[Federal Register Volume 59, Number 164 (Thursday, August 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20710]


[[Page Unknown]]

[Federal Register: August 25, 1994]


_______________________________________________________________________

Part II





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Secretary



_______________________________________________________________________



24 CFR Part 200, et al.



Restrictions on Assistance to



Noncitizens; Proposed Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 200, 215, 235, 236, 247, 812, 850, 880, 881, 882, 883, 
884, 886, 887, 900, 904, 905, 912 and 960

[Docket No. R-94-409; FR-2383--P-04]
RIN 2501-AA63

 

Restrictions on Assistance to Noncitizens

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement section 214 of the Housing 
and Community Development Act of 1980, as amended. Section 214 
prohibits the Secretary of HUD from making financial assistance 
available to persons other than United States citizens, nationals, or 
certain categories of eligible noncitizens in HUD's Public Housing and 
Indian Housing programs (including homeownership), the section 8 
housing assistance payments programs, the Housing Development Grants 
program, the section 236 interest reduction and rental assistance 
programs, the Rent Supplement program, and the section 235 
homeownership program.

DATES: Comments due date: October 24, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, Office of the General 
Counsel, room 10276, Department of Housing and Urban Development, 451 
7th Street, SW., Washington, DC 20410-0500. Comments should refer to 
the above docket number and title. A copy of each comment submitted 
will be available for public inspection during regular business hours 
weekdays at the above address. Facsimile (FAX) comments are not 
acceptable.

FOR FURTHER INFORMATION CONTACT: For the covered programs, the 
following persons should be contacted:
    (1) For Public Housing, Section 8 Certificate, Rental Voucher, and 
Moderate Rehabilitation (except Single Room Occupancy--``SRO'') 
programs --Edward Whipple, Rental and Occupancy Branch, Office of 
Public Housing, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 708-
0744;
    (2) For Indian Housing programs--Dominic Nessi, Director, Office of 
Native American Programs, Department of Housing and Urban Development, 
451 Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 
708-1015;
    (3) For the Section 8 Moderate Rehabilitation SRO program--Barbara 
Richards, Acting Director, Office of Special Needs Assistance Programs, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410-7000, telephone (202) 708-4300;
    (4) For the other Section 8 programs, the Section 236 programs, 
Housing Development Grants and Rent Supplement--Barbara Hunter, Program 
Planning Division, Office of Multifamily Management, Department of 
Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 
20410-8000, telephone (202) 708-3944; and
    (5) For the Section 235 homeownership program--William Heyman, 
Office of Lender Activities and Land Sales Registration, Office of 
Single Family Housing, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410-8000, telephone (202) 708-
1824.
    For persons with hearing impairment, the TDD number is (202) 472-
6725. None of the foregoing telephone numbers are toll-free.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

    The information collection requirements contained in this rule have 
been submitted to the Office of Management and Budget (OMB) for review 
under the Paperwork Reduction Act of 1980. No person may be subjected 
to a penalty for failure to comply with these information collection 
requirements until they have been approved and assigned an OMB control 
number. The OMB control number, when assigned, will be announced by a 
separate notice in the Federal Register.
    Public reporting burden for the collection of information 
requirements contained in this rule is estimated to include the time 
for reviewing the instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information.
    Information on the estimated public reporting burden is provided 
under the preamble heading Other Matters. Send comments regarding this 
burden estimate or any other aspect of this collection of information, 
including suggestions for reducing this burden, to the Department of 
Housing and Urban Development, Rules Docket Clerk, 451 Seventh Street, 
SW., room 10276, Washington, DC 20410; and to the Office of Management 
and Budget, Office of Information and Regulatory Affairs, Attention HUD 
Desk Officer, room 3001, Washington, DC 20503.

II. Statutory and Regulatory Background

    The restrictions on providing housing assistance to noncitizens 
with ineligible immigration status have been embodied in statute since 
1980. Section 214 of the Housing and Community Development Act of 1980 
(94 Stat. 1637) (Section 214) was the original basis for restrictions 
on providing assistance to noncitizens with ineligible immigration 
status in the assisted housing programs. Section 214 was amended by 
section 329(a) of the Housing and Community Development Amendments of 
1981 (94 Stat. 408), by section 121(a)(2) of the Immigration Reform and 
Control Act of 1986 (``IRCA'', 100 Stat. 3384), and by section 164 of 
the Housing and Community Development Act of 1987 (101 Stat. 1860). 
(Section 214, as amended by these statutory sections, is codified at 42 
U.S.C. 1436a.)
    There have been numerous attempts by HUD to implement by regulation 
the statutory restrictions on providing assistance to noncitizens with 
ineligible immigration status. Rules, both proposed and final, were 
published in 1982 (47 FR 18914, and 47 FR 43674), in 1986 (51 FR 
15611), and 1988 (53 FR 842, and 53 FR 41038). Despite the publication 
of final rules during the period between 1982 and 1988, the statutory 
restrictions of section 214 have not been made effective. A detailed 
history of the regulatory efforts to implement section 214 (including 
why the final rules were not made effective) can be found in the rule 
published on January 13, 1988 (53 FR 842).
    The most recent proposed rule implementing section 214 (before 
publication of this proposed rule) was published on October 19, 1988 
(53 FR 41038). The proposed rule published in today's Federal Register 
is based on the October 19, 1988 proposed rule, and takes into 
consideration public comment received on the October 19, 1988 proposed 
rule. The discussion of public comments is set forth in section VII of 
this preamble.

III. Procedural Matters

A. No Restrictions on Use of Assistance Until Final Rule Is Published 
and Effective

    Until a final rule implementing section 214 is published and made 
effective, there are no HUD restrictions on the use of assisted housing 
by noncitizens with ineligible immigration status. Consequently, until 
this proposed rule has reached the final rule stage, covered entities 
(i.e., housing authorities, managers of HUD-assisted housing, and 
mortgagees in the section 235 FHA insurance program) are not authorized 
to take any action based on the eligible immigration status of 
applicants and tenants.

B. Using the ``Effective Date of the Final Rule'' as the Critical Date 
Rather Than ``Date of Enactment''

    Paragraph (c)(1) of section 214 was added by the Housing and 
Community Development Act of 1987 (the 1987 Act) and confers discretion 
on the Secretary of HUD to continue assistance or defer termination of 
assistance on behalf of an individual for whom assistance would 
otherwise be terminated if that person was ``receiving such assistance 
on the date of enactment of the Housing and Community Development Act 
of 1987.''
    The term ``date of enactment'' is also found in section 214(d) in 
the description of the elderly persons who need not provide 
documentation of their immigration status. The statute exempts from 
such documentation any individual who is ``62 years of age or older, 
and is receiving financial assistance on the date of the enactment of 
the Housing and Community Development Act of 1987.''
    HUD has determined that the provisions of section 214 are too 
complex to be determined self-implementing as of the date of enactment 
of the 1987 Act (February 5, 1988). Thus, the restrictions of section 
214 will not be felt until a final regulation is published and becomes 
effective.
    The general Congressional intent of section 214(c)(1) was to 
protect ``the sanctity of the family.'' (See remarks of Sen. William 
Armstrong, 133 Cong. Rec. S18615, December 21, 1987.) To honor this 
intent, HUD believes it is necessary to implement the new protective 
provisions at the same time that the restrictions of section 214 become 
effective. To do otherwise would be to thwart the pro-family intent of 
the Congress by prematurely triggering the statute's protections and 
rendering them meaningless for families admitted after the enactment 
date, but before a final rule effectively applies the restrictions of 
section 214.
    In other words, since the exact effect on persons applying for or 
participating in the covered HUD programs will not be known until 
publication of the final rule, HUD is interpreting the statutory 
language to permit lenient treatment to persons receiving assistance on 
the effective date of the final rule when all parties affected will 
have notice of the methods that HUD has chosen for implementing the 
statutory restrictions rather than on the precise date of enactment of 
the 1987 Act. To limit lenient treatment to persons receiving 
assistance on the precise date of enactment would create a category of 
persons (admitted between February 5, 1988 and the final rule's 
effective date) who would be denied the new statutory protections 
simply because of the time associated with promulgation of a final 
rule. Support for this position is found in a House Committee Report in 
connection with the 1987 Act (H.R. Rep. No. 100-1222, 100th Cong., 1st 
Sess. 49 (1987) (``House Report'')). In that report, the Congress 
stated: ``The modifications [made by the 1987 Act] are intended to 
clarify the original intent of Congress that families in which at least 
one person is eligible are not disqualified and that the rules not be 
applied retroactively.'' (House Report at p. 50.)

IV. Reimbursement for Costs of Implementing and Operating Verification 
System

    Section 214(g) authorizes HUD to reimburse covered entities for the 
costs incurred in implementing and operating the system developed by 
the Immigration and Naturalization Service (INS) for verifying 
immigration status. The INS system is referred to as the Systematic 
Alien Verification for Entitlements or SAVE.
    Although implementation and operation of the INS verification 
system is not specifically addressed in this rule, detailed guidance 
will be issued to covered entities at the time of publication of the 
final rule. HUD will be developing a method of coordinating with the 
INS for verifying immigration status through SAVE, which includes an 
automated system, and a manual search capability. HUD anticipates that 
the cost of necessary verification inquiries made on the automated 
system will be billed directly to HUD.

V. Section 214 Coverage of HUD Programs

A. HUD Programs Covered by Section 214

    Paragraph (b) of section 214 states that its restrictions 
concerning noncitizens with ineligible immigration status apply to the 
provision of ``financial assistance made available pursuant to the 
United States Housing Act of 1937, section 235, or 236 of the National 
Housing Act, or section 101 of the Housing and Urban Development Act of 
1965.''
1. Programs Covered by the 1937 Act
    The programs providing financial assistance on behalf of tenants 
(or homebuyers) pursuant to the United States Housing Act of 1937 (42 
U.S.C. 1437 et seq.) (1937 Act) are the Public and Indian Housing 
programs, the Section 8 Housing Assistance Payments programs, and the 
Housing Development Grant programs (with respect to low income units 
only). All of these programs provide housing, either directly (such as 
public housing) or indirectly (such as through Section 8 Certificates), 
that is assisted by HUD.
    a. Public and Indian Housing Programs. Included among the Public 
and Indian Housing programs are the Mutual Help and Turnkey III 
Homeownership Opportunity programs. The restrictions against financial 
assistance to noncitizens with ineligible immigration status are to be 
applied to current homebuyers under the Turnkey III and Mutual Help 
programs only to the extent that applying the restrictions would be 
consistent with existing contracts. All homeownership contracts 
executed after the effective date of the final rule will be covered by 
the restrictions. Another homeownership program covered is the HOPE for 
Public and Indian Housing Homeownership program developed pursuant to 
42 U.S.C. 1437aaa.
    b. Section 8 Housing Assistance Payments Programs. The Section 8 
Housing Assistance Payments programs include New Construction, 
Substantial Rehabilitation, Moderate Rehabilitation, Certificate, 
Voucher, State Housing Agency and Farmers Home Administered, Section 
202 Housing for the Elderly or Handicapped projects (when section 8 
assistance is involved), Loan Management and Property Disposition 
projects. While the Rental Rehabilitation program also is operated 
under the 1937 Act (section 17 of the 1937 Act), it does not provide 
financial assistance to tenants except to the extent tenants 
participate in the Section 8 Certificate or Voucher programs, which are 
separately covered by the restrictions of section 214.
2. Section 235 of the NHA
    The program authorized under section 235 of the National Housing 
Act (12 U.S.C. 1715z) (NHA), provides for payments by HUD to the 
mortgagee on behalf of a low income mortgagor to reduce the homebuyer's 
payments to an affordable level, e.g., the higher of a certain 
percentage of income or the amount that would be payable if the 
interest charged on the mortgage loan were set at some figure such as 
four percent. This program is available to purchasers of single family 
homes, and to purchasers of units in cooperatives and condominiums. The 
rule will affect mainly new applicants for participation in the 
program.
    Assistance contracts of section 235 homeowners who executed their 
contracts before the effective date of this rule will be honored 
without regard to their citizenship or immigration status. 
Additionally, mortgagors who refinance their section 235 mortgages 
(which were executed before the effective date of the final rule, and 
whose assistance contracts were unchanged after that date) with 
mortgages insured under section 235(r) of the NHA are not subject to 
the section 214 requirements. The reason for the latter exemption is 
that many old 235 mortgages bear an interest rate higher than 12 
percent. If the section 214 requirements (with the required 
recertifications) are made applicable to current 235 mortgagors who 
agree to refinance under section 235(r), this may be a disincentive to 
refinancing, and also would be detrimental to HUD. The section 235(r) 
program is designed to aid HUD in saving millions of dollars in section 
235 assistance payments by refinancing the 235 mortgages at a lower 
interest rate. Because the 235(r) program was designed specifically to 
provide for the refinancing of section 235 mortgages, HUD does not 
believe that this is the type of contract modification or program 
change that triggers the section 214 requirements.
    The rule will largely have an impact on current section 235 
homeowners themselves only if a homeowner's mortgage is to be revised 
for some reason (other than refinancing under section 235(r)), in which 
case the modification will include application of the restrictions on 
immigration status as if the mortgagor were an applicant for 
participation in the assistance program. Although there may be no new 
mortgages insured and assisted under this program, at conveyance of 
properties already insured and assisted under the program, purchasers 
will be required to demonstrate eligibility in order to be approved for 
assistance (and thereafter at each annual recertification, to continue 
to receive assistance).
3. Section 236 of the NHA
    The section 236 program provides for payments to a mortgagee on 
behalf of the owner of a rental housing project designed for occupancy 
by low income families in order to reduce the owner's payments to the 
amount that would be payable if the interest rate on the mortgage loan 
were set at a figure such as one percent. These lower mortgage payments 
enable the owner to charge qualified tenants lower than market rate 
rents (``basic rents''), although tenants who are not qualified for the 
benefits of the program may be charged market rate rents. In addition, 
rental assistance payments are available for some units in these 
projects to enable the rents charged to tenants who cannot afford the 
``basic rent'' to be reduced to an amount based on a percentage of 
income, similar to the rents charged in the public housing and section 
8 programs. This rule applies to all the tenants of a section 236 
project who pay a below market-rate rent. It does not apply to tenants 
who pay a market-rate rent. (It should be noted, however, that a market 
rent tenant would be required to submit evidence of citizenship or 
eligible immigration status if he or she subsequently applied for 
tenant-based assistance.)
4. Section 101/Rent Supplement Program
    The program authorized under section 101 of the Housing and Urban 
Development Act of 1965 (12 U.S.C. 1701s), is the Rent Supplement 
program. Under this program, HUD makes payments to a housing owner that 
is a private nonprofit entity or limited dividend entity and whose 
purchase of the property is financed by a mortgage loan insured under 
certain HUD programs, or is financed under a State or local program 
approved by HUD. These payments are for the benefit of low income 
tenants to enable the owner to charge these tenants rents based on a 
percentage of their incomes, similar to the rents charged in the public 
housing and section 8 programs.

B. HUD Programs Not Covered by Section 214

    HUD-assisted housing programs that are not covered by 42 U.S.C. 
1436a, and consequently are not covered by this rule, are: (1) The 
section 221(d)(3) and (d)(5) program of interest subsidy for projects 
with mortgages insured under those sections of the National Housing Act 
(12 U.S.C. 17151); (2) the programs developed to serve the homeless 
(see 42 U.S.C. 11361), except for Section 8 Moderate Rehabilitation SRO 
program (24 CFR part 882, subpart H); (3) the HOPE Homeownership of 
Multifamily Units program developed pursuant to 42 U.S.C. 12871; (4) 
the HOPE for Homeownership of Single Family Homes developed pursuant to 
42 U.S.C. 12891; (5) the HOME program developed pursuant to 42 U.S.C. 
12741; (6) the Supportive Housing for the Elderly program developed 
pursuant to 42 U.S.C. 1701q; and (7) the Supportive Housing for Persons 
with Disabilities program developed pursuant to 42 U.S.C. 8013.
    The above listed programs are not covered unless any of these 
programs is used in conjunction with a covered program, such as section 
8 housing assistance payments.

VI. Overview of 1994 Proposed Rule

    The proposed rule published in today's Federal Register (the 1994 
proposed rule) is substantially similar to the proposed rule published 
on October 19, 1988 (1988 proposed rule). In many respects, section 214 
allows little discretion on the part of HUD to expand or reduce the 
statutory provisions by regulation. As noted above, section 214 is very 
specific about what HUD programs are covered by the statute. Section 
214 is also specific about what categories of noncitizens are eligible 
to receive HUD financial assistance, the procedures to be used to 
verify immigration status, the types of documentation that must be 
submitted and who must submit this documentation, the appeal procedures 
to be provided to persons initially determined to have ineligible 
status, and the special assistance to be provided to certain families 
with members who have eligible status and those who have ineligible 
status.

A. Summary of Principal Provisions of 1994 Proposed Rule

    The following provides a summary of the principal provisions of the 
1994 proposed rule.
1. Eligibility for HUD Financial Assistance
    Noncitizens eligible for financial assistance are limited to 
statutory categories.
    Noncitizen students who are nonimmigrants are excluded from 
receiving financial assistance in accordance with section 214.
2. Evidence of Eligible Status (Who Submits What)
    For citizens--
    A written declaration only. (The proposed rule removes the 1988 
proposed rule language concerning suspicion of submission of false 
declaration of citizenship.)
    For noncitizens 62 years of age or older, and receiving HUD 
assistance on the effective date of the rule--
    A written declaration, and
    Proof of age document.
    For all other noncitizens--
    A written declaration,
    A verification consent form, and
    Evidence of immigration status.
    Election not to declare eligible status. The 1994 proposed rule 
also contains a provision that permits a member of a family to elect 
not to contend that he or she has eligible status (i.e., the person 
elects not to submit a declaration of eligible status), and if other 
members of the family declare eligible status and have eligible status, 
the family may be eligible for continued assistance, proration of 
assistance (see discussion of proration of assistance under section 
VI.A.11 of this preamble), or temporary deferral of termination of 
assistance, as appropriate.
    Permissible to incorporate declaration in housing application 
assistance. The 1994 proposed rule does not prescribe a specific 
declaration. A responsible entity may provide for the declaration to be 
incorporated in the application for assistance, or make it a separate 
document. The declaration, however, must cite the statutory authority 
under which it is required to be provided, and the purpose for the 
requirement (i.e., that financial assistance is contingent upon the 
submission of the form). Additional guidance on implementing the 
requirements of section 214, that is to be issued at the time of 
publication of the final rule, will include model language for the 
declaration, as well as the verification consent form.
3. When to Submit Evidence of Eligible Immigration Status
    For applicants, the 1994 proposed rule provides for the responsible 
entity to require submission of the evidence by the date the 
responsible entity anticipates or has knowledge that verification of 
other aspects of eligibility for assistance (i.e., income, family 
composition) will occur.
    For persons already receiving assistance, the rule provides for the 
responsible entity to require submission of evidence at the first 
regular reexamination of eligibility (i.e., reexamination of income and 
family composition) that occurs after the effective date of the final 
rule.
    For new occupants in an assisted unit, the rule provides for the 
responsible entity to require submission of evidence at the first 
interim or regular reexamination following the person's occupancy.
    One-time submission for continuous occupancy. The proposed rule 
clarifies that evidence of eligible status is required to be submitted 
only one time for each family member that maintains continuous 
occupancy in an assisted unit.
4. Extension of Time to Submit Evidence
    The 1994 proposed rule would require responsible entities to grant 
an extension of time in which to submit evidence if the applicant or 
tenant submits the declaration of eligible immigration status, and 
certifies that the evidence needed to support the declaration is 
temporarily unavailable, and prompt and diligent efforts to obtain this 
evidence will be undertaken. The proposed rule provides that the 
extension may not be for an indefinite period, but allows for the 
responsible entity to establish a time period that is sufficient for 
the applicant or tenant to obtain the needed evidence.
5. When Verification of Eligible Status is to Occur
    For applicants, the 1994 proposed rule provides for the responsible 
entity to verify evidence of eligible immigration status at the time 
the responsible entity verifies other aspects of eligibility for 
assistance (i.e., income, family composition).
    For persons already receiving assistance, the rule provides for the 
responsible entity to verify evidence of eligible status at the time 
that it verifies other aspects of eligibility (i.e., reexamination of 
income, family composition) for continued occupancy in the assisted 
unit.
    Verification of evidence of eligible immigration status is to be 
treated the same as any other factor which determines a family's 
eligibility for assistance.
6. Verification Procedures
    The proposed rule provides for the following verification 
procedures in accordance with the INS verification systems:
    (1) Primary verification of the immigration status is conducted by 
means of an automated system (SAVE) that provides access to the names, 
file numbers, and admission numbers of noncitizens;
    (2) Secondary verification is a manual search by the INS of its 
records to determine an individual's immigration status. If primary 
verification fails to confirm eligible immigration status, secondary 
verification must be performed. The results of primary verification are 
not sufficient to conclude that an individual does not have eligible 
immigration status.
    (3) No waiver of verification procedures. The proposed rule does 
not provide for waiver of the INS verification procedures.
7. Protection of Individual's Privacy
    Section 214(d)(3) requires HUD to protect the ``individual's 
privacy to the maximum degree possible.'' The 1988 proposed rule 
provided that evidence of immigration status submitted by an applicant 
or tenant to the responsible entity may be released by the responsible 
entity to HUD, or to a Federal, State or local agency under specific 
circumstances, or may be released by HUD to any Federal, State, or 
local government agency (including the Social Security Administration 
and the INS) under specific circumstances, and listed those 
circumstances.
    The 1994 proposed rule recognizes the impossibility of anticipating 
all circumstances under which a responsible entity or HUD may be 
required to release information. Accordingly, the 1994 proposed rule 
removes the list of circumstances, and provides that (1) the 
responsible entity may release the information to HUD and the INS for 
purposes of determining eligible immigration status, (2) HUD may 
release the information to the INS, and (3) the responsible entity and 
HUD may release the information to any other Federal, State or local 
government agency in accordance with applicable Federal, State or local 
law that requires the release of the evidence to that agency.
8. No Delay, Denial, Reduction, or Termination of Assistance Pending 
Verification of Eligible Status or Pending INS Appeal; but Delay for 
Applicant Following INS Appeal
    Consistent with section 214(d)(4), the 1994 proposed rule provides 
that assistance to an applicant may not be delayed, reduced, or denied, 
and assistance to a tenant may not be delayed, denied, reduced or 
terminated, during the pendency of the verification procedures for 
eligible status, or during the pendency of the INS appeal procedure.
    Consistent with section 214(d)(5), assistance to an applicant may 
not be denied, and assistance to a tenant may not be terminated during 
the pendency of the informal hearing procedure provided by the 
responsible entity. However, section 214(d)(5) only restricts denial or 
termination of assistance. Thus, assistance to an applicant may be 
delayed, but not denied, during the pendency of the informal hearing 
process.
9. Extension of Time to Request INS Appeal or Informal Hearing
    The 1994 proposed rule requires the responsible entity extend the 
time for requesting an appeal to the INS or for requesting an informal 
hearing upon good cause shown by the applicant or tenant.
10. Continued Assistance/Deferred Termination of Assistance
    Consistent with section 214, the 1994 proposed rule provides for 
assistance to be continued or termination of assistance temporarily 
deferred for certain families and under certain circumstances as set 
forth in section 214(c)(1).
11. Proration of Assistance
    The 1994 proposed rule provides for proration of assistance for 
applicant and tenant families containing family members with eligible 
and ineligible immigration status (``mixed families''). The allowance 
for proration of assistance departs from HUD's previous position on 
this issue. HUD previously took the position that proration was not 
authorized by section 214, and even if authorized, not feasible in its 
covered programs, particularly in HUD's public housing and section 8 
programs. On further consideration, HUD acknowledges that the statutory 
language does not prohibit proration of assistance, and HUD has 
designed formulas for proration that it believes will make proration of 
assistance possible in covered programs.
    HUD specifically requests comment from the public on the proration 
formulas set forth in Secs. 200.188, 812.11, 905.310(s), and 912.11. 
HUD welcomes suggestions on alternative formulas and comments on the 
subject of proration of assistance, generally.
12. Other
    Additional provisions in the 1994 proposed rule (particularly those 
that differ from the 1988 proposed rule) are addressed in the 
discussion of public comments on the 1988 proposed rule set forth in 
section VII of this preamble.
    Documents in Other Languages. One additional provision included in 
the 1994 proposed rule is a requirement that for any document or notice 
that the rule requires the responsible entity (housing authority, 
project owner, mortgagee) to provide an applicant or tenant or to 
obtain the signature of the applicant or tenant, the responsible 
entity, where feasible, is to provide such document in a language that 
is understood by the applicant or tenant if he or she is not proficient 
in English.
    Nondiscrimination Requirements. The 1994 proposed rule includes a 
provision that restricts the responsible entity from administering the 
restrictions of section 214 in a manner which discriminates or treats 
persons differently because of race, color, religion, national origin, 
sex, disability or familial status, as prohibited by the Fair Housing 
Act (42 U.S.C. 3601-3619), Title VI of the Civil Rights of 1964 (42 
U.S.C. 2000d-2000d-5), and section 504 of the Rehabilitation Act of 
1973 (29 U.S.C. 794). Such unlawful actions include determinations of 
eligibility and ineligibility, using different requirements to 
ascertain that eligibility or ineligibility, and treating persons 
differently, if those actions are based on such factors as language, 
country of origin, or family associations.

B. Organization of Proposed Rule

    Because of the number of HUD programs covered by section 214, this 
proposed rule amends several program regulations in three chapters of 
HUD's regulations: 24 CFR Chapter II, Chapter VIII, and Chapter IX. 
Within these three chapters, conforming amendments are made to several 
parts, and four parts are substantially amended to address the 
restrictions of section 214. These parts are: parts 200, 812, 905, and 
912. The regulations implementing section 214 in each of these four 
parts are divided into the following regulatory sections, and generally 
follow the order shown below.

Sec.  Definitions. (200.181, 812.2, 905.102, 912.2)
Sec.  Requirements concerning notices and documents. (200.180a, 812.5a, 
905.310(a), 912.5a)
Sec.  General provisions (200.182, 812.5, 905.310(b), 912.5)
Sec.  Submission of evidence of citizenship or eligible immigration 
status. (200.183, 812.6, 905.310(e), 912.6)
Sec.  Documents of eligible immigration status. (200.184, 812.7, 
905.310(k), 912.7)
Sec.  Verification of eligible immigration status. (200.185, 812.8, 
905.310(l), 912.8)
Sec.  Delay, denial or termination of assistance. (200.186, 812.9, 
905.310(m), 912.9)
Sec.  Preservation of mixed and other families. (200.187, 812.10, 
905.310(f), 912.10)
Sec.  Proration of assistance. (200.188, 812.11, 905.310(s), 912.11)
Sec.  Prohibition of assistance to noncitizen students. (200.189, 
812.12, 905.310(t), 912.12)
Sec.  Compliance with nondiscrimination requirements. (200.190, 812.13, 
912.13)
Sec.  Protection from liability for responsible entities, State and 
local agencies and officials. (200.191, 812.14, 905.310(u), 912.14)
Sec.  Liability of ineligible families for reimbursement of benefits. 
(200.192, 812.15)

VII. Response to Public Comments on 1988 Proposed Rule

    This section of the preamble discusses the significant issues and 
questions raised by public comments received on the 1988 proposed rule. 
The discussion of public comments on the 1988 proposed rule is included 
in the preamble to the 1994 proposed rule to assist the public in 
understanding why certain provisions in the 1988 proposed rule were 
revised or not revised in the 1994 proposed rule.
    During the public comment period for the 1988 proposed rule, 20 
comments were received. These represented the views of several housing 
authorities, two State departments of housing, project owners, an 
association of management agents, and an association of housing 
officials, legal services organizations, immigration law organizations, 
and an advocacy group for the elderly. Many comments made suggestions 
criticizing the restrictions for being too broad, the special relief 
for being too narrow, or the procedures for giving inadequate 
opportunity to applicants to demonstrate eligibility. However, other 
comments focused on the burden placed on the entity responsible for 
enforcing the restrictions and complained that the procedures were too 
complicated and costly.
    In addition to the comments received during the comment period of 
the 1988 proposed rule, HUD held an informal meeting at HUD 
headquarters in February 1994 on the subject of the restrictions 
imposed by section 214. This meeting was attended by representatives of 
organizations that included, but were not limited to: The Farmers Home 
Administration, the Association of Farmworker Opportunity Programs, 
California Rural Legal Assistance, Inc., Chicanos for La Causa, New 
York Legal Aid Society, National Center for Youth Law, National Council 
of La Raza, National Housing Law Project, and the Puerto Rican Legal 
Defense and Education Fund. These organizations submitted additional 
written comments at, and subsequent to, the meeting. These comments are 
part of the docket file for this rule, and are available for inspection 
by the public.
    The following provides a discussion of the comments received on the 
1988 proposed rule, and notes the changes that HUD made, and declined 
to make in the 1994 proposed rule as a result of these comments.

A. Restrictions To Apply on Effective Date of Final Rule

    As discussed in section III.B. of the preamble, the 1994 proposed 
rule uses, as did the 1988 proposed rule, the phrase ``the effective 
date of the final rule'' in lieu of the statutory phrase--``date of 
enactment'' of the 1987 Act.

B. Eligible Status

1. Noncitizen Eligibility Limited to Statutory Categories
    Two housing agencies and a legal services organization stated that 
Seasonal Agricultural Workers (SAWs) and Replenishment Agricultural 
Workers (RAWs) should be included in the rule's list of noncitizens 
with eligible immigration status. These two categories of noncitizens 
were authorized to be given temporary lawful resident status by IRCA, 
which also granted amnesty to noncitizens who had resided illegally in 
the United States since before January 1, 1982. Although a later 
amendment to the HUD statute governing eligible immigration status for 
these programs (the 1987 Housing Act) clarified that the latter 
category of noncitizens have eligible status, it did not refer to the 
SAWs and RAWs. For this reason, the 1988 proposed rule did not include 
SAWs and RAWs as having eligible status.
    However, after reviewing the language of IRCA pertaining to SAWs 
and RAWs (amending sections 210 and 210A of the Immigration and 
Nationality Act), and consulting with the Immigration and 
Naturalization Service (INS) about the interpretation to be given 
sections 210(a)(5) and 210A(d)(4) (8 U.S.C. 1160 and 1161), HUD 
determined that noncitizens admitted for temporary or permanent lawful 
residence under these sections have eligible status, as long as their 
status has not expired or changed. In a letter to HUD dated December 
17, 1993, the INS noted that as a practical matter, no additional RAWS 
were admitted during Federal fiscal years 1990 through 1993, the period 
in which RAWS could have been admitted, and stated that no noncitizens 
``were or will be admitted as RAWs.'' Consequently, the 1994 proposed 
rule includes reference to SAWs, but not RAWs.
    One commenter urged that HUD add to its list of the categories of 
eligible noncitizens two categories not expressly recognized by the 
statute as having such status: (1) Noncitizens who have lived, worked 
and paid taxes in the United States for many years and who will become 
legal permanent residents in the near future, such as relatives of 
citizens or permanent residents; and (2) noncitizens who are so 
elderly, ill, or disabled that the INS will not deport them on 
humanitarian grounds.
    HUD lacks the legal authority to add these categories of 
individuals to the list of those eligible for admission to the programs 
covered by this rule. However, if individuals meeting these 
descriptions already reside in assisted housing, they may qualify for 
continued assistance under the regulatory provisions pertaining to 
mixed families if they live with citizens or permanent residents, or 
for deferral of termination of assistance if they are unable to locate 
alternative suitable housing.
2. Ineligibility of Noncitizen Students
    Section 214 provides that noncitizen students who are not 
immigrants (i.e., are not seeking to establish residency in the United 
States) are not eligible for assistance. The Congress passed the 
provision concerning nonimmigrant student noncitizens (sec. 164, Pub. 
L. 100-242, 101 Stat. 1861) in the late fall of 1987, directly targeted 
against noncitizen students who are nonimmigrant in very emphatic 
language: ``Notwithstanding any other provision of law, the Secretary 
of Housing and Urban Development may not make financial assistance 
available for the benefit of'' a noncitizen student who is a 
nonimmigrant. (Emphasis added) HUD lacks the authority to modify this 
mandate. However, the Chinese Student Protection Act of 1992, Public 
Law 102-404, dated October 9, 1992, allows certain persons who may have 
been admitted to the United States as noncitizen students who are 
nonimmigrants to adjust their status to that of lawful permanent 
residents of the United States, and thus become eligible noncitizens 
under this rule. (See 8 CFR part 245 as amended on July 1, 1993, 58 FR 
35832.)
    HUD, however, has interpreted the restrictions on assistance to 
noncitizen students as not applying to the citizen spouse of a 
noncitizen student or to the children of the citizen spouse and 
noncitizen student.

C. Submission of Evidence of Eligible Status

1. Documentation Requirements--Who Submits What
    One commenter urged HUD to require all applicants and tenants, 
whether citizens or noncitizens, to submit documentation establishing 
eligibility. The commenter insisted that by doing so, HUD would reduce 
the likelihood of discrimination by owners, and ensure that applicants 
do not bypass the verification procedures by simply declaring that they 
are citizens. In contrast, another commenter insisted that HUD's 
requirement that noncitizens and citizens submit documentation of 
eligible citizenship or immigration status would only increase the 
burden on already-busy property managers.
    The 1994 proposed rule maintains documentation requirements because 
documentation requirements are imposed by statute. However, the 1994 
proposed rule revises the documentation requirements for citizens, and 
for noncitizens who are or will be 62 years of age or older and are or 
will be residing in assisted housing when these regulations take 
effect. The 1994 proposed rule removes the requirement in the 1988 
proposed rule that citizens and noncitizens 62 years of age or older 
and residing in assisted housing submit a verification consent form. 
(See section VI.A.2. of this preamble which describes the documentation 
required by the 1994 proposed rule.)
    The 1994 proposed rule does not modify the documentation 
requirements for all other noncitizens (i.e., those who are not 62 
years of age or older and residing in assisted housing) because these 
documentation requirements for noncitizens are statutorily prescribed 
by the Immigration Reform and Control Act of 1986 (IRCA) (42 U.S.C. 
1320b-7). Under IRCA, every individual who declares him or herself to 
be a noncitizen with eligible immigration status (except for certain 
elderly tenants) must submit immigration documents for verification by 
the INS. This requirement applies to every member of a household, 
including children.
    HUD disagrees with the commenter who suggested that requiring all 
tenants and applicants to submit documentation of citizenship or 
immigration status would lessen the likelihood of discrimination by 
responsible entities. Under both the 1988 and 1994 proposed rules, a 
responsible entity is required to ask any individual declaring eligible 
immigration status to submit immigration documents for verification 
with the INS.
    Individuals who declare in writing that they are United States 
citizens are not required under IRCA to submit proof of citizenship. 
HUD construes this provision to mean that the Congress specifically 
intended to exempt citizens from IRCA's document submission and 
verification procedures, and this statutory construction is reflected 
in the 1994 proposed rule, as it was in the 1988 proposed rule. (See, 
also, the discussion between Senators Kennedy and Hawkins at 131 Cong. 
Rec. S11414, 11417 (daily ed. September 13, 1985).)
    This interpretation is supported by the language contained in Part 
A of IRCA. Specifically, section 101 of IRCA (Control of Unlawful 
Employment of Aliens) amends the Immigration and Nationality Act by 
adding a new section 274A (8 U.S.C. 1324a), which provides at section 
274A(b) for the establishment of an employment verification system. 
Under section 274A(b), the Congress specifically required an employer 
to attest under penalty of perjury that it had verified that an 
individual was not an unauthorized noncitizen, and that the 
verification was based upon a review of certain statutorily prescribed 
documents. These documents include, among others, U.S. passports and 
certificates of U.S. citizenship or naturalization. This statutory 
scheme is markedly absent under HUD's provisions under Part C of IRCA 
(Verification of Status Under Certain Programs). Accordingly, given the 
marked absence of these requirements from section 214, HUD is not 
imposing a proof of citizenship requirement in the rule.
    One commenter urged HUD to exempt persons with disabilities from 
the rule's ``citizen and noncitizen status documentation 
requirements.'' Another commenter asked that the rule exempt from the 
documentation requirements all persons who are covered by HUD's 
definition of ``elderly person,'' which would include non-elderly 
persons and persons with disabilities. The commenter suggested that the 
exemption could be limited to those instances where the individual 
actually submitted medical proof of his or her disability.
    The documentation requirements under the rule are statutorily 
mandated under IRCA, and HUD does not have the discretion to 
administratively exempt from those requirements a particular group of 
persons. Moreover, section 621 of the Housing and Community Development 
Act of 1992 (106 Stat. 3812) (1992 Act), which amended section 3 of the 
U.S. Housing Act of 1937 (42 U.S.C. 1437a) (1937 Act), revised the 
statutory definition of ``elderly person'' to remove the reference to 
persons with disabilities and limit this term to persons who are 62 
years or older. (Before the amendment, persons with disabilities were 
included in the definition of ``elderly person,'' regardless of the age 
of the disabled person.) Accordingly, as amended by the 1992 Act a 
person with disabilities meets the 1937 Act definition of ``elderly 
person'' if the person is 62 years or older. In light of the amendment 
made to the definition of ``elderly person'' by the 1992 Act, HUD 
cannot treat disabled persons who are not 62 years of age or older as 
if they were elderly persons.
    It is important to clarify two related points on this issue. Since 
any individual who declares, under penalty of perjury, that he or she 
is a United States citizen is not required to submit proof of 
citizenship, no documentation requirements are imposed upon a person 
with disabilities (or anyone else) who is a U.S. citizen. Similarly, 
any person with disabilities who (1) is a noncitizen, (2) is 62 years 
of age or older or will be 62 years of age by the time he or she is 
required to submit evidence of eligible status, and (3) is receiving 
HUD assistance on the effective date of this final rule, is exempt from 
the rule's requirements to submit evidence of immigration status. This 
person only would be required to submit, in addition to the 
declaration, a proof of age document. As a result, even though there is 
no specific exemption for persons with disabilities under this rule, it 
is still possible that a person with disabilities may not have to 
submit immigration status documentation because of the rule's own 
general exemptions.
2. Persons Other Than Citizens and Certain Elderly Persons Are Not 
Exempt From Documentation Requirements
    One commenter argued that the statutory provision establishing the 
statutory documentation requirements does not apply to applicants 
because section 214(d) requires immigration documents to be submitted 
by individuals who are, among other things, ``receiving financial 
assistance on the date of the enactment of the Housing and Community 
Development Act of 1987.'' (As noted in the discussion under section 
VII.A. of this preamble, in both the 1988 and 1994 proposed rules, HUD 
replaces the term ``date of enactment'' of the 1987 Act with 
``effective date of final rule.'')
    Since applicants for HUD assistance could not have been ``receiving 
financial assistance on February 5, 1988'' (the date of enactment of 
the 1987 Act), the commenter contends that applicants do not need to 
submit documents verifying citizenship or eligible immigration status 
until they actually become recipients. Consequently, this commenter 
asked HUD to include in the rule a prohibition against the removal of 
any applicant's name from a waiting list based upon a failure to verify 
immigration status with the INS.
    HUD disagrees with this interpretation. The 1987 Act amended 
section 214 to provide that:

    If such an individual is not a citizen or national of the United 
States, is not 62 years of age or older, and is receiving financial 
assistance on the date of the enactment of the Housing and Community 
Development Act of 1987, there must be presented either * * * (alien 
registration documents or other documents acceptable to HUD). (42 
U.S.C. 1436a(d)(2))

    HUD has construed this language to mean that only two classes of 
individuals are exempt from the immigration documentation requirements: 
(1) Those who declare themselves to be U.S. citizens or nationals; and 
(2) noncitizens who are or will be 62 years of age by the time they are 
required to submit immigration documents, and who were receiving HUD 
financial assistance on the effective date of this final rule. This 
second category of persons, however, would be required to present proof 
of age.
    The commenter proposes that HUD establish an additional exemption 
for all applicants to assisted housing. Again, under this 
interpretation, the documentation requirements would not be triggered 
until the applicant becomes a tenant ``receiving financial 
assistance.'' HUD believes that there is no legal basis for adopting 
this interpretation of the 1987 Act. There is no evidence in the 1987 
Act that the documentation requirements of section 214 were intended to 
apply only to tenants. To the contrary, the 1987 Act contains other 
provisions that support that the documentation requirements were 
intended to cover applicants as well. (See, for example, 42 U.S.C. 
1436a(d)(4)(A)(ii) and 1436a(d)(4)(B)(ii), which prohibit HUD from 
delaying, denying, reducing or terminating an individual's eligibility 
for financial assistance pending INS verification or appeal.)
    Moreover, in discussing the proposed implementation of the SAVE 
verification system under IRCA, Senator Hawkins specifically remarked:

* * * [I]f the applicant is not a U.S. citizen, the State is 
required to use the person's alien file or alien registration number 
to verify with the Immigration and Naturalization Service the 
alien's immigration status * * * (Emphasis added) (at 131 Cong. Rec. 
S11415, daily ed. Sept 13, 1985).

