[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Pages E17-E18]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              PUBLIC HOUSING TENANT INTEGRITY ACT OF 1977

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                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. KNOLLENBERG. Mr. Speaker, I rise to day to introduce the Public 
Housing Tenant Integrity Act of 1997. This bill amends section 6103 of 
the Internal Revenue Code and section 904 of the Stewart B. McKinney 
Homeless Assistance Amendment Act to allow the Housing and Urban 
Development Administration [HUD] to fight fraud and abuse that has 
developed when public housing tenants fail to fully disclose or update 
their income.
  As we move into the 21st century, budgetary constraints will continue 
to limit nondefense discretionary spending. Public housing is not 
immune from these constraints. Though Congress and HUD have taken steps 
to prepare housing for the future, there is still room for improvement. 
One area I believe we can make substantial inroads is to eliminate 
fraud and abuse. By aggressively attacking existing fraud and abuse, we 
can squeeze every dollar appropriated for public housing and direct it 
effectively to those most in need. We can also assure the American 
taxpayer that tenants pay their fair share.
  As most of you know, when an individual applies for public housing, 
the key qualification is income. An applicant who meets the income 
requirement is required to pay rent equal to 30 percent of their 
income. The taxpayer subsidizes the rest. Unfortunately, housing 
agencies do not have independent sources to verify the applicant's wage 
and income data, even if the housing agency suspects the individual 
underreported income. Moreover, the system encourages residents to 
underreport their income when they apply for housing.
  Despite the lack of a nationwide study, HUD has estimated the abuse 
at $300 million annually. Further, the General Accounting Office [GAO] 
issued a 1992 report that found unreported income abuse could be as 
high as 21 percent. Others have projected a reasonable estimate between 
5 and 10 percent which is consistent with other Federal benefit 
programs. Whatever the number, fighting this abuse and stopping 
individuals who defraud the Federal Government is a commonsense goal.
  Congress, HUD, and others have long recognized the need to address 
this particular problem and in 1988 Congress passed the Steward B. 
McKinney Homeless Assistance Amendments Act. The McKinney Act provided 
State agencies with the authority to disclose

[[Page E18]]

wage and unemployment data to HUD and housing authorities, but not to 
owners or managers. This program was somewhat successful, but it 
expired in October 1994.
  Then in 1993, Congress passed the Omnibus Budget Reconciliation Act. 
It contained a provision which permits the Social Security 
Administration [SSA] and the Internal Revenue Service [IRS] to disclose 
earned and unearned income data to HUD. However, and this is very 
important, it did not provide for the redisclosure of income data to 
those local entities who directly service and oversee the tenants.
  This particular program was first implemented in 1996 and matches 
information reported by the tenant with earned and unearned income 
reported to the SSA and IRS. If a discrepancy exists, HUD notifies the 
local housing authority that a particular tenant has underreported 
their income, but HUD is prohibited from disclosing how much the 
discrepancy is or where it exists. Thus, the local housing authority 
must launch their own investigation or have the tenant voluntarily 
disclose the information, despite the fact HUD has the information they 
need. HUD also informs the tenant, requesting he or she redisclose to 
the housing agencies their true income. Unfortunately, the individual 
must voluntarily do this and without giving local entities the 
information already complied the true effectiveness of this program 
will be diminished.
  As you can see, steps have been taken to fight those who abuse the 
system, but the final step still remains. The Public Housing Tenant 
Integrity Act of 1997 builds on this foundation by making it possible 
for HUD to share the information it has to local housing agencies. 
Allowing local agencies to receive this information is a logical step, 
and it makes perfect sense. After all, local agencies are on the front 
line and work with public housing tenants every day.
  One area of concern with computer matching is preventing the illegal 
disclosure of Federal tax data. However, safeguards currently exist 
between, and I believe we can develop further safeguards to protect the 
interests of all those involved including Congress and the IRS. 
Moreover, I believe Congress has an obligation to the taxpayer that 
public housing assistance is a benefit not a right.
  Mr. Speaker, this legislation is designed to stop individuals who 
defraud the government of hundreds of millions of dollars annually. We 
have the technology to fight this fraud and abuse and passage of the 
Public Housing Tenant Integrity Act is needed to provide local housing 
authorities with the necessary tools to do just that. I look forward to 
working with my colleagues on both sides of the aisle to pass this 
commonsense legislation.

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