[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Rules and Regulations]
[Pages 68924-68934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30720]
[[Page 68923]]
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Part III
Department of Housing and Urban Development
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24 CFR Parts 5 and 908
Refinement of Income and Rent Determination Requirements in Public and
Assisted Housing Programs: Implementation of the Enterprise Income
Verification System--Amendments; Final Rule
Federal Register / Vol. 74, No. 248 / Tuesday, December 29, 2009 /
Rules and Regulations
[[Page 68924]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5 and 908
[Docket No. FR-5351-F-02]
RIN 2501-AD48
Refinement of Income and Rent Determination Requirements in
Public and Assisted Housing Programs: Implementation of the Enterprise
Income Verification System--Amendments
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
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SUMMARY: On January 27, 2009, HUD issued a final rule that revised the
regulations for its public and assisted housing programs to require the
use of the Enterprise Income Verification system by public housing
agencies and multifamily housing owners and management agents when
verifying the employment and income of program participants. Consistent
with Administration policy to review rules issued during the transition
from one Administration to another, HUD re-opened the January 27, 2009,
final rule for public comment, and delayed the effective date of the
regulatory amendments to January 31, 2010. The public comments received
in response to solicitation of comments on the January 27, 2009, final
rule highlighted certain regulatory provisions requiring further
clarification and others extraneous to the purpose of the rule, which
was full implementation of the Enterprise Income Verification (EIV)
system. On October 15, 2009, HUD published a proposed rule soliciting
public comment on proposed revisions to the January 27, 2009, final
rule that would clarify certain provisions of the January 27, 2009,
final rule and return other regulatory provisions to their pre-January
2009, final rule content.
This final rule follows publication of the October 15, 2009,
proposed rule, and takes into consideration the public comments
received on the proposed rule. After careful consideration of the
issues raised by the commenters, HUD has decided to make three minor
technical changes to the October 15, 2009, proposed rule to clarify the
scope of the provision governing termination of assistance, and the
scope of the Social Security number (SSN) disclosure requirements
applicable to new household members under the age of 6 and current
participants 62 years of age or older.
DATES: Effective Date: January 31, 2010.
FOR FURTHER INFORMATION CONTACT: For Office of Public and Indian
Housing programs, contact Nicole Faison, Program Advisor for the Office
of Public Housing and Voucher Programs, Department of Housing and Urban
Development, 451 7th Street, SW., Room 4214, Washington, DC 20410,
telephone number 202-402-4267. For Office of Housing Programs, contact
Gail Williamson, Director of the Housing Assistance Policy Division,
Department of Housing and Urban Development, 451 7th Street, SW., Room
6138, Washington, DC 20410, telephone number 202-402-2473. (These are
not toll-free numbers.) Persons with hearing or speech impairments may
access these numbers through TTY by calling the toll-free Federal
Information Relay Service at 800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
On January 27, 2009, at 74 FR 4832, HUD published a final rule,
entitled ``Refinement of Income and Rent Determination Requirements in
Public and Assisted Housing Programs'' (January Final Rule). The
January Final Rule revised HUD's public and assisted housing program
regulations to implement the upfront income verification process for
program participants and to require the use of HUD's EIV system by
public housing agencies (PHAs) and owners and management agents (O/As)
(collectively referred to in this final rule as ``processing
entities''). The January Final Rule followed publication of a June 19,
2007 proposed rule, at 72 FR 33844, and took into consideration the
public comments received on the June 2007 proposed rule.
The January Final Rule was originally scheduled to become effective
on March 30, 2009. On February 11, 2009, at 74 FR 6839, HUD published a
notice in the Federal Register seeking public comment on whether to
delay the effective date of the January Final Rule. The February 11,
2009, notice was issued in accordance with the memorandum of January
20, 2009, from the Assistant to the President and Chief of Staff,
entitled ``Regulatory Review'' and subsequently published in the
Federal Register on January 26, 2009 (74 FR 4435). The notice explained
that HUD was considering a temporary delay in the effective date to
allow the opportunity for further review and consideration of new
regulations, consistent with the Chief of Staff memorandum. In addition
to soliciting comments specifically on delaying the effective date, the
February 11, 2009, notice also requested comment generally on the
January Final Rule.
The comment period on the February 11, 2009, notice closed on March
13, 2009. HUD received 50 public comments. Comments were submitted by a
variety of organizations, including PHAs, property owners, management
agents, legal aid organizations, community development organizations,
and public interest organizations. The majority of comments were
supportive of a delayed effective date. The commenters not only
supported a delay, but sought clarification or changes by HUD of
certain aspects of the January Final Rule, about which questions and
comments were raised. Among other issues, commenters requested that HUD
address the need to revise the definition of ``annual income,'' and to
clarify the verification procedures applicable to noncitizens and
participants who may experience difficulty obtaining SSNs for their
children.
Following publication of the February 11, 2009, Federal Register
notice, HUD issued a final rule on March 27, 2009 (74 FR 13339), that
extended the effective date of the January Final Rule to September 30,
2009. The purpose of this extension was to provide HUD with time to
review the public comments received in response to the February 11,
2009, notice. On August 28, 2009, at 74 FR 44285, HUD published a final
rule that further extended the effective date of the January Final Rule
to January 31, 2010. The further extension was undertaken to allow the
two HUD Assistant Secretaries, who have responsibility for the programs
affected by the rule and were then only recently confirmed, sufficient
time to review the subject matter of the January Final Rule, and to
review and consider the public comments received on HUD's February 11,
2009, Federal Register notice.
II. The October 15, 2009, Proposed Rule
On October 15, 2009, at 74 FR 52931, HUD published a proposed rule
soliciting public comment on proposed regulatory revisions to the
January Final Rule to address the issues and concerns raised by the
public commenters on the January Final Rule. The regulatory changes
proposed by HUD in the October 15, 2009, proposed rule were few and the
changes focused on addressing issues raised by the commenters regarding
the purpose of the January Final Rule, which is full implementation of
the EIV system. Other issues raised by the commenters but extraneous to
EIV implementation were deferred for future consideration.
Specifically, the Department proposed to withdraw the January Final
Rule
[[Page 68925]]
amendments to the definition of annual income and to HUD's noncitizens
regulations and return these provisions to their pre-January 2009
content.
The October 15, 2009, proposed rule reiterated HUD's commitment to
the full and effective implementation of the EIV system. The most
significant regulatory changes proposed by the October 15, 2009, rule
were designed to simplify the SSN disclosure and verification
processes, to the extent feasible, and consistent with maintaining
confidentiality of these processes. Specifically, HUD proposed to
alleviate the potential burdens imposed on seniors by exempting current
participants who are 62 years of age or older from having to disclose a
SSN. HUD also proposed to reduce administrative burden by exempting all
participants, regardless of age, who have previously disclosed a valid
SSN and have not been issued a new SSN from having to re-provide their
SSN for duplicative verification. The proposed rule would also permit
compliance with the SSN disclosure requirements through submission of a
valid SSN card issued by the Social Security Administration or an
original document issued by a Federal or State government agency that
provides the SSN of the individual along with other identifying
information. Further, HUD proposed to revise and clarify the
applicability of the SSN disclosure requirements for households adding
new household members under the age of 6. The proposed rule would also
provide processing entities with additional flexibility to determine
the timing of disclosure of a newly assigned SSN, and to defer the
termination of a participant who fails to comply with the SSN
disclosure requirements due to unforeseen circumstances outside the
control of the household.
Interested readers are referred to the preamble of the October 15,
2009, proposed rule for additional information regarding the proposed
regulatory amendments to the January Final Rule.