Clearly, the Congress intended the SAVE system to be used to verify the 
immigration status of applicants to assisted housing, and not to delay 
this process until after the applicant became a tenant receiving HUD 
assistance. Consequently, the 1994 proposed rule does not revise the 
1988 proposed rule's interpretation of this statutory language.
    Two commenters urged HUD to consider an alternative interpretation 
concerning the elderly exemption, one which would exempt from the 
rule's documentation requirements any individual who not only is 62 
years of age or older and receiving HUD financial assistance on the 
effective date of the final rule, but an individual who is receiving 
HUD financial assistance on the effective date of the final rule, and 
who will be 62 years of age by the time he or she is required to submit 
evidence of eligible status. This revision would provide individuals 
with a longer period of time in which to qualify under the elderly 
exemption. HUD agrees that this is the preferable statutory 
interpretation, and is consistent with Congressional intent concerning 
the protections to be provided to persons already receiving assistance 
and elderly persons. Accordingly, the 1994 proposed rule contains this 
interpretation.
    Another commenter on the ``elderly exemption,'' advocated that the 
exemption apply to both current tenants of HUD-assisted housing, and 
``to future applicants who are elderly.'' Citing from the House 
Committee Report on H.R. 4 (H.R. Rep. No. 100-122, 100th Cong., 1st 
Sess. 49 (1987)), the commenter contended that Congress meant to 
exclude from the rule's documentation requirements all elderly 
individuals, and not just those who were receiving financial assistance 
on the effective date of HUD's final rule. The commenter quoted from 
page 50 of the House Committee Report:

    Elderly persons 62 years or older would only have to certify, 
and would not have to provide documentation establishing their 
immigration status or nationality.

    While it is true that the House version of the 1987 Act would have 
extended the elderly exemption to all persons 62 years of age or older, 
this language was modified prior to passage of the bill. Under section 
164(c)(1) of the 1987 Act, as passed (101 Stat. 1861), the Congress 
narrowed the exemption to apply only to an individual who is ``* * *  
62 years of age or older, and (who) is receiving financial assistance 
on the date of the enactment of the Housing and Community Development 
Act of 1987.''
    As discussed above, HUD construes this language to mean that the 
elderly exemption applies only to individuals who are or will be 62 
years of age by the time they would be required to submit evidence of 
eligible status, and who are receiving HUD financial assistance on the 
effective date of the final rule. Accordingly, HUD has not adopted the 
suggested modification in the 1994 proposed rule.
3. Submission of Original Documentation
    One commenter argued that elderly persons would be unable to 
produce original records proving their age in the time period allowed 
by the proposed regulations. HUD notes that the 1988 proposed rule did 
not provide any time limit for the submission of documents, including 
documents establishing an individual's age. With regard to the 
documentation that is needed to establish an individual's age (i.e., 
the types of acceptable documents, and whether original documents must 
be submitted or whether some alternative procedure is permissible), the 
1994 proposed rule does not prescribe acceptable documentation. 
Responsible entities will continue to follow existing procedures used 
in the various assisted housing programs to document age (i.e., to 
document that a person is an ``elderly person''). HUD also notes that 
most individuals who are 62 years of age or older will have readily 
available the documents establishing age since those documents are 
needed to obtain social security benefits, and other benefits provided 
by communities (e.g., discounts for senior citizens).
    Several commenters urged HUD to eliminate the requirement in the 
1988 proposed rule that applicants and tenants must submit original 
immigration documents for verification with the INS. These commenters 
asserted that the proposed rule failed to consider the burden this 
requirement would impose upon individuals who had to surrender their 
INS documents, or upon HAs that would have to implement costly 
procedures to keep track of these documents. As an alternative, these 
commenters suggested that individuals be permitted to submit certified 
copies of INS documents, with original INS documents required only when 
the responsible entity has a reasonable suspicion of fraud or 
misrepresentation.
    HUD has consulted with the INS about whether certified immigration 
documents, rather than original INS documents, are acceptable for SAVE 
verification. The INS has indicated to HUD that ``* * * only originals 
of documents denoting immigration status'' may be used to establish 
eligibility through the SAVE system. Consequently, HUD does not have 
the discretion to modify this provision of the rule. However, it should 
be noted that under no circumstance should a responsible entity retain 
in its possession any original INS documents. The responsible entity 
should review the original INS document, make photocopies of the 
document for its own records, and return the original document to the 
applicant or tenant as quickly as possible. This restriction on the 
retention of original INS documents by the responsible entity is 
included in the 1994 proposed rule.
4. When Documentation Is To Be Submitted
    Two commenters noted that the 1988 proposed rule did not contain 
time limits for applicants and tenants to submit their immigration 
documents. The commenters stated that, to the extent immigration 
documents must be submitted within the time period for the general 
recertification of eligibility process, it would be ``too brief a 
period.''
    HUD agrees with the suggestion that owners and housing authorities 
(HAs) must provide notice of the time period for submission of 
immigration documents. Section VI.A.3 of this preamble describes the 
time for submission of documents as provided in the 1994 proposed rule. 
The 1994 proposed rule also requires owners and HAs to inform 
applicants and tenants of this time period in the notice to applicants 
and tenants that advises them that the provision of financial 
assistance or continued financial assistance is contingent upon the 
submission and verification of immigration documents.
    Another commenter asked that the rule clarify that the responsible 
entity's notice to tenants and applicants, advising that financial 
assistance is contingent upon the submission and verification of 
immigration documents, be in writing. HUD intended that this notice be 
in writing, and the 1994 proposed rule makes this clarification.
    Several commenters asked HUD to include in this notice, as well as 
the notice informing ineligible applicants and tenants about the denial 
or termination of assistance, of the existence of, and the procedures 
for obtaining relief under, the ``preservation of families'' provision. 
HUD agrees that both of these notices should inform applicants and 
tenants that they may qualify for relief under the preservation of 
families provision, and indicate the criteria and procedures for 
obtaining such relief, and the 1994 proposed rule adopts this 
requirement for notices.
5. Removal of 1988 ``Reason to Suspect'' Provisions
    A number of commenters expressed concern that the 1988 proposed 
rule authorized an owner or HA to initiate termination procedures 
whenever there is evidence of conflicting or inconsistent information 
regarding an individual's identity or claimed citizenship status. 
Several commenters claimed that the 1988 rule's ``reason to suspect'' 
provision invites discrimination against anyone who ``appears 
foreign,'' and they urged that sanctions be imposed upon responsible 
entities that are found to have discriminated on this basis.
    The 1994 proposed rule removes this provision. Any false statement 
or fraudulent evidence concerning eligibility on the basis of eligible 
citizenship or immigration status should be handled in the same manner 
that an owner or HA addresses false statements or fraudulent evidence 
with respect to other aspects of eligibility. To the extent possible, 
eligible citizenship or immigration status should be treated the same 
as other factors that are taken into consideration in determining a 
person's eligibility for assistance or continued assistance. Except 
where mandated by statute (notice requirements, verification 
procedures, hearing requirements, special relief provisions), the 
proposed rule directs the responsible entity to rely on existing 
procedures that are in place and applicable to other eligibility 
factors.
6. Privacy Issues
    One commenter asked HUD to revise the provision in the 1988 
proposed rule that granted authority to HUD to share with Federal, 
State or local government agencies any information that it obtains 
during the verification process. The commenter stated that information 
concerning citizenship or eligible immigration status obtained by HAs 
and project owners during the verification process should not be used 
for any purpose other than to determine eligibility for assistance.
    Information contained in the HUD systems of records is subject to 
the provisions of the Privacy Act of 1974 (5 U.S.C. 552a). Information 
gathered by HAs or private owners is not. However, any information 
gathered by these entities could be subject to State or local privacy 
laws. The 1988 proposed rule purported to list all the sources to which 
the information could be released and the purposes for which the 
information could be used. HUD has concluded that a rule cannot 
anticipate all the possibilities in which such evidence may be 
compelled to be released by HUD or the project owner or HA under 
applicable law, and the 1994 proposed rule removes the list of 
circumstances in which evidence of eligible status may be released. 
(Section VI.A.7 of this preamble describes how the 1994 proposed rule 
addresses this issue.)

    With respect to the privacy issue, HUD has determined that the 
project owner, like HUD, should bear no obligation to control what an 
agency (to which the project owner or HUD was required to release 
evidence of eligible immigration status) does with this evidence. 
Therefore, the 1994 proposed rule provides that neither HUD nor the 
responsible entity is responsible for the further use or transmission 
of the information released in accordance to applicable law.

7. Security of INS Data Base

    A number of commenters mentioned that there is a serious potential 
for misuse of the INS data base, particularly when the data base is 
being accessed by private entities. They suggested that HUD include 
``enhanced protections'' in the rule to safeguard the confidentiality 
of information obtained from the data base. Similarly, another 
commenter urged that authorized names or approval numbers for INS 
document verification be provided to owners and HAs.

    With regard to the first comment, HUD points out that the INS 
already has protections built into the SAVE system to maintain the 
confidentiality of system information, particularly when information is 
being accessed by private individuals. In addition, HUD will provide 
the INS with the names and approval numbers of project owners or HA 
representatives who are authorized to access the SAVE system. The 
project owners and HA representatives may use information obtained from 
the INS and the applicant only in accordance with the verification 
consent form.

D. Documents of Eligible Status

    Several commenters advocated recognition of an immigration judge's 
decision granting a suspension of deportation as evidence of lawful 
admission for permanent residence. Their reasoning was that the Form I-
551, which ordinarily evidences lawful admission for permanent 
residence, is issued after the decision and backdated to the date of 
the decision but may not be available when an applicant or tenant needs 
to establish eligible immigration status.

    The INS has informed HUD that the decision of an immigration judge 
to suspend deportation is not final when issued. The INS may review 
such a decision and reverse it. If the INS decides not to reverse the 
decision, or is unable to act within the required review period, a Form 
I-551 is issued and the decision becomes final. Therefore, while a copy 
of the decision itself is not evidence of final INS action conferring 
eligible status, the Form I-551 is. The 1994 proposed rule does not 
include a decision to suspend deportation in the list of acceptable 
documentation of eligible immigration status, since it is not evidence 
of final INS action. However, if an applicant or tenant has only the 
judge's order suspending deportation at the time of application or 
recertification of income, he or she can appeal to the INS to obtain a 
final determination of immigration status and a Form I-551.

    The Department of Agriculture contacted HUD about its inclusion of 
Form I-688A in the list of documents evidencing eligible immigration 
status. Since the housing programs operated by the Department of 
Agriculture are to follow the same strictures concerning eligible 
noncitizens (with the exception of farm workers' housing) as apply to 
HUD programs, the inquiry was whether Form I-688A is evidence of a 
grant of eligible status under HUD programs, or whether it is merely 
evidence that an individual has applied for eligible status. After 
consulting with the INS, HUD determined that it is the latter. 
Therefore, the I-688A has been removed from the list of documents that 
evidence eligible immigration status in the 1994 proposed rule.

    In the 1994 proposed rule, other changes were made to the list of 
immigration documents that appeared in the 1988 proposed rule. These 
changes were made in response to a 1993 letter from the INS, which 
provided information concerning the current status of various 
identification documents (i.e., current form numbers, the annotation on 
cards, etc.), and HUD will further consult the INS on applicable 
immigration documents before issuance of the final rule.

E. Verification of Eligible Immigration Status

1. General

    One commenter asked HUD to specifically state in the rule that 
eligibility determinations by HAs may not be relied upon by third 
persons as evidence of citizenship or immigration status. HUD has not 
included the requested language in this 1994 proposed rule because HUD 
has no authority to either require or prohibit persons to rely on HA 
eligibility determinations as evidence of citizenship or eligible 
immigration status.
2. Verification Based Solely on INS Documents
    Several commenters objected to the requirement in the 1988 proposed 
rule that the responsible entity obtain from the applicant or tenant 
either an INS document that contains a photograph, or an additional 
document with a photograph, to ensure the alien's identity. These 
commenters noted that neither IRCA nor the 1987 Housing Act requires an 
individual to submit a photograph when the INS document submitted does 
not contain one.
    The 1994 proposed rule requires only the submission of the INS 
immigration document in whatever form that document may be in (i.e., 
whether it contains a photograph or does not contain a photograph).
3. No Denial or Termination of Assistance Pending Verification Process
    Three commenters asserted that the 1988 proposed rule would have 
implemented section 121 of IRCA ``* * * in a manner that violates many 
of section 121's protections for the public, and without a well-
developed plan with the INS for processing verification requests and 
for reimbursement.'' The commenters expressed concern that INS records 
may be unreliable, verification could take several months and produce 
erroneous results, and the consequences would be that eligible persons 
would have assistance denied or terminated.
    The 1994 proposed rule closely tracks the statutory protections 
found in 42 U.S.C. 1436a (d)(4)(A)(ii) and (d)(4)(B)(ii). These 
statutory sections require HUD to provide a ``reasonable opportunity'' 
to submit documents, and to appeal to the INS. The 1994 proposed rule 
requires that a responsible entity not deny admission to an otherwise 
eligible applicant to a covered program solely on the basis of 
immigration status, when such assistance is available, or terminate 
assistance to a tenant, during the ``reasonable opportunity'' to submit 
immigration documents, or pending the INS verification process, or the 
INS appeal. Under this expansive interpretation, an applicant or tenant 
would not be penalized for any delay in verifying eligible immigration 
status, irrespective of the cause for the delay.
    However, for applicants, the protections against ``delay'' in 
providing assistance only extend through the INS appeal process. The 
statute does not provide protection for an applicant against delay in 
providing assistance during the pendency of the informal hearing 
process. While the statute provides that during the pendency of the 
informal hearing process, assistance may not be denied or terminated 
(42 U.S.C. 1436a(d)(6)(D)), the statute drops reference to ``delay.''
    Three commenters noted that the proposed rule failed to establish a 
timetable for owners to submit documents to the INS for verification. 
They contended that delays in the submission of immigration documents 
to the INS could jeopardize a person's eligibility for assistance or 
continued assistance, and thereby violate the statutory mandate that 
assistance not be delayed, denied, or terminated as a result of the 
verification process. These commenters urged HUD to include in the rule 
a timetable for the submission and processing of documentation.
    The 1994 proposed rule adopts this suggestion although protections 
provided by 42 U.S.C. 1436a (d)(4)(A)(ii) and (d)(4)(B)(ii), as 
discussed above and incorporated in the rule, renders the issue largely 
moot. As discussed above, a responsible entity must admit an otherwise 
eligible applicant to an available unit during the period provided to 
submit immigration documents, or pending the INS verification, or INS 
appeal process. Thus, even if an owner delays the submission to the INS 
of an applicant's immigration documents, the delay will not affect the 
applicant's ability to obtain assistance if the applicant is otherwise 
eligible, and if assistance is available. Nevertheless, the 1994 
proposed rule requires that a responsible entity submit to the INS no 
later than 10 days following the date of submission copies of 
immigration documents that it obtains from applicants and tenants.
    HUD has refrained from establishing a specific time period for 
processing immigration documents, because this can vary greatly 
depending upon the circumstances. However, for the same reasons 
discussed above, the failure to establish a processing deadline will 
not affect a person's eligibility for assistance or continued 
assistance if the person is otherwise eligible for assistance.
4. Purpose of Secondary Verification
    One commenter asked whether secondary verification would have to be 
instituted whenever the primary verification process is unable to 
confirm eligible immigration status, including instances where the 
primary system verifies ineligible status.
    Assistance to an applicant or tenant may never be denied or 
terminated solely on the basis of the primary verification system's 
determination of ineligibility. The 1994 proposed rule provides that a 
responsible entity must institute secondary verification whenever 
primary verification is either unable to confirm eligible status, or 
when it verifies ineligible immigration status. The only instance in 
which primary verification would be used without the benefit of 
secondary verification is when the primary system verifies eligible 
immigration status.

    A number of commenters asserted that the 1988 proposed rule 
improperly characterized the INS secondary verification process as an 
appeal. They cited the General Accounting Office's October 1987 Report 
on SAVE, in which the INS stated that ``no denial of benefits may be 
based solely on primary verification.'' These commenters contend that 
secondary verification is not an appeal, but a necessary step because 
of inadequacies of the INS primary verification system.

    HUD has consulted with the INS concerning IRCA's reference to an 
appeals process, and the INS agrees with the commenters that secondary 
verification may not substitute for the appeals process under 42 U.S.C. 
1436a(d)(4)(A)(i). Further, the INS confirmed that secondary 
verification is a necessary step to the denial or termination of 
assistance to an individual, and that the INS appeals process cannot be 
initiated until after secondary verification establishes that the 
individual is not an eligible alien. The 1994 proposed rule therefore 
removes the reference to an ``appeal'' that accompanied the ``secondary 
verification'' heading in the applicable regulatory sections.

5. Appealing Secondary Verification of Ineligible Status

    The 1994 proposed rule includes a discussion of the procedures for 
initiating the INS appeal once secondary verification establishes 
ineligible status. Under these procedures, the responsible entity must 
notify the applicant or tenant of the INS determination of 
ineligibility, and of the individual's right to appeal to the INS the 
verification decision, to submit additional documentation or a written 
explanation in support of the appeal, or to request an informal 
hearing. The responsible entity must submit photocopies of these 
documents to the appropriate INS district director, together with a 
copy of INS Form G-845S (used to process the secondary verification 
request) and a cover letter identifying the package as an appeal of the 
INS determination of ineligibility. The INS will issue a decision on 
the appeal within 30 days from the date of 
its receipt of the documents. If the INS is unable to respond within 
this time period, it will notify the applicant or tenant and indicate 
the reasons for the delay. Pending the outcome of the INS appeal, an 
otherwise eligible applicant must be provided with housing assistance, 
if such assistance is available, and assistance to a tenant may not be 
interrupted.
6. The SAVE System
    A few commenters claimed that the 1988 proposed rule's provisions 
on the SAVE verification procedures seemed premature, since it appeared 
that the necessary coordination with the INS had not yet been 
completed. They asked HUD to make clear that a rule would not take 
effect until the SAVE process is fully operational.
    HUD has been working closely with the INS to implement the SAVE 
system for its covered programs, and fully expects to have all of the 
necessary coordination completed before the effective date of a final 
rule implementing section 214. In addition, HUD plans a delayed 
effective date for its final rule. The delay will provide for a period 
that is sufficient for project owners and HAs to undergo training on 
the SAVE system and become proficient in its use. As a result, HUD 
fully expects all necessary coordination with the INS on the use of the 
SAVE system to be completed before the effective date of the final rule 
implementing section 214.
    Other commenters claimed that the 1988 proposed rule failed to 
provide the detailed information necessary to implement SAVE such as 
how requests for verification would be transmitted to the INS, who 
would bear responsibility for lost INS documents, or what line item of 
the ``statement of profit or loss'' in HUD Form 92410 should include 
the relevant administrative costs.
    The procedures for the SAVE system are established by the INS, and 
HUD is required to use these procedures. Therefore, elaboration of the 
SAVE procedures is not a matter to be established by HUD through 
rulemaking. The INS has a handbook governing the procedure, and HUD 
will develop supplementary instructions that will assist responsible 
entities in following the SAVE procedures. HUD expects to issue 
detailed guidance well in advance of the effective date of a final 
rule.

F. Reasonable Opportunity to Establish Eligible Status--No Denial or 
Termination of Assistance during Reasonable Opportunity Period

    Several commenters strongly objected to HUD's interpretation in the 
1988 proposed rule of 42 U.S.C. 1436a(d)(4)(A)(ii) and (d)(4)(B)(ii). 
These statutory sections state that HUD must provide individuals with 
``a reasonable opportunity'' to submit immigration documents for 
verification with the INS, and that pending this period HUD may not 
``delay, deny, reduce, or terminate (an) individual's eligibility for 
financial assistance on the basis of the individual's immigration 
status.''
    In the 1988 proposed rule, HUD maintained that so long as the 
responsible entity continued to process an applicant for purposes of 
establishing eligibility for financial assistance, and placed the 
applicant's name on a waiting list once eligibility (aside from 
eligible immigration status) was established, it was complying with the 
requirements of IRCA. HUD reasoned that under this procedure the 
applicant's ``eligibility for financial assistance'' would not be 
delayed pending the secondary verification, even though assistance 
would not actually be provided until eligible immigration status was 
verified with the INS.
    The commenters argued that delaying assistance because of 
immigration verification violates IRCA's prohibition against delaying 
assistance during the reasonable opportunity to submit immigration 
documents, or pending the INS verification or INS appeal. They further 
claimed that the distinction drawn by HUD in the preamble to the 1988 
proposed rule between delaying eligibility and delaying financial 
assistance violates IRCA as soon as an applicant reaches the top of the 
waiting list. The commenters instead advocated admitting applicants 
based upon their written declarations of eligibility, and later 
evicting them if secondary verification establishes that the tenant is 
an ineligible alien.
    As discussed under section VII.E.3 of this preamble, HUD has 
reconsidered its interpretation of 42 U.S.C. 1436a(d)(4)(A)(ii) and 
(d)(4)(B)(ii). The 1994 proposed rule provides that an otherwise 
eligible applicant must be admitted to a housing assistance program, if 
such assistance is available, during the reasonable opportunity to 
submit immigration documents, pending the INS primary or secondary 
verification of immigration status, or pending the conclusions of the 
INS appeal process. Again, however, as discussed earlier in this 
preamble, the statute does not provide identical protection to an 
applicant during the informal hearing process. Although assistance may 
not be denied pending the conclusion of the informal hearing process, 
assistance to an applicant may be delayed.
    With regard to tenants, the 1994 proposed rule provides assistance 
may not be terminated during the reasonable opportunity to submit 
immigration documents, pending the INS primary or secondary 
verification, or pending the conclusion of the INS appeal process, or 
pending the conclusion of the informal hearing process.

G. Proration of Assistance Permitted

    Several commenters disagreed with HUD's analysis in the preamble to 
the 1988 proposed rule (53 FR 41046-47) that IRCA's prohibitions 
against delaying, denying, reducing or terminating assistance pending 
verification also preclude the proration of assistance (i.e., 
permitting a family with ineligible family members to continue to 
receive assistance, based only on the eligible members). The commenters 
insisted that this language was intended solely to protect individuals 
against the loss of benefits during INS verification of immigration 
status, and should not be used by HUD to prohibit the proration of 
assistance.
    As discussed earlier in this preamble, HUD has revised its position 
on the issue of proration of assistance. HUD agrees with the commenters 
that the statutory language is insufficient to support the prohibition 
of proration of assistance. The 1994 proposed rule provides for 
proration of assistance for applicants and tenants. Again, HUD 
specifically requests comment on the issue of proration of assistance, 
on the formulas for prorating assistance as set forth in the proposed 
rule, and welcomes suggestions and recommendations on how these 
formulas could be improved or made simpler.

H. Changing Units or Housing Programs

    One commenter asked HUD to revise the provision in the 1988 
proposed rule that would require a responsible entity to verify a 
tenant's immigration status as a condition of transferring from one 
unit to another, or from one housing assistance program to another. The 
commenter stated that there may be instances in which the tenant family 
has to transfer through no fault of its own during the term of the 
lease, and HAs should have the discretion to continue assistance under 
such circumstances for a minimum of one year.
    HUD agrees that a tenant who transfers from one unit to another 
within the same housing project should not be required to verify 
eligible immigration status since that tenant would be merely seeking 
to continue an existing subsidy, and the 1994 proposed rule adopts this 
change. In the case of public housing, even a transfer from one project 
to another would be continuation of the existing subsidy and therefore 
not involve an ``admission,'' which would require verification of 
eligible immigration status, unless the move was from the jurisdiction 
of one HA to another HA.
    With regard to transfers from one subsidy program to another or 
from one housing project to another, immigration status is verified 
when HUD regulations require that the tenant be treated like any other 
applicant attempting to receive a new form of housing assistance. HUD's 
position is not dependent upon whether the change is voluntary or 
involuntary, but rather if the change renders the tenant a new 
applicant under HUD's regulations. For example, if a family moved from 
one section 236 project to another, the move would be considered a new 
admission, because each project is separately owned and operated and 
the family would be required to satisfy admission criteria of the 
management of the project to which it was moving. Therefore, the family 
would be asked to submit information about citizenship or eligible 
immigration status along with income eligibility information.

I. Hearings

1. Administrative Burden
    One commenter claimed that the hearing requirements contained in 
the 1988 proposed rule would place a tremendous administrative burden 
upon HAs, and would result in overloading its existing hearing officers 
with potentially ``hundreds of ineligible alien determinations.'' The 
commenter maintained that this would delay proceedings against truly 
undesirable residents, such as those involved in drug transactions. 
Another commenter suggested that HAs should respond to the increased 
administrative burden by delaying the ineligibility determination 
hearings until more serious cases are heard, or by developing some 
other priority system.
    HUD believes that these commenters have overestimated the number of 
hearings that will be requested by persons as a result of ineligibility 
determinations under this rule. As noted earlier in this preamble, HUD 
believes that the majority of applicants and tenants will be citizens 
and assert citizenship. Additionally, HUD expects that it is unlikely 
that a noncitizen who has been confirmed by the INS verification system 
and appeals process to be ineligible for assistance will go to the 
trouble of requesting a hearing to contest the final INS decision. 
Consequently, HUD expects the administrative burden imposed upon HAs 
and project owners as a result of providing these hearings to be 
minimal.
2. Expansion of Procedural Protections in Hearing Process
    One commenter questioned the legal sufficiency of the 1988 proposed 
rule's informal hearings on the denial and termination of assistance.
    HUD believes that the hearing process provided under the 1988 
proposed rule was legally sufficient, and complied with the 
requirements of the 1987 Act. The 1988 proposed rule met the minimum 
statutory requirements for a hearing. Under 42 U.S.C. 1436a(d)(6), HUD 
is required to make available to an individual who has been determined 
to be an ineligible noncitizen ``* * * the applicable fair hearing 
process.'' The section lists the minimum statutory criteria needed to 
comport with due process requirements, which include: (1) Written 
notice of the determination to deny or terminate benefits, and of the 
opportunity for a hearing to discuss the determination; (2) a hearing 
before an impartial hearing officer; and (3) written notification by 
the responsible entity of the decision of the hearing officer.
    The 1994 proposed rule adds certain other due process components to 
the informal hearing process. These additional components are those 
provided by HAs and project owners for termination of tenancy (e.g., 
see 24 CFR 905.340, and 24 CFR 966.56). HUD believes that the type of 
hearing provided for termination of tenancy also should be available to 
applicants who are denied assistance on the basis of ineligible 
immigration status.
3. Timeframes for Requesting Hearings and Issuing Decisions
    Four commenters objected to the 1988 proposed rule's 14-day period 
for requesting a hearing, claiming that the period is too brief since 
it would run from the date on the notice, and not from the date of 
receipt. They urged HUD instead to grant a hearing whenever reasonable 
cause is shown for a belated hearing request, or whenever there is only 
nominal prejudice to the responsible entity. Another commenter asked 
HUD to extend the period for requesting a hearing from 14 to 30 days.
    While HUD has not entirely adopted either of these suggestions in 
the 1994 proposed rule, the 1994 proposed rule provides that a hearing 
must be requested within 14 days of the date of mailing the written 
notice of ineligibility or the INS appeals decisions (established by 
the date of postmark) or the date of personal delivery of the notice 
(established by date of actual delivery) to the applicant or tenant. In 
addition, the 1994 proposed rule requires the responsible entity to 
grant an extension for requesting a hearing upon good cause shown by 
the applicant or tenant.
    Other commenters objected to the requirement that responsible 
entities must provide an applicant or tenant with a written final 
decision regarding the decision to deny or terminate benefits within 
five days of the informal hearing. They claimed that this five-day 
limit does not provide a responsible entity with sufficient time to 
investigate and verify additional documentation that may have been 
submitted by the applicant or tenant at the hearing. HUD agrees with 
these commenters, and the 1994 proposed rule provides that the 
responsible entity must provide its written decision within 14 days of 
the hearing date.
4. Hearing Officers
    Several commenters expressed concern about the qualifications of 
hearing officers under the 1988 proposed rule. The commenters cited the 
United States Supreme Court's decisions in Schweiker v. McClure, 456 
U.S. 188 (1982) and Matthews v. Eldredge, 424 U.S. 319 (1976) in 
support of their claims that the requirements for hearing offices 
contained in the 1988 proposed rule are constitutionally deficient.
    Specifically, a number of commenters asserted that under the 
standards established in McClure, a project owner who wants his or her 
employee to qualify as a hearing officer must first ensure that the 
employee has knowledge of the SAVE program, immigration law, and 
relevant program information.
    HUD disagrees with this interpretation of the McClure case. In 
McClure, the Supreme Court focused on the second of the three factors 
cited in Matthews, which considers the risk of an erroneous decision 
and the probable value, if any, of additional or substitute due process 
safeguards. The Court then noted that in that case the Department of 
Health and Human Services by regulation required its carriers to select 
as a hearing officer:

    [A]n attorney or other qualified individual with the ability to 
conduct formal hearings and with a general understanding of medical 
matters and terminology. The hearing officer must have a thorough 
knowledge of the Medicare program and the statutory authority and 
regulations upon which it is based, as well as rulings, policy 
statements, and general instructions pertinent to the Medicare 
Bureau.'' (Id. at 1188).

The Supreme Court found that because the HHS regulation ensured the 
qualifications of hearing officers, the record did not support the 
appellee's claims that additional due process safeguards would reduce 
the risk of erroneous deprivation of benefits.
    However, it is inaccurate to point to the HHS regulatory standards 
on the qualification of Medicaid hearing officers as establishing the 
minimum constitutional standards needed to comply with due process. 
Moreover, contrary to the suggestion of commenters, it is unnecessary 
for HUD to require under its rule implementing section 214 that hearing 
officers have substantive knowledge of immigration law. The INS has 
undisputed expertise in this area, and under the rule any applicant or 
tenant who is faced with the denial or termination of benefits because 
of ineligible immigration status is guaranteed an opportunity to 
directly appeal to the INS the ineligibility determination. As a 
result, it would be duplicative and unnecessary to require hearing 
officers to have in-depth knowledge of immigration law.
    Two commenters contended that the regulatory sections in the 1988 
proposed rule which permitted a hearing to be held before an officer or 
employee of the owner so long as he or she did not make the initial 
decision of ineligibility, violates the 1987 Act's requirement of an 
impartial hearing officer. Another commenter claimed that the informal 
hearing established in the 1988 proposed rule failed to satisfy 
statutory and constitutional requirements, since both the initial 
decision and the decision following the hearing are issued by the 
owner, and not the owner's designated representative.
    HUD disagrees with these comments. Both the 1988 and 1994 proposed 
rules provide that an individual who has received a letter denying or 
terminating assistance may request an informal hearing at which he or 
she can meet with any person designated by the owner * * * other than a 
person who made or approved the decision under review, or other than a 
person who is a subordinate of the person who made or approved the 
decision under review. HUD believes that this language comports with 
due process requirements for impartiality and, as a result, the 
provision remains unchanged in the 1994 proposed rule.
    Another commenter suggested that the rule provide for hearing 
officers to be bilingual, or to provide the applicant or tenant with 
interpreters when circumstances require.
    The 1994 proposed rule does not require hearing officers to be 
bilingual. With respect to interpreters, the 1994 proposed rule 
provides that an applicant or tenant is entitled to have an interpreter 
present at the denial or termination hearing, at his or her own 
expense, or at the owner's expense, as may be agreed upon by the 
parties. The owner may already have in his employ a person who speaks 
the language of the applicant or tenant, and is willing to have this 
person serve as an interpreter. Alternatively, the applicant or tenant 
may prefer to select their own interpreter.
5. Record of Hearing
    Two commenters claimed that it was essential to the fair hearing 
procedure that the responsible entity maintain a record of the hearing 
for judicial review.
    The informal hearing process does not require that a record be 
generated and maintained, and HUD declines to impose such requirement 
in this rule. The 1994 proposed rule provides for the responsible 
entity to allow an audiotape of the hearing, but no transcript is 
required to be made that would meet court standards and facilitate 
judicial review. In addition, and in accordance with HUD practice in 
the administration of many of its programs, the 1994 proposed rule 
requires that documents used by the responsible entity in processing an 
application or verification of eligibility of a tenant be maintained 
for a period of time.

J. Notices

    A number of commenters requested that the notice of denial or 
termination of assistance include a brief statement of the reasons for 
the denial or termination, and an explanation of any documents found to 
be missing or inadequate. In addition, four commenters asked that the 
rule be revised to require the responsible entity to inform applicants 
and tenants not only of the right to obtain a hearing, but also of the 
procedures for initiating the hearing and the INS appeal. HUD agrees 
with both of these suggestions and has adopted these changes in the 
1994 proposed rule.
    Other commenters asked that all notices issued under the rule to 
applicants and tenants be required to be bilingual or multilingual, as 
necessary. As discussed in section VI.A.12 of this preamble, the 1994 
proposed rule imposes a duty on the responsible entity to provide, 
where feasible, documents or notices in a language that is understood 
by the applicant or tenant if the applicant or tenant is not proficient 
in English.

K. Removal of Resumption of Assistance and Retention of Assistance 
Provisions

    Four commenters claimed that HUD's position on the resumption of 
assistance to tenants after required evidence is submitted is unduly 
harsh. The commenters referred to the preamble of the 1988 proposed 
rule, in which HUD stated that after financial assistance for a tenant 
is terminated, assistance would not resume unless all of the required 
evidence was submitted by the tenant to the owner, ``* * * and 
resumption of assistance is authorized in accordance with HUD 
requirements.'' (HUD indicated in the 1988 proposed rule that these 
requirements would be described in greater detail in program 
handbooks.) The commenters maintained that assistance should always be 
restored to an eligible family when necessary to prevent homelessness, 
or when a delay in the submission of documentation is caused by 
circumstances beyond the control of the tenant.
    One commenter stated that resuming assistance to a family after 
assistance has been terminated can be programmatically burdensome, 
since HA units are typically fully leased and there are waiting lists. 
This commenter urged HUD to provide HAs, in advance of the 
implementation of the final rule, with the handbook requirements on the 
resumption of assistance so that necessary procedures can be developed.
    Another commenter objected to HUD's statement in the preamble of 
the rule that program handbooks would contain the requirements 
governing resumption of assistance. The commenter claimed that these 
requirements should be published in the final rule and not in a program 
handbook.
    On further consideration of this issue, HUD has determined that 
once assistance to a tenant has been terminated for ineligible 
immigration status, the tenant should be treated the same as if the 
assistance were terminated for any other reason. No special procedure 
needs to be developed for purposes of this rule.
    Similarly, the 1988 regulatory provision concerning ``Retention of 
Financial Assistance'' has been removed. This provision prohibited a 
responsible entity from receiving or retaining financial assistance 
paid for the benefit of a tenant admitted for participation in a 
program when required evidence of eligible status has not been 
submitted or verified by the INS in accordance with the regulations. 
This prohibition applies whether a responsible entity admitted a person 
who has ineligible immigration status, or who is ineligible on some 
other basis (e.g., the person's income makes them ineligible for 
assistance).

