[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR135.38]

[Page 736]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
    CHAPTER I--OFFICE OF ASSISTANT SECRETARY FOR EQUAL OPPORTUNITY, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 135_ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME
 
 Subpart B_Economic Opportunities for Section 3 Residents and Section 3 
                            Business Concerns
 
Sec.  135.38  Section 3 clause.

    All section 3 covered contracts shall include the following clause 
(referred to as the section 3 clause):

    A. The work to be performed under this contract is subject to the 
requirements of section 3 of the Housing and Urban Development Act of 
1968, as amended, 12 U.S.C. 1701u (section 3). The purpose of section 3 
is to ensure that employment and other economic opportunities generated 
by HUD assistance or HUD-assisted projects covered by section 3, shall, 
to the greatest extent feasible, be directed to low- and very low-income 
persons, particularly persons who are recipients of HUD assistance for 
housing.
    B. The parties to this contract agree to comply with HUD's 
regulations in 24 CFR part 135, which implement section 3. As evidenced 
by their execution of this contract, the parties to this contract 
certify that they are under no contractual or other impediment that 
would prevent them from complying with the part 135 regulations.
    C. The contractor agrees to send to each labor organization or 
representative of workers with which the contractor has a collective 
bargaining agreement or other understanding, if any, a notice advising 
the labor organization or workers' representative of the contractor's 
commitments under this section 3 clause, and will post copies of the 
notice in conspicuous places at the work site where both employees and 
applicants for training and employment positions can see the notice. The 
notice shall describe the section 3 preference, shall set forth minimum 
number and job titles subject to hire, availability of apprenticeship 
and training positions, the qualifications for each; and the name and 
location of the person(s) taking applications for each of the positions; 
and the anticipated date the work shall begin.
    D. The contractor agrees to include this section 3 clause in every 
subcontract subject to compliance with regulations in 24 CFR part 135, 
and agrees to take appropriate action, as provided in an applicable 
provision of the subcontract or in this section 3 clause, upon a finding 
that the subcontractor is in violation of the regulations in 24 CFR part 
135. The contractor will not subcontract with any subcontractor where 
the contractor has notice or knowledge that the subcontractor has been 
found in violation of the regulations in 24 CFR part 135.
    E. The contractor will certify that any vacant employment positions, 
including training positions, that are filled (1) after the contractor 
is selected but before the contract is executed, and (2) with persons 
other than those to whom the regulations of 24 CFR part 135 require 
employment opportunities to be directed, were not filled to circumvent 
the contractor's obligations under 24 CFR part 135.
    F. Noncompliance with HUD's regulations in 24 CFR part 135 may 
result in sanctions, termination of this contract for default, and 
debarment or suspension from future HUD assisted contracts.
    G. With respect to work performed in connection with section 3 
covered Indian housing assistance, section 7(b) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450e) also applies 
to the work to be performed under this contract. Section 7(b) requires 
that to the greatest extent feasible (i) preference and opportunities 
for training and employment shall be given to Indians, and (ii) 
preference in the award of contracts and subcontracts shall be given to 
Indian organizations and Indian-owned Economic Enterprises. Parties to 
this contract that are subject to the provisions of section 3 and 
section 7(b) agree to comply with section 3 to the maximum extent 
feasible, but not in derogation of compliance with section 7(b).