III. This Final Rule; Technical Changes to October 15, 2009, Proposed
Rule
This final rule takes into consideration the public comments
received on the October 15, 2009, proposed rule. The public comment
period on the proposed rule closed on November 16, 2009, and HUD
received 21 comments. Comments were submitted by PHAs, multifamily
property managers, national organizations representing PHAs and O/As,
housing service providers for the aging, legal aid organizations, and
private individuals. After careful consideration of the issues raised
by the commenters, HUD decided to make three minor technical changes to
the October 15, 2009, proposed rule. Specifically, this final rule
clarifies that new household members under the age of 6 who already
have a SSN are subject to the same disclosure and verification
requirements as new household members who are at least 6 years of age.
The final rule also clarifies that, subject to the exemptions allowed,
an entire household may lose its tenancy if one member of the household
does not comply with the SSN disclosure requirements. This was the
position that HUD took in the final rule issued on January 27, 2009,
and was not proposed to be changed by the October 15, 2009, proposed
rule. HUD emphasizes, however, that the possible loss of tenancy is
subject to the exemptions provided in HUD's regulations. HUD has also
taken the opportunity afforded by this final rule to clarify that a
participant who qualifies for the senior exemption to the SSN
disclosure requirements is exempt from the SSN requirements for all
future income examinations, even if the senior moves to a new HUD-
assisted property.
The regulatory amendments made by this final rule supersede
provisions of the January Final Rule that would otherwise take effect
on January 31, 2010. The following section of the preamble presents a
summary of the significant issues raised by the public commenters on
the October 15, 2009, proposed rule and HUD's responses to these
issues.
IV. Discussion of the Public Comments Received on the October 15, 2009,
Proposed Rule
The majority of the commenters expressed their support for the
regulatory changes proposed by the October 15, 2009, proposed rule, and
particularly for the EIV system. In general, commenters stated that the
EIV system has been an increasingly valuable tool to processing
entities, by improving the accuracy of income and rent determinations,
uncovering potential fraud, and reducing administrative overhead in
assisted housing programs.
Commenters expressed their support for delay in the EIV
implementation while HUD took the time to clarify other issues
addressed by the January Final Rule. Two commenters, however,
encouraged HUD to move forward with a final rule that would address the
definition of ``annual income.'' The commenters stated that they
support the definition of ``annual income'' in the January Final Rule.
The commenters asked HUD not to wait on statutory changes, for which
legislative proposals have been offered for the past 6 years but none
have been enacted into law. The commenters encouraged HUD to commence
rulemaking on the subject of annual income as expeditiously as
possible. HUD is aware of the need to address the issue of annual
income and intends to address this issue.
Another comment that was expressed by housing provider commenters
that use EIV was on the need for additional guidance and attention by
HUD on several aspects of the EIV system. HUD will be providing such
guidance to help facilitate mandatory use of EIV in the near future.
A. Comments Regarding EIV Implementation
Comment: Date of mandatory use of EIV. One commenter stated that
HUD's January Final Rule was clear on all issues and that EIV
implementation should not have been delayed. The commenter stated that
the delay in implementation places taxpayer dollars at risk because of
the higher possibility that improper subsidies will occur without using
EIV. Other commenters, however, supported further delay of mandatory
implementation of EIV. One commenter suggested that it might be
advisable to further delay the EIV implementation date, given the
delays in the release of the long-expected revisions to the current EIV
guidance and the need for new training on system use. Another commenter
stated that the rule should allow for PHAs to continue exercising the
discretion to use EIV and should not make EIV mandatory. The commenter
stated that PHAs have found certain non-EIV resources to be more
reliable and accurate than EIV in verifying income. The commenter
stated that there are still problems with the EIV system and that by
mandating use of EIV, a failure on the part of a PHA to use EIV will
subject the PHA to sanctions and adverse Office of Inspector General
audit findings. The commenter stated that the best solution is to
continue to allow PHAs the discretion, but no mandate to use EIV.
Another commenter expressed similar concerns about mandating use of EIV
by O/As. Another commenter, also concerned with the impact of mandatory
EIV use by O/As, stated that HUD has underestimated the success of EIV.
This commenter states that HUD should develop an escalated support
structure for O/As who still are struggling to get access to secure
systems, to EIV, or to working user names and passwords, including a
key group of representatives to handle
[[Page 68926]]
advanced support issues. This commenter also offered a list of subjects
related to EIV on which HUD should provide additional guidance. Another
commenter stated that HUD's EIV system cannot serve the functions
required under the rule.
HUD Response: HUD remains of the position that mandatory use of
EIV, commencing on January 31, 2010, is the proper course of action to
follow. For the reasons expressed by the majority of the commenters,
the use of upfront income verification will serve as a valuable
resource in verifying employment and income while helping to identify
and cure inaccuracies in public and assisted housing subsidy
determinations, this benefitting public and assisted housing providers,
tenants, and taxpayers. Additionally, HUD has already provided a
substantial period for affected parties and interested members of the
public to comment on the EIV system, and a further delay in
implementation of the EIV system is without satisfactory justification.
Having said that, however, HUD is cognizant that, as with the use of
any information system, improvements will be needed and features can be
enhanced, and that users of the system will require ongoing education
and guidance. HUD is committed to having the EIV system be as efficient
and effective as possible and to making changes that will achieve this
objective. As noted earlier, HUD is also committed to issuing guidance
on EIV and upfront verification, as well as to continuing to provide
the training necessary to ensure that users are familiar with, and
capable of successfully implementing, the EIV system.
Comment: Clarify meaning of use of EIV system in its entirety.
Several commenters requested that HUD clarify the meaning of using EIV
``in its entirety.'' One of the commenters stated that if processing
entities are required to use EIV ``in its entirety'' and be sanctioned
for failing to do so, HUD needs to better explain the meaning of the
phrase ``in its entirety.'' The commenter suggested that HUD make the
requested administrative guidance easily accessible to processing
entities, such as by posting it on HUD's Web site. ``If not, ``the
commenter wrote, ``compliance with the requirement will be difficult
and enforcement may be arbitrary.'' Similar to this comment, but
expressed slightly differently, two commenters requested that the final
rule clearly identify each stage for which EIV is required; that is,
whether EIV use is mandatory only for initial admission, or if it is
also mandatory for annual reexaminations or interim reexaminations. One
commenter stated that housing providers currently cannot access EIV for
applicant households prior to admission, and that verification is
available only after an applicant household is determined eligible for
housing assistance. The reason that such information is not available
is that information has not been submitted into the Public and Indian
Housing Information Center (PIC). With respect to entities'
responsibilities for implementing EIV, a commenter stated that, to
avoid confusion, the final rule should more clearly differentiate
between the multifamily Section 8 programs in 24 CFR part 880, 881,
883, 884, 886, and 891, and the role of PHAs in the Housing Choice
Voucher program (24 CFR part 982). The commenter states that, in the
latter program, the PHA is the processing entity, while in the former
programs the PHA is not. The commenter stated that it is important for
the final rule to clearly address the roles and responsibilities
assigned to PHAs, O/As, and contract administrators.
HUD Response: Use of EIV in its entirety means that EIV is required
by the PHA or O/A to verify the employment and income of existing
tenants at the time of all mandatory reexaminations and
recertifications. In addition, the PHA or O/A must use other reports in
EIV such as the Failed Verification Report, the Deceased Tenant Report,
the Multiple Subsidy Report, etc., at various times to reduce
administrative and subsidy payment errors. The inclusion of the ``in
its entirety'' language was in response to commenters on the January
2009 Final Rule who questioned whether the use of the EIV system was
required only for income verification with respect to determining
eligibility for admission. As noted in the preamble to the October 15,
2009, proposed rule, HUD clarified that processing entities ``must use
the EIV system in its entirety as a third party source to verify tenant
employment and income information during mandatory reexaminations or
recertifications of family composition and income and also to reduce
administrative and subsidy payment errors in accordance with HUD
administrative guidance'' (74 FR 52931, 52934 first column).