L. Extensions; Requirement to Grant Upon Good Cause; and Grant or 
Denial to be in Writing

    Numerous comments were received on the 1988 proposed rule's 
provisions on the extension of time for tenants to submit immigration 
documents. (See section VII.F of this preamble concerning reasonable 
opportunity to submit documents of eligible status by both applicants 
and tenants.)
    One commenter stated that while the 1988 proposed rule permitted a 
tenant under certain circumstances to obtain an extension of time for 
the submission of immigration documents, the 1988 rule failed to 
consider the financial burden this requirement imposes upon HAs. In 
order to implement this provision, the commenter claimed that housing 
authorities would have to develop systems to record extensions, and to 
monitor tenant compliance, and the rule should provide reimbursement 
for these expenses.
    While HUD agrees that recording tenant extensions and monitoring 
compliance may impose a certain financial cost to responsible entities, 
HUD believes that this cost will be minimal. Again, HUD believes that 
most tenants will have eligible status, and tenants who are eligible 
for assistance will not need to request an extension of time to submit 
immigration documents, but will have the documents readily available. 
As discussed under section VII.F of this preamble, the 1994 proposed 
rule provides that an extension be granted to applicants and tenants 
upon good cause shown.
    One commenter argued that in the 1988 proposed rule HUD unfairly 
required a responsible entity to document in writing the decision to 
grant an extension, but failed to impose a similar requirement on the 
decision to deny an extension. The commenter claimed that the same 
standards that apply to the decision to grant an extension should also 
apply to the denial of an extension.
    The 1994 proposed rule provides for the granting or denial of an 
extension to be in writing, and if the extension is denied, to state 
the reasons for the denial.

M. Preservation of Mixed Families and Other Families

1. Proration of Assistance
    The preservation of families provision in the 1994 proposed rule 
includes proration of assistance, as discussed earlier in this 
preamble. Proration of assistance is available to a mixed family (a 
family with members with eligible citizenship/immigration status, and 
those without eligible immigration status), other than a family 
receiving continued assistance or other than a family for which 
termination of assistance is temporarily deferred.
2. Continued Assistance and Deferral of Termination of Assistance--
Generally
    Section 1436a(c)(1) (42 U.S.C. 1436a(c)(1)) provides that if 
assistance is to be terminated to a family that was receiving 
assistance when the 1987 Act was enacted, after a final finding of 
ineligibility, special relief may be provided under certain 
circumstances:

    [T]he public housing agency or other local governmental entity 
involved (in the case of public housing or assistance under section 
8 of the United States Housing Act of 1937) or the Secretary of 
Housing and Urban Development (in the case of any other financial 
assistance) may, in its discretion, take one of the following 
actions:
    (A) Permit the continued provision of financial assistance, if 
necessary to avoid the division of a family in which the head of 
household or spouse is a citizen of the United States, a national of 
the United States, or an alien resident of the United States 
described in [section 1436a(a)(1)-(6)]. For purposes of this 
paragraph, the term ``family'' means a head of household, any 
spouse, any parents of the head of household, any parents of the 
spouse, and any children of the head of household or spouse.
    (B) Defer the termination of financial assistance, if necessary 
to permit the orderly transition of the individual and any family 
members involved to other affordable housing. Any deferral under 
this subparagraph shall be for a 6-month period and may be renewed 
by the public housing agency or other entity involved for an 
aggregate period of 3 years. At the beginning of each deferral 
period, the public housing agency or other entity involved shall 
inform the individual and the family members of their ineligibility 
for financial assistance and offer them other assistance in finding 
other affordable housing.

    With respect to continued assistance, these provisions require a 
project owner (including a mortgagee) to consider permitting a family 
to continue to receive assistance in either of two situations. If the 
head of household or spouse is a citizen or national, or has eligible 
immigration status, and continued assistance is necessary to avoid 
division of the family, the assistance is to be continued indefinitely.
    Deferral of termination of assistance is available to a mixed 
family that qualifies for prorated assistance (and does not qualify for 
continued assistance) but decides not to accept prorated assistance, 
and the responsible entity allows the family time to find other 
suitable housing. If granted, the deferral period shall be for an 
initial period of six months. The deferral may be renewed for 
additional periods so long as the total period does not exceed three 
years.
3. Eligibility for These Forms of Relief
    Although the language of the statute would only have afforded 
relief to families receiving assistance on February 5, 1988, the 1994 
proposed rule provides, as did the 1988 proposed rule, that such relief 
will be afforded to families receiving assistance at the time the 
restrictions on immigration status are imposed. Since the restrictions 
are not imposed until the effective date of the final rule, the 1994 
proposed rule uses the effective date of the final rule as the critical 
date for eligibility for these forms of special relief.
4. Decision to Provide Continued Assistance
    a. Project owner discretion. Several commenters objected to the 
discretion given project owners under the 1988 proposed rule to 
determine whether a family containing at least one ineligible person 
could continue to receive assistance. They stated that the statute 
authorizes HUD to exercise this discretion, not a private owner. The 
commenters expressed concern that private owners would abuse this 
discretion, resulting in increased evictions, divisions of families, 
and homelessness.
    The 1994 proposed rule provides that if the qualifying conditions 
are found to exist, the project owner must provide continued assistance 
to a family.
    A few commenters objected to the provision of the 1988 proposed 
rule that permitted project owners to deny special relief to a tenant 
who is receiving ``only minimal financial assistance'' if the project 
owner determines that the tenant could afford to continue occupancy 
without assistance. The commenters stated that this provision is not 
authorized by the statute, and that decisions about minimal assistance 
and affordability are subjective and must be made by the tenant rather 
than the project owner. The 1994 proposed rule does not contain this 
provision.
    b. HA Discretion. Similar to the concern expressed about the 
likelihood of a project owner not granting continued assistance when 
the qualifying conditions are satisfied, was the concern expressed by 
three commenters that the 1988 proposed rule authorized HAs to not even 
consider whether to provide continued assistance to tenants in 
occupancy. These commenters stated that implicit in the statutory 
authority given to HAs to grant this type of relief to families is the 
duty to consider it.
    Unlike the statutory language with respect to programs administered 
by project owners, which gives the discretion to provide special relief 
to HUD, the language applicable to HAs grants the discretion directly 
to the HAs. The 1994 proposed rule requires HAs to establish a policy 
and the criteria to be followed in determining whether to grant a 
family this type of assistance. The rule notes that the statute 
establishes certain criteria applicable to continued assistance and 
this criteria must be included in the HA's policy guidance.
    c. Persons Eligible for Continued Assistance. A number of 
commenters took issue with the limit on the type of family to whom 
continued assistance is made available. The statute, however, 
prescribes the definition of the ``family group'' that is to be 
preserved: Head of household, any spouse, any parents of the head of 
household, any parents of the spouse, and any children of the head of 
household or spouse. The list has been carefully drawn to include not 
only common children of the head of household and spouse but also any 
other children either of them may have. Other relatives not having the 
prescribed relationship to the head of household or spouse (such as an 
aunt or uncle) who may have been living in the household and who have 
eligible status may be just as integral members of the family, but the 
Congress has not included them in the list of persons to be protected.
5. Deferral of Termination of Assistance
    a. Discretion to Provide this Type of Relief. The statute permits 
HUD (in the case of project owners) or the HA to defer termination of 
assistance in certain circumstances. For project owners, the 1994 
proposed rule requires project owners to grant this type of relief if a 
family meets the qualifying conditions. For HAs, the 1994 proposed rule 
permits HAs to determine whether this type of relief will be provided, 
but requires the HA, in establishing its standards, to be guided by the 
standards set forth in the rule implementing Section 214.
    b. Length of the Deferral Period. The statute also requires that 
the length of time of any deferral must be six months. The statute 
provides that deferrals may be renewed to total as long as 36 months. 
Commenters objected to the 1988 proposed rule's provisions that merely 
restated these periods. One commenter stated that 36 months exceeded a 
reasonable period, arguing in favor of a six month limit, and that a 
long deferral period unfairly diverts Federal housing assistance from 
eligible applicants. The other objector stated that an HA should have 
the discretion to renew deferrals for 12-month periods, to coincide 
with the annual recertification date.
    The 1994 proposed rule, similar to the 1988 proposed rule, 
provides, consistent with Section 214, for the possibility of allowing 
subsequent deferrals and that these deferral periods may aggregate to 
as long a time as 36 months. Each deferral is to be based on an 
examination of the ability of the family to find alternative housing. 
Since some housing markets are very tight, HUD believes that owners 
should have the flexibility permitted by the statute to allow families 
already occupying assisted housing to remain until they are able to 
locate other suitable housing.
    Two commenters raised the issue of whether deferral of termination 
of assistance would be available to persons with ineligible immigration 
status. The commenters appeared to believe that to obtain such relief, 
the ``family'' must have children.
    Temporary deferral of termination of assistance is not limited to 
families with children. An ineligible individual residing in Federally 
assisted housing could qualify for a deferral of termination of 
assistance if the individual could demonstrate that reasonable attempts 
to locate other suitable housing were unsuccessful. Recognizing that 
barrier-free housing suitable for mobility-impaired individuals is not 
readily available in the private market, it is likely that such an 
individual could make the necessary showing. (More permanent relief, in 
the form of continuation of assistance, might also be possible for a 
disabled person who is a member of a multi-person family that meets the 
special family definition, e.g., a family consisting of a disabled 
undocumented alien and a citizen spouse.)
    The 1988 proposed rule provided that, with respect to a tenant 
whose termination of assistance has been deferred once, an owner must 
make a determination of the availability of affordable housing and a 
decision about whether to extend the deferral of termination of 
assistance in sufficient time that the tenant can be notified at least 
60 days before the expiration of the deferral period of whether 
termination will be deferred again.
    A few commenters stated that this notice: (1) Must be given in 
writing at least 60 days before the expiration of the deferral period; 
(2) must be given in accordance with formal notice procedures (stating 
the reasons for any decision not to extend the deferral period, which 
must be based on relevant factors); and (3) must include an offer of a 
hearing.
    HUD agrees that adequate notice must be given before the expiration 
of the deferral in all cases, and the 1994 proposed rule adopts this 
suggestion.
6. Availability of Alternative Housing
    Under the deferral of termination of assistance provisions, what is 
important to an ineligible tenant is the type of evidence necessary to 
demonstrate that ``reasonable efforts'' have been made to find 
``affordable housing'' of ``appropriate size''. Several commenters 
wanted HUD to provide specific guidelines for these terms to assure 
that decisions are not arbitrary. Commenter suggestions with respect to 
``affordable housing'' were that this term must refer to housing for 
which the rent does not exceed that amount that would be paid in 
accordance with section 3(a) of the 1937 Act for a unit in the public 
housing program, and housing that is required to meet HUD's Section 8 
Housing Quality Standards. Another commenter suggested that this term 
should refer to housing located in the same community as that in which 
the tenant is currently residing, and that ``appropriate size'' be 
established with reference to HUD housing programs.
    If ``affordable housing'' and ``appropriate size'' of unit were 
defined as suggested by the commenters, it is likely that the only 
housing that would satisfy the test would be HUD-assisted housing. In 
many markets, housing assisted by HUD under the 1937 Act is the only 
resource available to poor families that meets those specifications, 
and, therefore, the test of the availability of other affordable 
housing would have little meaning. Consequently, HUD declines to define 
the ``affordable housing'' alternative in the terms suggested.
    However, HUD agrees that some guidance on the subject is needed, 
and the 1994 proposed rule provides guidance. The rule provides that 
other affordable housing refers to housing that is not substandard, 
that is of appropriate size for the family and that can be rented for 
an amount not exceeding the amount that the family pays for rent, 
including utilities, plus 25 percent.

N. Protection From Liability

    One commenter noted that although the 1988 proposed rule protected 
from liability both project owners and mortgagees who comply with the 
rule's verification requirements, only mortgagees are affirmatively 
sanctioned under the rule for noncompliance with the verification 
procedures. (See Sec. 235.13(g) of 1988 proposed rule, and 
Sec. 235.13(d) of 1994 proposed rule.) The commenter asked HUD to 
extend similar sanctions under part 200 to all project owners.
    HUD has reviewed ``invalid certification'' language applicable to 
mortgagees, and notes that under that provision, a mortgagee in the 
section 235 program who falsely certifies to HUD that it has verified a 
mortgagor's citizenship or immigration documents, must repay to HUD the 
full amount of assistance payments made on behalf of the mortgagor. The 
provision also prohibits any additional assistance payments from being 
made on the mortgagor's behalf.
    One commenter stated that while the 1988 proposed rule provides HAs 
with flexibility in implementation, it also increases their potential 
liability, and asked that the rule be revised to reduce this exposure. 
Another commenter asked that HAs be indemnified for any wrongful 
determinations of eligibility.
    HUD has not adopted either of these suggestions, since responsible 
entities that follow the statutory verification and due process 
requirements are protected from liability under both the 1987 Act and 
IRCA. Under section 1436a(e) (added by IRCA), HUD is prohibited from 
taking:

    * * * any compliance, disallowance, penalty, or other regulatory 
action against an entity with respect to any error in the entity's 
determination to make an individual eligible for financial 
assistance based on citizenship or immigration status * * * (if such 
eligibility is based upon the responsible entity's complying with 
the verification and other procedural due process requirements 
mandated under IRCA.)

    And, section 1436a(f)(1), added by the 1987 Act, provides that:

    Notwithstanding any other provision of law, no agency or 
official of a State or local government shall have any liability for 
the design or implementation of the Federal verification system * * 
* if the implementation by the State or local agency or official is 
in accordance with Federal rules and regulations.

    Because a responsible entity that follows the verification and due 
process requirements established in the final rule is statutorily 
protected from liability, HUD has not revised the requirements in the 
1994 proposed rule to include any additional protections.

O. Reexamination of Income

    Two commenters argued that the requirement for annual verification 
of the immigration status of any tenant family containing one or more 
non-citizen members is an unnecessary burden for project owners, HAs, 
and tenants. The commenters that immigration status rarely changes, and 
that any additional burden encountered because of an applicant's lack 
of citizenship might result in discrimination by project owners against 
all noncitizens.
    HUD agrees that the burden of requiring an annual recertification 
and verification of immigration status of all noncitizen members of 
tenant families outweighs any benefit to be obtained, and the 1994 
proposed rule revises the reexamination provisions to restrict the 
requirement for submission of a declaration (and documentation and 
verification of immigration status, where an alien is involved) to new 
individuals joining the household--other than by birth to one of the 
occupants.

P. Miscellaneous

1. Cost
    Several of the commenters on the 1988 proposed rule complained that 
the requirement that the immigration status of all applicants be 
documented and verified under these procedures which include the offer 
of hearings at several points would be expensive and time-consuming. 
One commenter estimated that it would need to hire 56 additional 
housing assistants, at a cost of $2 million, as well as conduct 
training of its employees, at a cost of $250,000, and spend $800,000 on 
notifying applicants of the requirements. Several HA commenters 
suggested that HUD reimburse them for additional staff time. Another 
commenter speculated that some landlords would withdraw from 
participation in HUD programs rather than put up with the extra burdens 
and costs of the new requirement.
    HUD is aware that the verification procedure prescribed by IRCA is 
not without cost. The Federal government will incur the cost of the 
computerized verification system (SAVE) operated by the INS. The cost 
of operating that system will not be billed to the HA or project owner 
accessing the system but to HUD, for each inquiry made to the system. 
For HAs and project owners in most areas of the country, the cost of 
the verification system will not be substantial, because most 
applicants and tenants will certify that they are citizens. For HAs and 
project owners located in the parts of the country where the 
concentration of noncitizen residents is greatest, there will be 
greater impact. However, the additional cost will be only a small, 
incremental change in the overall cost of processing applications and 
reexaminations.
    One small HA advocated that HUD at least provide grants to small 
HAs who must computerize to accomplish the required verification. HUD 
sees no reason that any HA would need to computerize in order to 
implement these requirements. All that is necessary to access the SAVE 
system is a touch-tone telephone.
2. Implementation Timing
    HAs indicated that the rule should not be implemented until the INS 
verification program is fully operational and readily available for 
their use. As stated earlier in this preamble, HUD is in full agreement 
with that desire. The SAVE system is operational. Funds have been 
budgeted for billing the cost of SAVE access for HUD programs to HUD. 
After the publication of the final rule, arrangements will be made to 
issue identifying codes to the many administrators of HUD-assisted 
housing.
3. Other Changes
    A number of the sections in the 1994 proposed rule have been 
revised and restructured for ease of understanding and clarity of 
complex provisions.
    In the 1994 proposed rule, HUD has changed the minimum retention 
period for documents from 3 years to 5 years. This makes the retention 
period coincide with the statute of limitations for criminal 
prosecution and the ongoing needs for computer matching to verify 
tenant income. The five-year retention requirement does not impose a 
burden on HAs and private project owners, because HAs and project 
owners currently retain the records concerning the initial 
certification, regular recertification and interim recertification for 
at least five years.

VIII. Other Matters

Executive Order 12866

    This proposed rule was reviewed by the Office of Management and 
Budget under Executive Order 12866 as a significant regulatory action. 
Any changes made in this proposed rule as a result of that review are 
clearly identified in the docket file for this proposed rule, which is 
available for public inspection in the Office of HUD's Rules Docket 
Clerk, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-0500.

Environmental Review

    A Finding of No Significant Impact with respect to the environment 
was made in accordance with HUD regulations in 24 CFR part 50 that 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332). The Finding is available for public inspection 
between 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules 
Docket Clerk at the above address.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this proposed rule before publication, and 
by approving it, certifies that this rule does not have a significant 
economic impact on a substantial number of small entities. HUD believes 
that the rule, when implemented, will have only a minimal impact on 
small housing project owners, small mortgagees and small housing 
agencies, since the procedures specified to implement the restrictions 
are to require owners and HAs to use an easily accessible (by 
telephone) automated system for verifying immigration status. HUD has 
arranged for the cost of the automated verification system, established 
by the Immigration and Naturalization Service, to be billed directly to 
HUD. The only other significant element of cost or delay in 
administration of HUD programs that may be encountered by small 
entities as a result of this rule is the requirement for a fair 
hearing, on request, for any applicant or tenant found to be 
ineligible. This procedure is specifically required by 42 U.S.C. 1436a. 
However, HUD does not believe that the cost or delay will be 
significant because HUD anticipates that small housing agencies, 
project owners and mortgagees will find that the majority of applicants 
or tenants are eligible to receive HUD assistance, and therefore fair 
hearings to determine eligibility on the basis of immigration status 
will be minimal.
    Therefore, HUD concludes that this rule will not have a significant 
economic impact on a substantial number of small entities, and that to 
the extent possible, HUD has minimized the economic impact on all 
entities, consistent with the Secretary's responsibilities under 
section 1436a.

Executive Order on Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this proposed rule will not have substantial direct 
effects on States or their political subdivisions, or the relationship 
between the Federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
This proposed rule addresses immigration, a topic exclusively the 
province of the Federal government, and the effect is the direct result 
of the statute that imposes the restriction against assistance to 
noncitizens, rather than a result of HUD's exercise of discretion in 
promulgating a rule to implement the statute.

Executive Order on The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that the provisions of this 
proposed rule, while affecting the composition and well-being of 
families, are strictly the result of the statute that imposes the 
restriction. The only families upon whom the statute and the rule have 
an impact are those containing individuals with ineligible immigration 
status who are not receiving the benefit of assisted housing, or whose 
continued receipt of assisted housing is not necessary in order to 
avoid the division of the family. However, even for families that 
contain members with ineligible status, the rule strives to maintain 
the unity of the family under the regulatory provisions concerning 
special assistance to mixed families.

Regulatory Agenda

    This proposed rule was listed as sequence number 1525 in the 
Department's Semiannual Agenda of Regulations published on April 25, 
1994 (59 FR 20424, 20433), under Executive Order 12866 and the 
Regulatory Flexibility Act.

Public Reporting Burden

    The information collection requirements contained in Secs. 200.183, 
200.185, 200.186, 200.187, 235.13, 812.6, 812.8, 812.9, 812.10, 
905.310, 912.6, 912.8, 912.9, and 912.10 of this rule have been 
submitted to the Office of Management and Budget (OMB) for review under 
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520) and have been 
assigned OMB control numbers 2502-0356 and 2577-0093. In accordance 
with OMB regulations codified at 5 CFR 1320.13 and 1320.15, the 
following chart is provided to describe the collection of information 
requirements. 

         Tabulation of Annual Reporting Burden; Proposed Rule--Restriction on Assistance to Noncitizens         
----------------------------------------------------------------------------------------------------------------
                                                         No. of                                                 
    Description of                          No. of     responses      Total                                     
     information         Section of 24   respondents      per         annual       Hours per       Total hours  
     collection          CFR affected                 respondents   responses      response                     
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Notification to        905.310(g),             3,300        700      2,310,000  .01............  23,100         
 tenants and            912.6.                                                                                  
 applicants in Public                                                                                           
 & Indian Housing.                                                                                              
Denials,               905.310(m)(4),          3,300         19         62,700  .10 (6 minutes)  6,270          
 terminations,          (r), 912.9,                                                                             
 extensions deferrals.  912.10.                                                                                 
Notification and       812.6, 812.9,       2,470,777          1      2,470,777  .05 (3 minutes)  123,539        
 verification,          812.10.                                                                                 
 denial, termination                                                                                            
 in section 8.                                                                                                  
Notification and       200.183,              412,315          1        412,315  .05............  20,616         
 verification,          200.186,                                                                                
 denial, termination    200.187, 235.13.                                                                        
 in FHA subsidized.                                                                                             
Extensions...........  812.6(h),             144,155          1        144,155  .16............  23,065 (10     
                        200.183(h).                                                               min.)         
Recordkeeping--Public  905.310(q),             3,300        761      2,511,300  .01............  25,113         
 and Indian Housing.    912.9(h).                                                                               
Recordkeeping in       812.9(h)........    2,470,777          1      2,470,777  .05............  125,539        
 section 8.                                                                                                     
Recordkeeping in FHA   200.186(h),           412,315          1        412,315  .05............  20,616         
 subsidized.            235.13.                                                                                 
                                                                                                ----------------
    Total annual       ................  ...........  ...........  ...........  ...............  405,458        
     burden.                                                                                                    
----------------------------------------------------------------------------------------------------------------

List of Subjects

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Incorporation by 
reference, Lead poisoning, Loan programs--housing and community 
development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 215

    Grant Programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 235

    Condominiums, Cooperatives, Grant programs--housing and community 
development, Low and moderate income housing, Mortgage insurance, 
Reporting and recordkeeping requirements.

24 CFR Part 236

    Grant programs--housing and community development, Low and moderate 
income housing, Mortgage insurance, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 247

    Grant programs--housing and community development, Loan programs--
housing and community development, Low and moderate income housing, 
Rent subsidies.

24 CFR Part 812

    Low and moderate income housing, Reporting and recordkeeping 
requirements.

24 CFR Part 850

    Grant programs--housing and community development, Low and moderate 
income housing, Reporting and recordkeeping requirements.

24 CFR Part 880

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 881

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 882

    Grant programs--housing and community development, Homeless, Lead 
poisoning, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 883

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 884

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 886

    Grant programs--housing and community development, Lead poisoning, 
Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 887

    Grant programs--housing and community development, Rent subsidies, 
Reporting and recordkeeping requirements.

24 CFR Part 900

    Grant programs--housing and community development, Rent subsidies.

24 CFR Part 904

    Grant programs--housing and community development, Loan programs--
housing and community development, Public housing.

24 CFR Part 905

    Aged, Energy conservation, Grant programs--housing and community 
development, Grant programs--Indians, Homeownership, Indians, 
Individuals with disabilities, Lead poisoning, Loan programs--housing 
and community development, Loan programs--Indians, Low and moderate 
income housing, Public housing, Reporting and recordkeeping 
requirements.

24 CFR Part 912

    Grant programs--housing and community development, Public housing, 
Reporting and recordkeeping requirements.

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Public housing.
    Accordingly, title 24 of the Code of Federal Regulations, parts 
200, 215, 235, 236, 247, 812, 859, 880, 881, 882, 883, 884, 886, 887, 
900, 904, 905, 912 and 960 would be amended as follows:

PART 200--INTRODUCTION

    1. The authority citation for part 200 would be revised to read as 
follows:

    Authority: 12 U.S.C. 1701-715z-18; 42 U.S.C. 1436a and 3535(d).

    2. A new subpart G, consisting of Secs. 200.180 through 200.192, 
would be added to read as follows:

Subpart G--Restrictions on Assistance to Noncitizens

Sec.
200.180  Applicability.
200.180a  Requirements concerning documents.
200.181  Definitions.
200.182  General provisions.
200.183  Submission of evidence of citizenship or eligible 
immigration status.
200.184  Documents of eligible immigration status.
200.185  Verification of eligible immigration status.
200.186  Delay, denial, reduction or termination of assistance.
200.187  Preservation of mixed families and other families.
200.188  Proration of assistance.
200.189  Prohibition of assistance to noncitizen students.
200.190  Compliance with nondiscrimination requirements.
200.191  Protection from liability for project owners, State and 
local government agencies and officials.
200.192  Liability of ineligible tenants for reimbursement of 
benefits.

Subpart G--Restrictions on Assistance to Noncitizens


Sec. 200.180  Applicability.

    (a) Covered programs/assistance. This subpart implements the 
statutory restrictions on providing financial assistance to benefit 
individuals who are not in eligible status with respect to citizenship 
or noncitizen immigration status. This subpart is applicable to 
financial assistance provided under:
    (1) Section 235 Program assistance. Section 235 of the National 
Housing Act (12 U.S.C. 1715-z) (the Section 235 Program), and for which 
the implementing regulations are codified in 24 CFR part 235;
    (2) Section 236 Program assistance (below market rent only). 
Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants 
paying below market rent only) (the Section 236 Program), and for which 
the implementing regulations are codified in 24 CFR part 236, subpart 
D; or
    (3) Rent Supplement Program assistance. Section 101 of the Housing 
and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent 
Supplement Program), and for which the implementing regulations are 
codified in 24 CFR part 215.
    (b) When financial assistance is considered paid. Covered financial 
assistance is considered to be provided (or paid), and the restrictions 
on providing covered financial assistance to noncitizens with 
ineligible immigration status are applicable as follows:
    (1) Payment under Section 235 Program. Financial assistance is 
considered to be paid under the Section 235 program on behalf of a 
mortgagor when:
    (i) The dwelling unit is subject to a mortgage insured under 
section 235 of the National Housing Act (and part 235 of this chapter); 
and
    (ii) Assistance payments are made to the mortgagee on behalf of the 
mortgagor under a contract between the mortgagee and the Secretary in 
accordance with section 235(b) of the National Housing Act, unless 
those assistance payments are pro-rated in accordance with 
Sec. 200.188.
    (2) Payment under Section 236 Program. Financial assistance is 
considered to be paid under the Section 236 program on behalf of a 
tenant or cooperative unit purchaser when:
    (i) The project is subject to a mortgage insured or the project is 
assisted under section 236 of the National Housing Act (and part 236 of 
this chapter) for which interest reduction payments are paid under a 
contract between the mortgagee and the Secretary; and
    (ii) The monthly rental charge paid to the owner for the dwelling 
unit is less than the HUD-approved market rent, whether or not rental 
assistance payments are also paid under a contract in accordance with 
section 236(f)(2) and part 236, subpart D, of this chapter, unless 
those assistance payments are prorated in accordance with Sec. 200.188.
    (3) Payment under Rent Supplement Program. Financial assistance is 
considered to be paid under the Rent Supplement program administered 
under section 101 of the Housing and Urban Development Act of 1965 when 
rent supplement payments are paid under a contract between the project 
owner and the Secretary in accordance with that section and part 215 of 
this chapter, unless those assistance payments are prorated in 
accordance with Sec. 200.188.
    (c) Covered individuals and entities--(1) Covered individuals/
persons and families. The provisions of this subpart apply to both 
applicants for assistance and persons already receiving assistance 
covered under this subpart (i.e., tenants, homebuyers, cooperative 
members; see definition of ``tenant'' in Sec. 200.181). Unless the 
context clearly indicates otherwise, the terms ``individual,'' 
``person'' or ``family,'' or the plural of these terms, as used in this 
subpart apply to both an applicant and a tenant, or an applicant family 
or a tenant family.
    (2) Covered entities. The provisions of this subpart apply to both 
project owners (as defined in Sec. 200.181) and mortgagees under the 
Section 235 homeownership program. Unless the context clearly indicates 
otherwise, the term ``project owner'' as used in this subpart includes 
mortgagee.
    (d) Administration of restrictions on providing assistance. Project 
owners shall administer the restrictions on providing assistance to 
noncitizens with ineligible immigration status in accordance with the 
requirements of this subpart.


Sec. 200.180a  Requirements concerning documents.

    For any notice or document (decision, declaration, consent form, 
etc.) that this subpart requires the project owner to provide to an 
individual, or requires the project owner to obtain the signature of an 
individual, the project owner, where feasible, must arrange for the 
notice or document to be provided to the individual in a language that 
is understood by the individual if the individual is not proficient in 
English. (See 24 CFR 8.6 of HUD's regulations for requirements 
concerning communications with persons with disabilities.)


Sec. 200.181  Definitions.

    Assisted dwelling unit means a dwelling unit for which financial 
assistance is considered to be paid, as determined in accordance with 
Sec. 200.180.
    Child means a member of the family, other than the family head or 
spouse, who is under 18 years of age.
    Citizen means a citizen or national of the United States.
    Evidence of citizenship or eligible immigration status means the 
documents which must be submitted to evidence citizenship or eligible 
immigration status. (See Sec. 200.186(b).)
    Family. Except as may be otherwise specified in this subpart, the 
term ``family'' for purposes of this subpart shall have the same 
meaning as provided in the definition section of the regulations for 
each of the following programs: the Section 235 Program, Section 236 
Program, and the Rent Supplement Program. (See, respectively, 24 CFR 
235.5, 24 CFR 236.2, 24 CFR 215.1).
    Financial assistance or covered financial assistance. See 
Sec. 200.180.
    Head of household means the adult member of the family who is the 
head of the household for purposes of determining income eligibility 
and rent.
    HUD means the Department of Housing and Urban Development.
    INS means the U.S. Immigration and Naturalization Service.
    Mixed family means a family whose members include those with 
citizenship or eligible immigration status, and those without 
citizenship or eligible immigration status.
    National means a person who owes permanent allegiance to the United 
States, for example, as a result of birth in a United States territory 
or possession.
    Noncitizen means a person who is neither a citizen nor national of 
the United States.
    Project owner means the person or entity that owns the housing 
project containing the assisted dwelling unit. For purposes of this 
subpart, this term includes the mortgagee, in the case of a Section 235 
mortgage.
    Section 214 means section 214 of the Housing and Community 
Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 
restricts HUD from making financial assistance available for 
noncitizens unless they meet one of the six statutory categories of 
eligible immigration status.
    Tenant means for the Rent Supplement program and the section 236 
program, an individual or a family renting an assisted dwelling unit or 
occupying such a dwelling unit as a cooperative member. For purposes of 
simplifying the language in this subpart to include the section 235 
homeownership program, the term tenant will also be used to include a 
homebuyer, where appropriate.


Sec. 200.182  General provisions.

    (a) Restrictions on assistance. Financial assistance under the 
programs covered by this subpart is restricted to:
    (1) Citizens, or
    (2) Noncitizens who have eligible immigration status in one of the 
following categories:
    (i) A noncitizen lawfully admitted for permanent residence, as 
defined by section 101(a)(20) of the Immigration and Nationality Act 
(INA), as an immigrant, as defined by section 101(a)(15) of the INA (8 
U.S.C. 1101(a)(20) and 1101(a)(15), respectively) [immigrants]. (This 
category includes a noncitizen admitted under section 210 or 210A of 
the INA (8 U.S.C. 1160 or 1161), [special agricultural worker], who has 
been granted lawful temporary resident status);
    (ii) A noncitizen who entered the United States before January 1, 
1972, or such later date as enacted by law, and has continuously 
maintained residence in the United States since then, and who is not 
ineligible for citizenship, but who is deemed to be lawfully admitted 
for permanent residence as a result of an exercise of discretion by the 
Attorney General under section 249 of the INA (8 U.S.C. 1259);
    (iii) A noncitizen who is lawfully present in the United States 
pursuant to an admission under section 207 of the INA (8 U.S.C. 1157) 
[refugee status]; pursuant to the granting of asylum (which has not 
been terminated) under section 208 of the INA (8 U.S.C. 1158) [asylum 
status]; or as a result of being granted conditional entry under 
section 203(a)(7) of the INA (8 U.S.C. 1153(a)(7)) before April 1, 
1980, because of persecution or fear of persecution on account of race, 
religion, or political opinion or because of being uprooted by 
catastrophic national calamity;
    (iv) A noncitizen who is lawfully present in the United States as a 
result of an exercise of discretion by the Attorney General for 
emergent reasons or reasons deemed strictly in the public interest 
under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) [parole 
status];
    (v) A noncitizen who is lawfully present in the United States as a 
result of the Attorney General's withholding deportation under section 
243(h) of the INA (8 U.S.C. 1253(h)) [threat to life or freedom]; or
    (vi) A noncitizen lawfully admitted for temporary or permanent 
residence under section 245A of the INA (8 U.S.C. 1255a) [amnesty 
granted under INA 245A].
    (b) Family eligibility for assistance. (1) A family shall not be 
eligible for assistance unless every member of the family residing in 
the unit is determined to have eligible status, as described in 
paragraph (a) of this section;
    (2) Despite the ineligibility of one or more family members, a 
mixed family may be eligible for one of the three types of assistance 
provided in Sec. 200.187. A family without any eligible members and 
receiving assistance on [insert the effective date of the final rule] 
may be eligible for temporary deferral of termination of assistance as 
provided in Sec. 200.187.


Sec. 200.183  Submission of evidence of citizenship or eligible 
immigration status.

    (a) General. Eligibility for assistance or continued assistance 
under a program covered by this subpart is contingent upon a family's 
submission to the project owner of the documents described in paragraph 
(b) of this section for each family member. If one or more family 
members do not have citizenship or eligible immigration status, the 
family members may exercise the election not to contend to have 
eligible immigration status as provided in paragraph (e) of this 
section, and the provisions of Sec. 200.187 shall apply.
    (b) Evidence of citizenship or eligible immigration status. Each 
family member, regardless of age, must submit the following evidence to 
the project owner.
    (1) For citizens, the evidence consists of a signed declaration of 
U.S. citizenship;
    (2) For noncitizens who are 62 years of age or older or who will be 
62 years of age or older and receiving assistance under a covered 
program on [insert the effect date of the final rule], the evidence 
consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
    (3) For all other noncitizens, the evidence consists of:
    (i) A signed declaration of eligible immigration status;
    (ii) The INS documents listed in Sec. 200.184; and
    (iii) A signed verification form.
    (c) Declaration. (1) For each family member, the family must submit 
to the project owner a written declaration, signed under penalty of 
perjury, by which the family member declares whether he or she is a 
U.S. citizen or a noncitizen with eligible immigration status.
    (i) For each adult, the declaration must be signed by the adult.
    (ii) For each child, the declaration must be signed by an adult 
residing in the assisted dwelling unit who is responsible for the 
child.
    (2) The written declaration may be incorporated as part of the 
application for housing assistance or may constitute a separate 
document.
    (d) Verification consent form--(1) Who signs. Each noncitizen who 
declares eligible immigration status must sign a verification consent 
form as follows.
    (i) For each adult, the form must be signed by the adult.
    (ii) For each child, the form must be signed by an adult residing 
in the assisted dwelling unit who is responsible for the child.
    (2) Notice of release of evidence by project owner. The 
verification consent form shall provide that evidence of eligible 
immigration status may be released by the project owner without 
responsibility for the further use or transmission of the evidence by 
the entity receiving it, to:
    (i) HUD, as required by HUD;
    (ii) The INS; and, if applicable;
    (iii) Another Federal agency, or a State or local government agency 
in accordance with Federal, State or local law that requires the 
release of the evidence to that agency.
    (3) Notice of release of evidence by HUD. The verification consent 
form also shall notify the individual of the possible release of 
evidence of eligible immigration status by HUD. Evidence of eligible 
immigration status shall only be released to the INS for purposes of 
establishing eligibility for financial assistance and not for any other 
purpose. HUD is not responsible for the further use or transmission of 
the evidence or other information by the INS.
    (e) Individuals who do not contend that they have eligible status. 
If one or more members of a family elect not to contend that they have 
eligible immigration status, and other members of the family establish 
their citizenship or eligible immigration status, the family may be 
eligible for prorated assistance under Sec. 200.188, despite the fact 
that no declaration or documentation of eligible status is submitted 
for one or more members of the family. The family must, however, 
identify to the project owner, the family member (or members) who will 
elect not to contend that he or she has eligible immigration status.
    (f) Notification of requirements of section 214--(1) When notice is 
to be issued. Notification of the requirement to submit evidence of 
citizenship or eligible immigration status, as required by this 
section, or to elect not to contend that one has eligible status, as 
provided by paragraph (e) of this section, shall be given by the 
project owner as follows:
    (i) Applicant's notice. Notification of the requirement to submit 
evidence of eligible status shall be given to each applicant at the 
time of application for assistance. Applicants whose applications are 
pending on [insert the effective date of the final rule] shall be 
notified of the requirement to submit evidence of eligible status as 
soon as possible after [insert the effective date of the final rule].
    (ii) Tenant's notice. Notification of the requirement to submit 
evidence of eligible status shall be given to each tenant at the time 
of, and together with, the project owner's notice of regular 
reexamination of tenant income, but not later than one year following 
[insert the effective date of the final rule].
    (iii) Timing of mortgagor's notice. A mortgagor receiving section 
235 assistance must be notified of the requirement to submit evidence 
of eligible status in accordance with Sec. 235.13(b)(2).
    (2) Form and content of notice. The notice shall:
    (i) State that financial assistance is contingent upon the 
submission and verification, as appropriate, of evidence of citizenship 
or eligible immigration status as required by paragraph (a) of this 
section;
    (ii) Describe the type of evidence that must be submitted, and 
state the time period in which that evidence must be submitted (see 
paragraph (g) of this section concerning when evidence must be 
submitted); and
    (iii) State that assistance will be prorated, denied or terminated, 
as appropriate, upon a final determination of ineligibility after all 
appeals have been exhausted (see Sec. 200.186 concerning INS appeal, 
and informal hearing process by the project owner) or, if appeals are 
not pursued, at a time to be specified in accordance with HUD 
requirements. Tenants also shall be informed of how to obtain 
assistance under the preservation of families provisions of 
Sec. 200.187.
    (g) When evidence of eligible status is required to be submitted. 
The project owner shall require evidence of eligible status to be 
submitted at the times specified in paragraph (g) of this section, 
subject to any extension granted in accordance with paragraph (h) of 
this section.
    (1) Applicants. For applicants, project owners must ensure that 
evidence of eligible status is submitted not later than the date the 
project owner anticipates or has knowledge that verification of other 
aspects of eligibility for assistance will occur (see Sec. 200.185(a)).
    (2) Tenants. For tenants (i.e., persons already receiving the 
benefit of assistance in a covered program on [insert the effective 
date of the final rule]), evidence of eligible status is required to be 
submitted as follows:
    (i) For financial assistance in the form of rent supplement 
payments or section 236 basic rent tenancy or rental assistance 
payments, the tenant shall, in accordance with the provisions of 
Secs. 215.55(a) and 236.80(a) of this chapter, submit the required 
evidence at the first regular reexamination after [insert the effective 
date of the final rule].
    (ii) For financial assistance in the form of section 235 assistance 
payments, the mortgagor shall submit the required evidence in 
accordance with Sec. 235.13(c) of this chapter.
    (3) New occupants of assisted units. For any new occupant of an 
assisted unit (e.g., a new family member comes to reside in the 
assisted unit), the required evidence shall be submitted at the first 
interim or regular reexamination following the person's occupancy.
    (4) Changing participation in a HUD program. Whenever a family 
applies for admission to a program covered by this subpart, evidence of 
eligible status is required to be submitted in accordance with the 
requirements of this subpart unless the family already has submitted 
the evidence to the project owner for a covered program.
    (5) One-time evidence requirement for continuous occupancy. For 
each family member, the family is required to submit evidence of 
eligible status only one time during continuously assisted occupancy 
under any covered program.
    (h) Extensions of time to submit evidence of eligible status--(1) 
When extension must be granted. The project owner shall extend the 
time, provided in paragraph (g) of this section, to submit evidence of 
eligible immigration status if the family member:
    (i) Submits the declaration required under Sec. 200.183(a) 
certifying that any person for whom required evidence has not been 
submitted is a noncitizen with eligible immigration status; and
    (ii) Certifies that the evidence needed to support a claim of 
eligible immigration status is temporarily unavailable, additional time 
is needed to obtain and submit the evidence; and prompt and diligent 
efforts will be undertaken to obtain the evidence.
    (2) Prohibition on indefinite extension period. Any extension of 
time, if granted, shall be for a specific period of time. The 
additional time provided should be sufficient to allow the individual 
the time to obtain the evidence needed. The project owner's 
determination of the length of the extension needed shall be based on 
the circumstances of the individual case.
    (3) Grant or denial of extension to be in writing. The project 
owner's decision to grant or deny an extension as provided in paragraph 
(h)(1) of this section shall be issued to the family by written notice. 
If the extension is granted, the notice shall specify the extension 
period granted. If the extension is denied, the notice shall explain 
the reasons for denial of the extension.
    (i) Failure to submit evidence or to establish eligible status. If 
the family fails to submit required evidence of eligible immigration 
status within the time period specified in the notice, or any extension 
granted in accordance with paragraph (h) of this section, or if the 
evidence is timely submitted but fails to establish eligible 
immigration status, the project owner shall proceed to deny, prorate or 
terminate assistance, or provide continued assistance or temporary 
deferral of termination of assistance, as appropriate, in accordance 
with the provisions of Secs. 200.186 and 200.187.


