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Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities

Section 3 Compliance Resources

Some valuable resources cost nothing and can actually save time and money. State, federal, and local jurisdictions support networks of institutions that provide training, job listing, job referrals, applicant matching, and small business counseling. In many cases, the services they offer cost nothing to clients because government programs pay for them. Find links below to Texas Workforce Commission and Small Business Development Centers.

“Greatest Extent Feasible”

Recipients and Section 3 covered contractors (review “Definitions”) may demonstrate compliance with the “greatest extent feasible” requirement of Section 3 by meeting the numerical goals set forth in 24 CFR §135.30 for providing training, employment, and contracting opportunities to Section 3 residents and section 3 business concerns (“Did you know?” box on HUD Section 3 page). Obligations outlined in 24 CFR §135.32, “Responsibilities of the recipient,” identify implementation procedures expected of contract awardees, including subrecipients and contractors. HUD and TDHCA recognize the limitations of local labor markets as well as existing federal and state procurement standards (24 CFR §85.36 - HUD.gov). [Sub]recipients and contractors would document these limitations as well as the strategies attempted and available resources investigated in the event that they could not meet minimum numerical goals for hiring and contracting (visit the Obligations page, for minimum numerical targets).

Certifications for Residents and Businesses

In accordance with 24 CFR 135, residents and business concerns seeking Section 3 preference shall certify, and submit supporting evidence to the subrecipient, contractor, or subcontractor to verify that they meet the qualifications for Section 3 preference. For persons hired or businesses contracted, subrecipients will keep certification documents on file.

Subrecipients can use their discretion for determining the type of verification required of prospective Section 3 residents and business concerns. Some examples include: proof of residency in a public housing authority (copy of lease); evidence of participation in a public assistance program (proof of federal subsidies for housing, food stamps, or unemployment benefits); payroll data; or other relevant business information. Required Section 3 Certification forms list the necessary supporting documents. Visit the Section 3 Forms page for the Resident and Business Certification forms.

Business Registry (HUD, Nation-wide) Explanation, Register a Business, Find a Business

HUD’s Suggestions to Comply with Obligations

For [sub]recipients, contractors, and subcontractors with questions about what types of activities they may undertake to ensure compliance with Section 3, HUD has provided suggestions in an appendix to the regulations at 24 CFR part 135. Find the following paragraphs in the Appendix to Part 135 (Code of Federal Regulations site).

  • Examples of Efforts to Offer Training and Employment Opportunities to Section 3 Residents
  • Examples of Efforts to Award Contracts to Section 3 Business Concerns
  • Examples of Procurement Procedures That Provide for Preference for Section 3 Business Concerns

CPD Grantee Monitoring Handbook, Chapter 22 FAIR HOUSING AND EQUAL OPPORTUNITY (FHEO), EXHIBIT 22-7 Guide for Review of Section 3 of the Housing and Urban Development Act of 1968 (HUD.gov)

Resources for Recruiting & Outreach to Section 3 Residents and Businesses (other economic opportunities)

Section 3 encourages businesses and trade unions to collaborate with local community colleges and technical schools to develop curricula and conduct training that improves the abilities of their workforce to meet local business needs.

  • Texas Workforce Commission’s Skills Development Fund supports the development and implementation of customized job-training projects. A private for-profit business, business consortium, or trade union identifies training that employees need, and then partners with a public community or technical college, or the Texas Engineering Extension Service (TEEX). The Skills Development Fund pays for the training and the college administers the grant using training methods that best accommodate the business, such as classroom, simulation, on-site, hands-on, and online instruction. Customized training through state-funded Skills grants ensures existing workers receive training to upgrade their skills and new employees gain proficiency in industry skill standards. For more information on the Skills Development Fund, including Frequently Asked Questions, visit http://skills.texasworkforce.org.
    • Contact the Workforce Business Services Development Team toll free at (877) 463-1777 or email Skills@twc.state.tx.us to discuss your project. An experienced team of Workforce Business Services professionals provides consultation and technical assistance to connect businesses, colleges, and workforce boards.
  • Local Workforce Development Boards (affiliated with Texas Workforce Commission)
    Workforce Development Boards, that oversee the Local Workforce Solutions Offices, can help project owners and developers to meet Section 3 requirements for notifying eligible Section 3 residents about employment and training opportunities associated with your construction, rehabilitation, or demolition project. Find your local Workforce Solutions Office here:
    http://www.twc.state.tx.us/dirs/wdbs/wdbweb.html
    • Contact the Business Services Unit of the local Workforce Development Board that serves your project area. Talk with them to find out what services they can offer. Let them know that you want to satisfy HUD Section 3 Obligations (24 CFR 135) and make the greatest feasible effort to reach out to low-income residents in the project service area. Ask if and how your project might qualify for employer incentives.
  • Small Business Development Centers (affiliated with Small Business Administration)
    This network provides counseling and training to small businesses that might need help discovering and obtaining all the qualifications necessary to successfully bid on contracts funded by government programs. Housing developers and subrecipients can use the SBDC client network to find contractors certified as Section 3 businesses. Contractors and subcontractors can work with SBDC business and contracting counselors to get certified as Section 3 businesses. Anyone can certify themselves as a Section 3 business but TDHCA subrecipients and housing developers cannot contract with anyone who does not meet essential business qualifications for doing work under a government-funded contract. SBDC counselors guide businesses to meet these qualifications. The following networks cover the entire state of Texas. Contact the center that serves the county in which your project or business resides. Ask to speak with a small business contracting advisor.
  • Minority Business Development Agency (affiliated with U.S. Department of Commerce)
  • Texas Comptroller, Centralized Master Bidders List
    http://www.window.state.tx.us/procurement/prog/hub/searching_cmbl.html
  • YouthBuild U.S.A. Find a YouthBuild Program | www.youthbuild.org
  • Public Housing Authorities operating in project county
     http://www.hud.gov/offices/pih/pha/contacts/states/tx.cfm
  • Texas Association of Community Action Agencies:  http://www.tacaa.org/
  • Section 8 Housing Assistance Providers:  (Contact program staff for resources if needed.) http://www.tdhca.state.tx.us/section-8/
  • Chamber of Commerce
  • Urban League, project area committee, or citizen advisory board
  • Local advertising media, including public signage
  • Local HUD program official, or other appropriate referral sources

If you have any questions, please email hudsection3@tdhca.state.tx.us or contact TDHCA Program Services staff.