With respect to initial admission, EIV cannot be used by processing
entities to verify an applicant's income, since form HUD-50058 or HUD-
5009 is not transmitted to HUD until after the family is admitted to
the program. HUD will issue administrative guidance with respect to the
timeframe for consulting the EIV system once the form HUD-50058 or HUD-
50059 has been transmitted. This will allow processing entities to
promptly follow up with the family to discuss, in a timely manner, any
EIV-noted disparities in reported family employment, income, identity,
or receipt of duplicate rental assistance and make any necessary
subsidy adjustments based on confirmed information that may not have
been reported or may have been understated by the family. HUD obtains
income information for all newly admitted families within 60 days of
receiving the form HUD-50058 or HUD-50059 from the processing entities.
HUD believes that the final rule is clear on the roles and
responsibilities of the processing entities that are charged with using
EIV, but will publish additional administrative guidance that outlines
the requirements for the use of EIV by PHAs, O/As, and contract
administrators.
Comment: Compatibility of EIV with non-HUD programs. Two commenters
expressed concern with the reliance on EIV when HUD's housing programs
are combined with other housing programs that rely on HUD income
determinations, such as low-income housing tax credits (LIHTCs). The
commenters expressed concern that non-HUD providers will not be able to
use the EIV data to which HUD housing providers have access.
HUD Response: Use of EIV data is available, and limited to, the
processing entity (and their hired management agents) who have
transmitted a form HUD-50058 and HUD-50059 to the PIC and Tenant Rental
Assistance Certification System (TRACS), respectively.
Disclosing EIV information to O/As for use under the LIHTC program
or the Rural Housing Service (RHS) Section 515 program is not allowed
since neither the Internal Revenue Service nor the RHS are a party to
the computer matching agreements that HUD has with the Department of
Health and Human Services and the Social Security Administration, which
provide the income and benefit data in EIV. The fact that there is
financing through other federal agencies involved in a particular
property under one of the authorized HUD programs does not then permit
that federal agency to use or view information in the EIV system that
is covered by the computer matching agreements.
Comment: EIV should not be relied upon for third party
verification. Several commenters advised of difficulties using the EIV
system as a third party source to verify employment and income. The
commenters stated that the data available in EIV is frequently
outdated, in some instances over 6 months old.
[[Page 68927]]
One commenter stated that EIV was not designed to be the sole, main, or
primary source of income verification. The commenter stated that the
final rule should identify circumstances under which independent third
party verification must be used to complement upfront verification of
income using the EIV system, such as when a tenant disputes the EIV
data or a PHA believes it needs additional information. Other
commenters stated that the mandate to use EIV would result in
processing entities relying on EIV data they know to be inaccurate,
rather than using other, more accurate sources of income and rent data
in order to avoid HUD findings of noncompliance with regulatory
requirements or failure to properly manage assisted housing programs.
The commenters stated that, rather than requiring use of EIV, EIV
should simply be another tool available to housing providers for
verifying the completeness and accuracy of reported income.
HUD Response: As stated earlier, HUD is aware that EIV is not a
perfect system but EIV has been found to be an effective verification
system. EIV has been praised by the Government Accountability Office
(GAO) as ``an important part of [HUD's] plan for reducing improper
rental assistance payments'' and as providing processing entities
``with an efficient method for validating the incomes of families
receiving assistance.''\1\ As with any electronic database, there may
be, at times, a certain amount of delay between actual changes in
income and employment information and updates to the EIV data. Although
HUD has no control over the time lag in these data, which are provided
by other sources, the Department understands the concerns raised by the
commenters. The Department has and will continue to issue guidance on
how to use the data in EIV as third party verification despite the time
lag.
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\1\ GAO, High Risk Series: An Update, GAO-07-310 (Washington,
DC, January 2007), at page 14.
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Comment: Additional resources for successful EIV implementation.
One commenter stated that, while EIV is a valuable tool for combating
fraud, waste, and abuse, EIV has increased the administrative workload
on processing entities. The commenter stated that HUD should ``make
available grants to PHAs that are earmarked for providing additional
resources and investigative/paralegal staffing for combating fraud and
program abuse.''
HUD Response: HUD disagrees with the commenter that use of the EIV
system increases administrative workload. EIV is an automated system
that is free to the user and available 24 hours a day, 7 days a week.
In contrast to a manual system, EIV has been determined to be the most
effective, efficient, and least burdensome way to verify income.
Further, HUD will be issuing guidance to processing entities on how to
use EIV as effectively and efficiently as possible.
Comment: EIV may negatively affect HUD auditors. One commenter
stated that the stringency of the EIV system may interfere with an
auditor's access to tenant income and employment information in the
testing of lease files as required by the HUD Consolidated Audit Guide.
The commenter stated that the choices available to auditors would be to
gain EIV access as a ``Non-HUD User,'' or view the required information
in a very limited fashion. The commenter stated that, while gaining
access as a Non-HUD User affords the maximum flexibility in viewing the
information, there are large administrative burdens involved, the costs
of which cannot be passed on. On the other hand, the commenter stated,
the second, less burdensome option limits access to hardcopy files.
According to the commenter, these files may be located at multiple
property sites and it is unclear whether the files may be transmitted
between sites. The commenter stated that auditors would incur
prohibitive costs if required to visit all project sites to view
hardcopy files. The commenter urged HUD to devise another way for
auditors to access the necessary EIV data, and to clarify the protocols
regarding the copying and transmittal of this sensitive information.
HUD Response: HUD will take under advisement the suggestions made
by the commenter and review ways to facilitate the vital work performed
by auditors. HUD notes that auditors are authorized to view EIV records
contained in tenant files for the purpose of determining program
compliance; however, third party auditors are not authorized to obtain
access to EIV. The requirements governing the accessing of EIV data by
independent public auditors have been imposed by the entities with
which HUD has the computer matching agreements. In addition, HUD has a
duty to safeguard the integrity of the EIV system and to protect the
confidentiality of the income and employment data contained in the
system. HUD takes this responsibility seriously and will ensure that
any access to EIV data contains appropriate privacy protections.
B. Comments Regarding SSN Disclosure and Verification Requirements
1. General Comments on Scope, Applicability of and Exemption of SSN
Requirements
Comment: Authority to require SSN disclosure. A few commenters
questioned HUD's authority to require SSN disclosure as a condition of
participation in federally assisted housing programs. The commenters
stated that HUD has not provided an analysis to support its position
and that there is no statutory authorization for the requirement of
having a SSN as a condition for receipt of benefits. The commenters
stated that, while HUD has authority to deny housing assistance to
people who have been issued SSNs and failed to disclose them, HUD has
pointed to no authority allowing it to deny assistance to individuals
who have never had SSNs assigned, and where the individual certified to
that effect. The commenters requested that the final rule retain the
ability for individuals who have not had a SSN assigned to certify to
that fact.