Sec. 200.184  Documents of eligible immigration status.

    (a) General. A project owner shall request and review original 
documents of eligible immigration status. The project owner shall 
retain photocopies of the documents for its own records and return the 
original documents to the family.
    (b) Acceptable evidence of eligible immigration status. The 
original of one of the following documents is acceptable evidence of 
eligible immigration status, subject to verification in accordance with 
Sec. 200.185.
    (1) Form I-551, Alien Registration Receipt Card (for permanent 
resident aliens);
    (2) Form I-94, Arrival-Departure Record, with one of the following 
annotations:
    (i) ``Admitted as Refugee Pursuant to section 207'';
    (ii) ``Section 208'' or ``Asylum'';
    (iii) ``Section 243(h)'' or ``Deportation stayed by Attorney 
General'';
    (iv) ``Paroled Pursuant to Sec. 212(d)(5) of the INA'';
    (3) If Form I-94, Arrival-Departure Record, is not annotated, then 
accompanied by one of the following documents:
    (i) A final court decision granting asylum (but only if no appeal 
is taken);
    (ii) A letter from an INS asylum officer granting asylum (if 
application is filed on or after October 1, 1990) or from an INS 
district director granting asylum (if application filed before October 
1, 1990);
    (iii) A court decision granting withholding or deportation; or
    (iv) A letter from an INS asylum officer granting withholding of 
deportation (if application filed on or after October 1, 1990).
    (4) Form I-688, Temporary Resident Card, which must be annotated 
``section 245A'' or ``section 210'';
    (5) Form I-688B, Employment Authorization Card, which must be 
annotated ``Provision of Law 274a.12(11)'' or ``Provision of Law 
274a.12'';
    (6) A receipt issued by the INS indicating that an application for 
issuance of a replacement document in one of the above-listed 
categories has been made and the applicant's entitlement to the 
document has been verified; or
    (c) Other acceptable evidence. If other documents are determined to 
constitute acceptable evidence of eligible immigration status, they 
will be announced by HUD in a notice published in the Federal Register.


Sec. 200.185  Verification of eligible immigration status.

    (a) When verification is to occur. Verification of eligible 
immigration status shall be conducted by the project owner 
simultaneously with verification of other aspects of eligibility for 
assistance or continued eligibility for assistance under a covered 
program. The project owner shall verify eligible immigration status in 
accordance with the INS procedures described in this section.
    (b) Primary verification.--(1) Automated verification system. 
Primary verification of the immigration status of the person is 
conducted by the project owner through the INS automated system (INS 
Systematic Alien Verification for Entitlements (SAVE)). The INS SAVE 
system provides access to names, file numbers and admission numbers of 
noncitizens.
    (2) Failure of primary verification to confirm eligible immigration 
status. If the INS SAVE system does not verify eligible immigration 
status, secondary verification must be performed.
    (c) Secondary verification.--(1) Manual search of INS records. 
Secondary verification is a manual search by the INS of its records to 
determine an individual's immigration status. The project owner must 
request secondary verification, within 10 days of receiving the results 
of the primary verification, if the primary verification system does 
not confirm eligible immigration status, or if the primary verification 
system verifies immigration status that is ineligible for assistance 
covered by this subpart.
    (2) Secondary verification initiated by project owner. Secondary 
verification is initiated by the project owner forwarding photocopies 
of the original INS documents listed in Sec. 200.184 (front and back), 
attached to the INS document verification request form G-845S (Document 
Verification Request), to a designated INS office for review. (Form G-
845S is available from the local INS Office.)
    (3) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the project owner shall issue to the 
family the notice described in Sec. 200.186(d), which includes 
notification of appeal to the INS of the INS finding on immigration 
status (see Sec. 200.186(d)(4)).
    (d) Exemption from liability for INS verification. The project 
owner shall not be liable for any action, delay, or failure of the INS 
in conducting the automated or manual verification.


Sec. 200.186  Delay, denial, reduction or termination of assistance.

    (a) General. Assistance to a family may not be delayed, denied, 
reduced or terminated because of the immigration status of a family 
member except as provided in this section.
    (b) Restrictions on delay, denial, reduction or termination of 
assistance.--(1) Restrictions on reduction, denial or termination of 
assistance. Assistance to an applicant shall not be reduced or denied, 
and assistance to a tenant shall not be delayed, denied, reduced, or 
terminated, on the basis of ineligible immigration status of a family 
member if:
    (i) The primary and secondary verification of any immigration 
documents that were timely submitted has not been completed;
    (ii) The family member for whom required evidence has not been 
submitted has moved from the assisted dwelling unit;
    (iii) The family member who is determined not to be in an eligible 
immigration status following INS verification has moved from the 
assisted dwelling unit;
    (iii) The INS appeals process under Sec. 200.186(e) has not been 
concluded; or
    (iv) For a tenant, the informal hearing process under 
Sec. 200.186(f) has not been concluded.
    (2) Restrictions on denial or termination. Assistance to an 
applicant shall not be denied, and assistance to a tenant shall not be 
terminated, on the basis of ineligible immigration status of a family 
member if:
    (i) Assistance is prorated in accordance with Sec. 200.188;
    (ii) Assistance for a mixed family is continued in accordance with 
Sec. 200.187; or
    (iii) Deferral of termination of assistance is granted in 
accordance with Sec. 200.187.
    (3) When delay of assistance to an applicant is permissible. 
Assistance to an applicant may be delayed after the conclusion of the 
INS appeal process, but not denied until the conclusion of the informal 
hearing process, if an informal hearing is requested by the family.
    (c) Events causing denial or termination of assistance.--(1) 
General. Assistance to an applicant shall be denied, and a tenant's 
assistance shall be terminated, in accordance with the procedures of 
this section, upon the occurrence of any of the following events:
    (i) Evidence of citizenship (i.e., the declaration) and eligible 
immigration status is not submitted by the date specified in 
Sec. 200.183(g) or by the expiration of any extension granted in 
accordance with Sec. 200.183(h); or
    (ii) Evidence of citizenship and eligible immigration status is 
timely submitted, but INS primary and secondary verification does not 
verify eligible immigration status of a family member; and
    (iii) The family does not pursue INS appeal or informal hearing 
rights as provided in this section; or
    (iv) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family 
member.
    (2) Termination of assisted occupancy. For termination of assisted 
occupancy, see paragraph (i) of this section.
    (d) Notice of denial or termination of assistance. The notice of 
denial or termination of assistance shall advise the family:
    (1) That financial assistance will be denied or terminated, and 
provide a brief explanation of the reasons for the proposed denial or 
termination of assistance;
    (2) That the family may be eligible for proration of assistance as 
provided under Sec. 200.188;
    (3) In the case of a tenant, the criteria and procedures for 
obtaining relief under the preservation of families provision in 
Sec. 200.187;
    (4) That the family has a right to request an appeal to the INS of 
the results of secondary verification of immigration status and to 
submit additional documentation or a written explanation in support of 
the appeal in accordance with the procedures of paragraph (e) of this 
section;
    (5) That the family has a right to request an informal hearing with 
the project owner either upon completion of the INS appeal or in lieu 
of the INS appeal as provided in paragraph (f) of this section;
    (6) For applicants, the notice shall advise that assistance may not 
be delayed until the conclusion of the INS appeal process, but 
assistance may be delayed during the pendency of the informal hearing 
process.
    (e) Appeal by applicant to the INS.--(1) Submission of request for 
appeal to project owner. Upon receipt of notification by the project 
owner that INS secondary verification failed to confirm eligible 
immigration status, the family may request an appeal to the INS by 
communicating that request to the project owner within 14 days of the 
date the project owner mails or delivers the notice under paragraph (d) 
of this section.
    (2) Extension of time to request an appeal. The project owner shall 
extend the period of time for requesting an appeal (for a specified 
period) upon good cause shown.
    (3) Forwarding the appeal to INS. If the family requests an appeal 
to the INS, the project owner shall forward to the designated INS 
office any additional documentation or written explanation provided by 
the family in support of the appeal. This material must include a copy 
of the INS document verification request form G-845S (used to process 
the secondary verification request) and a cover letter indicating that 
the family is requesting an appeal of the INS immigration status 
verification results. (Form G-845S is available from the local INS 
Office.)
    (4) Decision by INS.--(i) When decision will be issued. The INS 
will issue to the project owner a decision within 30 days of its 
receipt of documentation concerning the family's appeal of the 
verification of immigration status. If, for any reason, the INS is 
unable to issue a decision within the 30 day time period, the INS will 
inform the project owner of the reasons for the delay, and the project 
owner will inform the family of the reasons for the delay.
    (ii) Notification of INS decision and of informal hearing 
procedures. When the project owner receives the INS decision, the 
project owner shall notify the family of the INS determination, of the 
reasons for the determination, and of the family's right to request an 
informal hearing on the PHA's ineligibility determination in accordance 
with the procedures of paragraph (f) of this section.
    (5) No delay, denial, reduction, or termination of assistance until 
completion of INS appeal process; direct appeal to INS. Pending the 
completion of the INS appeal under this section, assistance may not be 
delayed, denied, reduced or terminated on the basis of immigration 
status.
    (f) Informal hearing.--(1) When request for hearing is to be made. 
After notification of the INS decision on appeal, or in lieu of request 
of appeal to the INS, the family may request that the project owner 
provide a hearing. This request must be made either within 14 days of 
the date the project owner mails or delivers the notice under paragraph 
(d) of this section, or within 14 days of the mailing of the INS appeal 
decision issued in accordance with paragraph (e) of this section 
(established by the date of postmark).
    (2) Extension of time to request hearing. The project owner shall 
extend the period of time for requesting a hearing (for a specified 
period) upon good cause shown.
    (3) Informal hearing procedures. A family who submits a timely 
request for a hearing with the project owner shall have an opportunity 
for:
    (i) Hearing before an impartial individual. The family shall be 
provided a hearing before any person(s) designated by the project owner 
(including an officer or employee of the project owner), other than a 
person who made or approved the decision under review, and other than a 
person who is a subordinate of the person who made or approved the 
decision;
    (ii) Examination of evidence. The family shall be provided the 
opportunity to examine and copy at the individual's expense, at a 
reasonable time in advance of the hearing, any documents in the 
possession of the project owner pertaining to the family's eligibility 
status, or in the possession of the INS (as permitted by INS 
requirements), including any records and regulations that may be 
relevant to the hearing;
    (iii) Presentation of evidence and arguments in support of eligible 
status. The family shall be provided the opportunity to present 
evidence and arguments in support of eligible status. Evidence may be 
considered without regard to admissibility under the rules of evidence 
applicable to judicial proceedings;
    (iv) Controverting evidence of the project owner. The family shall 
be provided the opportunity to controvert evidence relied upon by the 
project owner and to confront and cross-examine all witnesses on whose 
testimony or information the project owner relies;
    (v) Representation. The family shall be entitled to be represented 
by an attorney, or other designee, at the family's expense, and to have 
such person make statements on the family's behalf;
    (vi) Interpretive services. The family shall be entitled to arrange 
for an interpreter to attend the hearing, at the expense of the family 
or project owner, as may be agreed upon by both parties; and
    (vii) Hearing to be recorded. The family shall be entitled to have 
the hearing recorded by audiotape (a transcript of the hearing may, but 
is not required to, be provided by the project owner).
    (4) Hearing decision. The project owner shall provide the family 
with a written final decision, based solely on the facts presented at 
the hearing, within 14 days of the date of the informal hearing. The 
decision shall state the basis for the decision.
    (g) Judicial relief. A decision against a family member, issued in 
accordance with paragraphs (e) or (f) of this section, does not 
preclude the family from exercising the right, that may otherwise be 
available, to seek redress directly through judicial procedures.
    (h) Retention of documents. The project owner shall retain for a 
minimum of 5 years the following documents that may have been submitted 
to the project owner by the family, or provided to the project owner as 
part of the INS appeal or the informal hearing process:
    (1) The application for financial assistance;
    (2) The form completed by the family for income re-examination;
    (3) Photocopies of any original documents (front and back), 
including original INS documents;
    (4) The signed verification consent form;
    (5) The INS verification results;
    (6) The request for an INS appeal;
    (7) The final INS determination;
    (8) The request for an informal hearing; and
    (9) The final hearing decision.
    (i) Termination of assisted occupancy. Assisted occupancy is 
terminated by:
    (1) If permitted under the lease, the project owner notifying the 
tenant that because of the termination of assisted occupancy the tenant 
is required to pay the HUD-approved market rent for the dwelling unit.
    (2) The project owner and tenant entering into a new lease without 
financial assistance.
    (3) The project owner evicting the tenant. An owner may continue to 
receive assistance payments if action to terminate the tenancy under an 
assisted lease is promptly initiated and diligently pursued, in 
accordance with the terms of the lease, and if eviction of the tenant 
is undertaken by judicial action pursuant to State and local law. 
Action by the owner to terminate the tenancy and to evict the tenant 
must be in accordance with 24 CFR part 247 and other HUD requirements. 
For any jurisdiction, HUD may prescribe a maximum period during which 
assistance payments may be continued during eviction proceedings and 
may prescribe other standards of reasonable diligence for the 
prosecution of eviction proceedings.


Sec. 200.187  Preservation of mixed families and other families.

    (a) Assistance available for mixed families--(1) Assistance 
available for tenant mixed families. For a mixed family assisted under 
a program by this subpart on [insert the effective date of the final 
rule], one of the following three types of assistance may be available 
to the family:
    (i) Continued assistance (see paragraph (b) of this section);
    (ii) Prorated assistance (see Sec. 200.188); or
    (iii) Temporary deferral of termination of assistance (see 
paragraph (c) of this section).
    (2) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for assistance 
as provided in Sec. 200.188.
    (3) Assistance available to other families in occupancy. For 
families receiving assistance under a program covered by this subpart 
on [insert the effective date of the final rule] and who have no 
members with eligible immigration status, the project owner may grant 
the family temporary deferral of termination of assistance.
    (b) Continued assistance. A mixed family shall receive continued 
housing assistance if all of the following conditions are met:
    (1) The family was receiving assistance under a program covered by 
this subpart on [insert the effective date of the final rule]; 
    (2) The family's head of household or spouse has eligible 
immigration status as described in Sec. 200.182; and
    (3) The family does not include any person (who does not have 
eligible immigration status) other than the head of household, any 
spouse of the head of household, any parents of the head of household, 
any parents of the spouse, or any children of the head of household or 
spouse.
    (c) Temporary deferral of termination of assistance--(1) 
Eligibility for this type of assistance. If a mixed family qualifies 
for prorated assistance (and does not qualify for continued 
assistance), but decides not to accept prorated assistance, or if a 
family has no members with eligible immigration status, the family 
shall be eligible for temporary deferral of termination of assistance 
if necessary to permit the family additional time for the orderly 
transition of those family members with ineligible status, and any 
other family members involved, to other affordable housing. Other 
affordable housing is used in the context of transition of an 
ineligible family from a rent level that reflects HUD assistance to a 
rent level that is unassisted; the term refers to housing that is not 
substandard, that is of appropriate size for the family and that can be 
rented for an amount not exceeding the amount that the family pays for 
rent, including utilities, plus 25 percent.
    (2) Conditions for granting temporary deferral of termination of 
assistance. The project owner shall grant a temporary deferral of 
termination of assistance to a mixed family if one of the following 
conditions is met:
    (i) The family demonstrates that reasonable efforts to find other 
affordable housing of appropriate size have been unsuccessful (for 
purposes of this section, reasonable efforts include seeking 
information from, and pursuing leads obtained from the State housing 
agency, the city government, local newspapers, rental agencies and the 
owner);
    (ii) The vacancy rate for affordable housing of appropriate size is 
below five percent in the housing market for the area in which the 
project is located; or
    (iii) The Comprehensive Housing Affordability Strategy (CHAS), as 
described in 24 CFR part 91 and if applicable to the covered program, 
indicates that the local jurisdiction's housing market lacks sufficient 
affordable housing opportunities for households having a size and 
income similar to the family seeking the deferral.
    (3) Time limit on deferral period. If temporary deferral of 
termination of assistance is granted, the deferral period shall be for 
an initial period not to exceed six months. The initial period may be 
renewed for additional periods of six months, but the aggregate 
deferral period shall not exceed a period of three years.
    (4) Notification requirements for beginning of each deferral 
period. At the beginning of each deferral period, the project owner 
must inform the family of its ineligibility for financial assistance 
and offer the family information concerning, and referrals to assist in 
finding, other affordable housing.
    (5) Determination of availability of affordable housing at end of 
each deferral period. Before the end of each deferral period, the 
project owner must:
    (i) Make a determination of the availability of affordable housing 
of appropriate size based on the vacancy rate for affordable housing of 
appropriate size in the housing market for the area in which the 
project is located, the CHAS (if applicable), the owner's own knowledge 
of the availability of affordable housing, and on evidence of the 
tenant family's efforts to locate such housing. (Affordable housing 
will be determined to be available if the vacancy rate is five percent 
or greater, or if the CHAS (if applicable), the owner's knowledge and 
the tenant's evidence indicate that other affordable housing is 
available) and
    (ii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination will 
be deferred again (provided that the granting of another deferral will 
not result in aggregate deferral periods that exceed three years), and 
a determination was made that other affordable housing is not 
available; or
    (iii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination of 
financial assistance will not be deferred because either granting 
another deferral will result in aggregate deferral periods that exceed 
three years, or a determination has been made that other affordable 
housing is available.
    (d) Notification of decision on family preservation assistance. A 
project owner shall notify the family of its decision concerning the 
family's qualification for assistance under this section. If the family 
is ineligible for assistance under this section, the notification shall 
state the reasons, which must be based on relevant factors. For tenant 
families, the notice also shall inform the family of any applicable 
appeal rights.


Sec. 200.188  Proration of assistance.

    (a) Applicability. This section applies to a mixed family other 
than a family receiving continued assistance under Sec. 200.187(b), or 
other than a family for which termination of assistance is temporarily 
deferred under Sec. 200.187(c).
    (b) Method for prorating assistance. For each of the three types of 
assistance covered by this subpart, the project owner shall prorate the 
family's assistance as follows:
    (1) Proration under Rent Supplement Program. If the household 
participates in the Rent Supplement Program, the rent supplement paid 
on the household's behalf shall be the rent supplement the household 
would otherwise be entitled to, multiplied by a fraction, the 
denominator of which is the number of people in the household and the 
numerator of which is the number of eligible persons in the household.
    (2) Proration under Section 235 Program. If the household 
participates in the Section 235 Program, the interest reduction 
payments paid on the household's behalf shall be the payments the 
household would otherwise be entitled to, multiplied by a fraction the 
denominator of which is the number of people in the household and the 
numerator of which is the number of eligible persons in the household;
    (3) Proration under Section 236 Program without the benefit of 
additional assistance. If the household participates in the Section 236 
Program without the benefit of any additional assistance, the 
household's rent shall be increased above the rent the household would 
otherwise pay by an amount equal to the difference between the market 
rate rent for the unit and the rent the household would otherwise pay 
multiplied by a fraction the denominator of which is the number of 
people in the household and the numerator of which is the number of 
ineligible persons in the household;
    (4) Proration under Section 236 Program with the benefit of 
additional assistance. If the household participates in the Section 236 
Program with the benefit of additional assistance under the rent 
supplement, rental assistance payment or Section 8 programs, the 
household's rent shall be increased above the rent the household would 
otherwise pay by:
    (i) An amount equal to the difference between the market rate rent 
for the unit and the basic rent for the unit multiplied by a fraction, 
the denominator of which is the number of people in the household, and 
the numerator of which is the number of ineligible persons in the 
household, plus;
    (ii) An amount equal to the rent supplement, housing assistance 
payment or rental assistance payment the household would otherwise be 
entitled to multiplied by a fraction, the denominator of which is the 
number of people in the household and the numerator of which is the 
number of ineligible persons in the household.


Sec. 200.189  Prohibition of assistance to noncitizen students.

    (a) General. The provisions of Secs. 200.187 and 200.188, 
permitting continued assistance, prorated assistance or temporary 
deferral of termination of assistance for certain families, do not 
apply to any person who is determined to be a noncitizen student, as 
defined in paragraph (b) of this section, or the family of the 
noncitizen student, as described in paragraph (c) of this section.
    (b) Noncitizen student. For purposes of this part, a noncitizen 
student is defined as a noncitizen who:
    (1) Has a residence in a foreign country that the person has no 
intention of abandoning;
    (2) Is a bona fide student qualified to pursue a full course of 
study; and
    (3) Is admitted to the United States temporarily and solely for 
purposes of pursuing such a course of study at an established 
institution of learning or other recognized place of study in the 
United States, particularly designated by such person and approved by 
the Attorney General after consultation with the Department of 
Education of the United States, which institution or place of study 
shall have agreed to report to the Attorney General the termination of 
attendance of each nonimmigrant student (and if any such institution of 
learning or place of study fails to make such reports promptly the 
approval shall be withdrawn).
    (c) Family of noncitizen student. The prohibition on providing 
assistance to a noncitizen student as described in paragraph (a) of 
this section also extends to the noncitizen spouse of the noncitizen 
student and minor children of any noncitizen student if the spouse or 
children are accompanying the student or following to join such 
student. The prohibition on providing assistance to a noncitizen 
student does not extend to the citizen spouse of the noncitizen student 
and the children of the citizen spouse and noncitizen student.


Sec. 200.190  Compliance with nondiscrimination requirements.

    The project owner shall administer the restrictions on use of 
assisted housing by noncitizens with ineligible immigration status 
imposed by this part in conformity with the nondiscrimination 
requirements of, including, but not limited to, title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d-2000d-5), section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), the Fair Housing Act (42 
U.S.C. 3601-3619), and the regulations implementing these statutes, and 
other civil rights statutes cited in the applicable program 
regulations. These statutes prohibit, among other things, 
discriminatory practices on the basis of race, color, national origin, 
sex, religion, age, disability and familial status in the provision of 
housing.


Sec. 200.191  Protection from liability for project owners, State and 
local government agencies and officials.

    (a) Protection from liability for project owners. HUD will not take 
any compliance, disallowance, penalty, or other regulatory action 
against a project owner with respect to any error in its determination 
of eligibility for financial assistance based on citizenship or 
immigration status:
    (1) If the project owner established eligibility based upon 
verification of eligible immigration status through the verification 
system described in Sec. 200.185;
    (2) Because the project owner was required to provide an 
opportunity for the family to submit evidence in accordance with 
Sec. 200.183;
    (3) Because the project owner was required to wait for completion 
of INS verification of immigration status in accordance with 
Sec. 200.185;
    (4) Because the project owner was required to wait for completion 
of the INS appeal process provided in accordance with Sec. 200.186(e); 
or
    (5) Because the project owner was required to provide an informal 
hearing in accordance with Sec. 200.186(f).
    (b) Protection from liability for State and local government 
agencies and officials. State and local government agencies and 
officials shall not be liable for the design or implementation of the 
verification system described in Sec. 200.185 and the informal hearings 
provided under Sec. 200.186, as long as the implementation by the State 
and local government agency or official is in accordance with 
prescribed HUD rules and requirements.


Sec. 200.192  Liability of ineligible tenants for reimbursement of 
benefits.

    Where a tenant has received the benefit of HUD financial assistance 
to which the tenant was not entitled because the tenant intentionally 
misrepresented ``eligible status'' (as defined in Sec. 200.182), the 
ineligible tenant is responsible for reimbursing HUD for the assistance 
improperly paid. If the amount of the assistance is substantial, the 
project owner is encouraged to refer the case to the HUD Regional 
Inspector General's office for further investigation. Possible criminal 
prosecution may follow based on the False Statements Act (18 U.S.C. 
1001 and 1010).

PART 215--RENT SUPPLEMENT PAYMENTS

    3. The authority citation for part 215 would continue to read as 
follows:

    Authority: 12 U.S.C. 1701s; 42 U.S.C. 3535(d).

    4. In Sec. 215.20, paragraph (b)(2) would be amended by adding a 
new sentence at the end to read as follows:


Sec. 215.20  Qualified tenant.

* * * * *
    (b) * * *
    (2) * * * For restrictions on financial assistance to noncitizens 
with ineligible immigration status, see part 200, subpart G, of this 
chapter.
* * * * *
    5. In Sec. 215.25, paragraph (a)(1) would be revised to read as 
follows:


Sec. 215.25  Determination of eligibility.

    (a)(1) The housing owner shall determine eligibility following 
procedures prescribed by the Commissioner when processing applications 
for admission and tenant applications for assistance. The requirements 
of part 200, subpart G, of this chapter govern the submission and 
verification of citizenship information and eligible immigration status 
for applicants, and the procedures for denial or proration of 
assistance based upon a failure to establish eligible immigration 
status.
* * * * *
    6. Section 215.55 would be amended by adding two sentences at the 
end of paragraph (a), by adding one sentence at the end of paragraph 
(b), and by adding two sentences at the end of paragraph (c), to read 
as follows:


Sec. 215.55  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of part 200, subpart G, of this chapter concerning 
obtaining and processing information on the citizenship or eligible 
immigration status of all family members. Thereafter, at each regular 
reexamination, the owner shall follow the requirements of part 200, 
subpart G, of this chapter, concerning obtaining and processing 
information on the citizenship or eligible immigration status of any 
new family member.
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when a new family member has been added, the 
owner shall follow the requirements of part 200, subpart G, of this 
chapter, concerning obtaining and processing information on the 
citizenship or eligible immigration status of the new family member.
    (c) Termination of assistance. * * * Assistance also may be 
terminated in accordance with any requirements of the lease or with HUD 
requirements. The procedures of part 200, subpart G, of this chapter, 
apply when termination is based upon a determination that the tenant 
does not have eligible immigration status.
    7. A new Sec. 215.80 would be added to read as follows:


Sec. 215.80  Determination of eligible immigration status of applicants 
and tenants; protection from liability.

    (a) Housing owner's obligation to make determination. A housing 
owner shall obtain and verify information regarding the citizenship or 
immigration status of applicants and tenants in accordance with the 
procedures of part 200, subpart G, of this chapter.
    (b) Protection from liability. HUD will not take any compliance, 
disallowance, penalty or other regulatory action against a housing 
owner with respect to any error in its determination that an individual 
is eligible for financial assistance based upon citizenship or eligible 
immigration status, as provided in Sec. 200.189 of this chapter.

PART 235--MORTGAGE INSURANCE AND ASSISTANCE PAYMENTS FOR HOME 
OWNERSHIP AND PROJECT REHABILITATION

    8. The authority citation for part 235 would continue to read as 
follows:

    Authority: 12 U.S.C. 1715b, and 1715z; 42 U.S.C. 3535(d).

    9. Section 235.2 would be amended by adding a new paragraph (f) to 
read as follows:


Sec. 235.2  Basic program outline.

* * * * *
    (f) Evidence of citizenship or eligible immigration status shall be 
submitted by the applicant or mortgagor and verified in accordance with 
part 200, subpart G of this chapter and Sec. 235.13.
    10. Section 235.10 would be amended by adding a new paragraph 
(c)(2)(iii) and by adding a sentence at the end of paragraph (e), to 
read as follows:


Sec. 235.10  Eligible mortgagors.

* * * * *
    (c) * * *
    (2) * * *
    (iii) A new member is added to the family in which case evidence of 
citizenship or eligible immigration status also shall be submitted, in 
accordance with part 200, subpart G, of this chapter.
* * * * *
    (e) * * * Eligibility for assistance under this subpart also 
requires citizenship or eligible immigration status, as determined in 
accordance with part 200, subpart G, of this chapter, except that 
citizenship or eligible immigration status shall not be required of a 
mortgagor whose assistance contract was executed before [insert the 
effective date of the final rule] and remains unchanged after that 
date. (See Sec. 235.13(c).)
* * * * *
    11. A new Sec. 235.13 would be added to read as follows:


Sec. 235.13  Special requirements concerning citizenship or eligible 
immigration status.

    (a) General. Except as may be supplemented by the provisions of 
this section, the requirements of 24 CFR part 200, subpart G, 
concerning restrictions on the use of assisted housing by noncitizens 
with ineligible immigration status are applicable to mortgagees and 
mortgagors covered by the Section 235 Program with the exception of 
mortgagors:
    (1) Whose assistance contracts were executed before [insert the 
effective date of the final rule] and remain unchanged after that date; 
or
    (2) Who refinance their section 235 mortgages, which were executed 
before [insert effective date of final rule] and whose assistance 
contracts were unchanged after that date, with mortgages insured under 
section 235(r) of the National Housing Act (12 U.S.C. 1715z).
    (b) Notification of requirements to submit evidence of eligible 
status--(1) Notice to applicants. A mortgagee shall notify applicants, 
including applicants whose names are on a waiting list on [insert the 
effective date of the final rule], that financial assistance is 
contingent upon the submission and verification, as appropriate, of 
evidence of eligible citizenship and immigration status as required 
under 24 CFR part 200, subpart G.
    (2) Notice to mortgagors. A mortgagee also shall notify mortgagors 
(except Section 235(r) mortgagors) whose contracts are executed after 
[insert the effective date of the final rule] that continued financial 
assistance is contingent upon the submission and verification, as 
appropriate, of the evidence of eligible status required in 24 CFR part 
200, subpart G. This notice requirement also shall apply to mortgagors 
whose contracts are revised, at the request of the mortgagor, after 
[insert the effective date of the final rule].
    (c) Submission of evidence of eligible status--(1) When evidence of 
eligible immigration status is to be submitted. A mortgagee shall 
obtain evidence concerning an applicant or mortgagor's citizenship or 
eligible immigration status, as required by 24 CFR part 200, subpart G, 
at the following times:
    (i) Application for assistance; and
    (ii) The first recertification of family income and composition 
conducted after [insert the effective date of the final rule], in 
accordance with Sec. 235.10 or Sec. 235.350. The requirements of this 
section are not applicable to mortgagors whose assistance contracts 
were executed before [insert the effective date of the final rule] and 
remain unchanged after that date, or to mortgagors who refinance their 
section 235 mortgages, which were executed before [insert the effective 
date of the final rule] and whose assistance contracts remain unchanged 
after such date, with mortgages insured under section 235(r) of the 
National Housing Act.
    (2) Extensions of time to submit evidence of eligible status. The 
provisions of Sec. 200.183(e) of this chapter, concerning extension of 
time within which to submit evidence of eligible status are applicable.
    (d) Certification by mortgagee--(1) General. The mortgagee shall 
verify the evidence submitted in the case of an applicant or mortgagor 
declaring eligible immigration status, in accordance with the 
requirements of part 200, subpart G, of this chapter, and certify to 
the Secretary that the required information concerning citizenship or 
eligible immigration status has been submitted and verified (if 
applicable) for all persons for whom the evidence is required. If the 
applicant or mortgagor's citizenship or eligible immigration status is 
not established as a result of the process required under 24 CFR part 
200, subpart G, the mortgagee shall notify the applicant or mortgagor 
in accordance with the requirements of 24 CFR part 200, subpart G 
concerning notification of the possibility of denial or termination of 
assistance, and, if applicable, of additional assistance that may be 
available to the applicant or mortgagor.
    (2) Invalid certification. (i) If the mortgagee has certified to 
the Secretary in accordance with paragraph (d)(1) of this section that 
the required information concerning citizenship or eligible immigration 
status has been submitted and verified (if applicable), and the 
Secretary subsequently determines that the procedures required by this 
section and 24 CFR part 200, subpart G, were not followed, the 
following actions will be taken:
    (A) The mortgagee will be required to repay to the Secretary the 
full amount of assistance payments made on behalf of the mortgagor 
under this part; and
    (B) No additional assistance payments may be made on behalf of the 
mortgagor.
    (ii) The Secretary may permit the resumption of assistance payments 
if all persons residing in the dwelling whose status was not determined 
to be eligible have moved from the dwelling unit, or their status has 
been determined to be eligible, in accordance with 24 CFR part 200, 
subpart G.
    (iii) If the mortgagee has certified to the Secretary in accordance 
with paragraph (c)(1) of this section that the required information 
concerning citizenship or eligible immigration status has been 
submitted and verified (if applicable), and the Secretary subsequently 
determines that the mortgagor's eligible status determination was based 
on fraudulent documents, or was otherwise defective, although the 
determination was made in accordance with required procedures, the 
following actions will be taken:
    (A) The mortgagor will be required to repay to the Secretary the 
full amount of assistance payments made on behalf of the mortgagor 
under this part; and
    (B) No additional assistance payments may be made on behalf of the 
mortgagor.
    (iv) The Secretary's right to repayment from the mortgagor under 
paragraph (c)(2)(i) of this section shall not affect or limit the 
Secretary's right to refund of overpaid assistance payments from the 
mortgagee as provided in Sec. 235.361(b).
    (e) Mortgage insurance commitments. Commitments to insure mortgages 
under this part will not be issued or extended unless the mortgagee has 
made the certification required under paragraph (c) of this section.
    (f) Other related provisions. See Sec. 235.10 for eligibility 
requirements, specifically citizenship and eligible immigration status; 
Sec. 235.350 for the mortgagor's required recertification, including 
provision of information concerning eligible immigration status; and 
generally part 200, subpart G, of this chapter, for the provisions on 
restrictions to providing assistance to noncitizens with ineligible 
immigration status.
    12. In Sec. 235.325, a new paragraph (c) would be added to read as 
follows:


Sec. 235.325  Qualified cooperative members.

* * * * *
    (c) Eligibility as a cooperative member under this subpart also 
requires eligible status with respect to citizenship or eligible 
immigration status determined in accordance with 24 CFR part 200, 
subpart G. (See Sec. 235.13.)
    13. Section 235.350 would be amended by adding a new paragraph 
(a)(2)(iii) to read as follows:


Sec. 235.350  Mortgagor's required recertification.

    (a) * * *
    (2) * * *
    (iii) A new member is added to the family who is not born in the 
United States (except for a mortgagor described in Sec. 235.13(a) (1) 
or (2)).
* * * * *
    14. In Sec. 235.375, a new paragraph (b)(6) would be added to read 
as follows:


Sec. 235.375  Termination, suspension, or reinstatement of the 
assistance payments contract.

* * * * *
    (b) * * *
    (6) Failure to provide evidence of citizenship or eligible 
immigration status in accordance with 24 CFR part 200, subpart G:
    (i) For a new member of the family, other than a child born in the 
United States, except with respect to a mortgagor described under 
Sec. 235.13(a) (1) and (2);
    (ii) At the first recertification of an assistance contract, except 
with respect to a mortgagor described in Sec. 235.13(a) (1) and (2); or
    (iii) Upon modification of an existing assistance contract.
* * * * *

PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENTS FOR 
RENTAL PROJECTS

    15. The authority citation for part 236 would continue to read as 
follows:

    Authority: 12 U.S.C. 1715b and 1715z-1; 42 U.S.C. 3535(d).

    16. In Sec. 236.2, the definition of ``qualified tenant'' would be 
amended by adding a new paragraph (c) to read as follows:


Sec. 236.2  Definitions.

* * * * *
    Qualified tenant. * * *
    (c) For restrictions on financial assistance to noncitizens with 
ineligible immigration status, see 24 CFR part 200, subpart G.
* * * * *
    17. In Sec. 236.70, paragraph (a)(1) would be revised to read as 
follows:


Sec. 236.70  Occupancy requirements.

