answer no to two questions
  and scroll to bottom report and click submit.
• Transaction button which will show all
  disbursements from LOCCS from each Program funded.

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Update to SPEARS System Cont.

• Grantees can now save and print reports.
• New reports will show if met all the 3 goals, if
  dont meet all 3 goals will not be able to submit
  report without providing information why didnt
  meet the goals.
• Reports locked from edits 72 hours after
  submitting. Can request reports to be unlocked
  from the system. Click on unlock icon. Follow
  instructions to email 60002questions_at_hud.gov
• Need assistance email 60002questions_at_hud.gov

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QUESTIONS

• For more information contact
• Michele Hutchins, Equal Opportunity Specialist
• Office of Fair Housing Equal Opportunity
• Utah State HUD Office
• 125 S. State Street, Room 3001
• Salt Lake City, UT 84138
• [phone]-Direct line
• [phone]-TDD line
• email michele.hutchins_at_hud.gov