HUD Response: The SSN disclosure and verification requirements made
effective by this final rule are consistent with the authorizing
statutes for the various HUD programs affected by the rule, and are
issued pursuant to the general rulemaking authority granted HUD by
section 7(d) of the Department of HUD Act (42 U.S.C. 3535(d)). Section
7(d) provides the Secretary with the authority to ``make such rules and
regulations as may be necessary to carry out his functions, powers, and
duties.'' The statutes governing HUD's housing assistance programs
establish criteria for those who seek to reside in such housing and,
for all of those programs, eligibility criteria include income
requirements and citizenship and legal immigration requirements, at a
minimum. HUD has an obligation to ensure that those receiving housing
assistance meet the statutory criteria, and to minimize any opportunity
for fraud, waste and abuse. Contrary to the statements made by the
commenters that HUD has failed to provide a need for the SSN
requirements, HUD has explained its rationale for the modified
disclosure and verification procedures in the preambles to the various
rules associated with this rulemaking, including the preamble to this
final rule. The EIV system will help to identify and cure inaccuracies
in public and assisted housing subsidy determinations, thus benefitting
public and assisted housing providers, tenants, and taxpayers. The EIV
system relies on the inputting of a SSN to verify income and employment
[[Page 68928]]
data. Accordingly, the SSN disclosure requirements are an essential
component to the full and successful implementation of EIV. Contrary to
the belief of the commenters, a certification to the lack of a SSN has
never, on its own, been acceptable to permit an individual to become a
participant in a HUD rental assistance program.
Notwithstanding the need for SSN disclosure, HUD is cognizant of
the potential hardship that the requirements may impose on some
households and has attempted, where possible, to mitigate such burden.
HUD believes that the final rule strikes the appropriate balance
between the need to fully implement EIV and avoiding the imposition of
undue regulatory burden.
As discussed more fully elsewhere in this preamble, this final rule
exempts the elderly residing in HUD subsidized housing from having to
disclose a SSN and has extended the applicable disclosure deadlines for
households adding new children or who fail to comply with the SSN
requirements due to unforeseen circumstances.
Comment: Allow flexibility in verification for unexpected
circumstances. One commenter stated that the costs and potential
incorrect terminations of assistance outweigh the potential benefits of
a strict identity verification system. HUD should evaluate the fact
that, in many cases, the non-disclosure is justifiable and that non-
verified tenants make up a very small percentage of the total, against
the harm caused by rigid barriers to housing, such as increased
homelessness. The commenter states that eligible household members may
lack a SSN because they are ineligible for a SSN or face some other
logistical barrier to getting one. The commenter stated that examples
of such barriers include: victims of human trafficking who are eligible
for benefits under 22 U.S.C. 7105(b); individuals granted withholding
of deportation; children of immigrant families, and other similar
examples given in the comment. The commenter stated that HUD should
allow a broader range of documentation to allow for such situations.
Related to the request to not establish a strict identity verification
system, the commenter stated that the rule should make clear that
prorated assistance is available to families who are unable to disclose
a SSN. The commenter also stated that participants should not be
punished for circumstances beyond their control, and that the language
in paragraph (c)(2) of Sec. 5.218 (Penalties for failing to disclose
and verify Social Security and Employer Identification Numbers), which
states that the housing provider ``may defer termination,'' should be
changed to ``must defer termination.''
HUD Response: HUD disagrees that the verification system being
established by this rulemaking is strictly an identity verification
system, and HUD has allowed flexibility in several areas where HUD
found it could provide flexibility, yet maintain the need to ensure
that individuals and families being provided housing assistance under
HUD programs meet the eligibility requirements for these programs. With
respect to the issue of proration of assistance, HUD has not proposed
to change its regulations governing proration of assistance. Proration
of assistance applies only to those who do not contend eligible
immigration status. There is no proration of assistance for
noncompliance with the SSN disclosure requirements. With respect to
penalties, HUD believes it is important to leave discretion with the
processing entities, who are in the best position to determine, given
the circumstances confronted, when deferral of termination is
warranted.
Comment: Definition of ``valid SSN.'' One commenter wrote that the
term ``valid SSN'' should be defined as a SSN that has not been
identified as invalid by the EIV system.
HUD Response: HUD's position is that the meaning of the term
``valid SSN'' is clear from the context of the regulatory language, and
a codified definition is not necessary. The commenter correctly notes
that a valid SSN is one that has not been identified as invalid by the
EIV system, either when the SSN is initially disclosed or during a
subsequent examination conducted by the processing entity.
Comment: Does a household include live-in aides and foster
children? One commenter asked whether live-in aides and foster children
are considered household members subject to the SSN disclosure and
verification requirements. Another commenter stated that there should
be an exemption for foster children because fostering agencies will not
always disclose the SSN.
HUD Response: Live-in aides and foster children are subject to the
SSN requirements.
Comment: Disclosure of newly assigned SSN. One commenter suggested
the removal of the language providing that a newly assigned SSN must be
disclosed ``at such earlier time specified by the processing entity''
(Sec. 5.216(e)(2)(iii)). The commenter stated that the processing
entity should not have the ability to determine when a newly assigned
SSN should be disclosed.
HUD Response: Section 5.216(e)(2), to which the commenter objects,
requires that a newly assigned SSN be disclosed no later than the next
regularly scheduled reexamination or recertification of income and
family composition, but provides processing entities with the
discretion to require disclosure at some earlier time. This regulatory
section is designed to provide processing entities with the operational
flexibility to determine when the disclosure of a newly assigned SSN is
less disruptive to households and most beneficial to the administration
of the housing assistance--which HUD maintains is appropriate.
Comment: Clarify consequences to households if one member of
household does not comply with SSN requirements. One commenter asked
HUD to clarify, at the final rule stage, if an entire household loses
its tenancy if one member of the household does not comply with SSN
requirements.
HUD Response: Subject to the exemptions allowed, an entire
household may lose its tenancy if one member of the household does not
comply with the SSN disclosure requirements. HUD has taken the
opportunity afforded by this final rule to clarify this issue in the
regulatory text. Specifically, Sec. 5.218(c), regarding the
termination of assistance and tenancy, has been revised to clarify that
the ``participant and the participant's household'' are subject to
termination for failure to comply with the SSN requirements. As noted
earlier in this preamble, the possibility that an entire household may
lose its tenancy if one member of the household does not comply with
the SSN disclosure requirements was part of HUD's January 27, 2009,
final rule (74 FR 4832), and was not proposed to be changed by HUD's
October 15, 2009, proposed rule. (Please see HUD's response to a
comment about loss of tenancy by a household that was provided in the
January 27, 2009, final rule at 74 FR 4833, third column.)
2. Comments Regarding Individuals Who Do Not Contend Eligible
Immigration Status
Comment: Such individuals should not be exempt from SSN disclosure
requirements. One commenter objected to the inapplicability of the SSN
disclosure requirements to persons who do not contend legal immigration
status. The commenter stated that such exception unjustly requires
United States citizens to undergo more stringent verification
procedures than
[[Page 68929]]
individuals who lack the legal right to reside in the U.S. The
commenter suggested that the final rule provide a comprehensive list of
documents that will be used to verify citizenship.
HUD Response: The commenter is incorrect in asserting that the
exception to the SSN requirements protects individuals who lack the
legal right to reside in the U.S. The exception applies solely to
individuals who do not contend legal immigration status (that is, the
legal immigration status required by the Housing and Community
Development Act of 1980, 42 U.S.C. 1436a)\2\), and therefore are
ineligible for HUD housing assistance. Individuals who do not contend
legal immigration status may include persons lawfully residing in the
U.S.; for example, persons for whom entry was provided on student or
work visas, but who do not meet the legal residency categories of the
Housing and Community Development Act of 1980. Individuals who do not
contend legal immigration status for HUD subsidized housing may reside
in HUD subsidized housing only as members of a family who contend and
are confirmed to be U.S. citizens or have the legal immigration status
required by the Housing and Community Development Act of 1980.
---------------------------------------------------------------------------
\2\ The Housing and Community Development Act of 1980 lists the
categories of resident immigrants that are eligible to receive HUD
housing assistance.
---------------------------------------------------------------------------
HUD is not revising the rule in response to the request to provide
a comprehensive list of documents to verify citizenship. This final
rule is solely directed at full implementation of EIV, and is not
directed to revising or updating HUD's noncitizens regulations.