    (a)(1) The housing owner shall determine eligibility following 
procedures prescribed by the Commissioner when processing applications 
for admission. The requirements of 24 CFR part 200, subpart G, govern 
the submission and verification of information related to citizenship 
and eligible immigration status for those applicants who seek admission 
at a below market rent.
* * * * *
    18. Section 236.80 would be amended by adding two sentences at the 
end of paragraph (a), by adding one sentence at the end of paragraph 
(b), and by adding three sentences at the end of paragraph (c), to read 
as follows:


Sec. 236.80  Reexamination of income.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 200, subpart G, concerning obtaining and 
processing information on the citizenship or eligible immigration 
status of all family members. Thereafter, at each regular 
reexamination, the owner shall follow the requirements of 24 CFR part 
200, subpart G, concerning obtaining and processing information on the 
citizenship or eligible immigration status of any new family member.
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the owner 
shall follow the requirements of 24 CFR part 200, subpart G, concerning 
obtaining and processing information on the citizenship or eligible 
immigration status of the new family member.
    (c) * * * Assistance also may be terminated in accordance with any 
requirements of the lease or with HUD requirements. When termination is 
based upon a determination that the tenant does not have eligible 
immigration status, the procedures of 24 CFR part 200, subpart G, 
apply. The procedures include the provision of assistance to certain 
mixed families (families whose members include those with eligible 
immigration status, and those without eligible immigration status) in 
lieu of termination.
    19. In Sec. 236.710, a new sentence would be added at the end of 
this section to read as follows:


Sec. 236.710  Qualified tenant.

    * * * For restrictions on financial assistance to noncitizens with 
ineligible immigration status, see 24 CFR part 200, subpart G.
    20. In Sec. 236.715, paragraph (a) would be revised to read as 
follows:


Sec. 236.715  Determination of eligibility.

    (a) The housing owner shall determine eligibility following 
procedures prescribed by the Commissioner when processing applications 
for admission and tenant applications for assistance. The requirements 
of 24 CFR part 200, subpart G, govern the submission and verification 
of information related to citizenship and eligible immigration status 
for applicants, and the procedures for denial of assistance based upon 
a failure to establish eligible immigration status.
* * * * *
    21. A new Sec. 236.765 would be added to subpart D read as follows:


Sec. 236.765  Determination of eligible immigration status of 
applicants and tenants; protection from liability.

    (a) Housing owner's obligation to make determination. A housing 
owner shall obtain and verify information regarding the citizenship or 
immigration status of applicants and tenants in accordance with the 
procedures of 24 CFR part 200, subpart G.
    (b) Protection from liability. HUD will not take any compliance, 
disallowance, penalty or other regulatory action against a housing 
owner with respect to any error in its determination to make an 
individual eligible for financial assistance based upon citizenship or 
eligible immigration status, as provided in 24 CFR part 200, subpart G.

PART 247--EVICTIONS FROM CERTAIN SUBSIDIZED AND HUD-OWNED PROJECTS

    22. The authority citation for part 247 would continue to read as 
follows:

    Authority: 12 U.S.C. 1701s, 1715b, 1715l, and 1715z-1; 42 U.S.C. 
1437a, 1437c, 1437f and 3535(d).

    23. In Sec. 247.3, paragraph (c)(3) would be revised to read as 
follows:


Sec. 247.3  Entitlement of tenants to occupancy.

* * * * *
    (c) * * *
    (3) Failure of the tenant to supply on time all required 
information on the income and composition, or eligibility factors, of 
the tenant household (including, but not limited to, failure to submit 
required evidence of citizenship or eligible immigration status, in 
accordance with 24 CFR part 200, subpart G, failure to meet the 
disclosure and verification requirements for Social Security Numbers, 
as provided by 24 CFR part 200, subpart T, or 24 CFR part 750 (as 
appropriate), or failure to sign and submit consent forms for the 
obtaining of wage and claim information from State Wage Information 
Collection Agencies, as provided by 24 CFR part 200, subpart V, or 24 
CFR part 760 (as appropriate), or to knowingly provide incomplete or 
inaccurate information; and
* * * * *

PART 812--DEFINITION OF FAMILY AND OTHER RELATED TERMS; OCCUPANCY 
BY SINGLE PERSONS

    24. The authority citation for part 812 would be revised to read as 
follows:

    Authority: 42 U.S.C. 1436a, 1437a and 3535(d).

    25. In Sec. 812.1, paragraph (a) would be amended by removing the 
word ``and'' following the semicolon in paragraph (a)(1); by removing 
the period at the end of paragraph (a)(2) and replacing with ``and''; 
and by adding a new paragraph (a)(3), to read as follows:


Sec. 812.1  Purpose and applicability.

    (a) * * *
    (3) Implements the statutory prohibition against making assistance 
under the United States Housing Act of 1937 (``Act'') (42 U.S.C. 1437) 
available for the benefit of noncitizens with ineligible immigration 
status.
* * * * *
    26. Section 812.2 would be amended by adding definitions in 
alphabetical order for the terms ``Child,'' ``Citizen,'' ``Evidence of 
citizenship or eligible immigration status,'' ``HA,'' ``Head of 
household,'' ``HUD,'' ``INS,'' ``Mixed family,'' ``National,'' 
``Noncitizen,'' and ``Responsible entity,'' ``Section 214'' and 
``Section 214 covered programs'' to read as follows:


Sec. 812.2  Definitions.

* * * * *
    Child. A member of the family, other than the family head or 
spouse, who is under 18 years of age.
    Citizen. A citizen or national of the United States.
* * * * *
    Evidence of citizenship or eligible immigration status. The 
documents which must be submitted to evidence citizenship or eligible 
immigration status. (See Sec. 812.6(b).)
* * * * *
    HA. A housing authority--either a public housing agency or an 
Indian housing authority, or both.
* * * * *
    Head of household. The adult member of the family who is the head 
of the household for purposes of determining income eligibility and 
rent.
    HUD. The Department of Housing and Urban Development.
    INS. The U.S. Immigration and Naturalization Service.
* * * * *
    Mixed family. A family whose members include those with citizenship 
or eligible immigration status, and those without citizenship or 
eligible immigration status.
    National. A person who owes permanent allegiance to the United 
States, for example, as a result of birth in a United States territory 
or possession.
    Noncitizen. A person who is neither a citizen nor national of the 
United States.
    Responsible entity. The person or entity responsible for 
administering the restrictions on providing assistance to noncitizens 
with ineligible immigration status:
    (1) For the Section 8 Certificate, the Section 8 Housing Voucher, 
and the Section 8 Moderate Rehabilitation programs, the housing 
authority (HA) administering the program under an ACC with HUD.
    (2) For all other Section 8 programs, the owner.
    Section 214. Section 214 of the Housing and Community Development 
Act of 1980, as amended (42 U.S.C. 1436a). Section 214 restricts HUD 
from making financial assistance available for noncitizens unless they 
meet one of the six statutory categories of eligible immigration 
status.
    Section 214 covered programs. Programs to which the restrictions 
imposed by section 214 apply are programs that make available financial 
assistance pursuant to the United States Housing Act of 1937 (42 U.S.C. 
1437-440), section 235 or section 236 of the National Housing Act (12 
U.S.C. 1715z and 1715z-1) and section 101 of the Housing and Urban 
Development Act of 1965 (12 U.S.C. 1701s).
* * * * *
    27. Part 812 would be amended by redesignating Secs. 812.1 through 
812.4 as subpart A, and by adding the subpart heading to read, 
``Subpart A--General,'' and by adding a new subpart B, consisting of 
Secs. 812.5 through 812.15, to read as follows:

Subpart B--Restrictions on Assistance to Noncitizens

Sec.
812.5  General.
812.5a  Requirements concerning documents.
812.6  Submission of evidence of citizenship or eligible immigration 
status.
812.7  Documents of eligible immigration status.
812.8  Verification of eligible immigration status.
812.9  Delay, denial or termination of assistance.
812.10  Preservation of mixed families and other families.
812.11  Proration of assistance.
812.12  Prohibition of assistance to noncitizen students.
812.13  Compliance with nondiscrimination requirements.
812.14  Protection from liability for responsible entities, State, 
local, and tribal government agencies and officials.
812.15  Liability of ineligible families for reimbursement of 
benefits.

Subpart B--Restrictions on Assistance to Noncitizens


Sec. 812.5  General.

    (a) Restrictions on assistance. Assistance provided under a section 
214 covered program is restricted to:
    (1) Citizens; or
    (2) Noncitizens who have eligible immigration status in one of the 
following categories:
    (i) A noncitizen lawfully admitted for permanent residence, as 
defined by section 101(a)(20) of the Immigration and Nationality Act 
(INA), as an immigrant, as defined by section 101(a)(15) of the INA (8 
U.S.C. 1101(a)(20) and 1101(a)(15), respectively) [immigrants]. (This 
category includes a noncitizen admitted under section 210 or 210A of 
the INA (8 U.S.C. 1160 or 1161), [special agricultural worker], who has 
been granted lawful temporary resident status);
    (ii) A noncitizen who entered the United States before January 1, 
1972, or such later date as enacted by law, and has continuously 
maintained residence in the United States since then, and who is not 
ineligible for citizenship, but who is deemed to be lawfully admitted 
for permanent residence as a result of an exercise of discretion by the 
Attorney General under section 249 of the INA (8 U.S.C. 1259);
    (iii) A noncitizen who is lawfully present in the United States 
pursuant to an admission under section 207 of the INA (8 U.S.C. 1157) 
[refugee status]; pursuant to the granting of asylum (which has not 
been terminated) under section 208 of the INA (8 U.S.C. 1158) [asylum 
status]; or as a result of being granted conditional entry under 
section 203(a)(7) of the INA (8 U.S.C. 1153(a)(7)) before April 1, 
1980, because of persecution or fear of persecution on account of race, 
religion, or political opinion or because of being uprooted by 
catastrophic national calamity;
    (iv) A noncitizen who is lawfully present in the United States as a 
result of an exercise of discretion by the Attorney General for 
emergent reasons or reasons deemed strictly in the public interest 
under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) [parole 
status];
    (v) A noncitizen who is lawfully present in the United States as a 
result of the Attorney General's withholding deportation under section 
243(h) of the INA (8 U.S.C. 1253(h)) [threat to life or freedom]; or
    (vi) A noncitizen lawfully admitted for temporary or permanent 
residence under section 245A of the INA (8 U.S.C. 1255a) [amnesty 
granted under INA 245A].
    (b) Family eligibility for assistance. (1) A family shall not be 
eligible for assistance unless every member of the family residing in 
the unit is determined to have eligible status, as described in 
paragraph (a) of this section;
    (2) Despite the ineligibility of one or more family members, a 
mixed family may be eligible for one of the three types of assistance 
provided in Sec. 812.10. A family without any eligible members and 
receiving assistance on [insert the effective date of the final rule] 
may be eligible for temporary deferral of termination of assistance as 
provided in Sec. 812.10.


Sec. 812.5a  Requirements concerning documents.

    For any notice or document (decision, declaration, consent form, 
etc.) that Secs. 812.5 through 812.15 require a responsible entity to 
provide to an individual, or require that the responsible entity obtain 
the signature of the individual, the responsible entity, where 
feasible, must arrange for the notice or document to be provided to the 
individual in a language that is understood by the individual if the 
individual is not proficient in English. (See 24 CFR 8.6 of HUD's 
regulations for requirements concerning communications with persons 
with disabilities.)


Sec. 812.6  Submission of evidence of citizenship or eligible 
immigration status.

    (a) General. Eligibility for assistance or continued assistance 
under a section 214 covered program is contingent upon a family's 
submission to the responsible entity of the documents described in 
paragraph (b) of this section for each family member. If one or more 
family members do not have citizenship or eligible immigration status, 
the family members may exercise the election not to contend to have 
eligible immigration status as provided in paragraph (e) of this 
section, and the provisions of Sec. 812.10 shall apply.
    (b) Evidence of citizenship or eligible immigration status. Each 
family member, regardless of age, must submit the following evidence to 
the responsible entity:
    (1) For citizens, the evidence consists of a signed declaration of 
U.S. citizenship;
    (2) For noncitizens who are 62 years of age or older or who will be 
62 years of age or older and receiving assistance under a section 214 
covered program on [insert the effective date of the final rule], the 
evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
    (3) For all other noncitizens, the evidence consists of:
    (i) A signed declaration of eligible immigration status;
    (ii) The INS documents listed in Sec. 812.7; and
    (iii) A signed verification consent form.
    (c) Declaration. For each family member, the family must submit to 
the responsible entity a written declaration, signed under penalty of 
perjury, by which the family member declares whether he or she is a 
U.S. citizen or a noncitizen with eligible immigration status.
    (1) For each adult, the declaration must be signed by the adult.
    (2) For each child, the declaration must be signed by an adult 
residing in the assisted dwelling unit who is responsible for the 
child.
    (d) Verification consent form--(1) Who signs. Each noncitizen who 
declares eligible immigration status, must sign a verification consent 
form as follows:
    (i) For each adult, the form must be signed by the adult.
    (ii) For each child, the form must be signed by an adult member of 
the family residing in the assisted dwelling unit who is responsible 
for the child.
    (2) Notice of release of evidence by responsible entity. The 
verification consent form shall provide that evidence of eligible 
immigration status may be released by the responsible entity, without 
responsibility for the further use or transmission of the evidence by 
the entity receiving it, to:
    (i) HUD as required by HUD;
    (ii) The INS; and, if applicable;
    (iii) Another Federal agency, or a State or local government agency 
in accordance with Federal, State or local law that requires the 
release of the evidence to that agency.
    (iv) Notice of release of evidence by HUD. The verification consent 
form also shall notify the individual of the possible release of 
evidence of eligible immigration status by HUD. Evidence of eligible 
immigration status shall only be released to the INS for purposes of 
establishing eligibility for financial assistance and not for any other 
purpose. HUD is not responsible for the further use or transmission of 
the evidence or other information by the INS.
    (e) Individuals who do not contend to have eligible immigration 
status. If one or more members of a family elect not to contend that 
they have eligible immigration status and the other members of the 
family establish their citizenship or eligible immigration status, the 
family may be considered for prorated assistance under Sec. 812.11 
despite the fact that no declaration or documentation of eligible 
status is submitted by one or more members of the family. The family 
must, however, identify to the responsible entity, the family member 
(or members) who will elect not to contend that he or she has eligible 
immigration status.
    (f) Notification of requirements of section 214--(1) When notice is 
to be issued. Notification of the requirement to submit evidence of 
citizenship or eligible immigration status, as required by this 
section, or to elect not to contend that one has eligible immigration 
status, as allowed by paragraph (e) of this section, shall be given by 
the responsible entity as follows:
    (i) Applicant's notice. Notification of the requirement to submit 
evidence of eligible status shall be given to each applicant at the 
time of application for financial assistance. Families whose 
applications are pending on [insert the effective date of the final 
rule] shall be notified of the requirements to submit evidence of 
eligible status as soon as possible after [insert the effective date of 
the final rule].
    (ii) Notice to families already receiving assistance. For a family 
in occupancy on [insert the effective date of the final rule] 
notification of the requirement to submit evidence of eligible status 
shall be given to each at the time of, and together with, the 
responsible entity's notice of the first regular reexamination after 
that date, but not later than one year following [insert the effective 
date of the final rule].
    (2) Form and content of notice. The notice shall:
    (i) State that financial assistance is contingent upon the 
submission and verification, as appropriate, of the evidence of 
citizenship or eligible immigration status, as required by this 
section;
    (ii) Describe the type of evidence that must be submitted and state 
the time period in which that evidence must be submitted (see paragraph 
(g) of this section concerning when evidence must be submitted); and
    (iii) State that assistance will be prorated, denied or terminated, 
as appropriate, upon a final determination of ineligibility after all 
appeals have been exhausted (see Sec. 812.9 concerning INS appeal, and 
informal hearing process) or, if appeals are not pursued, at a time to 
be specified in accordance with HUD requirements. Families already 
receiving assistance also shall be informed of how to obtain assistance 
under the preservation of families provisions of Sec. 812.10.
    (g) When evidence of eligible status is required to be submitted. 
The responsible entity shall require evidence of eligible status to be 
submitted at the times specified in paragraph (g) of this section, 
subject to any extension granted in accordance with paragraph (h) of 
this section.
    (1) Applicants. For applicants, the responsible entity must ensure 
that evidence of eligible status is submitted not later than the date 
the responsible entity anticipates or has knowledge that verification 
of other aspects of eligibility for assistance will occur (see 
Sec. 812.8(a)).
    (2) Families already receiving assistance. For a family already 
receiving the benefit of assistance in a covered program on [insert the 
effective date of the final rule], the required evidence shall be 
submitted at the first regular reexamination after [insert the 
effective date of the final rule], in accordance with program 
requirements. (See Secs. 850.151, 880.603, 881.603, 882.212, 882.515, 
883.704, 884.124, 886.124, 886.324, or 887.357 of this chapter.)
    (3) New occupants of assisted units. For any new family members, 
the required evidence shall be submitted at the first interim or 
regular reexamination following the person's occupancy.
    (4) Changing participation in a HUD program. Whenever a family 
applies for admission to a section 214 covered program, evidence of 
eligible status is required to be submitted in accordance with the 
requirements of this part unless the family already has submitted the 
evidence to the responsible entity for a covered program.
    (5) One-time evidence requirement for continuous occupancy. For 
each family member, the family is required to submit evidence of 
eligible status one time during continuously assisted occupancy under 
any covered program.
    (h) Extensions of time to submit evidence of eligible status--(1) 
When extension must be granted. The responsible entity shall extend the 
time provided in paragraph (g) of this section, to submit evidence of 
eligible immigration status if the family member:
    (i) Submits the declaration required under Sec. 812.6(b) certifying 
that any person for whom required evidence has not been submitted is a 
noncitizen with eligible immigration status; and
    (ii) Certifies that the evidence needed to support a claim of 
eligible immigration status is temporarily unavailable, additional time 
is needed to obtain and submit the evidence, and prompt and diligent 
efforts will be undertaken to obtain the evidence.
    (2) Prohibition on indefinite extension period. Any extension of 
time, if granted, shall be for a specific period of time. The 
additional time provided should be sufficient to allow the family the 
time to obtain the evidence needed. The responsible entity's 
determination of the length of the extension needed shall be based on 
the circumstances of the individual case.
    (3) Grant or denial of extension to be in writing. The responsible 
entity's decision to grant or deny an extension as provided in 
paragraph (h)(1) of this section shall be issued to the family by 
written notice. If the extension is granted, the notice shall specify 
the extension period granted. If the extension is denied, the notice 
shall explain the reasons for denial of the extension.
    (i) Failure to submit evidence or establish eligible immigration 
status. If the family fails to submit required evidence of eligible 
immigration status within the time period specified in the notice, or 
any extension granted in accordance with paragraph (h) of this section, 
or if the evidence is timely submitted but fails to establish eligible 
immigration status, the responsible entity shall proceed to deny, 
prorate or terminate assistance, or provide continued assistance or 
temporary deferral of termination of assistance, as appropriate, in 
accordance with the provisions of Secs. 812.9 and 812.10 respectively. 
For all section 8 programs, denial or termination of assistance shall 
be in accordance with the procedures of Sec. 812.9.


Sec. 812.7  Documents of eligible immigration status.

    (a) General. A responsible entity shall request and review original 
documents of eligible immigration status. The responsible entity shall 
retain photocopies of the documents for its own records and return the 
original documents to the family.
    (b) Acceptable evidence of eligible immigration status. The 
original of one of the following documents is acceptable evidence of 
eligible immigration status, subject to verification in accordance with 
Sec. 812.8:
    (1) Form I-551, Alien Registration Receipt Card (for permanent 
resident aliens);
    (2) Form I-94, Arrival-Departure Record, with one of the following 
annotations:
    (i) ``Admitted as Refugee Pursuant to Section 207'';
    (ii) ``Section 208'' or ``Asylum'';
    (iii) ``Section 243(h)'' or ``Deportation stayed by Attorney 
General'';
    (iv) ``Paroled Pursuant to Sec. 212(d)(5) of the INA'';
    (3) If Form I-94, Arrival-Departure Record, is not annotated, then 
accompanied by one of the following documents:
    (i) A final court decision granting asylum (but only if no appeal 
is taken);
    (ii) A letter from an INS asylum officer granting asylum (if 
application is filed on or after October 1, 1990) or from an INS 
district director granting asylum (if application filed before October 
1, 1990);
    (iii) A court decision granting withholding or deportation; or
    (iv) A letter from an INS asylum officer granting withholding of 
deportation (if application filed on or after October 1, 1990).
    (4) Form I-688, Temporary Resident Card, which must be annotated 
``Section 245A'' or ``Section 210'';
    (5) Form I-688B, Employment Authorization Card, which must be 
annotated ``Provision of Law 274a.12(11)'' or ``Provision of Law 
274a.12'';
    (6) A receipt issued by the INS indicating that an application for 
issuance of a replacement document in one of the above-listed 
categories has been made and the applicant's entitlement to the 
document has been verified; or
    (c) Other acceptable evidence. If other documents are determined to 
constitute acceptable evidence of eligible immigration status, they 
will be announced by HUD in a notice published in the Federal Register.


Sec. 812.8  Verification of eligible immigration status.

    (a) When verification is to occur. Verification of eligible 
immigration status shall be conducted by the responsible entity 
simultaneously with verification of other aspects of eligibility for 
assistance under a Section 214 covered program. (See Sec. 812.6(g).) 
The responsible entity shall verify eligible immigration status in 
accordance with the INS procedures described in this section.
    (b) Primary verification--(1) Automated verification system. 
Primary verification of the immigration status of the person is 
conducted by the responsible entity through the INS automated system 
(INS Systematic for Alien Verification for Entitlements (SAVE)). The 
INS SAVE system provides access to names, file numbers and admission 
numbers of noncitizens.
    (2) Failure of primary verification to confirm eligible immigration 
status. If the INS SAVE system does not verify eligible immigration 
status, secondary verification must be performed.
    (c) Secondary verification--(1) Manual search of INS records. 
Secondary verification is a manual search by the INS of its records to 
determine an individual's immigration status. The responsible entity 
must request secondary verification, within 10 days of receiving the 
results of the primary verification, if the primary verification system 
does not confirm eligible immigration status, or if the primary 
verification system verifies immigration status that is ineligible for 
assistance under a covered Section 214 covered program.
    (2) Secondary verification initiated by responsible entity. 
Secondary verification is initiated by the responsible entity 
forwarding photocopies of the original INS documents listed in 
Sec. 812.7 (front and back), attached to the INS document verification 
request form G-845S (Document Verification Request), to a designated 
INS office for review. (Form G-845S is available from the local INS 
Office.)
    (3) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the responsible entity shall issue to the 
family the notice described in Sec. 812.9(d), which includes 
notification of appeal to the INS of the INS finding on immigration 
status (see Sec. 812.9(d)(4)).
    (d) Exemption from liability for INS verification. The responsible 
entity shall not be liable for any action, delay, or failure of the INS 
in conducting the automated or manual verification.


Sec. 812.9  Delay, denial, or termination of assistance.

    (a) General. Assistance to a family may not be delayed, denied, or 
terminated because of the immigration status of a family member except 
as provided in this section.
    (b) Restrictions on delay, denial, or termination of assistance--
(1) General. Assistance to an applicant shall not be delayed or denied, 
and assistance to a tenant shall not be delayed, denied, or terminated, 
on the basis of ineligible immigration status of a family member if:
    (i) The primary and secondary verification of any immigration 
documents that were timely submitted has not been completed;
    (ii) The family member for whom required evidence has not been 
submitted has moved from the tenant's dwelling unit;
    (iii) The family member who is determined not to be in an eligible 
immigration status following INS verification has moved from the 
tenant's dwelling unit;
    (iv) The INS appeals process under Sec. 812.9(e) has not been 
concluded;
    (v) For a tenant, the informal hearing process under Sec. 812.9(f) 
has not been concluded;
    (vi) Assistance is prorated in accordance with Sec. 812.11;
    (vii) Assistance for a mixed family is continued in accordance with 
Sec. 812.10; or
    (viii) Deferral of termination of assistance is granted in 
accordance with Sec. 812.10.
    (2) When delay in assistance to an applicant is permissible. 
Assistance to an applicant may be delayed after the conclusion of the 
INS appeal process, but not denied until the conclusion of the 
responsible entity informal hearing process, if an informal hearing is 
requested by the family.
    (c) Events causing denial or termination of assistance. Assistance 
to an applicant shall be denied, and a tenant's assistance shall be 
terminated, in accordance with the procedures of this section, upon the 
occurrence of any of the following events:
    (1) Evidence of citizenship (i.e., the declaration) and eligible 
immigration status is not submitted by the date specified in 
Sec. 812.6(g) or by the expiration of any extension granted in 
accordance with Sec. 812.6(h); or
    (2) Evidence of citizenship and eligible immigration status is 
timely submitted, but INS primary and second verification does not 
verify eligible immigration status of a family member; and
    (3) The family does not pursue INS appeal or informal hearing 
rights as provided in this section; or
    (4) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family 
member.
    (d) Notice of denial or termination of assistance. The notice of 
denial or termination of assistance shall advise the family:
    (1) That financial assistance will be denied or terminated, and 
provide a brief explanation of the reasons for the proposed denial or 
termination of assistance;
    (2) That the family may be eligible for proration of assistance as 
provided under Sec. 812.11;
    (3) In the case of a tenant, the criteria and procedures for 
obtaining relief under the preservation of families provision in 
Sec. 812.10;
    (4) That the family has a right to request an appeal to the INS of 
the results of secondary verification of immigration status and to 
submit additional documentation or a written explanation in support of 
the appeal in accordance with the procedures of paragraph (e) this 
section;
    (5) That the family has a right to request an informal hearing with 
the responsible entity either upon completion of the INS appeal or in 
lieu of the INS appeal as provided in paragraph (f) of this section;
    (6) For applicants, the notice shall advise that assistance may not 
be delayed until the conclusion of the INS appeal process, but 
assistance may be delayed during the pendency of the responsible entity 
informal hearing process.
    (e) Appeal to the INS--(1) Submission of request for appeal to 
responsible entity. Upon receipt of notification by the responsible 
entity that INS secondary verification failed to confirm eligible 
immigration status, the family may request an appeal to the INS by 
communicating that request to the responsible entity within 14 days of 
the date the responsible entity mails or delivers the notice under 
paragraph (d) of this section.
    (2) Extension of time to request an appeal. The responsible entity 
shall extend the period of time for requesting an appeal (for a 
specified period) upon good cause shown.
    (3) Forwarding the appeal to INS. If the family requests an appeal 
to the INS, the responsible entity shall forward to the designated INS 
office any additional documentation or written explanation provided by 
the family in support of the appeal. This material must include a copy 
of the INS document verification request form G-845S (used to process 
the secondary verification request) and a cover letter indicating that 
the family is requesting an appeal of the INS immigration status 
verification results. (Form G-845S is available from the local INS 
Office.)
    (4) Decision by INS--(i) When decision will be issued. The INS will 
issue to the responsible entity a decision within 30 days of its 
receipt of documentation concerning the family's appeal of the 
verification of immigration status. If, for any reason, the INS is 
unable to issue a decision within the 30 day time period, the INS will 
inform the responsible entity of the reasons for the delay, and the 
responsible entity will inform the family of the reasons for the delay.
    (ii) Notification of INS decision and of informal hearing 
procedures. When the responsible entity receives the INS decision, the 
responsible entity shall notify the family of the INS determination, of 
the reasons for the determination, and of the family's right to request 
an informal hearing on the responsible entity's ineligibility 
determination in accordance with the procedures of paragraph (f) of 
this section.
    (5) No delay, denial or termination of assistance until completion 
of INS appeal process; direct appeal to INS. Pending the completion of 
the INS appeal under this section, assistance may not be delayed, 
denied or terminated on the basis of immigration status.
    (f) Informal hearing--(1) When request for hearing is to be made. 
After notification of the INS decision on appeal, or in lieu of request 
of appeal to the INS, the family may request that the responsible 
entity provide a hearing. This request must be made either within 14 
days of the date the responsible entity mails or delivers the notice 
under paragraph (d) of this section, or within 14 days of the mailing 
of the INS appeal decision issued in accordance with paragraph (e) of 
this section (established by the date of postmark).
    (2) Extension of time to request hearing. The responsible entity 
shall extend the period of time for requesting a hearing (for a 
specified period) upon good cause shown.
    (3) Informal hearing procedures. (i) For tenants, the procedures 
for the hearing before the responsible entity are set forth in 24 CFR 
part 966.
    (ii) For applicants, the procedures for the informal hearing before 
the responsible entity are as follows:
    (A) Hearing before an impartial individual. The applicant shall be 
provided a hearing before any person(s) designated by the responsible 
entity (including an officer or employee of the responsible entity), 
other than a person who made or approved the decision under review, and 
other than a person who is a subordinate of the person who made or 
approved the decision;
    (B) Examination of evidence. The applicant shall be provided the 
opportunity to examine and copy, at the applicant's expense and at a 
reasonable time in advance of the hearing, any documents in the 
possession of the responsible entity pertaining to the applicant's 
eligibility status, or in the possession of the INS (as permitted by 
INS requirements), including any records and regulations that may be 
relevant to the hearing;
    (C) Presentation of evidence and arguments in support of eligible 
status. The applicant shall be provided the opportunity to present 
evidence and arguments in support of eligible status. Evidence may be 
considered without regard to admissibility under the rules of evidence 
applicable to judicial proceedings;
    (D) Controverting evidence of the project owner. The applicant 
shall be provided the opportunity to controvert evidence relied upon by 
the responsible entity and to confront and cross-examine all witnesses 
on whose testimony or information the responsible entity relies;
    (E) Representation. The applicant shall be entitled to be 
represented by an attorney, or other designee, at the applicant's 
expense, and to have such person make statements on the applicant's 
behalf;
    (F) Interpretive services. The applicant shall be entitled to 
arrange for an interpreter to attend the hearing, at the expense of the 
applicant or responsible entity, as may be agreed upon by both parties;
    (G) Hearing to be recorded. The applicant shall be entitled to have 
the hearing recorded by audiotape (a transcript of the hearing may, but 
is not required, to be provided by the responsible entity); and
    (H) Hearing decision. The responsible entity shall provide the 
family with a written final decision, based solely on the facts, 
presented at the hearing within 14 days of the date of the informal 
hearing. The decision shall state the basis for the decision.
    (g) Judicial relief. A decision against a family member, issued in 
accordance with paragraphs (e) or (f) of this section, does not 
preclude the family from exercising the right, that may otherwise be 
available, to seek redress directly through judicial procedures.
    (h) Retention of documents. The responsible entity shall retain for 
a minimum of 5 years the following documents that may have been 
submitted to the responsible entity by the family, or provided to the 
responsible entity as part of the INS appeal or the informal hearing 
process:
    (1) The application for financial assistance;
    (2) The form completed by the family for income re-examination;
    (3) Photocopies of any original documents (front and back), 
including original INS documents;
    (4) The signed verification consent form;
    (5) The INS verification results;
    (6) The request for an INS appeal;
    (7) The final INS determination;
    (8) The request for an informal hearing; and
    (9) The final informal hearing decision.
    (i) Termination of assisted occupancy. (1) In the Section 8 
programs other than Section 8 Certificate, Housing Voucher, and 
Moderate Rehabilitation programs, assisted occupancy is terminated by:
    (i) If permitted under the lease, the project owner notifying the 
family that because of the termination of assisted occupancy, the 
family is required to pay the HUD-approved market rent for the dwelling 
unit.
    (ii) The project owner and family entering into a new lease without 
Section 8 assistance.
    (iii) The project owner evicting the family. While the family 
continues in occupancy of the unit, the project owner may continue 
assistance payments in accordance with the Housing Assistance Payments 
contract if judicial action to terminate the tenancy and evict the 
family is promptly initiated and diligently pursued by the project 
owner in accordance with the terms of the lease. Action by the project 
owner to terminate the tenancy and to evict the family shall be in 
accordance with HUD regulations and other HUD requirements. For any 
jurisdiction, HUD may prescribe a maximum period during which 
assistance payments may be continued during eviction proceedings and 
may prescribe other standards of reasonable diligence for the 
prosecution of eviction proceedings.
    (2) In the Section 8 Certificate, Housing Voucher, and Moderate 
Rehabilitation programs, assisted occupancy is terminated by 
terminating assistance payments. (See provisions of this section 
concerning termination of assistance.) The HA shall not make any 
additional assistance payments to the project owner after the required 
procedures specified in this section have been completed. In addition, 
the HA shall not approve a lease, enter into an assistance contract, or 
process a portability move for the family after those procedures have 
been completed.


Sec. 812.10  Preservation of mixed families and other families.

    (a) Assistance available for mixed families--(1) Assistance 
available for tenant mixed families. For a mixed family assisted under 
a Section 214 covered program on [insert the effective date of the 
final rule], one of the following three types of assistance may be 
available to the family:
    (i) Continued assistance (see paragraph (c) of this section);
    (ii) Prorated assistance (see Sec. 812.11); or
    (iii) Temporary deferral of termination of assistance (see 
paragraph (d) of this section).
    (2) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for assistance 
as provided in Sec. 812.11.
    (3) Assistance available to other families in occupancy. For 
families receiving assistance under a Section 214 covered program on 
the [insert the effective date of the final rule] and who have no 
members with eligible immigration status, the responsible entity may 
grant the family temporary deferral of termination of assistance.
    (b) Discretion afforded to provide family preservation assistance--
(1) Project owners. With respect to assistance administered by a 
project owner, HUD has the discretion to determine under what 
circumstances families are to be provided one of the three forms of 
assistance for preservation of the family. HUD is exercising its 
discretion by specifying the standards in this section under which a 
project owner must provide one of the three types of assistance 
described in paragraph (a) of this section to a family.
    (2) HAs. With respect to an HA acting as a contract administrator 
of a certificate (including project-based certificate), housing 
voucher, or Moderate Rehabilitation program (as opposed to an HA 
owner), the HA, rather than HUD, has the discretion to determine the 
circumstances under which a family will be offered one of these forms 
of assistance. The HA must establish its own policy and criteria to 
follow in making its decision. In establishing the criteria for 
granting continued assistance or temporary deferral of termination of 
assistance, the HA must incorporate the statutory criteria, which are 
set forth in paragraphs (c) and (d) of this section.
    (c) Continued assistance. A mixed family may receive continued 
housing assistance if all of the following conditions are met:
    (1) The family was receiving assistance under a Section 214 covered 
program on [insert the effective date of the final rule];
    (2) The family's head of household or spouse has eligible 
immigration status as described in Sec. 812.5; and
    (3) The family does not include any person (who does not have 
eligible immigration status) other than the head of household, any 
spouse of the head of household, any parents of the head of household, 
any parents of the spouse, or any children of the head of household or 
spouse.
    (d) Temporary deferral of termination of assistance--(1) 
Eligibility for this type of assistance. If a mixed family qualifies 
for prorated assistance (and does not qualify for continued 
assistance), but decides not to accept prorated assistance, or if a 
family has no members with eligible immigration status, the family may 
be eligible for temporary deferral of termination of assistance if 
necessary to permit the family additional time for the orderly 
transition of those family members with ineligible status, and any 
other family members involved, to other affordable housing. Other 
affordable housing is used in the context of transition of an 
ineligible family from a rent level that reflects HUD assistance to a 
rent level that is unassisted; the term refers to housing that is not 
substandard, that is of appropriate size for the family and that can be 
rented for an amount not exceeding the amount that the family pays for 
rent, including utilities, plus 25 percent.
    (2) Time limit on deferral period. If temporary deferral of 
termination of assistance is granted, the deferral period shall be for 
an initial period not to exceed six months. The initial period may be 
renewed for additional periods of six months, but the aggregate 
deferral period shall not exceed a period of three years.
    (3) Notification requirements for beginning of each deferral 
period. At the beginning of each deferral period, the responsible 
entity must inform the family of its ineligibility for financial 
assistance and offer the family information concerning, and referrals 
to assist in finding, other affordable housing.
    (4) Determination of availability of affordable housing at end of 
each deferral period. Before the end of each deferral period, the 
responsible entity must:
    (i) Make a determination of the availability of affordable housing 
of appropriate size based on evidence of conditions which when taken 
together will demonstrate an inadequate supply of affordable housing 
for the area in which the project is located, the CHAS (if applicable; 
the CHAS refers to the Comprehensive Housing Affordability Strategy, 
described in 24 CFR part 91), the responsible entity's own knowledge of 
the availability of affordable housing, and on evidence of the tenant 
family's efforts to locate such housing; and
    (ii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination will 
be deferred again (provided that the granting of another deferral will 
not result in aggregate deferral periods that exceed three years), and 
a determination was made that other affordable housing is not 
available; or
    (iii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination of 
financial assistance will not be deferred because either granting 
another deferral will result in aggregate deferral periods that exceed 
three years, or a determination has been made that other affordable 
housing is available.
    (e) Notification of decision on family preservation assistance. A 
responsible entity shall notify the family of its decision concerning 
the family's qualification for assistance under this section. If the 
family is ineligible for assistance under this section, the 
notification shall state the reasons, which must be based on relevant 
factors. For tenant families, the notice also shall inform the family 
of any applicable appeal rights. (For HAs administering Certificate or 
Housing Voucher Programs, see Secs. 882.216 or 887.405 of this 
chapter.)


Sec. 812.11  Proration of assistance.

