[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Notices]
[Page 69219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22183]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6429-N-01]


Section 3 Benchmarks for Creating Economic Opportunities for Low- 
and Very Low-Income Persons and Eligible Businesses

AGENCY: Office of the Assistant Deputy Secretary for Field Policy and 
Management, HUD.

ACTION: Notification of benchmarks.

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SUMMARY: HUD's regulations require that HUD set Section 3 benchmarks by 
publishing a notification, subject to public comment, in the Federal 
Register and update the benchmarks no less frequently than once every 
three years by the same method of notification. This notice updates the 
2020 version of the benchmark notice and requests public comment about 
the Section 3 benchmark goals.

DATES: Effective Date: November 6, 2023.

FOR FURTHER INFORMATION CONTACT: Nathan Roush, Program Analyst, Office 
of Field Policy and Management, Department of Housing and Urban 
Development, Five Points Plaza, 40 Marietta St NW, Atlanta, GA 30303, 
telephone number 678-732-2045 (this is not a toll-free number). General 
email inquiries regarding Section 3 may be sent to [email protected]. 
HUD welcomes and is prepared to receive calls from individuals who are 
deaf or hard of hearing, as well as individuals with speech or 
communication disabilities. To learn more about how to make an 
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 3 of the Housing and Urban Development Act of 1968, as 
amended by the Housing and Community Development Act of 1992 (Section 
3), contributes to the establishment of stronger, more sustainable 
communities by ensuring that employment and other economic 
opportunities generated by Federal financial assistance for housing and 
community development programs are, to the greatest extent feasible, 
directed toward low- and very low-income persons, particularly those 
who are recipients of government assistance for housing. HUD is 
statutorily charged with the authority and responsibility to implement 
and enforce Section 3 through regulation, which HUD has done through 
the publication of the Section 3 final rule, titled ``Enhancing and 
Streamlining the Implementation of Section 3 Requirements for Creating 
Economic Opportunities for Low- and Very Low-Income Persons and 
Eligible Businesses,'' 85 FR 61524 (``HUD's Section 3 Final Rule''). 
This final rule is codified in 24 CFR part 75.
    HUD's Section 3 regulations require the establishment of Section 3 
benchmarks for Section 3 workers and Targeted Section 3 workers through 
a document published in the Federal Register. 24 CFR 75.13(b) and 
75.23(b). Consistent with these requirements, HUD published a benchmark 
notice in the Federal Register on September 29, 2020, titled ``Section 
3 Benchmarks for Creating Economic Opportunities for Low- and Very Low-
Income Persons and Eligible Businesses,'' 85 FR 60907. HUD's Section 3 
regulations also require HUD to update the benchmarks through a 
document published in the Federal Register, subject to public comment, 
not less frequently than once every three years. 24 CFR 75.13(b)(1) and 
75.23(b)(1).

II. Section 3 Benchmarks

    HUD's Section 3 regulations require that in altering and updating 
the established benchmark goals, HUD must consider Section 3 labor hour 
data collected during the prior three-year period. 24 CFR 75.13(b)(1) 
and 75.23(b)(1). After evaluation and consideration of the data 
collected to date, HUD has determined that the available data is not a 
sufficiently representative sample to support the alteration of the 
current published benchmark goals or publication of aggregate labor 
hour data. Therefore, the benchmark goals will continue to be the 
ratios established in the original Section 3 benchmark notice published 
September 29, 2020, and HUD will continue to support the labor hour 
goal methodology contained therein.
    HUD considered a number of factors in making this decision. Despite 
being published on September 29, 2020, HUD's Section 3 final rule did 
not go into effect until November 30, 2020, and compliance only began 
to be required for activities and projects funded on or after July 1, 
2021. This means that activities and projects funded prior to July 1, 
2021, were not required to report labor hours under 24 CFR part 75, 
which does not give HUD a full three years of data to review. 
Additionally, the count of labor hours and evaluation of achievement of 
benchmark goals are not determined until an activity or project is 
completed. Given the varying duration of construction projects, a 
number of larger Section 3 projects--those with higher numbers of labor 
hours--funded after July 1, 2021, have not yet completed construction 
and therefore have not reported final labor hours for Section 3 workers 
or Targeted Section 3 workers. These factors, among others, have 
contributed to initial reports containing limited data on a small 
subset of projects, which HUD believes does not create a large- or 
representative-enough sample of data to merit a change to the existing 
benchmarks or publication of aggregate data on labor hours and the 
proportion of recipients meeting benchmarks.
    While HUD has decided not to change the benchmark goals for Public 
Housing Financial Assistance and Section 3 Projects, HUD would like to 
solicit public comment on any matters related to this notice, 
generally, but specifically on the experience of grantees, contractors, 
and other stakeholders in achieving the existing benchmark goals along 
with any challenges faced or recommendations for appropriate benchmarks 
for future updates. HUD will not be issuing a second notice regarding 
the current Section 3 benchmarks unless the comments provide HUD with a 
basis for making revisions to the benchmarks.
    HUD will publish another notice to update Section 3 benchmarks no 
later than three years after the publication of this notice, as 
required by HUD's Section 3 regulations.

Michele Perez,
Assistant Deputy Secretary for Field Policy and Management.
[FR Doc. 2023-22183 Filed 10-4-23; 8:45 am]
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