Although the January Final Rule would have made several revisions to
the documentation requirements in HUD's noncitizens regulations, those
amendments were found to be extraneous and consequently distracting to
HUD's goal of full EIV implementation. Given the sensitivity and
significance of the issues involved, HUD has withdrawn these
amendments, leaving in place the noncitizens requirements as codified
prior to revision by the January Final Rule. Any changes to HUD's
noncitizen regulations are more appropriately undertaken by separate
rulemaking that focuses exclusively on these policies and providing the
public with additional opportunity to comment.
Comment: Exempt individuals not contending eligible immigration
status from the penalties authorized by Sec. 5.218. One commenter
stated that the penalties of Sec. 5.218 (Penalties for failing to
disclose and verify Social Security and Employer Identification
numbers) should be inapplicable to applicants and participants who do
not contend eligible immigration status under 24 CFR part 5, subpart E.
HUD Response: Since individuals who do not contend eligible
immigration status under subpart E are exempt from the requirement to
disclose a SSN, HUD believes it is clear that the penalties for failure
to disclose a SSN are not applicable to any individual for whom an
exemption applies.
Comment: Clarify treatment of the Certificate of Naturalization.
One commenter asked HUD why, given the protections provided by EIV,
does the Certificate of Naturalization say ``Do Not Copy.'' The
commenter stated, ``With the added security EIV now provides by
matching identity with the SSA, it seems odd that we now also need to
increase our precautions as well.''
HUD Response: Whenever the issue of information pertaining to
personal identity is involved, HUD believes that all measures directed
to maintaining confidentiality should be followed.
3. Comments Regarding the ``Grandfathering'' of Elderly Participants
Comment: The provision regarding the ``grandfathering'' of seniors
is contradictory. One commenter asked that HUD's final rule clarify
whether seniors, 62 years of age or older, residing in HUD subsidized
housing as of January 31, 2010, are exempt from the requirements.
Another commenter stated that the seniors exemption that HUD provides
in the rule should be continued beyond January 31, 2010, and that, in
fact, HUD could not set a cut-off date of January 31, 2010, for the
seniors exemption because the Housing and Community Development Act of
1980 at 42 U.S.C. 1436a(d)(1)-(2) allows seniors to self-certify.
Another commenter stated that Sec. 5.216(e), which addresses the
``grandfathering'' of persons age 62 and older with respect to
disclosure of SSNs, is contradictory, in that it states that current
participants age 62 and older are not required to disclose SSNs, but
then states that only those individuals who have previously disclosed a
valid SSN are exempted from the disclosure requirements.
HUD Response: The exemption for seniors provided by the rule is
applicable only to participants who are 62 years of age or older on
January 31, 2010. Individuals reaching the age of 62 years after
January 31, 2010, will be subject to the SSN disclosure requirements.
With respect to the commenter who suggested that HUD was statutorily
prohibited from requiring a senior to disclose a SSN, the statute to
which HUD refers is the Housing and Community Development Act of 1980,
which governs housing assistance for immigrants. The provision to which
the commenter specifically refers allows individuals not claiming legal
immigration status for housing assistance to not declare eligibility
for this assistance. This provision is already reflected in HUD's
regulations. With respect to the final issue raised by the third
commenter, the commenter incorrectly reads Sec. 5.216(e). As proposed
in the October 15, 2009, rule, this final rule exempts current program
participants who are 62 years of age or older as of January 31, 2010,
from having to disclose a SSN. The exception applies whether or not the
participant has previously disclosed a SSN. Section 5.216 (e)(1)(i)
explicitly provides that the SSN disclosure requirements apply to
``[e]ach participant, except those age 62 or older as of January 31,
2010'' (emphasis added). Section 5.216(e) then provides an additional
exemption for current participants, regardless of age, who previously
have disclosed a valid SSN. These individuals are also excused from
having to re-provide their SSN for duplicative verification.
Comment: All seniors--whether current participants or applicants--
should be exempted from SSN disclosure. Three commenters suggested that
HUD expand the exemption for seniors 62 years of age and older to
include applicants, as well as current program participants. The
commenters stated that the potential burdens of producing a SSN, which
HUD seeks to alleviate through the exemption for senior participants,
are also faced by older applicants. One commenter suggested that a
senior applying after January 31, 2010, be allowed to provide a SSN
without documentary proof, so long as the senior signs a statement that
the number is valid and that the senior understands that EIV will be
used to verify the accuracy of the number. The commenter suggested that
the applicant should be allowed to retain his or her place on the
waiting list but not become a participant until the SSN verification
procedures are met.
HUD Response: HUD believes that an exception is justified for
persons age 62 or older on January 31, 2010, who are currently residing
in assisted housing, because of the potential burdens faced by the
elderly in providing a SSN, the small number of seniors who would
qualify for the exception, and the fact that many of these senior
citizens have resided in their units for years in compliance with all
other program requirements. However, HUD remains of the position that
all new applicants,
[[Page 68930]]
regardless of age, must meet the SSN disclosure requirements.
Comment: Objection to the senior exemption. One commenter
questioned the need for the exemption proposed by HUD for seniors 62
years of age or older. The commenter stated that processing entities
will have difficulty administering exceptions to the SSN disclosure
requirements, and suggested that all individuals, other than those not
contending legal immigration status, should be required to provide a
SSN. This commenter suggested that seniors should be granted the same
flexibility proposed for children under 6 years of age, that is, a 90-
day period in which to produce the SSN. This commenter also suggested
that, if the exemption for persons 62 years of age or older remains in
the final rule, seniors should not be included in the EIV
reconciliation reports that HUD provides to processing entities
identifying participants who have not complied with the SSN disclosure
requirements.
HUD Response: HUD has carefully limited the scope of the exceptions
to the SSN disclosure and verification requirements. The exception to
which the commenter objects is narrowly tailored to avoid the eviction
of elderly persons who already reside in assisted housing and who are
in compliance with all other program requirements. HUD believes the
narrow exemption for seniors is merited given the potentially harsh
results should these persons be subject to the SSN requirements and the
burdens that may be experienced by seniors in trying to produce a SSN.
The commenter, however, raises a good point with regard to the omission
of elderly participants from the EIV reconciliation reports. Although
it currently is not possible to omit these individuals given the
current design of the EIV system, HUD will take the suggestion made by
the commenter under advisement.
Comment: Clarification of senior exemption. One commenter requested
clarification on whether senior participants processed on or after
January 31, 2010, will need to produce a valid SSN. Another commenter
asks whether ``grandfathering'' applies if the senior moves from one
HUD-assisted property to another. The commenter stated that a senior
may need to move to different housing for good reasons, such as the
presence of a disability, the senior has another type of verified
medical condition, the senior becomes the victim of abuse, or the
senior requires the assistance of a live-in aide and hence a larger
unit. In these cases, the senior should continue to receive HUD
assistance so long as proper verification is performed.
HUD Response: The exception for senior participants is based on a
two-prong test: (1) the participant must be 62 years of age or older on
January 31, 2010; and (2) the person's initial determination of
eligibility must have begun before that date. A participant who fails
either prong is subject to the SSN disclosure requirements. A
participant who satisfies both prongs is exempt from the SSN
requirements for all future income examinations, even if the senior
moves to a new HUD-assisted property. HUD has taken the opportunity
afforded by this final rule to clarify this point. Specifically, the
regulatory text no longer provides that the initial determination of
eligibility is ``under the program involved.'' The inclusion of this
phrase might mistakenly have been interpreted to mean that elderly
participants ``lose'' the exemption when moving to a new unit.