    (a) Applicability. This section applies to a mixed family other 
than a family receiving continued assistance under Sec. 812.10(c), or 
other than a family for which termination of assistance is temporarily 
deferred under Sec. 812.10(d).
    (b) Method of prorating assistance--(1) Section 8 assistance other 
than Section 8 voucher assistance. For Section 8 assistance other than 
assistance provided under the Section 8 Voucher Program, the HA shall 
prorate the family's assistance as follows:
    (i) Step 1. Determine gross rent for the unit. (Gross rent is 
contract rent plus any allowance for tenant paid utilities).
    (ii) Step 2. Determine total tenant payment in accordance with 24 
CFR 813.107(a). (Annual income includes income of all family members, 
including any family member who has not established eligible 
immigration status).
    (iii) Step 3. Subtract amount determined in Step 2 from amount 
determined in Step 1.
    (iv) Step 4. Multiply the amount determined in Step 3 by a fraction 
for which:
    (A) The numerator is the number of family members who have 
established eligible immigration status, and
    (B) The denominator is the total number of family members.
    (v) Prorated housing assistance. The amount determined in Step 4 is 
the prorated housing assistance payment for a mixed family.
    (vi) No effect on contract rent. Proration of the housing 
assistance payment does not affect contract rent to the owner. The 
family must pay as rent the portion of contract rent not covered by the 
prorated housing assistance payment.
    (2) Section 8 Voucher assistance. For assistance under the Section 
8 Voucher Program, the HA shall prorate the family's assistance as 
follows:
    (i) Step 1. Determine the amount of the pre-proration voucher 
housing assistance payment in accordance with 24 CFR 887.353. (Annual 
income includes income of all family members, including any family 
member who has not established eligible immigration status.)
    (ii) Step 2. Multiply the amount determined in Step 1 by a fraction 
for which:
    (A) The numerator is the number of family members who have 
established eligible immigration status, and
    (B) The denominator is the total number of family members.
    (iii) Prorated housing assistance. The amount determined in Step 2 
is the prorated housing assistance payment for a mixed family.
    (iv) No effect on rent to owner. Proration of the voucher housing 
assistance payment does not affect rent to the owner. The family must 
pay as rent the portion of rent not covered by the prorated housing 
assistance payment.


Sec. 812.12  Prohibition of assistance to noncitizen students.

    (a) General. The provisions of Secs. 812.10 and 812.11, permitting 
continued assistance, prorated assistance or temporary deferral of 
termination of assistance for certain families, do not apply to any 
person who is determined to be a noncitizen student, as defined in 
paragraph (b) of this section, or the family of the noncitizen student, 
as described in paragraph (c) of this section.
    (b) Noncitizen student. For purposes of this part, a noncitizen 
student is defined as a noncitizen who:
    (1) Has a residence in a foreign country that the person has no 
intention of abandoning;
    (2) Is a bona fide student qualified to pursue a full course of 
study; and
    (3) Is admitted to the United States temporarily and solely for 
purposes of pursuing such a course of study at an established 
institution of learning or other recognized place of study in the 
United States, particularly designated by such person and approved by 
the Attorney General after consultation with the Department of 
Education of the United States, which institution or place of study 
shall have agreed to report to the Attorney General the termination of 
attendance of each nonimmigrant student (and if any such institution of 
learning or place of study fails to make such reports promptly the 
approval shall be withdrawn).
    (c) Family of noncitizen student. The prohibition on providing 
assistance to a noncitizen student as described in paragraph (a) of 
this section also extends to the noncitizen spouse of the noncitizen 
student and minor children of any noncitizen student if the spouse or 
children are accompanying the student or following to join such 
student. The prohibition on providing assistance to a noncitizen 
student does not extend to the citizen spouse of the noncitizen student 
and the children of the citizen spouse and noncitizen student.


Sec. 812.13  Compliance with nondiscrimination requirements.

    The responsible entity shall administer the restrictions on use of 
assisted housing by noncitizens with ineligible immigration status 
imposed by this part in conformity with the nondiscrimination 
requirements of, including, but not limited to, title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d-2000d-5), section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), the Fair Housing Act (42 
U.S.C. 3601-3619), and the regulations implementing these statutes, and 
other civil rights statutes cited in the applicable program 
regulations. These statutes prohibit, among other things, 
discriminatory practices on the basis of race, color, national origin, 
sex, religion, age, disability and familial status in the provision of 
housing.


Sec. 812.14  Protection from liability for responsible entities, State, 
local, and tribal government agencies and officials.

    (a) Protection from liability for responsible entities. HUD will 
not take any compliance, disallowance, penalty, or other regulatory 
action against a responsible entity with respect to any error in its 
determination of eligibility for financial assistance based on 
citizenship or immigration status:
    (1) If the responsible entity established eligibility based upon 
verification of eligible immigration status through the verification 
system described in Sec. 812.8;
    (2) Because the responsible entity was required to provide an 
opportunity for the family to submit evidence in accordance with 
Sec. 812.6;
    (3) Because the responsible entity was required to wait for 
completion of INS verification of immigration status in accordance with 
Sec. 812.8;
    (4) Because the responsible entity was required to wait for 
completion of the INS appeal process provided in accordance with 
Sec. 812.9(e); or
    (5) Because the responsible entity was required to provide an 
informal hearing in accordance with Sec. 812.9(f).
    (b) Protection from liability for State, local and tribal 
government agencies and officials. State, local and tribal government 
agencies and officials shall not be liable for the design or 
implementation of the verification system described in Sec. 812.8, and 
the informal hearings provided under Sec. 812.9(f), as long as the 
implementation by the State, local or tribal government agency or 
official is in accordance with prescribed HUD rules and requirements.


Sec. 812.15  Liability of ineligible families for reimbursement of 
benefits.

    Where a family has received the benefit of HUD financial assistance 
to which it was not entitled because the family intentionally 
misrepresented eligible status, the ineligible family is responsible 
for reimbursing HUD for the assistance improperly paid. If the amount 
of the assistance is substantial, the responsible entity is encouraged 
to refer the case to the HUD Regional Inspector General's office for 
further investigation. Possible criminal prosecution may follow based 
on the False Statements Act (18 U.S.C. 1001 and 1010).

PART 850--HOUSING DEVELOPMENT GRANTS

    28. The authority citation for part 850 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437o and 3535(d).

    29. Section 850.151 would be revised by adding one sentence at the 
beginning of paragraph (c), by adding two sentences at the end of 
paragraph (f)(1), and by adding a new paragraph (f)(3), to read as 
follows:


Sec. 850.151  Project restrictions.

* * * * *
    (c) Tenant selection. The owner shall determine the eligibility of 
applicants for lower income units in accordance with the requirements 
of 24 CFR parts 812 and 813, including the provisions of these parts 
concerning citizenship or eligible immigration status and income 
limits, and certain assistance to mixed families (families whose 
members include those with eligible immigration status, and those 
without eligible immigration status). * * *
* * * * *
    (f) * * *
    (1) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 concerning verification of 
the immigration status of any new family member.
* * * * *
    (3) For provisions related to termination of assistance for failure 
to establish citizenship or eligible immigration status, see 24 CFR 
812.9, and also 24 CFR 812.10 for provisions related to certain 
assistance to mixed families (families whose members include those with 
eligible immigration status, and those without eligible immigration 
status) in lieu of termination of assistance, and for provisions 
related to deferral of termination of assistance.
* * * * *

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

    30. The authority citation for part 880 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

    31. In Sec. 880.504, a new paragraph (e) would be added, to read as 
follows:


Sec. 880.504  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to submit evidence of 
citizenship or eligible immigration status. If an owner who is subject 
to paragraphs (a) and (b) of this section is required to terminate 
housing assistance payments for the family in accordance with 24 CFR 
812.9 because the owner determines that the entire family does not have 
U.S. citizenship or eligible immigration status, the owner may allow 
continued occupancy of the unit by the family without Section 8 
assistance following the termination of assistance, or if the family 
constitutes a mixed family, as defined in 24 CFR 812.10, the owner 
shall comply with the provisions of 24 CFR 812.10 concerning assistance 
to mixed families, and deferral of termination of assistance.
    32. In Sec. 880.601, paragraph (b) would be revised to read as 
follows:


Sec. 880.601  Responsibilities of owner.

* * * * *
    (b) Management and maintenance. The owner is responsible for all 
management functions, including determining eligibility of applicants 
in accordance with 24 CFR parts 812 and 813, provision of Federal 
selection preferences in accordance with Sec. 880.613, selection of 
tenants, obtaining and verifying Social Security Numbers submitted by 
families (as provided by 24 CFR part 750), obtaining signed consent 
forms from families for the obtaining of wage and claim information 
from State Wage Information Collection Agencies (as provided by 24 CFR 
part 760), reexamination of family income, evictions and other 
terminations of tenancy, and collection of rents, and all repair and 
maintenance functions (including ordinary and extraordinary maintenance 
and replacement of capital items). All these functions shall be 
performed in compliance with applicable Equal Opportunity requirements.
* * * * *
    33. Section 880.603 would be amended by revising the introductory 
text of paragraph (b), by adding a sentence at the end of paragraph 
(b)(3), by adding two sentences at the end of paragraph (c)(1), and by 
adding one sentence at the end of paragraph (c)(2) and paragraph 
(c)(3), to read as follows:


Sec. 880.603  Selection and admission of assisted tenants.

* * * * *
    (b) Determination of eligibility and selection of tenants. The 
owner is responsible for obtaining and verifying information related to 
income in accordance with 24 CFR part 813, and evidence related to 
citizenship and eligible immigration status in accordance with 24 CFR 
part 812, to determine whether the applicant is eligible for assistance 
in accordance with the requirements of 24 CFR parts 812 and 813, and to 
select families for admission to the program, which includes giving a 
Federal selection preference in accordance with Sec. 880.613.
* * * * *
    (3) * * * For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR 812.9, and also 24 CFR 812.10 for 
provisions related to certain assistance for mixed families (families 
whose members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
* * * * *
    (c) * * *
    (1) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 and verify the immigration 
status of any new family member.
    (2) * * * At any interim reexamination after [insert the effective 
date of the final rule] when a new family member has been added, the 
owner shall follow the requirements of 24 CFR part 812 concerning 
obtaining and processing evidence of the citizenship or eligible 
immigration status of any new family member.
    (3) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
* * * * *
    34. Section 880.607 would be amended by redesignating the first 
sentence following the paragraph heading in paragraph (b)(3) as 
paragraph (b)(3)(i); by redesignating the existing paragraphs (b)(3)(i) 
and (b)(3)(ii) as (b)(3)(i)(A) and (b)(3)(i)(B), respectively; by 
redesignating and revising the undesignated paragraph in (b)(3) as 
(b)(3)(ii) and by adding a new paragraph (c)(4) to read as follows:


Sec. 880.607  Termination of tenancy and modification of lease.

* * * * *
    (b) * * *
    (3) * * *
    (ii) Failure of the family to timely submit all required 
information on family income and composition, including failure to 
submit required evidence of citizenship or eligible immigration status 
(as provided by 24 CFR part 812), failure to disclose and verify Social 
Security Numbers (as provided by 24 CFR part 750), failure to sign and 
submit consent forms (as provided by 24 CFR part 760), or knowingly 
providing incomplete or inaccurate information, shall constitute a 
substantial violation of the lease.
    (c) * * *
    (4) For provisions related to termination of assistance because of 
failure to establish citizenship or eligible immigration status, 
including informal hearing procedures, see 24 CFR part 812.9, and also 
24 CFR 812.10 for provisions concerning certain assistance for mixed 
families (families whose members include those with eligible 
immigration status, and those without eligible immigration status) in 
lieu of termination of assistance, and for provisions concerning 
deferral of termination of assistance.
* * * * *

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR 
SUBSTANTIAL REHABILITATION

    35. The authority citation for part 881 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

    36. In Sec. 881.504, a new paragraph (e) would be added to read as 
follows:


Sec. 881.504  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to submit evidence of 
citizenship or eligible immigration status. If an owner who is subject 
to paragraphs (a) and (b) of this section is required to terminate 
financial assistance in accordance with 24 CFR 812.9 because the owner 
determines that the entire family does not have U.S. citizenship or 
eligible immigration status, the owner may allow continued occupancy of 
the unit by the family without Section 8 assistance following the 
termination of assistance, or if the family constitutes a mixed family, 
as defined in 24 CFR 812.10, the owner shall comply with the provisions 
of 24 CFR 812.10 concerning certain assistance to mixed families, and 
deferral of termination of assistance.
    37. In Sec. 881.601, paragraph (b) would be revised to read as 
follows:


Sec. 881.601  Responsibilities of owner.

* * * * *
    (b) Management and maintenance. The owner is responsible for all 
management functions (including determining eligibility of applicants 
in accordance with 24 CFR parts 812 and 813, provision of Federal 
selection preferences in accordance with Sec. 880.613, selection of 
tenants, obtaining and verifying Social Security Numbers submitted by 
families (as provided by 24 CFR part 750), obtaining signed consent 
forms from families for the obtaining of wage and claim information 
from State Wage Information Collection Agencies (as provided by 24 CFR 
part 760), reexamination of family income, evictions and other 
terminations of tenancy, and collection of rents) and all repair and 
maintenance functions (including ordinary and extraordinary maintenance 
and replacement of capital items). All these functions shall be 
performed in compliance with applicable Equal Opportunity requirements.
* * * * *
    38. Section 881.603 would be amended by revising the introductory 
text of paragraph (b), by adding one sentence at the end of paragraph 
(b)(3), by adding two sentences at the end of paragraph (c)(1), and by 
adding one sentence at the end of paragraphs (c)(2) and (c)(3), to read 
as follows:


Sec. 881.603  Selection and admission of assisted tenants.

* * * * *
    (b) Determination of eligibility and selection of tenants. The 
owner is responsible for obtaining and verifying information related to 
income in accordance with 24 CFR part 813, and evidence related to 
citizenship and eligible immigration status in accordance with 24 part 
812 to determine whether the applicant is eligible for assistance in 
accordance with the requirements of 24 CFR parts 812 and 813 and parts 
750 and 760 of chapter VII, and to select families for admission to the 
program, which includes giving a federal selection preference in 
accordance with Sec. 881.613.
* * * * *
    (3) * * * For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR part 812.9, and also 24 CFR 812.10 for 
provisions concerning certain assistance for mixed families (families 
whose members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
* * * * *
    (c) * * *
    (1) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 concerning verification of 
the immigration status of any new family member.
    (2) * * * At any interim reexamination after [insert the effective 
date of the final rule] when a new family member has been added, the 
owner shall follow the requirements of 24 CFR part 812 concerning 
obtaining and processing evidence of citizenship or eligible 
immigration status of the new family member.
    (3) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
* * * * *
    39. In Sec. 881.607, the second sentence of paragraph (b)(3)(ii) 
would be revised, and a new paragraph (c)(4) would be added, to read as 
follows:


Sec. 881.607  Termination of tenancy and modification of lease.

* * * * *
    (b) * * *
    (3) * * * Failure of the family to timely submit all required 
information on family income and composition, including failure to 
submit required evidence of citizenship or eligible immigration status 
(as provided by 24 CFR part 812), failure to disclose and verify Social 
Security Numbers (as provided by 24 CFR part 750), failure to sign and 
submit consent forms (as provided by 24 CFR part 760), or knowingly 
providing incomplete or inaccurate information, shall constitute a 
substantial violation of the lease. * * *
    (c) * * *
    (4) For provisions related to termination of assistance because of 
failure to establish citizenship or eligible immigration status, 
including the informal hearing procedures, see 24 CFR 812.9, and also 
24 CFR 812.10 for provisions concerning certain assistance for mixed 
families (families whose members include those with eligible 
immigration status, and those without eligible immigration status) in 
lieu of termination of assistance, and for provisions concerning 
deferral of termination of assistance.
* * * * *

PART 882--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--EXISTING 
HOUSING

    40. The authority citation for part 882 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d). Subpart H 
is also issued under authority of 42 U.S.C. 11401.

    41. In Sec. 882.116, paragraph (c) would be revised to read as 
follows:


Sec. 882.116  Responsibilities of the PHA.

* * * * *
    (c) Receipt and review of applications for participation; selection 
of applicants; verification of family income and other factors relating 
to eligibility (including citizenship or eligible immigration status as 
provided by 24 CFR part 812) and amount of assistance; and maintenance 
of a waiting list.
* * * * *
    42. In Sec. 882.118, paragraph (a)(1) would be revised to read as 
follows:


Sec. 882.118  Obligations of the family.

    (a) * * *
    (1) Supply such certification, release, information or 
documentation as the PHA or HUD determine to be necessary, including 
submission of required evidence of citizenship or eligible immigration 
status (as provided by 24 CFR part 812), submission of Social Security 
Numbers and verifying documentation (as provided by 24 CFR part 750), 
submission of signed consent forms for the obtaining of wage and claim 
information from State Wage Information Collection Agencies (as 
provided by 24 CFR part 760), and submissions required for an annual or 
interim reexamination of family income and composition.
* * * * *
    43. In Sec. 882.209, paragraph (a)(2) would be revised to read as 
follows:


Sec. 882.209  Selection and participation.

    (a) * * *
    (2)(i) The PHA shall determine whether an applicant for 
participation:
    (A) Qualifies as a family;
    (B) Is income eligible; and
    (C) Is a citizen or is in eligible immigration status as determined 
in accordance with 24 CFR part 812.
    (ii) The family shall submit any certification, release, 
information, or documentation as the PHA or HUD determines to be 
necessary (see the requirements in 24 CFR parts 750, 760, 812, and 
813).
* * * * *
    44. In Sec. 882.210, a new paragraph (f) would be added to read as 
follows:


Sec. 882.210  Grounds for denial or termination of assistance.

* * * * *
    (f) The family's obligations as stated in Sec. 882.118 include 
submission of required evidence of citizenship or eligible immigration 
status. For a statement of circumstances in which the PHA shall deny or 
terminate housing assistance payments because a family member is not a 
U.S. citizen or does not establish eligible immigration status, and the 
applicable informal hearing procedures, see Sec. 882.216(b) and 24 CFR 
812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of denial or termination of assistance, and 
for provisions concerning deferral of termination of assistance.
    45. Section 882.212 would be amended by adding two sentences at the 
end of paragraph (a), and by adding one sentence at the end of 
paragraphs (b) and (c), to read as follows:


Sec. 882.212  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the PHA shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the PHA shall 
follow the requirements of 24 CFR part 812 concerning verification of 
the immigration status of any new family member (except a child born in 
the United States).
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the PHA 
shall follow the requirements of 24 CFR part 812 concerning obtaining 
and processing evidence of citizenship or eligible immigration status 
of the new family member.
    (c) * * * For provisions requiring termination of housing 
assistance payments when the PHA determines that a member is not a U.S. 
citizen or does not have eligible immigration status, see Sec. 882.216 
and 24 CFR 812.9, and also 24 CFR 812.10 for provisions concerning 
certain assistance for mixed families (families whose members include 
those with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
* * * * *
    46. Section 882.216 would be amended by adding a new paragraph 
(a)(5) and new paragraphs (b)(1)(v) and (b)(8), to read as follows:


Sec. 882.216   Informal review or hearing.

    (a) * * *
    (5) The informal hearing provisions for the denial of assistance on 
the basis of ineligible immigration status are contained in 24 CFR 
812.9.
    (b) * * *
    (1) * * *
    (v) A determination that the participant does not qualify under the 
PHA's policy for granting special relief under 24 CFR 812.10.
* * * * *
    (8) The informal hearing provisions for the termination of 
assistance on the basis of ineligible immigration status are contained 
in 24 CFR 812.9.
* * * * *
    47. In Sec. 882.514, paragraph (f) would be amended by adding one 
sentence at the end, to read as follows:


Sec. 882.514  Family participation.

* * * * *
    (f) * * * The informal hearing requirements for denial and 
termination of assistance on the basis of ineligible immigration status 
are contained in 24 CFR 812.9.
* * * * *
    48. Section 882.515 would be amended by adding two sentences at the 
end of paragraph (a), and by adding one sentence at the end of 
paragraphs (b) and (c), to read as follows:


Sec. 882.515  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of this rule], the PHA shall follow the requirements of 
24 CFR part 812 concerning obtaining and processing evidence of 
citizenship or eligible immigration status of all family members. 
Thereafter, at each regular reexamination, the PHA shall follow the 
requirements of 24 CFR part 812 concerning verification of immigration 
status of any new family member.
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the PHA 
shall follow the requirements of 24 CFR part 812 concerning obtaining 
and processing evidence of citizenship or eligible immigration status 
of the new family member.
    (c) * * * For provisions requiring termination of assistance when 
the PHA determines that a family member is not a U.S. citizen or does 
not have eligible immigration status, see Sec. 882.216 and 24 CFR 812.9 
and also 24 CFR 812.10 for provisions concerning certain assistance for 
mixed families (families whose members include those with eligible 
immigration status, and those without eligible immigration status) in 
lieu of termination of assistance, and for provisions concerning 
deferral of termination of assistance.
    48a. Section 882.808 would be amended by adding two sentences at 
the end of paragraph (i)(1), one sentence at the end of paragraph 
(i)(2), and a sentence at the end of paragraph (l), to read as follows:


Sec. 882.808  Management.

* * * * *
    (i) * * *
    (1) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the PHA shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the PHA shall 
follow the requirements of 24 CFR part 812 concerning verification of 
immigration status of any new family member.
    (2) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the PHA 
shall follow the requirements of 24 CFR part 812 concerning obtaining 
and processing evidence of citizenship or eligible immigration status 
of the new family member.
* * * * *
    (l) * * * For provisions requiring termination of assistance when 
the PHA determines that a family member is not a U.S. citizen or does 
not have eligible immigration status, see Sec. 882.216 and 24 CFR 
812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, or for 
provisions concerning deferral of termination of assistance.
* * * * *

PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

    49. The authority citation for part 883 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    50. In Sec. 883.101, the last sentence of paragraph (c) would be 
revised to read as follows:


Sec. 883.101  General.

* * * * *
    (c) * * * Eligible families are families, as defined in 24 CFR part 
812, whose incomes qualify them for assistance in accordance with 24 
CFR part 813, and who are otherwise eligible under these parts.
* * * * *
    51. In Sec. 883.605, a new paragraph (e) would be added, to read as 
follows:


Sec. 883.605  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to submit evidence of 
citizenship or eligible immigration status. If an owner who is subject 
to paragraphs (a) and (b) of this section is required to terminate 
financial assistance in accordance with 24 CFR 812.9 because the owner 
determines that the entire family does not have U.S. citizenship or 
eligible immigration status, the owner may allow continued occupancy of 
the unit by the family without Section 8 assistance following the 
termination of assistance, or if the family constitutes a mixed family, 
as defined in 24 CFR 812.10, the owner shall comply with the provisions 
of 24 CFR 812.10 concerning assistance to mixed families, and deferral 
of termination of assistance.
    52. In Sec. 883.702, the section heading and paragraph (b) would be 
revised to read as follows:


Sec. 883.702  Responsibilities of the owner.

* * * * *
    (b) Management and maintenance. The owner is responsible for all 
management functions (including determination of the eligibility of 
applicants in accordance with 24 CFR parts 812 and 813, provision of 
Federal selection preferences in accordance with Sec. 883.714, 
selection of tenants, obtaining and verifying Social Security Numbers 
submitted by families (as provided by 24 CFR part 750), obtaining 
signed consent forms from families for the obtaining of wage and claim 
information from State Wage Information Collection Agencies (as 
provided by 24 CFR part 760), reexamination of family income, evictions 
and other terminations of tenancy, and collection of rents) and all 
repair and maintenance functions (including ordinary and extraordinary 
maintenance and replacement of capital items). All these functions 
shall be performed in compliance with applicable Equal Opportunity 
requirements.
* * * * *
    53. Section 883.704 would be amended by adding one sentence at the 
end of paragraph (b)(3), two sentences at the end of paragraph (c)(1), 
and one sentence at the end of paragraphs (c)(2), and (c)(3), to read 
as follows:


Sec. 883.704  Selection and admission of tenants.

* * * * *
    (b) * * *
    (3) * * * For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR 812.9, and also see 24 CFR 812.10 for 
provisions concerning certain assistance for mixed families (families 
whose members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
* * * * *
    (c) * * *
    (1) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 concerning the verification 
of the immigration status of any new family member.
    (2) * * * At any interim reexamination after [insert the effective 
date of the rule] when there is a new family member, the owner shall 
follow the requirements of 24 CFR part 812 concerning obtaining and 
processing evidence of citizenship or eligible immigration status of 
the new family member.
    (3) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
* * * * *
    54. In Sec. 883.708, the second sentence of paragraph (b)(3)(ii) 
beginning with ``Failure of * * *'' would be revised, and a new 
paragraph (c)(4) would be added, to read as follows:


Sec. 883.708  Termination of tenancy and modification of lease.

* * * * *
    (b) * * *
    (3) * * *
    (ii) * * * Failure of the family to timely submit all required 
information on family income and composition, including failure to 
submit required evidence of citizenship or eligible immigration status 
(as provided by 24 CFR part 812), failure to disclose and verify Social 
Security Numbers (as provided by 24 CFR part 750), failure to sign and 
submit consent forms (as provided by 24 CFR part 760), or knowingly 
provide incomplete or inaccurate information, shall constitute a 
substantial violation of the lease. * * *
* * * * *
    (c) * * *
    (4) For provisions requiring termination of assistance for failure 
to establish citizenship or eligible immigration status, including the 
applicable informal hearing requirements, see 24 CFR 812.9, and also 24 
CFR 812.10 for provisions concerning certain assistance for mixed 
families (families whose members include those with eligible 
immigration status, and those without eligible immigration status) in 
lieu of termination of assistance, and for provisions concerning 
deferral of termination of assistance.
* * * * *

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

    55. The authority citation for part 884 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    56. In Sec. 884.118, paragraph (a)(3) would be revised to read as 
follows:


Sec. 884.118  Responsibilities of the owner.

    (a) * * *
    (3) Performance of all management functions, including the taking 
of applications; determining eligibility of applicants in accordance 
with 24 CFR parts 812 and 813; selection of families, including 
verification of income, provision of Federal selection preferences in 
accordance with Sec. 884.226, obtaining and verifying Social Security 
Numbers submitted by applicants (as provided by 24 CFR part 750), 
obtaining signed consent forms from applicants for the obtaining of 
wage and claim information from State Wage Information Collection 
Agencies (as provided in 24 CFR part 760), and other pertinent 
requirements; and determination of the amount of tenant rent in 
accordance with HUD established schedules and criteria.
* * * * *
    57. In section 884.214, paragraph (b)(1) would be revised and a new 
paragraph (b)(8) would be added, to read as follows:


Sec. 884.214  Marketing.

* * * * *
    (b) Eligibility, selection and admission of families. (1) The owner 
is responsible for determination of eligibility of applicants in 
accordance with the procedures of 24 CFR part 812, selection of 
families from among those determined to be eligible (including 
provision of Federal selection preferences in accordance with 
Sec. 884.226), and computation of the amount of housing assistance 
payments on behalf of each selected family, in accordance with 
schedules and criteria established by HUD.
* * * * *
    (8) For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR 812.9, and also 24 CFR 812.10 for 
provisions concerning certain assistance for mixed families (families 
whose members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
    58. In Sec. 884.216, a new sentence is added at the end of the 
paragraph to read as follows:


Sec. 884.216  Termination of tenancy.

    * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, 
including the applicable informal hearing requirements, see 24 CFR 
812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
    59. Section 884.218 would be amended by adding two sentences at the 
end of paragraph (a), one sentence at the end of paragraphs (b) and 
(c), to read as follows:


Sec. 884.218  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 concerning verification of 
the immigration status of any new family member.
    (b) * * * At any interim reexamination after [Insert the effective 
date of this rule] when there is a new family member, the owner shall 
follow the requirements of 24 CFR part 812 concerning obtaining and 
processing evidence of citizenship or eligible immigration status of 
the new family member.
    (c) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
    60. In Sec. 884.223, a new paragraph (e) would be added to read as 
follows:


Sec. 884.223  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to establish citizenship 
or eligible immigration status. If an owner subject to paragraphs (a) 
and (b) of this section is required to terminate housing assistance 
payments for the family in accordance with Sec. 812.9 of this chapter 
because the owner determines that the entire family does not have U.S. 
citizenship or eligible immigration status, the owner may allow 
continued occupancy of the unit by the family without Section 8 
assistance following the termination of assistance, or if the family 
constitutes a mixed family, as defined in 24 CFR 812.10, the owner 
shall comply with the provisions of 24 CFR 812.10 concerning assistance 
to mixed families, and deferral of termination of assistance.

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL 
ALLOCATIONS

    61. The authority citation for part 886 would continue to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
1619.

    62. In Sec. 886.119, the section heading and paragraph (a)(3) would 
be revised to read as follows:


Sec. 886.119  Responsibilities of the owner.

    (a) * * *
    (3) Performance of all management functions, including the taking 
of applications; determining eligibility of applicants in accordance 
with 24 CFR parts 812 and 813; selection of families, including 
verification of income, provision of Federal selection preferences in 
accordance with Sec. 886.132, obtaining and verifying Social Security 
Numbers submitted by applicants (as provided by 24 CFR part 750), 
obtaining signed consent forms from applicants for the obtaining of 
wage and claim information from State Wage Information Collection 
Agencies (as provided in 24 CFR part 760), and other pertinent 
requirements; and determination of the amount of tenant rent in 
accordance with HUD established schedules and criteria.
* * * * *
    63. In Sec. 886.121, paragraph (b) would be revised and a new 
paragraph (c) would be added, to read as follows:


Sec. 886.121  Marketing.

* * * * *
    (b) The Owner shall comply with the applicable provisions of the 
Contract, this subpart, and the procedures of 24 CFR part 812 in taking 
applications, selecting families, and all related determinations.
    (c) For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR 812.9, and also 24 CFR 812.10 for 
provisions concerning certain assistance for mixed families (families 
whose members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
    64. Section 886.124 would be amended by adding two sentences at the 
end of paragraph (a), one sentence at the end of paragraphs (b) and (c) 
to read as follows:


Sec. 886.124  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of 24 CFR part 812 concerning verification of 
the immigration status of any new family member.
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the owner 
shall follow the requirements of 24 CFR part 812 concerning obtaining 
and processing evidence of citizenship or eligible immigration status 
of the new family member.
    (c) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9 and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
    65. Section 886.128 would be revised to read as follows:


Sec. 886.128  Termination of tenancy.

    Part 247 of this title applies to the termination of tenancy and 
eviction of a family assisted under this subpart. For cases involving 
termination of tenancy because of a failure to establish citizenship or 
eligible immigration status, the procedures of 24 parts 247 and 812 
shall apply. The provisions of 24 CFR 812.10 concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and 
concerning deferral of termination of assistance also shall apply.
    66. In Sec. 886.129, a new paragraph (e) would be added, to read as 
follows:


Sec. 886.129  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to establish citizenship 
or eligible immigration status. If an owner subject to paragraphs (a) 
and (b) of this section is required to terminate housing assistance 
payments for the family in accordance with 24 CFR 812.9 because the 
owner determines that the entire family does not have U.S. citizenship 
or eligible immigration status, the owner may allow continued occupancy 
of the unit by the family without Section 8 assistance following the 
termination of assistance, or if the family constitutes a mixed family, 
as defined in 24 CFR 812.10, the owner shall comply with the provisions 
of 24 CFR 812.10 concerning assistance to mixed families, and deferral 
of termination of assistance.
    67. In Sec. 886.318, paragraph (a)(3) would be revised to read as 
follows:


Sec. 886.318  Responsibilities of the owner.

    (a) * * *
    (3) Performance of all management functions, including the taking 
of applications; determining eligibility of applicants in accordance 
with 24 CFR parts 812 and 813; selection of families, including 
verification of income, provision of Federal selection preferences in 
accordance with Sec. 886.337, obtaining and verifying Social Security 
Numbers submitted by applicants (as provided by 24 CFR part 750), 
obtaining signed consent forms from applicants for the obtaining of 
wage and claim information from State Wage Information Collection 
Agencies (as provided in 24 CFR part 760), and other pertinent 
requirements; and determination of the amount of tenant rent in 
accordance with HUD established schedules and criteria.
* * * * *
    68. In Sec. 886.321, the first two sentences of paragraph (b)(1) 
would be revised and a new paragraph (b)(7) would be added, to read as 
follows:


Sec. 886.321  Marketing.

* * * * *
    (b)(1) HUD will determine the eligibility for assistance of 
families in occupancy before sales closing. After the sale, the owner 
shall be responsible for determining the eligibility of applicants for 
tenancy (including compliance with the procedures of 24 CFR part 812 on 
evidence of citizenship or eligible immigration status), selection of 
families from among those determined to be eligible (including 
provision of Federal preferences in accordance with Sec. 886.337), and 
computation of the amount of housing assistance payments on behalf of 
each selected family, in accordance with the Gross Rent and the Total 
Tenant Payment computed in accordance with 24 CFR part 813. * * *
* * * * *
    (7) For the informal hearing provisions related to denial of 
assistance based upon failure to establish citizenship or eligible 
immigration status, see 24 CFR 812.9, and 24 CFR 812.10 for provisions 
concerning certain assistance for mixed families (families whose 
members include those with eligible immigration status, and those 
without eligible immigration status) in lieu of denial of assistance.
* * * * *
    69. Section 886.324 would be amended by adding two sentences at the 
end of paragraph (a), one sentence at the end of paragraphs (b) and 
(c), to read as follows:


Sec. 886.324  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the owner shall follow the 
requirements of 24 CFR part 812 concerning obtaining and processing 
evidence of citizenship or eligible immigration status of all family 
members. Thereafter, at each regular reexamination, the owner shall 
follow the requirements of part 812 concerning verification of the 
immigration status of any new family member.
    (b) * * * At any interim reexamination after [insert the effective 
date of the final rule] when there is a new family member, the owner 
shall follow the requirements of 24 CFR part 812 concerning obtaining 
and processing evidence of citizenship or eligible immigration status 
of the new family member.
    (c) * * * For provisions requiring termination of assistance for 
failure to establish citizenship or eligible immigration status, see 24 
CFR 812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and for 
provisions concerning deferral of termination of assistance.
    70. Section 886.328 would be revised to read as follows:


Sec. 886.328  Termination of tenancy.

    Part 247 of this title applies to the termination of tenancy and 
eviction of a family assisted under this subpart. For cases involving 
termination of tenancy because of a failure to establish citizenship or 
eligible immigration status, the procedures of 24 CFR parts 247 and 812 
shall apply. The provisions of 24 CFR 812.10 concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of termination of assistance, and 
concerning deferral of termination of assistance also shall apply.
    71. In Sec. 886.329, a new paragraph (e) would be added to read as 
follows:


Sec. 886.329  Leasing to eligible families.

* * * * *
    (e) Termination of assistance for failure to establish citizenship 
or eligible immigration status. If an owner who is subject to 
paragraphs (a) and (b) of this section is required to terminate housing 
assistance payments for the family in accordance with 24 CFR 812.9 
because the owner determines that the entire family does not have U.S. 
citizenship or eligible immigration status, the owner may allow 
continued occupancy of the unit by the family without section 8 
assistance following the termination of assistance, or if the family 
constitutes a mixed family, as defined in 24 CFR 812.10, the owner 
shall comply with the provisions of 24 CFR 812.10 concerning assistance 
to mixed families, and deferral of termination of assistance.

PART 887--HOUSING VOUCHERS

    72. The authority citation for part 887 would be revised to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d).

    73. In Sec. 887.105, paragraph (b)(5) would be revised to read as 
follows:


Sec. 887.105  PHA responsibilities.

* * * * *
    (b) * * *
    (5) Determine the amount of, and make, the housing assistance 
payment (see Sec. 887.353); obtain and verify evidence related to 
citizenship and eligible immigration status in accordance with 24 CFR 
part 812; reexamine the family income and family size and composition, 
at least annually, and redetermine the amount of the housing assistance 
payment (see Secs. 887.355 through 887.359); adjust the amount of the 
housing assistance payment as a result of an adjustment by the PHA of 
any applicable payment standard or utility allowance (see Secs. 887.353 
and 887.361); and
* * * * *
    74. In Sec. 887.355, paragraph (b) would be redesignated as 
paragraph (c), and a new paragraph (b) would be added, to read as 
follows:


Sec. 887.355  Regular reexamination of family income and composition.

* * * * *
    (b) At the first regular reexamination after [insert the effective 
date of the final rule], the PHA shall follow the requirements of 24 
CFR part 812 concerning obtaining and processing evidence of 
citizenship or eligible immigration status of all family members. 
Thereafter, at each regular reexamination, the PHA shall follow the 
requirements of 24 CFR part 812 concerning verification of the 
immigration status of any new family member.
* * * * *
    75. Section 887.357 would be amended by adding a new sentence at 
the end, to read as follows:


Sec. 887.357  Interim reexamination of family income and composition.

    * * * At any interim reexamination after [insert the effective date 
of the final rule] that involves the addition of a new family member, 
the PHA shall follow the requirements of 24 CFR part 812 concerning 
obtaining and processing evidence of citizenship or eligible 
immigration status of the new family member.
    76. In Sec. 887.401, paragraph (a)(1) would be revised, to read as 
follows:


Sec. 887.401  Family responsibilities.

    (a) A family shall:
    (1) Supply any certification, release, information, or 
documentation that the PHA or HUD determines to be necessary in the 
administration of the program, including submission of required 
evidence of citizenship or eligible immigration status (as provided by 
24 CFR part 812), disclosure and verification of Social Security 
Numbers (as provided by 24 CFR part 750), signing and submission of 
consent forms for the obtaining of wage and claim information from 
State Wage Information Collection Agencies (as provided by 24 CFR part 
760), and other information required for use by the PHA in a regularly 
scheduled reexamination or interim reexamination of family income and 
composition in accordance with HUD requirements;
* * * * *
    77. In Sec. 887.403, paragraphs (d) and (e) would be redesignated 
as paragraphs (e) and (f), and a new paragraph (d) would be added, to 
read as follows:


Sec. 887.403  Grounds for PHA denial or termination of assistance.

* * * * *
    (d) The family's obligations as stated in Sec. 887.401 include 
submission of required evidence of citizenship or eligible immigration 
status. For a statement of circumstances in which the PHA shall deny or 
terminate assistance because of a family member's inability to 
establish citizenship or eligible immigration status, and the 
applicable informal hearing procedures, see 24 CFR 882.216 and 24 CFR 
812.9, and also 24 CFR 812.10 for provisions concerning certain 
assistance for mixed families (families whose members include those 
with eligible immigration status, and those without eligible 
immigration status) in lieu of denial or termination of assistance, and 
for provisions concerning deferral of termination of assistance.
    78. Section 887.405 would be amended by adding a new paragraph 
(a)(4) and new paragraphs (b)(1)(iv) and (b)(8), to read as follows:


Sec. 887.405  Informal review or hearing.

    (a) * * *
    (4) The informal hearing provisions for the denial of assistance on 
the basis of ineligible immigration status are contained in 24 CFR 
812.9.
    (b) * * *
    (1) * * *
    (iv) A determination that the participant does not qualify under 
the PHA's policy for granting special assistance under 24 CFR 812.10.
* * * * *
    (8) The informal hearing provisions for the termination of 
assistance on the basis of ineligible immigration status are contained 
in 24 CFR 812.9.