4. Comments Regarding the Addition of New Household Members
Commenter: Question regarding addition of new household member who
is at least 6 years of age. One commenter asked whether new household
members over 6 years of age must disclose a SSN before they are added
to the lease or before the household is placed on the waiting list, or
whether the new household member may move in and then be given 90 days
to produce a SSN. If households are allowed on the waiting list prior
to SSN disclosure, how long may the household remain on the list
without all of the members having disclosed a valid SSN?
HUD Response: The provisions for adding a new household member
apply solely to households already receiving housing assistance and,
therefore, would not affect placement on a waiting list. The final
rule, at Sec. 5.216(e)(2)(i), provides that the new household member
must disclose a SSN upon the request of the processing entity, and no
later than the time of processing the interim reexamination or
recertification of family composition that includes the new member.
Comment: Omission of children under 6 years of age who already have
a SSN. One commenter stated that the provisions regarding the addition
of new household members at Sec. 5.216(e)(2) seems to inadvertently
omit disclosure requirements pertaining to children under 6 years of
age who already have a SSN. Another commenter asked, in the case of a
new household with members under 6 years of age or an existing
household who adds a member under 6 years of age, who has 90 days to
produce an SSN for the child, what happens after the end of the time
period and any extension? The commenter asked if assistance is
terminated, and, if so, when is the termination effective? Should the
household begin paying market rent as of the month following the 90-day
extension? Is there a different rule for Project Rental Assistance
Contract (PRAC) properties?
HUD Response: HUD's rule provides that the 90-day period for the
disclosure of a SSN applies solely to new household members under the
age of 6 who do not already have a SSN (see Sec. 5.216(e)(2)(ii)(A)).
New household members under the age of 6 who have a SSN are subject to
the same disclosure requirements as new household members at least 6
years of age and must disclose the SSN upon the earlier of: (1) the
request of the processing entity; or (2) the interim reexamination or
recertification of family composition that includes the new member. To
enhance clarity, HUD has revised the language of Sec. 5.216(e)(2) to
explicitly make this point.
Comment: Suggested change to SSN disclosure requirements for new
household members under the age of 6. One commenter suggested that to
avoid having to conduct multiple reexaminations to add a child to the
household, the final rule should allow a processing entity to add a
child with another identification number, but not require the SSN until
the next regularly scheduled reexamination, or no later than 15 months
after the child is added to the household.
HUD Response: HUD has not revised the rule in response to this
comment. HUD remains of the position that the provisions regarding the
addition of children under the age of 6 to the household strike the
appropriate balance between mitigating the potential burden faced by a
family in obtaining a new SSN for a child, minimizing the burden on
processing entities, and assuring the integrity of the EIV process.
Processing entities will still be able to use HUD systems to generate
an alternate identification number to facilitate reporting of the new
household member under the age of 6 on the form HUD-50058 or HUD-50059.
However, the alternate identification number must be replaced with a
SSN, within 90 calendar days (or approved 90-day extension) of the
child being added to the household.
[[Page 68931]]
5. Comments Regarding Waiting List Placement and Termination of
Assistance
Comment: Households that fail to comply with SSN requirements
should be removed from waiting list. One commenter suggested that
applicants who do not disclose their SSNs should be able to remain on
the waiting list for 90 days, with one 90-day extension, rather than
indefinitely.
HUD Response: HUD has not revised the rule in response to this
comment. A household on the waiting list will not be provided housing
assistance until such time as all household members disclose a valid
SSN. Moreover, placement on the waiting list merely serves to reserve a
place in the program for the household, but does not necessarily deny
or delay housing assistance to other households. Depending on the
policies of the processing entity governing placement on the waiting
list, an applicant household that is lower on the waiting list, but
that is able to comply with the SSN requirements, may be eligible to
move ahead of a family that is unable to comply with the SSN
requirements at the time assistance becomes available, and thus be
provided housing assistance. HUD will issue administrative guidance on
how long a processing entity may keep an applicant family that is
noncompliant with the SSN disclosure requirement on the waiting list.
Comment: Question regarding scope of termination. Two commenters
stated that Sec. 5.218(c)(3) should be clarified regarding whether the
failure of a member of a household to disclose a SSN would result in
the loss of tenancy for the entire household or only the member who
failed to disclose the SSN. One of the commenters stated that if the
result was the loss of tenancy for the entire family it would violate
the due process cause of the 14th Amendment by violating the right of
families to live together, as recognized in Moore v. East Cleveland,
431 U.S. 494 (1977) and Yolano-Donnelly v. Cisneros, No. S-86-846 (E.D.
Cal., March 8, 1996).
HUD Response: HUD believes that its regulations are clear that
housing assistance may not be provided on behalf of a household that
contains a member who fails to comply with the SSN disclosure and
verification requirements. Contrary to the commenter's statement that
denial of assistance would result in forced separation of family
members, the result is that denial of assistance precludes HUD housing
assistance as a housing option, but does not result in forced
separation of family members.
C. Comments Regarding Definition of Annual Income
Comment: Use of historical income. Although the October 15, 2009,
proposed rule withdrew the January Final Rule amendments to the
definition of annual income codified at Sec. 5.609, one commenter
registered disapproval with the January Final Rule amendments regarding
the use of historical amounts in determining annual income. The
commenter recommended that income should continue to be defined as
anticipated income for the 12-month period following move-in or
certification. The commenter stated that the use of historical income
might lead to the granting of housing assistance to individuals who do
not need it, and increase the administrative burden on processing
entities due to the greater discretion allowed.
HUD Response: The recommendation made by the commenter is reflected
in this final rule. As part of the October 15, 2009, proposed
amendments, HUD withdrew the January Final Rule amendments pertaining
to the definition of annual income. Accordingly, the content of the
annual income provision at Sec. 5.609 remains as it was prior to
amendment by the January Final Rule.
Comment: HUD should address annual income determinations for
seasonal or cyclical workers. One commenter urged HUD to quickly
address the method of calculating rent for seasonal workers and those
participants who habitually lose income prior to annual
recertifications. The commenter wrote that there is insufficient
guidance on this topic.
HUD Response: HUD understands the concern expressed by the
commenter and, as stated in the preamble to the October 15, 2009,
proposed rule, issues concerning calculation of rent are more
appropriate for a rule for which that subject is the focus. The focus
of this rule is full implementation of the EIV system.
D. Comments Regarding Proposed Amendment to 24 CFR part 908
Comment: Record retention requirement. Two commenters expressed
concern regarding the proposed conforming change to the part 908
requirements. (HUD's regulations at 24 CFR part 908 codify the
requirements regarding the electronic submission of required family
data for certain assisted housing programs.) The commenters expressed
concern with the proposed requirement that supporting documentation be
retained along with the form HUD-50058, for 3 years after a household
ends its participation. One commenter questioned whether the Code of
Federal Regulations is the appropriate place to mandate records
retention requirements. The other commenter was concerned about
confidentiality issues that may result from maintaining hard copies of
the forms for a period of 3 years after a household ends its
participation, and asked whether electronic retention of the
information would meet the record retention requirement.
HUD Response: The record retention requirements provided by this
rule will assist HUD's monitoring of EIV implementation. The Code of
Federal Regulations contains binding agency requirements, including
agency information collection and recordkeeping requirements. HUD notes
that the part 908 regulations were promulgated in 1995 and have been in
effect for over a decade. With respect to the question concerning
electronic retention of the forms, the proposed regulatory text made
final by today's rule explicitly provides that ``[e]lectronic retention
of form HUD-50058 and HUD-50058-FSS, and supporting documentation
fulfills the retention requirement under this section'' (see Sec.
908.101).
V. Findings and Certifications
Executive Order 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this final rule
under Executive Order 12866 (entitled ``Regulatory Planning and
Review''). OMB determined that this final rule is a ``significant
regulatory action,'' as defined in section 3(f) of the Order (although
not economically significant, as provided in section 3(f)(1) of the
Order).
The Final Rule was determined an economically significant rule
based on its mandate that the EIV system be used by all processing
entities. The narrowly tailored regulatory amendments made by this
final rule do not modify the economic impact of mandatory EIV use, and
neither add or revise the EIV requirements of the Final Rule. These
regulatory amendments are limited to addressing certain provisions of
the Final Rule that caused confusion and that were extraneous to full
implementation of EIV. The clarifications made by this rule do not
result in an impact on the economy of $100 million or more.
The docket file is available for public inspection in the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development,
[[Page 68932]]
451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Due to
security measures at the HUD Headquarters building, please schedule an
appointment to review the docket file by calling the Regulations
Division at 202-402-3055 (this is not a toll-free number). Individuals
with speech or hearing impairments may access this number via TTY by
calling the Federal Information Relay Service at 800-877-8339.
Paperwork Reduction Act
The information collection requirements in this final rule have
been approved by OMB under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520) and assigned OMB Control Numbers 2577-0220 and 2502-
0204. In accordance with the Paperwork Reduction Act, an agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information, unless the collection displays a currently
valid OMB Control Number.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
As an initial matter, HUD notes that this final rule builds upon the
January Final Rule, which the Department determined did not have a
significant economic impact on a substantial number of small entities.
This scope of this final rule is much more narrowly focused than that
of the January Final Rule, and its potential economic impacts are
correspondingly reduced. As noted, this final rule is concerned
exclusively with the full and successful implementation of the EIV
system. The regulatory amendments made by this final rule are few and
limited to clarifying certain provisions of the January Final Rule and
returning other regulatory provisions extraneous to EIV implementation
to their pre-January 2009 final rule content. The final rule does not
alter the economic impact of full EIV implementation, and neither adds
to or modifies the EIV requirements of the January Final Rule. To the
extent this final rule has any economic impact, it is to reduce the
costs and regulatory burdens imposed on processing entities by
withdrawing the January Final Rule amendments to HUD's annual income
requirements and the regulations governing housing assistance to
noncitizens.
Accordingly, this final rule does not alter the small entity impact
analysis made in the January Final Rule nor does this final rule, which
makes certain clarifying amendments, result in a significant economic
impact on a substantial number of small entities.
Environmental Impact
This final rule involves external administrative or fiscal
requirements or procedures related to income limits and exclusions with
regard to eligibility for or calculation of HUD housing assistance or
rental assistance that do not constitute a development decision
affecting the physical condition of specific project areas or building
sites. In addition, part of this rule involves operating instructions
and procedures in connection with activities under Federal Register
documents that previously have been subject to a required environmental
review. Accordingly, under 24 CFR 50.19(c)(6) and 50.19(c)(4), this
final rule is categorically excluded from environmental review under
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of section 6 of the Executive Order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This final rule does not
impose any federal mandate on any state, local, or tribal government,
or on the private sector, within the meaning of the UMRA.
List of Subjects
24 CFR Part 5
Administrative practice and procedure, Aged, Claims, Crime,
Government contracts, Grant programs--housing and community
development, Individuals with disabilities, Intergovernmental
relations, Loan programs--housing and community development, Low and
moderate income housing, Mortgage insurance, Penalties, Pets, Public
housing, Rent subsidies, Reporting and recordkeeping requirements,
Social Security, Unemployment compensation, Wages.
24 CFR Part 908
Computer technology, Grant programs--housing and community
development, Rent subsidies, Reporting and recordkeeping requirements.
0
Accordingly, for the reasons described in the preamble, HUD amends 24
CFR parts 5 and 908, as amended in the final rule published on January
27, 2009, at 74 FR 4832, as follows:
PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS
0
1. The authority citation for part 5 continues to read as follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n,
3535(d), and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.
0
2. Revise Sec. 5.216 to read as follows:
Sec. 5.216 Disclosure and verification of Social Security and
Employer Identification Numbers.
(a) General. The requirements of this section apply to applicants
and participants as described in this section, except that this section
is inapplicable to individuals who do not contend eligible immigration
status under subpart E of this part (see Sec. 5.508).
(b) Disclosure required of assistance applicants. Each assistance
applicant must submit the following information to the processing
entity when the assistance applicant's eligibility under the program
involved is being determined.
(1) The complete and accurate SSN assigned to the assistance
applicant and to each member of the assistance applicant's household;
and
(2) The documentation referred to in paragraph (g)(1) of this
section to verify each such SSN.
(c) Disclosure required of individual owner applicants. Each
individual owner applicant must submit the following information to the
processing entity when the individual owner applicant's eligibility
under the program involved is being determined:
(1) The complete and accurate SSN assigned to the individual owner
applicant and to each member of the individual owner applicant's
household
[[Page 68933]]
who will be obligated to pay the debt evidenced by the mortgage or loan
documents; and
(2) The documentation referred to in paragraph (g)(1) of this
section to verify each such SSN.
(d) Disclosure required of certain officials of entity applicants.
Each officer, director, principal stockholder, or other official of an
entity applicant must submit the following information to the
processing entity when the entity applicant's eligibility under the
program involved is being determined:
(1) The complete and accurate SSN assigned to each such individual;
and
(2) The documentation referred to in paragraph (g)(1) of this
section to verify each SSN.
(e) Disclosure required of participants--(1) Initial disclosure.
(i) Each participant, except those age 62 or older as of January 31,
2010, whose initial determination of eligibility was begun before
January 31, 2010, must submit the information described in paragraph
(e)(1)(ii) of this section, if the participant has:
(A) Not previously disclosed a SSN;
(B) Previously disclosed a SSN that HUD or the SSA determined was
invalid; or
(C) Been issued a new SSN.
(ii) Each participant subject to the disclosure requirements under
paragraph (e)(1)(i) of this section must submit the following
information to the processing entity at the next interim or regularly
scheduled reexamination or recertification of family composition or
income, or other reexamination or recertification for the program
involved:
(A) The complete and accurate SSN assigned to the participant and
to each member of the participant's household; and
(B) The documentation referred to in paragraph (g)(1) of this
section to verify each such SSN.
(2) Subsequent disclosure. Once a participant has disclosed and the
processing entity has verified each SSN, the following rules apply:
(i) Addition of new household member who is at least 6 years of age
or under the age of 6 and has an assigned SSN. When the participant
requests to add a new household member who is at least 6 years of age,
or is under the age of 6 and has an assigned SSN, the participant must
provide the following to the processing entity at the time of the
request, or at the time of processing the interim reexamination or
recertification of family composition that includes the new member(s):
(A) The complete and accurate SSN assigned to each new member; and
(B) The documentation referred to in paragraph (g)(1) of this
section to verify the SSN for each new member.
(ii) Addition of new household member who is under the age of 6 and
has no assigned SSN. (A) When a participant requests to add a new
household member who is under the age of 6 and has not been assigned a
SSN, the participant shall be required to provide the complete and
accurate SSN assigned to each new child and the documentation referred
to in paragraph (g)(1) of this section to verify the SSN for each new
child within 90 calendar days of the child being added to the
household.
(B) The processing entity shall grant an extension of one
additional 90-day period if the processing entity, in its discretion,
determines that the participant's failure to comply was due to
circumstances that could not have reasonably been foreseen and were
outside the control of the participant. During the period that the
processing entity is awaiting documentation of a SSN, the processing
entity shall include the child as part of the assisted household and
the child shall be entitled to all the benefits of being a household
member. If, upon expiration of the provided time period, the
participant fails to produce a SSN, the processing entity shall follow
the provisions of Sec. 5.218.