PART 900--SECTION 23 HOUSING ASSISTANCE PAYMENTS PROGRAM--NEW 
CONSTRUCTION AND SUBSTANTIAL REHABILITATION

    79. The authority citation for part 900 would continue to read as 
follows:

    Authority: 42 U.S.C. 1410(b) and 3535(d).

    80. In Sec. 900.102, the first sentence of paragraph (g) would be 
revised to read as follows:


Sec. 900.102  Definitions.

* * * * *
    (g) Eligible families. Those families determined by the LHA to meet 
the requirements for admission into housing assisted under this part in 
accordance with 24 CFR parts 912 and 913 and other pertinent 
requirements. * * *
* * * * *
    81. Section 900.202 would be amended by adding a new sentence to 
the end of paragraph (d)(3), and by redesignating existing paragraphs 
(g) and (h) as paragraphs (h) and (i) respectively, and by adding a new 
paragraph (g), to read as follows:


Sec. 900.202  Project operation.

* * * * *
    (d) * * *
    (3) * * * For provisions related to denial of assistance because of 
a failure to establish citizenship or eligible immigration status, the 
requirements of 24 CFR 960.207 and 24 CFR part 912 shall apply.
* * * * *
    (g) Termination of assistance. For provisions related to 
termination of assistance for failure to establish citizenship or 
eligible immigration status, the requirements of 24 CFR parts 912 and 
966 shall apply.
* * * * *

PART 904--LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES

    82. The authority citation for part 904 would be revised to read as 
follows:

    Authority: 42 U.S.C. 1437-1437ee and 3535(d).

    83. In Sec. 904.104, the first sentence of paragraph (b)(1) and 
paragraph (g)(2) would be revised, to read as follows:


Sec. 904.104  Eligibility and selection of homebuyers.

* * * * *
    (b) Eligibility and standards for admission. (1) Homebuyers shall 
be lower income families that are determined to be eligible for 
admission in accordance with the provisions of 24 CFR parts 912 and 
913, which prescribe income definitions, income limits, and 
restrictions concerning citizenship or eligible immigration status. * * 
*
* * * * *
    (g) * * *
    (2) Applicants who are not selected for a specific Turnkey III 
development shall be notified in accordance with HUD-approved 
procedure. The notice shall state:
    (i) The reason for the applicant's rejection (including a 
nonrecommendation by the recommending committee unless the applicant 
has previously been so notified by the committee);
    (ii) That the applicant will be given an informal hearing on such 
determination, regardless of the reason for the rejection, if the 
applicant makes a request for such a hearing within a reasonable time 
(to be specified in the notice) from the date of the notice; and
    (iii) For denial of assistance for failure to establish citizenship 
or eligible immigration status, the applicant may request, in addition 
to the informal hearing, an appeal to the INS, in accordance with 24 
CFR 912.9.
* * * * *
    84. In Sec. 904.107, paragraphs (j)(2) and (m)(1) would be revised 
to read as follows:


Sec. 904.107  Responsibilities of homebuyer.

* * * * *
    (j) * * *
    (2) For purposes of determining eligibility of an applicant (see 24 
CFR parts 912 and 913, as well as this part) and the amount of 
Homebuyer payments under paragraph (j)(1) of this section, the LHA 
shall examine the family's income and composition and follow the 
procedures required by 24 CFR part 912 for determining citizenship or 
eligible immigration status before initial occupancy. Thereafter, for 
the purposes stated above and to determine whether a Homebuyer is 
required to purchase the home under Sec. 904.104(h)(1), the LHA shall 
reexamine the Homebuyer's income and composition regularly, at least 
once every 12 months, and shall undertake such further determination 
and verification of citizenship or eligible immigration status as 
required by 24 CFR part 912. The Homebuyer shall comply with the LHA's 
policy regarding required interim reporting of changes in the family's 
income and composition. If the LHA receives information from the family 
or other source concerning a change in the family income or other 
circumstances between regularly scheduled reexaminations, the LHA, upon 
consultation with the family and verification of the information (in 
accordance with 24 CFR parts 912 and 913 of this chapter) shall 
promptly make any adjustments determined to be appropriate in the 
Homebuyer payment amount or take appropriate action concerning the 
addition of a family member who is not a citizen with eligible 
immigration status. Any change in the family's income or other 
circumstances that results in an adjustment in the Total Tenant Payment 
and Tenant Rent must be verified.
* * * * *
    (m) Termination by LHA. (1) In the event the homebuyer breaches the 
Homebuyers Ownership Opportunity Agreement by failure to make the 
required monthly payment within ten days after its due date, by 
misrepresenting or withholding of information in applying for admission 
or in connection with any subsequent reexamination of income and family 
composition (including the failure to submit any required evidence of 
citizenship or eligible immigration status, as provided by 24 CFR part 
912; the failure to meet the disclosure and verification requirements 
for Social Security Numbers, as provided by 24 CFR part 750; or the 
failure to sign and submit consent forms for the obtaining of wage and 
claim information from State Wage Information Collection Agencies, as 
provided by 24 CFR part 760), or by failure to comply with any of the 
other homebuyer obligations under the Agreement, the LHA may terminate 
the Agreement. No termination under this paragraph may occur less than 
30 days after the LHA gives the homebuyer notice of its intention to do 
so, in accordance with paragraph (m)(3) of this section. For 
termination of assistance for failure to establish citizenship or 
eligible immigration status under 24 CFR part 912, the requirements of 
24 CFR parts 912 and 966 shall apply.
* * * * *

PART 905--INDIAN HOUSING PROGRAMS

    85. The authority citation for part 905 would continue to read as 
follows:

    Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437a, 1437aa, 1437bb, 
1437cc, 1437ee, and 3535(d).

    86. Section 905.102 would be amended by adding definitions in 
alphabetical order for the terms ``Child,'' ``Citizen,'' ``Evidence of 
citizenship or eligible immigration status,'' ``Head of household,'' 
``INS,'' ``Mixed family,'' ``National,'' ``Noncitizen,'' ``Section 
214,'' and ``Section 214 covered program,'' to read as follows:


Sec. 905.102  Definitions.

* * * * *
    Child. A member of the family, other than the family head or a 
spouse, who is under 18 years of age.
* * * * *
    Citizen. A citizen or national of the United States.
* * * * *
    Evidence of citizenship or eligible immigration status. The 
documents which must be submitted to evidence citizenship or eligible 
immigration status (see Sec. 905.310(e)).
* * * * *
    Head of household. The adult member of the family who is the head 
of the household for purposes of determining income eligibility and 
rent.
* * * * *
    INS. The U.S. Immigration and Naturalization Service.
* * * * *
    Mixed family. A family whose members include those with citizenship 
or eligible immigration status, and those without citizenship or 
eligible immigration status.
* * * * *
    National. A person who owes permanent allegiance to the United 
States, for example, as a result of birth in a United States territory 
or possession.
* * * * *
    Noncitizen. A person who is neither a citizen nor national of the 
United States.
* * * * *
    Section 214. Section 214 of the Housing and Community Development 
Act of 1980, as amended (42 U.S.C. 1436a). Section 214 restricts HUD 
from making financial assistance available for noncitizens unless they 
meet one of the six statutory categories of eligible immigration 
status.
    Section 214 covered programs. Programs to which the restrictions 
imposed by section 214 apply are programs that make available financial 
assistance pursuant to the United States Housing Act of 1937 (42 U.S.C. 
1437-440), section 235 or section 236 of the National Housing Act (12 
U.S.C. 1715z and 1715z-1) and section 101 of the Housing and Urban 
Development Act of 1965 (12 U.S.C. 1701s).
* * * * *
    87. Section 905.310 would be added to read as follows:


 Sec. 905.310  Restrictions on assistance to noncitizens.

    (a) Requirements concerning documents. For any notice or document 
(decision, declaration, consent form, etc.) that this section requires 
an IHA to provide to an individual, or requires that the IHA obtain the 
signature of the individual, the IHA, where feasible, must arrange for 
the notice or document to be provided to the individual in a language 
that is understood by the individual if the individual is not 
proficient in English. (See 24 CFR 8.6 of HUD's regulations for 
requirements concerning communications with persons with disabilities.)
    (b) Restrictions on assistance. Assistance provided under a section 
214 covered program is restricted to:
    (1) Citizens; or
    (2) Noncitizens who have eligible immigration status in one of the 
following categories:
    (i) A noncitizen lawfully admitted for permanent residence, as 
defined by section 101(a)(20) of the Immigration and Nationality Act 
(INA), as an immigrant, as defined by section 101(a)(15) of the INA (8 
U.S.C. 1101(a)(20) and 1101(a)(15), respectively) [immigrants]. (This 
category includes a noncitizen admitted under section 210 or 210A of 
the INA (8 U.S.C. 1160 or 1161), [special agricultural worker], who has 
been granted lawful temporary resident status);
    (ii) A noncitizen who entered the United States before January 1, 
1972, or such later date as enacted by law, and has continuously 
maintained residence in the United States since then, and who is not 
ineligible for citizenship, but who is deemed to be lawfully admitted 
for permanent residence as a result of an exercise of discretion by the 
Attorney General under section 249 of the INA (8 U.S.C. 1259);
    (iii) A noncitizen who is lawfully present in the United States 
pursuant to an admission under section 207 of the INA (8 U.S.C. 1157) 
[refugee status]; pursuant to the granting of asylum (which has not 
been terminated) under section 208 of the INA (8 U.S.C. 1158) [asylum 
status]; or as a result of being granted conditional entry under 
section 203(a)(7) of the INA (8 U.S.C. 1153(a)(7)) before April 1, 
1980, because of persecution or fear of persecution on account of race, 
religion, or political opinion or because of being uprooted by 
catastrophic national calamity;
    (iv) A noncitizen who is lawfully present in the United States as a 
result of an exercise of discretion by the Attorney General for 
emergent reasons or reasons deemed strictly in the public interest 
under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) [parole 
status];
    (v) A noncitizen who is lawfully present in the United States as a 
result of the Attorney General's withholding deportation under section 
243(h) of the INA (8 U.S.C. 1253(h)) [threat to life or freedom]; or
    (vi) A noncitizen lawfully admitted for temporary or permanent 
residence under section 245A of the INA (8 U.S.C. 1255a) [amnesty 
granted under INA 245A].
    (c) Family eligibility for assistance. (1) A family shall not be 
eligible for assistance unless every member of the family residing in 
the unit is determined to have eligible status, as described in 
paragraph (b) of this section;
    (2) Despite the ineligibility of one or more family members, a 
mixed family may be eligible for one of the three types of assistance 
provided in paragraph (r) of this section. A family without any 
eligible members and receiving assistance on [insert the effective date 
of the final rule] may be eligible for temporary deferral of 
termination of assistance as provided in paragraph (r) of this section.
    (d) Exemption of certain homebuyers from restrictions of this 
section. A homebuyer who executed a Homeownership Opportunity Agreement 
under the Turnkey III program or who executed a Mutual Help and 
Occupancy Agreement under the Mutual Help Homeownership program before 
[insert the effective date of the final rule] is not subject to this 
citizenship or eligible immigration status requirement for continued 
participation in the program.
    (e) Submission of evidence of citizenship or eligible immigration 
status.
    (1) General. Eligibility for assistance or continued assistance 
under a Section 214 covered program is contingent upon a family's 
submission to the IHA of the documents described in paragraph (e)(2) of 
this section for each family member. If one or more family members do 
not have citizenship or eligible immigration status, the members may 
exercise the election not to contend to have eligible immigration 
status as provided in paragraph (f) of this section, and the provisions 
of paragraph (r) of this section shall apply.
    (2) Evidence of citizenship or eligible immigration status. Each 
family, regardless of age, must submit the following evidence to the 
IHA:
    (i) For citizens, the evidence consists of a signed declaration of 
U.S. citizenship;
    (ii) For noncitizens who are 62 years of age or older or who will 
be 62 years of age or older and receiving assistance under a Section 
214 covered program on [insert the effective date of the final rule], 
the evidence consists of:
    (A) A signed declaration of eligible immigration status; and
    (B) Proof of age document.
    (iii) For all other noncitizens, the evidence consists of:
    (A) A signed declaration of eligible immigration status;
    (B) The INS documents listed in paragraph (k)(2) of this section; 
and
    (C) A signed verification consent form.
    (3) Declaration. For each family member, the family must submit to 
the IHA a written declaration, signed under penalty of perjury, by 
which the family member declares whether he or she is a U.S. citizen or 
a noncitizen with eligible immigration status.
    (i) For each adult, the declaration must be signed by the adult.
    (ii) For each child, the declaration must be signed by an adult 
residing in the assisted dwelling unit who is responsible for the 
child.
    (4) Verification consent form--(i) Who signs. Each noncitizen who 
declares eligible immigration status, must sign a verification consent 
form as follows:
    (A) For each adult, the form must be signed by the adult.
    (B) For each child, the form must be signed by an adult member of 
the family residing in the assisted dwelling unit who is responsible 
for the child.
    (ii) Notice of release of evidence by IHA. The verification consent 
form shall provide that evidence of eligible immigration status may be 
released by the IHA, without responsibility for the further use or 
transmission of the evidence by the entity receiving it, to:
    (A) HUD as required by HUD;
    (B) The INS; and, if applicable,
    (C) Another Federal agency, or a State or local government agency 
in accordance with Federal, State or local law that requires the 
release of the evidence to that agency.
    (iii) Notice of release of evidence by HUD. The verification 
consent form also shall notify the individual of the possible release 
of evidence of eligible immigration status by HUD. Evidence of eligible 
immigration status shall only be released to the INS for purposes of 
establishing eligibility for financial assistance and not for any other 
purpose. HUD is not responsible for the further use or transmission of 
the evidence or other information by the INS.
    (f) Individuals who do not contend to have eligible immigration 
status. If one or more members of a family elect not to contend that 
they have eligible immigration status and the other members of the 
family establish their citizenship or eligible immigration status, the 
family may be considered for prorated assistance under paragraph (s) of 
this section despite the fact that no declaration or documentation of 
eligible status is submitted by one or more members of the family. The 
family must, however, identify to the IHA, the family member (or 
members) who will elect not to contend that he or she has eligible 
immigration status.
    (g) Notification of requirements of Section 214--(1) When notice is 
to be issued. Notification of the requirement to submit evidence of 
citizenship or eligible immigration status, as required by this 
section, or to elect not to contend that one has eligible immigration 
status, as allowed by paragraph (f) of this section, shall be given by 
the IHA as follows:
    (i) Applicant's notice. Notification of the requirement to submit 
evidence of eligible status shall be given to each applicant at the 
time of application for financial assistance. Families whose 
applications are pending on [insert the effective date of the final 
rule] shall be notified of the requirements to submit evidence of 
eligible status as soon as possible after [insert the effective date of 
the final rule].
    (ii) Notice to families already receiving assistance. For a family 
in occupancy on [insert the effective date of the final rule], 
notification of the requirement to submit evidence of eligible status 
shall be given to each at the time of, and together with, the IHA's 
notice of the first regular reexamination after that date, but not 
later than one year following [insert the effective date of the final 
rule].
    (2) Form and content of notice. The notice shall:
    (i) State that financial assistance is contingent upon the 
submission and verification, as appropriate, of the evidence of 
citizenship or eligible immigration status, as required by this 
section; and
    (ii) Describe the type of evidence that must be submitted and state 
the time period in which that evidence must be submitted (see paragraph 
(h) of this section concerning when evidence must be submitted); and
    (iii) State that assistance will be prorated, denied or terminated, 
as appropriate, upon a final determination of ineligibility after all 
appeals have been exhausted (see paragraph (n) of this section 
concerning INS appeal, and paragraph (o) of this section concerning IHA 
informal hearing process) or, if appeals are not pursued, at a time to 
be specified in accordance with HUD requirements. Families already 
receiving assistance also shall be informed of how to obtain assistance 
under the preservation of families provisions of paragraph (r) of this 
section.
    (h) When evidence of eligible status is required to be submitted. 
The IHA shall require evidence of eligible status to be submitted at 
the times specified in paragraph (h) of this section subject to any 
extension granted in accordance with paragraph (i) of this section.
    (1) Applicants. For applicants, the IHA must ensure that evidence 
of eligible status is submitted not later than the date the IHA 
anticipates or has knowledge that verification of other aspects of 
eligibility for assistance will occur (see paragraph (l) of this 
section).
    (2) Families already receiving assistance. For a family already 
receiving the benefit of assistance in a covered program on [insert the 
effective date of the final rule], the required evidence shall be 
submitted at the first regular reexamination after [insert the 
effective date of the final rule], in accordance with program 
requirements.
    (3) New occupants of assisted units. For any new family members, 
the required evidence shall be submitted at the first interim or 
regular reexamination following the person's occupancy.
    (4) Changing participation in a HUD program. Whenever a family 
applies for admission to a Section 214 covered program, evidence of 
eligible status is required to be submitted in accordance with the 
requirements of this part unless the family already has submitted the 
evidence to the IHA for a covered program.
    (5) One-time evidence requirement for continuous occupancy. For 
each family member, the family is required to submit evidence of 
eligible status one time during continuously assisted occupancy under 
any covered program.
    (i) Extensions of time to submit evidence of eligible status--(1) 
When extension must be granted. The IHA shall extend the time, provided 
in paragraph (h) of this section, to submit evidence of eligible 
immigration status if the family member:
    (i) Submits the declaration required under paragraph (e)(3) of this 
section certifying that any person for whom required evidence has not 
been submitted is a noncitizen with eligible immigration status; and
    (ii) Certifies that the evidence needed to support a claim of 
eligible immigration status is temporarily unavailable, additional time 
is needed to obtain and submit the evidence, and prompt and diligent 
efforts will be undertaken to obtain the evidence.
    (2) Prohibition on indefinite extension period. Any extension of 
time, if granted, shall be for a specific period of time. The 
additional time provided should be sufficient to allow the family the 
time to obtain the evidence needed. The IHA's determination of the 
length of the extension needed, shall be based on the circumstances of 
the individual case.
    (3) Grant or denial of extension to be in writing. The IHA's 
decision to grant or deny an extension as provided in paragraph (i)(1) 
of this section shall be issued to the family by written notice. If the 
extension is granted, the notice shall specify the extension period 
granted. If the extension is denied, the notice shall explain the 
reasons for denial of the extension.
    (j) Failure to submit evidence or establish eligible immigration 
status. If the family fails to submit required evidence of eligible 
immigration status within the time period specified in the notice, or 
any extension granted in accordance with paragraph (i) of this section, 
or if the evidence is timely submitted but fails to establish eligible 
immigration status, the IHA shall proceed to deny, prorate or terminate 
assistance, or provide continued assistance or temporary deferral of 
termination of assistance, as appropriate, in accordance, respectively 
with the provisions of paragraph (m) of this section or paragraph (r) 
of this section.
    (k) Documents of eligible immigration status--(1) General. An IHA 
shall request and review original documents of eligible immigration 
status. The IHA shall retain photocopies of the documents for its own 
records and return the original documents to the family.
    (2) Acceptable evidence of eligible immigration status. The 
original of one of the following documents is acceptable evidence of 
eligible immigration status, subject to verification in accordance with 
paragraph (l) of this section.
    (i) Form I-551, Alien Registration Receipt Card (for permanent 
resident aliens);
    (ii) Form I-94, Arrival-Departure Record, with one of the following 
annotations:
    (A) ``Admitted as Refugee Pursuant to Section 207'';
    (B) ``Section 208'' or ``Asylum'';
    (C) ``Section 243(h)'' or ``Deportation stayed by Attorney 
General'';
    (D) ``Paroled Pursuant to Sec. 212(d)(5) of the INA'';
    (iii) If Form I-94, Arrival-Departure Record, is not annotated, 
then accompanied by one of the following documents:
    (A) A final court decision granting asylum (but only if no appeal 
is taken);
    (B) A letter from an INS asylum officer granting asylum (if 
application is filed on or after October 1, 1990) or from an INS 
district director granting asylum (if application filed before October 
1, 1990);
    (C) A court decision granting withholding or deportation; or
    (D) A letter from an INS asylum officer granting withholding of 
deportation (if application filed on or after October 1, 1990).
    (iv) Form I-688, Temporary Resident Card, which must be annotated 
``Section 245A'' or ``Section 210'';
    (v) Form I-688B, Employment Authorization Card, which must be 
annotated ``Provision of Law 274a.12(11)'' or ``Provision of Law 
274a.12'';
    (vi) A receipt issued by the INS indicating that an application for 
issuance of a replacement document in one of the above-listed 
categories has been made and the applicant's entitlement to the 
document has been verified; or
    (vii) If other documents are determined to constitute acceptable 
evidence of eligible immigration status, they will be announced by HUD 
in a notice published in the Federal Register.
    (l) Verification of eligible immigration status. (1) When 
verification is to occur. Verification of eligible immigration status 
shall be conducted by the IHA simultaneously with verification of other 
aspects of eligibility for assistance under a section 214 covered 
program. (See paragraph (h) of this section.) The IHA shall verify 
eligible immigration status in accordance with the INS procedures 
described in this section.
    (2) Primary verification. (i) Automated verification system. 
Primary verification of the immigration status of the person is 
conducted by the IHA through the INS automated system (INS Systematic 
for Alien Verification for Entitlements (SAVE)). The INS SAVE system 
provides access to names, file numbers and admission numbers of 
noncitizens.
    (ii) Failure of primary verification to confirm eligible 
immigration status. If the INS SAVE system does not verify eligible 
immigration status, secondary verification must be performed.
    (3) Secondary verification. (i) Manual search of INS records. 
Secondary verification is a manual search by the INS of its records to 
determine an individual's immigration status. The IHA must request 
secondary verification, within 10 days of receiving the results of the 
primary verification, if the primary verification system does not 
confirm eligible immigration status, or if the primary verification 
system verifies immigration status that is ineligible for assistance 
under a covered section 214 covered program.
    (ii) Secondary verification initiated by IHA. Secondary 
verification is initiated by the IHA forwarding photocopies of the 
original INS documents listed in paragraph (k)(2) of this section 
(front and back), attached to the INS document verification request 
form G-845S (Document Verification Request), to a designated INS office 
for review. (Form G-845S is available from the local INS Office.)
    (iii) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the IHA shall issue to the family the 
notice described in paragraph (m)(4) of this section, which includes 
notification of appeal to the INS of the INS finding on immigration 
status (see paragraph (m)(4)(iv) of this section).
    (4) Exemption from liability for INS verification. The IHA shall 
not be liable for any action, delay, or failure of the INS in 
conducting the automated or manual verification.
    (m) Delay, denial, or termination of assistance. (1) Restrictions 
on delay, denial, or termination of assistance. Assistance to an 
applicant shall not be delayed or denied, and assistance to a tenant 
shall not be delayed, denied, or terminated, on the basis of ineligible 
immigration status of a family member if:
    (i) The primary and secondary verification of any immigration 
documents that were timely submitted has not been completed;
    (ii) The family member for whom required evidence has not been 
submitted has moved from the tenant's dwelling unit;
    (iii) The family member who is determined not to be in an eligible 
immigration status following INS verification has moved from the 
tenant's dwelling unit;
    (iv) The INS appeals process under paragraph (n) of this section 
has not been concluded;
    (v) For a tenant, the IHA hearing process under paragraph (o) of 
this section has not been concluded;
    (vi) Assistance is prorated in accordance with paragraph (s) of 
this section;
    (vii) Assistance for a mixed family is continued in accordance with 
paragraph (r) of this section; or
    (viii) Deferral of termination of assistance is granted in 
accordance with paragraph (r) of this section.
    (2) When delay of assistance to applicant is permissible. 
Assistance to an applicant may be delayed after the conclusion of the 
INS appeal process, but not denied until the conclusion of the IHA 
informal hearing process, if an informal hearing is requested by the 
family.
    (3) Events causing denial or termination of assistance. Assistance 
to an applicant shall be denied, and a tenant's assistance shall be 
terminated, in accordance with the procedures of this section, upon the 
occurrence of any of the following events:
    (i) Evidence of citizenship (i.e., the declaration) and eligible 
immigration status is not submitted by the date specified in paragraph 
(h) of this section, or by the expiration of any extension granted in 
accordance with paragraph (i) of this section; or
    (ii) The evidence of citizenship and eligible immigration status is 
timely submitted, but INS primary and second verification does not 
verify eligible immigration status of a family member; and
    (iii) The family does not pursue INS appeal (as provided in 
paragraph (n) of this section) or IHA informal hearing rights (as 
provided in paragraph (o) of this section); or
    (iv) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family 
member.
    (4) Notice of denial or termination of assistance. The notice of 
denial or termination of assistance shall advise the family:
    (i) That financial assistance will be denied or terminated, and 
provide a brief explanation of the reasons for the proposed denial or 
termination of assistance;
    (ii) That the family may be eligible for proration of assistance as 
provided in paragraph (s) of this section;
    (iii) In the case of a tenant, the criteria and procedures for 
obtaining relief under the preservation of families provisions in 
paragraph (r) of this section;
    (iv) That the family has a right to request an appeal to the INS of 
the results of the secondary verification of immigration status, and to 
submit additional documentation or a written explanation in support of 
the appeal, in accordance with the procedures of paragraph (n) this 
section;
    (v) That the family has a right to request an informal hearing with 
the IHA either upon completion of the INS appeal or in lieu of the INS 
appeal, as provided in paragraph (n) of this section;
    (vi) For applicants, the notice shall advise that assistance may 
not be delayed until the conclusion of the INS appeal process, but 
assistance may be delayed during the pendency of the IHA informal 
hearing process.
    (n) Appeal to the INS--(1) Submission of request for appeal to IHA. 
Upon receipt of notification by the IHA that INS secondary verification 
failed to confirm eligible immigration status, the family may request 
an appeal to the INS by communicating that request to the IHA within 14 
days of the date the IHA mails or delivers the notice under paragraph 
(m)(4) of this section.
    (2) Extension of time to request an appeal. The IHA shall extend 
the period of time for requesting an appeal (for a specified period) 
upon good cause shown.
    (3) Forwarding the appeal to INS. If the family requests an appeal 
to the INS, the IHA shall forward to the designated INS office any 
additional documentation or written explanation provided by the family 
in support of the appeal. This material must include a copy of the INS 
document verification request form G-845S (used to process the 
secondary verification request) and a cover letter indicating that the 
family is requesting an appeal of the INS immigration status 
verification results. (Form G-845S is available from the local INS 
Office.)
    (4) Decision by INS--(i) When decision will be issued. The INS will 
issue to the IHA a decision within 30 days of its receipt of 
documentation concerning the family's appeal of the verification of 
immigration status. If, for any reason, the INS is unable to issue a 
decision within the 30 day time period, the INS will inform the IHA of 
the reasons for the delay, and the IHA will inform the family of the 
reasons for the delay.
    (ii) Notification of INS decision and of informal hearing 
procedures. When the IHA receives the INS decision, the IHA shall 
notify the family of the INS determination, of the reasons for the 
determination, and of the family's right to request an informal hearing 
on the IHA's ineligibility determination in accordance with the 
procedures of paragraph (o) of this section.
    (5) No delay, denial or termination of assistance until completion 
of INS appeal process; direct appeal to INS. Pending the completion of 
the INS appeal under this section, assistance may not be delayed, 
denied or terminated on the basis of immigration status.
    (o) Informal hearing.--(1) When request for hearing is to be made. 
After notification of the INS decision, or in lieu of request of appeal 
to the INS, the family may request that the IHA provide a hearing. This 
request must be made either within 14 days of the date the IHA mails or 
delivers the notice under paragraph (m)(4) of this section, or within 
14 days of the mailing of the INS appeal decision issued in accordance 
with paragraph (n)(4) of this section (established by the date of 
postmark).
    (2) Extension of time to request hearing. The IHA shall extend the 
period of time for requesting a hearing (for a specified period) upon 
good cause shown.
    (3) Informal hearing procedures. (i) For tenants, the procedures 
for the hearing before the IHA are set forth in Sec. 905.340.
    (ii) For applicants, the procedures for the informal hearing before 
the IHA are as follows:
    (A) Hearing before an impartial individual. The applicant shall be 
provided a hearing before any person(s) designated by the IHA 
(including an officer or employee of the IHA), other than a person who 
made or approved the decision under review, and other than a person who 
is a subordinate of the person who made or approved the decision;
    (B) Examination of evidence. The applicant shall be provided the 
opportunity to examine and copy, at the applicant's expense and at a 
reasonable time in advance of the hearing, any documents in the 
possession of the IHA pertaining to the applicant's eligibility status, 
or in the possession of the INS (as permitted by INS requirements), 
including any records and regulations that may be relevant to the 
hearing;
    (C) Presentation of evidence and arguments in support of eligible 
status. The applicant shall be provided the opportunity to present 
evidence and arguments in support of eligible status. Evidence may be 
considered without regard to admissibility under the rules of evidence 
applicable to judicial proceedings;
    (D) Controverting evidence of the project owner. The applicant 
shall be provided the opportunity to controvert evidence relied upon by 
the IHA and to confront and cross-examine all witnesses on whose 
testimony or information the IHA relies;
    (E) Representation. The applicant shall be entitled to be 
represented by an attorney, or other designee, at the applicant's 
expense, and to have such person make statements on the applicant's 
behalf;
    (F) Interpretive services. The applicant shall be entitled to 
arrange for an interpreter to attend the hearing, at the expense of the 
applicant or the IHA, as may be agreed upon by both parties;
    (G) Hearing to be recorded. The applicant shall be entitled to have 
the hearing recorded by audiotape (a transcript of the hearing may, but 
is not required to, be provided by the IHA); and
    (H) Hearing decision. The IHA shall provide the applicant with a 
written final decision, based solely on the facts presented at the 
hearing within 14 days of the date of the informal hearing. The 
decision shall state basis for the decision.
    (p) Judicial relief. A decision against a family member under the 
INS appeal process or the IHA informal hearing process does not 
preclude the family from exercising the right, that may otherwise be 
available, to seek redress directly through judicial procedures.
    (q) Retention of documents. The IHA shall retain for a minimum of 5 
years the following documents that may have been submitted to the IHA 
by the family or provided to the IHA as part of the INS appeal or the 
IHA informal hearing process:
    (1) The application for financial assistance;
    (2) The form completed by the family for income re-examination;
    (3) Photocopies of any original documents (front and back), 
including original INS documents;
    (4) The signed verification consent form;
    (5) The INS verification results;
    (6) The request for an INS appeal;
    (7) The final INS determination;
    (8) The request for an IHA informal hearing; and
    (9) The final hearing decision.
    (r) Preservation of mixed families and other families. (1) 
Assistance available for mixed families. (i) Assistance available for 
tenant mixed families. For a mixed family assisted under a section 214 
covered program on [insert the effective date of the final rule], one 
of the following three types of assistance may be available to the 
family:
    (A) Continued assistance (see paragraph (r)(2) of this section);
    (B) Prorated assistance (see paragraph (s) of this section); or
    (C) Temporary deferral of termination of assistance (see paragraph 
(r)(3) of this section).
    (ii) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for 
assistance, as provided in paragraph (s) of this section.
    (iii) Assistance available to other families in occupancy. For 
families receiving assistance under a Section 214 covered program on 
the [insert the effective date of the final rule] and who have no 
members with eligible immigration status, the IHA may grant the family 
temporary deferral of termination of assistance.
    (2) Continued assistance. A mixed family may receive continued 
housing assistance if all of the following conditions are met:
    (i) The family was receiving assistance under a section 214 covered 
program on [insert the effective date of the final rule];
    (ii) The family's head of household or spouse has eligible 
immigration status as described in paragraph (b)(2) of this section; 
and
    (iii) The family does not include any person (who does not have 
eligible immigration status) other than the head of household, any 
spouse of the head of household, any parents of the head of household, 
any parents of the spouse, or any children of the head of household or 
spouse.
    (3) Temporary deferral of termination of assistance. (i) 
Eligibility for this type of assistance. If a mixed family qualifies 
for prorated assistance (and does not qualify for continued 
assistance), but decides not to accept prorated assistance, or if a 
family has no members with eligible immigration status, the family may 
be eligible for temporary deferral of termination of assistance if 
necessary to permit the family additional time for the orderly 
transition of those family members with ineligible status, and any 
other family members involved, to other affordable housing. Other 
affordable housing is used in the context of transition of an 
ineligible family from a rent level that reflects HUD assistance to a 
rent level that is unassisted; the term refers to housing that is not 
substandard, that is of appropriate size for the family and that can be 
rented for an amount not exceeding the amount that the family pays for 
rent, including utilities, plus 25 percent.
    (ii) Time limit on deferral period. If temporary deferral of 
termination of assistance is granted, the deferral period shall be for 
an initial period not to exceed six months. The initial period may be 
renewed for additional periods of six months, but the aggregate 
deferral period shall not exceed a period of three years.
    (iii) Notification requirements for beginning of each deferral 
period. At the beginning of each deferral period, the IHA must inform 
the family of its ineligibility for financial assistance and offer the 
family information concerning, and referrals to assist in finding, 
other affordable housing.
    (iv) Determination of availability of affordable housing at end of 
each deferral period. Before the end of each deferral period, the IHA 
must:
    (A) Make a determination of the availability of affordable housing 
of appropriate size based on evidence of conditions which when taken 
together will demonstrate an inadequate supply of affordable housing 
for the area in which the project is located, the CHAS (if applicable; 
CHAS refers to the Comprehensive Housing Affordability Strategy 
described in 24 CFR part 91), the IHA's own knowledge of the 
availability of affordable housing, and on evidence of the tenant 
family's efforts to locate such housing; and
    (B) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination will 
be deferred again (provided that the granting of another deferral will 
not result in aggregate deferral periods that exceed three years), and 
a determination was made that other affordable housing is not 
available; or
    (C) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination of 
financial assistance will not be deferred because either granting 
another deferral will result in aggregate deferral periods that exceed 
three years, or a determination has been made that other affordable 
housing is available.
    (v) Notification of decision on family preservation assistance. An 
IHA shall notify the family of its decision concerning the family's 
qualification for assistance under this section. If the family is 
ineligible for assistance under this section, the notification shall 
state the reasons, which must be based on relevant factors. For tenant 
families, the notice also shall inform the tenant family of any appeal 
rights.
    (s) Proration of assistance. (1) Applicability. This section 
applies to a mixed family other than a family receiving continued 
assistance under paragraph (r)(2) of this section, or other than a 
family for which termination of assistance is temporarily deferred 
under paragraph (r)(3) of this section.
    (2) Method of prorating assistance. The IHA shall prorate the 
family's assistance by:
    (i) Step 1. Determining total tenant payment in accordance with 
Sec. 905.325 (annual income includes income of all family members, 
including any family member who has not established eligible 
immigration status).
    (ii) Step 2. Subtracting the total tenant payment from a HUD-
supplied ``Indian housing maximum rent'' applicable to the unit or the 
housing authority. (``Indian housing maximum rent'' shall be determined 
by HUD using the 95th percentile rent for the housing authority.) The 
result is the maximum subsidy for which the family could qualify if all 
members were eligible (``family maximum subsidy'').
    (iii) Step 3. Dividing the family maximum subsidy by the number of 
persons in the family (all persons) to determine the maximum subsidy 
per each family member who has citizenship or eligible immigration 
status (``eligible family member'). The subsidy per eligible family 
member is the ``member maximum subsidy''.
    (iv) Step 4. Multiplying the member maximum subsidy by the number 
of family members who have citizenship or eligible immigration status 
(``eligible family members'').
    (v) Step 5. The product of steps 1-4, as set forth in paragraph 
(s)(2) of this section is the amount of subsidy for which the family is 
eligible (``eligible subsidy''). The family's rent is the ``public 
housing maximum rent'' minus the amount of the eligible subsidy.
    (t) Prohibition of assistance to noncitizen students. (1) General. 
The provisions of this section permitting continued assistance, 
prorated assistance or temporary deferral of termination of assistance 
for certain families, do not apply to any person who is determined to 
be a noncitizen student, as defined in paragraph (t)(2) of this 
section, or the family of the noncitizen student, as described in 
paragraph (t)(3) of this section.
    (2) Noncitizen student. For purposes of this part, a noncitizen 
student is defined as a noncitizen who:
    (i) Has a residence in a foreign country that the person has no 
intention of abandoning;
    (ii) Is a bona fide student qualified to pursue a full course of 
study; and
    (iii) Is admitted to the United States temporarily and solely for 
purposes of pursuing such a course of study at an established 
institution of learning or other recognized place of study in the 
United States, particularly designated by such person and approved by 
the Attorney General after consultation with the Department of 
Education of the United States, which institution or place of study 
shall have agreed to report to the Attorney General the termination of 
attendance of each nonimmigrant student (and if any such institution of 
learning or place of study fails to make such reports promptly the 
approval shall be withdrawn).
    (3) Family of noncitizen student. The prohibition on providing 
assistance to a noncitizen student as described in paragraph (t)(1) of 
this section also extends to the noncitizen spouse of the noncitizen 
student and minor children of any noncitizen student if the spouse or 
children are accompanying the student or following to join such 
student. The prohibition on providing assistance to a noncitizen 
student does not extend to the citizen spouse of the noncitizen student 
and the children of the citizen spouse and noncitizen student.
    (u) Protection from liability for IHAs, State, Tribal, and local 
government agencies and officials. (1) Protection from liability for 
IHAs. HUD will not take any compliance, disallowance, penalty, or other 
regulatory action against an IHA with respect to any error in its 
determination of eligibility for assistance based on citizenship or 
immigration status:
    (i) If the IHA established eligibility based upon verification of 
eligible immigration status through the verification system described 
in paragraph (l) of this section;
    (ii) Because the IHA was required to provide an opportunity for the 
applicant or family to submit evidence in accordance with paragraphs 
(h) and (i) of this section;
    (iii) Because the IHA was required to wait for completion of INS 
verification of immigration status in accordance with paragraph (l) of 
this section;
    (iv) Because the IHA was required to wait for completion of the INS 
appeal process provided in accordance with paragraph (n) of this 
section; or
    (v) Because the IHA was required to provide an informal hearing in 
accordance with paragraph (o) of this section.
    (2) Protection from liability for State, Tribal and local 
government agencies and officials. State, Tribal, and local government 
agencies and officials shall not be liable for the design or 
implementation of the verification system described in paragraph (l) of 
this section and the IHA informal hearing provided under paragraph (o) 
of this section, so long as the implementation by the State, Tribal, or 
local government agency or official is in accordance with prescribed 
HUD rules and requirements.
    88. Section 905.315 would be amended by redesignating paragraphs 
(a)(i) and (a)(ii) as (a)(1) and (a)(2), respectively; by redesignating 
existing paragraphs (a)(2) and (a)(3) as paragraphs (b) and (c) 
respectively; and by adding a new paragraph (d), to read as follows:


Sec. 905.315  Initial determination, verification, and reexamination of 
family income and composition.