(iii) Assignment of new SSN. If the participant or any member of
the participant's household has been assigned a new SSN, the
participant must submit the following to the processing entity at
either the time of receipt of the new SSN; at the next interim or
regularly scheduled reexamination or recertification of family
composition or income, or other reexamination or recertification; or at
such earlier time specified by the processing entity:
(A) The complete and accurate SSN assigned to the participant or
household member involved; and
(B) The documentation referred to in paragraph (g)(1) of this
section to verify the SSN of each individual.
(f) Disclosure required of entity applicants. Each entity applicant
must submit the following information to the processing entity when the
entity applicant's eligibility under the program involved is being
determined:
(1) Any complete and accurate EIN assigned to the entity applicant;
and
(2) The documentation referred to in paragraph (g)(2) of this
section to verify the EIN.
(g) Required documentation--(1) SSN. The documentation necessary to
verify the SSN of an individual who is required to disclose his or her
SSN under paragraphs (a) through (e) of this section is:
(i) A valid SSN card issued by the SSA;
(ii) An original document issued by a federal or state government
agency, which contains the name of the individual and the SSN of the
individual, along with other identifying information of the individual;
or
(ii) Such other evidence of the SSN as HUD may prescribe in
administrative instructions.
(2) EIN. The documentation necessary to verify an EIN of an entity
applicant that is required to disclose its EIN under paragraph (f) of
this section is the official, written communication from the Internal
Revenue Service (IRS) assigning the EIN to the entity applicant, or
such other evidence of the EIN as HUD may prescribe in administrative
instructions.
(h) Effect on assistance applicants. (1) Except as provided in
paragraph (h)(2) of this section, if the processing entity determines
that the assistance applicant is otherwise eligible to participate in a
program, the assistance applicant may retain its place on the waiting
list for the program but cannot become a participant until it can
provide:
(i) The complete and accurate SSN assigned to each member of the
household; and
(ii) The documentation referred to in paragraph (g)(1) of this
section to verify the SSN of each such member.
(2) For applicants to the Section 8 Moderate Rehabilitation Single
Room Occupancy (SRO) Program for Homeless Individuals under 24 CFR part
882, subpart H, the documentation required in paragraph (h)(1) of this
section must be provided to the processing entity within 90 calendar
days from the date of admission into the program. The processing entity
shall grant an extension of one additional 90-day period if the
processing entity, in its discretion, determines that the applicant's
failure to comply was due to circumstances that could not have
reasonably been foreseen and were outside the control of the applicant.
If, upon expiration of the provided time period, the individual fails
to produce a SSN, the processing entity shall follow the provisions of
Sec. 5.218.
(i) Rejection of documentation. The processing entity must not
reject documentation referred to in paragraph (g) of this section,
except as HUD may otherwise prescribe through publicly issued notice.
0
3. Amend Sec. 5.218 by revising paragraphs (a), (b) and (c) to read as
follows:
[[Page 68934]]
Sec. 5.218 Penalties for failing to disclose and verify Social
Security and Employer Identification Numbers.
(a) Denial of eligibility of assistance applicants and individual
owner applicants. The processing entity must deny the eligibility of an
assistance applicant or individual owner applicant in accordance with
the provisions governing the program involved, if the assistance or
individual owner applicant does not meet the applicable SSN disclosure,
documentation, and verification requirements as specified in Sec.
5.216.
(b) Denial of eligibility of entity applicants. The processing
entity must deny the eligibility of an entity applicant in accordance
with the provisions governing the program involved; if:
(1) The entity applicant does not meet the EIN disclosure,
documentation, and verification requirements specified in Sec. 5.216;
or
(2) Any of the officials of the entity applicant referred to in
Sec. 5.216(d) does not meet the applicable SSN disclosure, and
documentation and verification requirements specified in Sec. 5.216.
(c) Termination of assistance or termination of tenancy of
participants. (1) The processing entity must terminate the assistance
or terminate the tenancy, or both, of a participant and the
participant's household, in accordance with the provisions governing
the program involved, if the participant does not meet the applicable
SSN disclosure, documentation, and verification requirements specified
in Sec. 5.216.
(2) The processing entity may defer termination and provide the
participant with an additional 90 calendar days to disclose a SSN, but
only if the processing entity, in its discretion, determines that:
(i) The failure to meet these requirements was due to circumstances
that could not have reasonably been foreseen and were outside the
control of the participant; and
(ii) There is a reasonable likelihood that the participant will be
able to disclose a SSN by the deadline.
(3) Failure of the participant to disclose a SSN by the deadline
specified in paragraph (c)(2) of this section will result in
termination of the assistance or tenancy, or both, of the participant
and the participant's household.
* * * * *
0
4. Add a new Sec. 5.233 to read as follows:
Sec. 5.233 Mandated use of HUD's Enterprise Income Verification (EIV)
System.
(a) Programs subject to this section and requirements. (1) The
requirements of this section apply to entities administering assistance
under the:
(i) Public Housing program under 24 CFR part 960;
(ii) Section 8 Housing Choice Voucher (HCV) program under 24 CFR
part 982;
(iii) Moderate Rehabilitation program under 24 CFR part 882;
(iv) Project-based Voucher program under 24 CFR part 983;
(v) Project-based Section 8 programs under 24 CFR parts 880, 881,
883, 884, 886, and 891;
(vi) Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);
(vii) Section 811 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 8013);
(viii) Sections 221(d)(3) and 236 of the National Housing Act (12
U.S.C. 1715l(d)(3) and 1715z-1); and
(ix) Rent Supplement program under section 101 of the Housing and
Urban Development Act of 1965 (12 U.S.C. 1701s).
(2) Processing entities must use HUD's EIV system in its entirety:
(i) As a third party source to verify tenant employment and income
information during mandatory reexaminations or recertifications of
family composition and income, in accordance with Sec. 5.236, and
administrative guidance issued by HUD; and
(ii) To reduce administrative and subsidy payment errors in
accordance with HUD administrative guidance.
(b) Penalties for noncompliance. Failure to use the EIV system in
its entirety may result in the imposition of sanctions and/or the
assessment of disallowed costs associated with any resulting incorrect
subsidy or tenant rent calculations, or both.
Sec. 5.236 [Amended]
0
5. In Sec. 5.236(b)(3)(i)(A), remove ``215''.
PART 908--ELECTRONIC TRANSMISSION OF REQUIRED FAMILY DATA FOR
PUBLIC HOUSING, INDIAN HOUSING, AND THE SECTION 8 RENTAL
CERTIFICATE, RENTAL VOUCHER, AND MODERATE REHABILITATION PROGRAMS
0
6. The authority citation for part 908 continues to read as follows:
Authority: 42 U.S.C. 1437f, 3535d, 3543, 3544, and 3608a.
0
7. Revise Sec. 908.101 to read as follows:
Sec. 908.101 Purpose.
The purpose of this part is to require Public Housing Agencies
(PHAs), including Moving-to-Work (MTW) PHAs, that operate Public
Housing, Indian Housing, or Section 8 Rental Certificate, Housing
Choice Voucher (HCV), Rental Voucher, and Moderate Rehabilitation
programs to electronically submit certain data to HUD for those
programs. These electronically submitted data are required for HUD
forms: HUD-50058, including the Family Self-Sufficiency (FSS) Addendum.
Applicable program entities must retain at a minimum, the last three
years of the form HUD-50058, and supporting documentation, during the
term of each assisted lease, and for a period of at least 3 years from
the end of participation (EOP) date, to support billings to HUD and to
permit an effective audit. Electronic retention of form HUD-50058 and
HUD-50058-FSS and supporting documentation fulfills the record
retention requirement under this section.
Dated: December 21, 2009.
Shaun Donovan,
Secretary.
[FR Doc. E9-30720 Filed 12-28-09; 8:45 am]
BILLING CODE 4210-67-P