* * * * *
    (d) Implementation of verification of citizenship or eligible 
immigration status. The IHA shall follow the procedures required by 
Sec. 905.310 for determining citizenship or eligible immigration status 
before initial occupancy, and, for tenants admitted before [insert the 
effective date of the final rule], at the first reexamination of family 
income and composition after that date. Thereafter, at the annual 
reexaminations of family income and composition, the IHA shall follow 
the requirements of Sec. 905.310 concerning verification of the 
immigration status of any new family member. The family shall comply 
with the IHA's policy regarding required interim reporting of changes 
in the family's income and composition. If the IHA is informed of a 
change in the family income or other circumstances between regularly 
scheduled reexaminations, the IHA, upon consultation with the family 
and verification of the information, shall promptly make any 
adjustments appropriate in the rent or Homebuyer payment amount or take 
appropriate action concerning the addition of a family member who is a 
noncitizen with ineligible immigration status.

PART 912--DEFINITION OF FAMILY AND OTHER RELATED TERMS; OCCUPANCY 
BY SINGLE PERSONS

    89. The authority citation for part 912 would be revised to read as 
follows:

    Authority: 42 U.S.C. 1436a, 1437a, and 3535(d)

    90. Section 912.1 would be amended by changing the period at the 
end of paragraph (a)(2) to a semicolon and adding the word ``and'' 
following the semicolon; and by adding a new paragraph (a)(3), to read 
as follows:


Sec. 912.1  Purpose and applicability.

    (a) * * *
    (3) Implements the statutory prohibition against making assistance 
under the United States Housing Act of 1937 (``Act'') (42 U.S.C. 1437 
et seq.) available for the benefit of noncitizens with ineligible 
immigration status.
* * * * *
    91. Section 912.2 would be amended by inserting definitions in 
alphabetical order for the terms ``Child,'' ``Citizen,'' ``Evidence of 
citizenship or eligible immigration status,'' ``Head of household,'' 
``HUD,'' ``Mixed family,'' ``National,'' ``Noncitizen,'' ``Section 
214,'' and ``Section 214 covered program,'' to read as follows:


Sec. 912.2  Definitions.

    Child. A member of the family, other than the family head or a 
spouse, who is under 18 years of age.
    Citizen. A citizen or national of the United States.
* * * * *
    Evidence of citizenship or eligible immigration status. The 
documents which must be submitted to evidence citizenship or eligible 
immigration status. (See Sec. 912.6(b).)
* * * * *
    Head of household. The adult member of the family who is the head 
of the household for purposes of determining income eligibility and 
rent.
    HUD. The Department of Housing and Urban Development.
* * * * *
    Mixed family. A family whose members include those with citizenship 
or eligible immigration status, and those without citizenship or 
eligible immigration status.
    National. A person who owes permanent allegiance to the United 
States, for example, as a result of birth in a United States territory 
or possession.
    Noncitizen. A person who is neither a citizen nor national of the 
United States.
* * * * *
    Section 214. Section 214 of the Housing and Community Development 
Act of 1980, as amended (42 U.S.C. 1436a). Section 214 restricts HUD 
from making financial assistance available for noncitizens unless they 
meet one of the six statutory categories of eligible immigration 
status.
    Section 214 covered programs. Programs to which the restrictions 
imposed by section 214 apply are programs that make available financial 
assistance pursuant to the United States Housing Act of 1937 (42 U.S.C. 
1437-1440), section 235 or section 236 of the National Housing Act (12 
U.S.C. 1715z and 1715z-1) and section 101 of the Housing and Urban 
Development Act of 1965 (12 U.S.C. 1701s).
* * * * *
    92. Part 912 would be amended by redesignating Secs. 912.1 through 
912.4 as subpart A, and by adding the subpart heading to read, 
``Subpart A--General'', and by adding a new subpart B consisting of 
Secs. 912.5 through 912.14, to read as follows:

Subpart B--Restrictions on Assistance to Noncitizens

Sec.
912.5  General.
912.5a  Requirements concerning documents.
912.6  Submission of evidence of citizenship or eligible immigration 
status.
912.7  Documents of eligible immigration status.
912.8  Verification of eligible immigration status.
912.9  Delay, denial, or termination of assistance.
912.10  Preservation of mixed families and other families.
912.11  Proration of assistance.
912.12  Prohibition of assistance to noncitizen students.
912.13  Compliance with nondiscrimination requirements.
912.14  Protection from liability for PHAs, State, local, and tribal 
government agencies and officials.

Subpart B--Restrictions on Assistance to Noncitizens


Sec. 912.5  General.

    (a) Restrictions on assistance. Assistance provided under a section 
214 covered program is restricted to:
    (1) Citizens, or
    (2) Noncitizens who have eligible immigration status in one of the 
following categories:
    (i) A noncitizen lawfully admitted for permanent residence, as 
defined by section 101(a)(20) of the Immigration and Nationality Act 
(INA), as an immigrant, as defined by section 101(a)(15) of the INA (8 
U.S.C. 1101(a)(20) and 1101(a)(15), respectively) [immigrants]. (This 
category includes a noncitizen admitted under section 210 or 210A of 
the INA (8 U.S.C. 1160 or 1161) [special agricultural worker], who has 
been granted lawful temporary resident status);
    (ii) A noncitizen who entered the United States before January 1, 
1972, or such later date as enacted by law, and has continuously 
maintained residence in the United States since then, and who is not 
ineligible for citizenship, but who is deemed to be lawfully admitted 
for permanent residence as a result of an exercise of discretion by the 
Attorney General under section 249 of the INA (8 U.S.C. 1259);
    (iii) A noncitizen who is lawfully present in the United States 
pursuant to an admission under section 207 of the INA (8 U.S.C. 1157) 
[refugee status]; pursuant to the granting of asylum (which has not 
been terminated) under section 208 of the INA (8 U.S.C. 1158) [asylum 
status]; or as a result of being granted conditional entry under 
section 203(a)(7) of the INA (8 U.S.C. 1153(a)(7)) before April 1, 
1980, because of persecution or fear of persecution on account of race, 
religion, or political opinion or because of being uprooted by 
catastrophic national calamity;
    (iv) A noncitizen who is lawfully present in the United States as a 
result of an exercise of discretion by the Attorney General for 
emergent reasons or reasons deemed strictly in the public interest 
under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) [parole 
status];
    (v) A noncitizen who is lawfully present in the United States as a 
result of the Attorney General's withholding deportation under section 
243(h) of the INA (8 U.S.C. 1253(h)) [threat to life or freedom]; or
    (vi) A noncitizen lawfully admitted for temporary or permanent 
residence under section 245A of the INA (8 U.S.C. 1255a) [amnesty 
granted under INA 245A].
    (b) Family eligibility for assistance. (1) A family shall not be 
eligible for assistance unless every member of the family residing in 
the unit is determined to have eligible status, as described in 
paragraph (a) of this section;
    (2) Despite the ineligibility of one or more family members, a 
mixed family may be eligible for one of the three types of assistance 
provided in Sec. 912.10. A family without any eligible members and 
receiving assistance on [insert the effective date of the final rule] 
may be eligible for temporary deferral of termination of assistance as 
provided in Sec. 912.10.


Sec. 912.5a  Requirements concerning documents.

    For any notice or document (decision, declaration, consent form, 
etc.) that Secs. 912.5 through 912.14 require a PHA to provide to an 
individual, or require that the PHA obtain the signature of the 
individual, the PHA, where feasible, must arrange for the notice or 
document to be provided to the individual in a language that is 
understood by the individual if the individual is not proficient in 
English. (See 24 CFR 8.6 of HUD's regulations for requirements 
concerning communications with persons with disabilities.)


Sec. 912.6  Submission of evidence of citizenship or eligible 
immigration status.

    (a) General. Eligibility for assistance or continued assistance 
under a section 214 covered program is contingent upon a family's 
submission to the PHA of the documents described in paragraph (b) of 
this section for each family member. If one or more family members do 
not have citizenship or eligible immigration status, the family members 
may exercise the election not to contend to have eligible immigration 
status as provided in paragraph (e) of this section, and the provisions 
of Sec. 912.10 shall apply.
    (b) Evidence of citizenship or eligible immigration status. Each 
family member, regardless of age, must submit the following evidence to 
the PHA:
    (1) For citizens, the evidence consists of a signed declaration of 
U.S. citizenship;
    (2) For noncitizens who are 62 years of age or older or who will be 
62 years of age or older and receiving assistance under a section 214 
covered program on [insert the effective date of the final rule], the 
evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
    (3) For all other noncitizens, the evidence consists of:
    (i) A signed declaration of eligible immigration status;
    (ii) The INS documents listed in Sec. 912.7; and
    (iii) A signed verification consent form.
    (c) Declaration. For each family member, the family must submit to 
the PHA a written declaration, signed under penalty of perjury, by 
which the family member declares whether he or she is a U.S. citizen or 
a noncitizen with eligible immigration status:
    (1) For each adult, the declaration must be signed by the adult.
    (2) For each child, the declaration must be signed by an adult 
residing in the assisted dwelling unit who is responsible for the 
child.
    (d) Verification consent form. (1) Who signs. Each noncitizen who 
declares eligible immigration status, must sign a verification consent 
form as follows:
    (i) For each adult, the form must be signed by the adult.
    (ii) For each child, the form must be signed by an adult member of 
the family residing in the assisted dwelling unit who is responsible 
for the child.
    (2) Notice of release of evidence by PHA. The verification consent 
form shall provide that evidence of eligible immigration status may be 
released by the PHA, without responsibility for the further use or 
transmission of the evidence by the entity receiving it, to:
    (i) HUD as required by HUD;
    (ii) The INS; and, if applicable;
    (iii) Another Federal agency, or a State or local government agency 
in accordance with Federal, State or local law that requires the 
release of the evidence to that agency.
    (3) Notice of release of evidence by HUD. The verification consent 
form also shall notify the individual of the possible release of 
evidence of eligible immigration status by HUD. Evidence of eligible 
immigration status shall only be released to the INS for purposes of 
establishing eligibility for financial assistance and not for any other 
purpose. HUD is not responsible for the further use or transmission of 
the evidence or other information by the INS.
    (e) Individuals who do not contend to have eligible immigration 
status. If one or more members of a family elect not to contend that 
they have eligible immigration status and the other members of the 
family establish their citizenship or eligible immigration status, the 
family may be considered for prorated assistance under Sec. 912.11 
despite the fact that no declaration or documentation of eligible 
status is submitted by one or more members of the family. The family 
must, however, identify to PHA the family member (or members) who will 
elect not to contend that he or she has eligible immigration status.
    (f) Notification of requirements of section 214. (1) Timing of 
notice. Notification of the requirement to submit evidence of 
citizenship or eligible immigration status, as required by this 
section, or to elect not to contend that one has eligible immigration 
status, as allowed by paragraph (e) of this section, shall be given by 
the PHA as follows:
    (i) Applicant's notice. Notification of the requirement to submit 
evidence of eligible status shall be given to each applicant at the 
time of application for financial assistance. Families whose 
applications are pending on [insert the effective date of the final 
rule] shall be notified of the requirements to submit evidence of 
eligible status as soon as possible after [insert the effective date of 
the final rule].
    (ii) Notice to families already receiving assistance. For a family 
in occupancy on [insert the effective date of the final rule], 
notification of the requirement to submit evidence of eligible status 
shall be given to each at the time of, and together with, the PHA's 
notice of the first regular reexamination after that date, but not 
later than one year following [insert the effective date of the final 
rule].
    (2) Form and content of notice. The notice shall:
    (i) State that financial assistance is contingent upon the 
submission and verification, as appropriate, of the evidence of 
citizenship or eligible immigration status, as required by this 
section; and
    (ii) Describe the type of evidence that must be submitted and state 
the time period in which that evidence must be submitted (see paragraph 
(g) of this section concerning when evidence must be submitted); and
    (iii) State that assistance will be prorated, denied or terminated, 
as appropriate, upon a final determination of ineligibility after all 
appeals have been exhausted (see Sec. 912.9 concerning INS appeal, and 
PHA informal hearing process) or, if appeals are not pursued, at a time 
to be specified in accordance with HUD requirements. Families already 
receiving assistance also shall be informed of how to obtain assistance 
under the preservation of families provisions of Sec. 912.10.
    (g) When evidence of eligible status is required to be submitted. 
The PHA shall require evidence of eligible status to be submitted at 
the times specified in paragraph (g) of this section, subject to any 
extension granted in accordance with paragraph (h) of this section.
    (1) Applicants. For applicants, the PHA must ensure that evidence 
of eligible status is submitted not later than the date the PHA 
anticipates or has knowledge that verification of other aspects of 
eligibility for assistance will occur (see Sec. 912.8(a)).
    (2) Families already receiving assistance. For a family already 
receiving the benefit of assistance in a covered program on [insert the 
effective date of the final rule], the required evidence shall be 
submitted at the first regular reexamination after [insert the 
effective date of the final rule], in accordance with program 
requirements.
    (3) New occupants of assisted units. For any new family members, 
the required evidence shall be submitted at the first interim or 
regular reexamination following the person's occupancy.
    (4) Changing participation in a HUD program. Whenever a family 
applies for admission to a section 214 covered program, evidence of 
eligible status is required to be submitted in accordance with the 
requirements of this part unless the family already has submitted the 
evidence to the PHA for a covered program.
    (5) One-time evidence requirement for continuous occupancy. For 
each family member, the family is required to submit evidence of 
eligible status one time during continuously assisted occupancy under 
any covered program.
    (h) Extensions of time to submit evidence of eligible status. (1) 
When extension must be granted. The PHA shall extend the time provided 
in paragraph (g) of this section, to submit evidence of eligible 
immigration status if the family member:
    (i) Submits the declaration required under Sec. 912.6(b) certifying 
that any person for whom required evidence has not been submitted is a 
noncitizen with eligible immigration status; and
    (ii) Certifies that the evidence needed to support a claim of 
eligible immigration status is temporarily unavailable, additional time 
is needed to obtain and submit the evidence, and prompt and diligent 
efforts will be undertaken to obtain the evidence.
    (2) Prohibition on indefinite extension period. Any extension of 
time, if granted, shall be for a specific period of time. The 
additional time provided should be sufficient to allow the family the 
time to obtain the evidence needed. The PHA's determination of the 
length of the extension needed, shall be based on the circumstances of 
the individual case.
    (3) Grant or denial of extension to be in writing. The PHA's 
decision to grant or deny an extension as provided in paragraph (h)(1) 
of this section shall be issued to the family by written notice. If the 
extension is granted, the notice shall specify the extension period 
granted. If the extension is denied, the notice shall explain the 
reasons for denial of the extension.
    (i) Failure to submit evidence or establish eligible immigration 
status. If the family fails to submit required evidence of eligible 
immigration status within the time period specified in the notice, or 
any extension granted in accordance with paragraph (h) of this section, 
or if the evidence is timely submitted but fails to establish eligible 
immigration status, the PHA shall proceed to deny, prorate or terminate 
assistance, or provide continued assistance or temporary deferral of 
termination of assistance, as appropriate, in accordance with the 
provisions of Secs. 912.9 and 912.10 respectively.


Sec. 912.7  Documents of eligible immigration status.

    (a) General. A PHA shall request and review original documents of 
eligible immigration status. The PHA shall retain photocopies of the 
documents for its own records and return the original documents to the 
family.
    (b) Acceptable evidence of eligible immigration status. The 
original of one of the following documents is acceptable evidence of 
eligible immigration status, subject to verification in accordance with 
Sec. 912.8:
    (1) Form I-551, Alien Registration Receipt Card (for permanent 
resident aliens);
    (2) Form I-94, Arrival-Departure Record, with one of the following 
annotations:
    (i) ``Admitted as Refugee Pursuant to Section 207'';
    (ii) ``Section 208'' or ``Asylum'';
    (iii) ``Section 243(h)'' or ``Deportation stayed by Attorney 
General'';
    (iv) ``Paroled Pursuant to Sec. 212(d)(5) of the INA'';
    (3) If Form I-94, Arrival-Departure Record, is not annotated, then 
accompanied by one of the following documents:
    (i) A final court decision granting asylum (but only if no appeal 
is taken);
    (ii) A letter from an INS asylum officer granting asylum (if 
application is filed on or after October 1, 1990) or from an INS 
district director granting asylum (if application filed before October 
1, 1990);
    (iii) A court decision granting withholding or deportation; or
    (iv) A letter from an INS asylum officer granting withholding of 
deportation (if application filed on or after October 1, 1990).
    (4) Form I-688, Temporary Resident Card, which must be annotated 
``Section 245A'' or ``Section 210'';
    (5) Form I-688B, Employment Authorization Card, which must be 
annotated ``Provision of Law 274a.12(11)'' or ``Provision of Law 
274a.12'';
    (6) A receipt issued by the INS indicating that an application for 
issuance of a replacement document in one of the above-listed 
categories has been made and the applicant's entitlement to the 
document has been verified; or
    (c) Other acceptable evidence. If other documents are determined to 
constitute acceptable evidence of eligible immigration status, they 
will be announced by HUD in a notice published in the Federal Register.


Sec. 912.8  Verification of eligible immigration status.

    (a) When verification is to occur. Verification of eligible 
immigration status shall be conducted by the PHA simultaneously with 
verification of other aspects of eligibility for assistance under a 
Section 214 covered program. (See Sec. 912.6(g).) The PHA shall verify 
eligible immigration status in accordance with the INS procedures 
described in this section.
    (b) Primary verification. (1) Automated verification system. 
Primary verification of the immigration status of the person is 
conducted by the PHA through the INS automated system (INS Systematic 
for Alien Verification for Entitlements (SAVE)). The INS SAVE system 
provides access to names, file numbers and admission numbers of 
noncitizens.
    (2) Failure of primary verification to confirm eligible immigration 
status. If the INS SAVE system does not verify eligible immigration 
status, secondary verification must be performed.
    (c) Secondary verification. (1) Manual search of INS records. 
Secondary verification is a manual search by the INS of its records to 
determine an individual's immigration status. The PHA must request 
secondary verification, within 10 days of receiving the results of the 
primary verification, if the primary verification system does not 
confirm eligible immigration status, or if the primary verification 
system verifies immigration status that is ineligible for assistance 
under a covered Section 214 covered program.
    (2) Secondary verification initiated by PHA. Secondary verification 
is initiated by the PHA forwarding photocopies of the original INS 
documents listed in Sec. 912.7 (front and back), attached to the INS 
document verification request form G-845S (Document Verification 
Request), to a designated INS office for review. (Form G-845S is 
available from the local INS Office.)
    (3) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the IHA shall issue to the family the 
notice described in Sec. 912.9(d), which includes notification of 
appeal to the INS of the INS finding on immigration status (see 
Sec. 912.9(d)(4)).
    (d) Exemption from liability for INS verification. The PHA shall 
not be liable for any action, delay, or failure of the INS in 
conducting the automated or manual verification.


Sec. 912.9  Delay, denial, or termination of assistance.

    (a) General. Assistance to a family may not be delayed, denied, or 
terminated because of the immigration status of a family member except 
as provided in this section.
    (b) Restrictions on delay, denial, or termination of assistance. 
(1) General. Assistance to an applicant shall not be delayed or denied, 
and assistance to a tenant shall not be delayed, denied, or terminated, 
on the basis of ineligible immigration status of a family member if:
    (i) The primary and secondary verification of any immigration 
documents that were timely submitted has not been completed;
    (ii) The family member for whom required evidence has not been 
submitted has moved from the tenant's dwelling unit;
    (iii) The family member who is determined not to be in an eligible 
immigration status following INS verification has moved from the 
tenant's dwelling unit;
    (iv) The INS appeals process under Sec. 912.9(e) has not been 
concluded;
    (v) For a tenant, the PHA hearing process under Sec. 912.9(f) has 
not been concluded;
    (vi) Assistance is prorated in accordance with Sec. 912.11;
    (vii) Assistance for a mixed family is continued in accordance with 
Sec. 912.10; or
    (viii) Deferral of termination of assistance is granted in 
accordance with Sec. 912.10.
    (2) When delay of assistance to an applicant is permissible. 
Assistance to an applicant may be delayed after the conclusion of the 
INS appeal process, but not denied until the conclusion of the PHA 
informal hearing process, if an informal hearing is requested by the 
family.
    (c) Events causing denial or termination of assistance. Assistance 
to an applicant shall be denied, and a tenant's assistance shall be 
terminated, in accordance with the procedures of this section, upon the 
occurrence of any of the following events:
    (1) Evidence of citizenship (i.e., the declaration) and eligible 
immigration status is not submitted by the date specified in 
Sec. 912.6(g) or by the expiration of any extension granted in 
accordance with Sec. 912.6(h); or
    (2) Evidence of citizenship and eligible immigration status is 
timely submitted, but INS primary and secondary verification does not 
verify eligible immigration status of a family member; and
    (3) The family does not pursue INS appeal or PHA informal hearing 
rights as provided in this section; or
    (4) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family 
member.
    (d) Notice of denial or termination of assistance. The notice of 
denial or termination of assistance shall advise the family:
    (1) That financial assistance will be denied or terminated, and 
provide a brief explanation of the reasons for the proposed denial or 
termination of assistance;
    (2) That they may be eligible for proration of assistance as 
provided under Sec. 912.11;
    (3) In the case of a tenant, the criteria and procedures for 
obtaining relief under the preservation of families provision in 
Sec. 912.10;
    (4) The family has a right to request an appeal to the INS of the 
results of the secondary verification of immigration status and to 
submit additional documentation or a written explanation in support of 
the appeal in accordance with the procedures of paragraph (e) of this 
section;
    (5) The family has a right to request an informal hearing with the 
PHA either upon completion of the INS appeal or in lieu of the INS 
appeal as provided in paragraph (f) of this section;
    (6) For applicants, the notice shall advise that assistance may not 
be delayed until the conclusion of the INS appeal process, but 
assistance may be delayed during the pendency of the PHA informal 
hearing process.
    (e) Appeal to the INS. (1) Submission of request for appeal to PHA. 
Upon receipt of notification by the PHA that INS secondary verification 
failed to confirm eligible immigration status, the family may request 
an appeal to the INS by communicating that request to the PHA within 14 
days of the date the PHA mails or delivers the notice under paragraph 
(d) of this section.
    (2) Extension of time to request an appeal. The PHA shall extend 
the period of time for requesting an appeal (for a specified period) 
upon good cause shown.
    (3) Forwarding the appeal to INS. If the family requests an appeal 
to the INS, the PHA shall forward to the designated INS office any 
additional documentation or written explanation provided by the family 
in support of the appeal. This material must include a copy of the INS 
document verification request form G-845S (used to process the 
secondary verification request) and a cover letter indicating that the 
family is requesting an appeal of the INS immigration status 
verification results.
    (4) Decision by INS. (i) When decision will be issued. The INS will 
issue to the PHA a decision within 30 days of its receipt of 
documentation concerning the family's appeal of the verification of 
immigration status. If, for any reason, the INS is unable to issue a 
decision within the 30 day time period, the INS will inform the PHA of 
the reasons for the delay, and the PHA will inform the family of the 
reasons for the delay.
    (ii) Notification of INS decision and of informal hearing 
procedures. When the PHA receives the INS decision, the PHA shall 
notify the family of the INS determination, of the reasons for the 
determination, and of the family's right to request an informal hearing 
on the PHA's ineligibility determination in accordance with the 
procedures of paragraph (f) of this section.
    (5) No delay, denial or termination of assistance until completion 
of INS appeal process; direct appeal to INS. Pending the completion of 
the INS appeal under this section, assistance may not be delayed, 
denied or terminated on the basis of immigration status.
    (f) Informal hearing. (1) When request for hearing is to be made. 
After notification of the INS decision on appeal, or in lieu of request 
of appeal to the INS, the family may request that the PHA provide a 
hearing. This request must be made either within 14 days of the date 
the PHA mails or delivers the notice under paragraph (d) of this 
section, or within 14 days of the mailing of the INS appeal decision 
issued in accordance with paragraph (e) of this section (established by 
the date of postmark).
    (2) Extension of time to request hearing. The PHA shall extend the 
period of time for requesting a hearing (for a specified period) upon 
good cause shown.
    (3) Informal hearing procedures. (i) For tenants, the procedures 
for the hearing before the PHA are set forth in 24 CFR part 966.
    (ii) For applicants, the procedures for the informal hearing before 
the PHA are as follows:
    (A) Hearing before an impartial individual. The applicant shall be 
provided a hearing before any person(s) designated by the PHA 
(including an officer or employee of the PHA), other than a person who 
made or approved the decision under review, and other than a person who 
is a subordinate of the person who made or approved the decision;
    (B) Examination of evidence. The PHA shall be provided the 
opportunity to examine and copy at the applicant's expense, at a 
reasonable time in advance of the hearing, any documents in the 
possession of the PHA pertaining to the applicant's eligibility status, 
or in the possession of the INS (as permitted by INS requirements), 
including any records and regulations that may be relevant to the 
hearing;
    (C) Presentation of evidence and arguments in support of eligible 
status. The applicant shall be provided the opportunity to present 
evidence and arguments in support of eligible status. Evidence may be 
considered without regard to admissibility under the rules of evidence 
applicable to judicial proceedings;
    (D) Controverting evidence of the project owner. The applicant 
shall be provided the opportunity to controvert evidence relied upon by 
the PHA and to confront and cross-examine all witnesses on whose 
testimony or information the PHA relies;
    (E) Representation. The applicant shall be entitled to be 
represented by an attorney, or other designee, at the applicant's 
expense, and to have such person make statements on the applicant's 
behalf;
    (F) Interpretive services. The applicant shall be entitled to 
arrange for an interpreter to attend the hearing, at the expense of the 
applicant or PHA, as may be agreed upon by both parties;
    (G) Hearing to be recorded. The applicant shall be entitled to have 
the hearing recorded by audiotape (a transcript of the hearing may, but 
is not required to be provided by the PHA); and
    (H) Hearing decision. The PHA shall provide the applicant with a 
written final decision, based solely on the facts presented at the 
hearing within 14 days of the date of the informal hearing.
    (g) Judicial relief. A decision against a family member, issued in 
accordance with paragraphs (e) or (f) of this section, does not 
preclude the family from exercising the right, that may otherwise be 
available, to seek redress directly through judicial procedures.
    (h) Retention of documents. The PHA shall retain for a minimum of 5 
years the following documents that may have been submitted to the PHA 
by the family, or provided to the PHA as part of the INS appeal or the 
PHA informal hearing process:
    (1) The application for financial assistance;
    (2) The form completed by the family for income re-examination;
    (3) Photocopies of any original documents (front and back), 
including original INS documents;
    (4) The signed verification consent form;
    (5) The INS verification results;
    (6) The request for an INS appeal;
    (7) The final INS determination;
    (8) The request for a PHA informal hearing; and
    (9) The final PHA hearing decision.


Sec. 912.10  Preservation of mixed families and other families.

    (a) Assistance available for mixed families. (1) Assistance 
available for tenant mixed families. For a mixed family assisted under 
a Section 214 covered program on [insert the effective date of the 
final rule], one of the following three types of assistance may be 
available to the family:
    (i) Continued assistance (see paragraph (b) of this section);
    (ii) Prorated assistance (see Sec. 912.11); or
    (iii) Temporary deferral of termination of assistance (see 
paragraph (c) of this section).
    (2) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for assistance 
as provided in Sec. 912.11.
    (3) Assistance available to other families in occupancy. For 
families receiving assistance under a Section 214 covered program on 
the [insert the effective date of the final rule] and who have no 
members with eligible immigration status, the PHA may grant the family 
temporary deferral of termination of assistance.
    (b) Continued assistance. A mixed family may receive continued 
housing assistance if all of the following conditions are met:
    (1) The family was receiving assistance under a Section 214 covered 
program on [insert the effective date of the final rule];
    (2) The family's head of household or spouse has eligible 
immigration status as described in Sec. 912.5; and
    (3) The family does not include any person (who does not have 
eligible immigration status) other than the head of household, any 
spouse of the head of household, any parents of the head of household, 
any parents of the spouse, or any children of the head of household or 
spouse.
    (c) Temporary deferral of termination of assistance. (1) 
Eligibility for this type of assistance. If a mixed family qualifies 
for prorated assistance (and does not qualify for continued 
assistance), but decides not to accept prorated assistance, or if a 
family has no members with eligible immigration status, the family may 
be eligible for temporary deferral of termination of assistance if 
necessary to permit the family additional time for the orderly 
transition of those family members with ineligible status, and any 
other family members involved, to other affordable housing. Other 
affordable housing is used in the context of transition of an 
ineligible family from a rent level that reflects HUD assistance to a 
rent level that is unassisted; the term refers to housing that is not 
substandard, that is of appropriate size for the family and that can be 
rented for an amount not exceeding the amount that the family pays for 
rent, including utilities, plus 25 percent.
    (2) Time limit on deferral period. If temporary deferral of 
termination of assistance is granted, the deferral period shall be for 
an initial period not to exceed six months. The initial period may be 
renewed for additional periods of six months, but the aggregate 
deferral period shall not exceed a period of three years.
    (3) Notification requirements for beginning of each deferral 
period. At the beginning of each deferral period, the PHA must inform 
the family of its ineligibility for financial assistance and offer the 
family information concerning, and referrals to assist in finding, 
other affordable housing.
    (4) Determination of availability of affordable housing at end of 
each deferral period. Before the end of each deferral period, the PHA 
must:
    (i) Make a determination of the availability of affordable housing 
of appropriate size based on evidence of conditions which when taken 
together will demonstrate an inadequate supply of affordable housing 
for the area in which the project is located, the CHAS (if applicable), 
the PHA's own knowledge of the availability of affordable housing, and 
on evidence of the tenant family's efforts to locate such housing; and
    (ii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination will 
be deferred again (provided that the granting of another deferral will 
not result in aggregate deferral periods that exceed three years), and 
a determination was made that other affordable housing is not 
available; or
    (iii) Notify the tenant family in writing, at least 60 days in 
advance of the expiration of the deferral period, that termination of 
financial assistance will not be deferred because either granting 
another deferral will result in aggregate deferral periods that exceed 
three years, or a determination has been made that other affordable 
housing is available.
    (d) Notification of decision on family preservation assistance. A 
PHA shall notify the family of it's decision concerning the family's 
qualification for assistance under this section. If the family is 
ineligible for assistance under this section, the notification shall 
state the reasons, which must be based on relevant factors. For tenant 
families, the notice also shall inform the family of any applicable 
appeal rights.


Sec. 912.11  Proration of assistance.

    (a) Applicability. This section applies to a mixed family other 
than a family receiving continued assistance under Sec. 912.10(b), or 
other than a family for which termination of assistance is temporarily 
deferred under Sec. 912.10(c).
    (b) Method of prorating assistance. The PHA shall prorate the 
family's assistance by:
    (1) Step 1. Determining total tenant payment in accordance with 24 
CFR 913.107(a) (annual income includes income of all family members, 
including any family member who has not established eligible 
immigration status).
    (2) Step 2. Subtracting the total tenant payment from a HUD-
supplied ``public housing maximum rent'' applicable to the unit or the 
housing authority. (Public housing maximum rent shall be determined by 
HUD using the 95th percentile rent for the housing authority.) The 
result is the maximum subsidy for which the family could qualify if all 
members were eligible (``family maximum subsidy'').
    (3) Step 3. Dividing the family maximum subsidy by the number of 
persons in the family (all persons) to determine the maximum subsidy 
per each family member who has citizenship or eligible immigration 
status (``eligible family member''). The subsidy per eligible family 
member is the ``member maximum subsidy.''
    (4) Step 4. Multiplying the member maximum subsidy by the number of 
``eligible'' family members.
    (5) Step 5. The product of steps 1-4, as set forth in paragraph 
(b)(2) of this section is the amount of subsidy for which the family is 
eligible (``eligible subsidy''). The family's rent is the ``public 
housing maximum rent'' minus the amount of the eligible subsidy.


Sec. 912.12  Prohibition of assistance to noncitizen students.

    (a) General. The provisions of Secs. 912.10 and 912.11, permitting 
continued assistance, prorated assistance or temporary deferral of 
termination of assistance for certain families, do not apply to any 
person who is determined to be a noncitizen student, as defined in 
paragraph (b) of this section, or the family of the noncitizen student, 
as described in paragraph (c) of this section.
    (b) Noncitizen student. For purposes of this part, a noncitizen 
student is defined as a noncitizen who:
    (1) Has a residence in a foreign country that the person has no 
intention of abandoning;
    (2) Is a bona fide student qualified to pursue a full course of 
study; and
    (3) Is admitted to the United States temporarily and solely for 
purposes of pursuing such a course of study at an established 
institution of learning or other recognized place of study in the 
United States, particularly designated by such person and approved by 
the Attorney General after consultation with the Department of 
Education of the United States, which institution or place of study 
shall have agreed to report to the Attorney General the termination of 
attendance of each nonimmigrant student (and if any such institution of 
learning or place of study fails to make such reports promptly the 
approval shall be withdrawn).
    (c) Family of noncitizen student. The prohibition on providing 
assistance to a noncitizen student as described in paragraph (a) of 
this section also extends to the noncitizen spouse of the noncitizen 
student and minor children of any noncitizen student if the spouse or 
children are accompanying the student or following to join such 
student. The prohibition on providing assistance to a noncitizen 
student does not extend to the citizen spouse of the noncitizen student 
and the children of the citizen spouse and noncitizen student.


Sec. 912.13  Compliance with nondiscrimination requirements.

    The PHA shall administer the restrictions on use of assisted 
housing by noncitizens with ineligible immigration status imposed by 
this part in conformity with the nondiscrimination requirements of, 
including, but not limited to, title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d-2000d-5), section 504 of the Rehabilitation Act of 
1973 (29 U.S.C. 794), the Fair Housing Act (42 U.S.C. 3601-3619), and 
the regulations implementing these statutes, and other civil rights 
statutes cited in the applicable program regulations. These statutes 
prohibit, among other things, discriminatory practices on the basis of 
race, color, national origin, sex, religion, age, disability and 
familial status in the provision of housing.


Sec. 912.14  Protection from liability for PHAs, State, local, and 
tribal government agencies and officials.

    (a) Protection from liability for PHAs. HUD will not take any 
compliance, disallowance, penalty, or other regulatory action against a 
PHA with respect to any error in its determination of eligibility for 
financial assistance based on citizenship or immigration status:
    (1) If the PHA established eligibility based upon verification of 
eligible immigration status through the verification system described 
in Sec. 912.8;
    (2) Because the PHA was required to provide an opportunity for the 
applicant or family to submit evidence in accordance with Sec. 912.6;
    (3) Because the PHA was required to wait for completion of INS 
verification of immigration status in accordance with Sec. 912.8;
    (4) Because the PHA was required to wait for completion of the INS 
appeal process provided in accordance with Sec. 912.9(e); or
    (5) Because the PHA was required to provide an informal hearing in 
accordance with Sec. 912.9(f) or 24 CFR part 966.
    (b) Protection from liability for State, local and tribal 
government agencies and officials. State, local and tribal government 
agencies and officials shall not be liable for the design or 
implementation of the verification system described in Sec. 912.8, and 
the informal hearings provided under Sec. 912.9(f) and 24 CFR part 966, 
as long as the implementation by the State, local or tribal government 
agency or official is in accordance with prescribed HUD rules and 
requirements.

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

    93. The authority citation for part 960 would be revised to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, and 3535(d).

    94. In Sec. 960.204, paragraphs (a) and (d)(4) would be revised to 
read as follows:


Sec. 960.204  PHA tenant selection policies.

    (a) In addition to policies and regulations including preferences 
and priorities established by the PHA for eligibility and admission to 
its public housing projects pursuant to the Act, the ACC, and parts 912 
and 913 of this chapter, each PHA shall adopt and implement policies 
and procedures embodying standards and criteria for tenant selection 
which take into consideration the needs of individual families for 
public housing and the statutory purpose in developing and operating 
socially and financially sound public housing projects that provide a 
decent home and a suitable living environment and foster economic and 
social diversity in the tenant body as a whole.
* * * * *
    (d) * * *
    (4) Provide for verification and documentation of information 
relevant to acceptance or rejection of an applicant, including 
documentation and verification of citizenship and eligible immigration 
status under 24 CFR part 912.
* * * * *
    95. In Sec. 960.206, paragraph (a) would be revised to read as 
follows:


Sec. 960.206  Verification procedures.

    (a) General. Adequate procedures must be developed to obtain and 
verify information with respect to each applicant. (See parts 912 and 
913 of this chapter, and 24 CFR parts 750 and 760.) Information 
relative to the acceptance or rejection of an applicant or the grant or 
denial of a Federal preference under Sec. 960.211 must be documented 
and placed in the applicant's file.
* * * * *
    96. Section 960.209 would be amended by adding two sentences at the 
end of paragraph (a), by adding one sentence at the end of paragraph 
(b), and by adding a new paragraph (c), to read as follows:


Sec. 960.209  Reexamination of family income and composition.

    (a) * * * At the first regular reexamination after [insert the 
effective date of the final rule], the PHA shall follow the 
requirements of 24 CFR part 912 concerning obtaining and processing 
information on the citizenship or eligible immigration status of all 
family members. Thereafter, at each regular reexamination, the PHA 
shall follow the requirements of 24 CFR part 912 concerning 
verification of the immigration status of any new family member.
    (b) * * * At any interim reexamination after [insert the effective 
of the final rule] when there is a new family member, the PHA shall 
follow the requirements of 24 CFR part 912 concerning obtaining and 
processing information on the citizenship or eligible immigration 
status of the new family member.
    (c) Termination. For provisions requiring termination of 
participation for failure to establish citizenship or eligible 
immigration status, see 24 CFR part 912.9, and also 24 CFR 912.10 for 
provisions concerning assistance to certain mixed families (families 
whose members include those with citizenship and eligible immigration 
status and those without eligible immigration status) in lieu of 
termination of assistance.

    Dated: August 3, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-20710 Filed 8-24-94; 8:45 am]
BILLING CODE 4210-32-P