[Federal Register Volume 59, Number 196 (Wednesday, October 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24835]


[[Page Unknown]]

[Federal Register: October 12, 1994]


                                                   VOL. 59, NO. 196

                                        Wednesday, October 12, 1994

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 200 and 760

[Docket No. R-94-1750; FR-3468-P-01]
RIN 2501-AB83

 

Participant's Consent to Release of Information

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to implement amendments to section 904 of 
the Stewart B. McKinney Homeless Assistance Amendments Act of 1988, 
made by section 903 of the Housing and Community Development Act of 
1992, and section 3003 of the Omnibus Budget Reconciliation Act of 
1993. Section 904 of the McKinney Act authorizes HUD to require 
applicants and participants in any HUD program involving initial and 
periodic review of an applicant's or participant's income to sign a 
consent form authorizing HUD, the PHA, or the owner to verify employee 
income information from current or previous employers; and HUD or the 
PHA to request wage and claim information from the State agency 
responsible for the administration of the State unemployment laws.

DATES: Comments due date: December 12, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, room 10276, Office of 
General Counsel, Department of Housing and Urban Development, 451 
Seventh Street SW., Washington, DC 20410-0500. Comments should refer to 
the above docket number and title. A copy of each comment submitted 
will be submitted will be available and public inspection and copying 
between 7:30 a.m. and 5:30 p.m. weekdays at the above address. 
Facsimile (FAX) comments not acceptable.

FOR FURTHER INFORMATION CONTACT: Edward Whipple, Director, Occupancy 
Division, Office of Assisted Housing, Room 4206, concerning occupancy 
matters; Albert B. Sullivan, Director, Office of Multifamily Housing, 
Room 6160 concerning housing assistance programs administered by this 
office; and David L. Decker, Director, Computer Matching Activities, 
Room 4122, concerning computer matching/tenant income verification 
matters. They may be contacted at the Department of Housing and Urban 
Development, 451 Seventh Street SW., Washington, DC 20410, telephone 
(202) 708-0744, (202) 708-3730 and (202) 708-0099, respectively. 
Hearing or speech-impaired individuals may call HUD's TDD number (202) 
708-0850. (These telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

    This rule proposes to implement section 904 of the Stewart B. 
McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544; 
hereafter referred to as the ``McKinney Act''), as amended by section 
903 of the Housing and Community Development Act of 1992, Pub. L. 102-
550, approved October 28, 1992 (1992 HCD Act) and section 3003 of the 
Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, approved 
August 10, 1993.
    Section 904 of the McKinney Act authorizes HUD to require 
applicants and participants and adult members of their families in any 
HUD program involving initial and periodic review of an applicant's or 
participant's income to sign a consent form authorizing: (1) HUD, the 
PHA, or the owner to verify employee income information from current or 
previous employers; and (2) HUD or the PHA to request wage and claim 
information from the State agency responsible for the administration of 
the State unemployment laws. On February 22, 1991, the Department 
published a final rule implementing section 904 of the McKinney Act (56 
FR 7518). In accordance with section 904(b) of the McKinney Act, HUD 
regulations make signing the consent form an explicit condition of 
initial or continuing eligibility for participation in the covered 
programs. This requirement is designed to ensure that correct 
determinations of eligibility for assistance and level of assistance 
are made under these programs.
    Section 903 of the Housing and Community Development Act of 1992 
(1992 Act) amends section 904 of the McKinney Act by adding a 
subsection (e) to section 904. Section 904(e) prohibits the Department 
from requiring the release of information by third parties as a 
condition of receiving housing assistance unless the requested consent 
for information is in compliance with the Privacy Act (5 U.S.C. 552a) 
and is appropriately limited as to time, relevance and necessity.
    The Department notes that Secs. 200.1220(a) and 760.20(a) of HUD's 
current regulations (24 CFR 200.1220(a), 24 CFR 760.20(a)) already 
require that the collection of employee income, wage and claim 
information be conducted, to the extent applicable, in accordance with 
the Privacy Act. Accordingly, this rule does not propose to make any 
changes to implement this statutory requirement.
    Section 904(e) also requires that the consent to release such 
information be limited with respect to time, and only cover information 
relevant and necessary to meet the requirements of section 904. In 
compliance with this statutory mandate, the Department is preposing to 
remove the regulatory provisions which authorize the collection of 
information, ``including information which can be obtained under other 
laws, regulations and handbooks.'' The rule also proposes to make the 
consent to release effective for 15 months from the time of execution, 
which is responsive to the recommendation in the House conference 
report. (H.R. Rep. No. 760, 102 Cong., 2d Sess. at 158 (1992).)
    Last, section 903 of 1992 Act requires that the Department develop 
a new consent form. This consent form has been issued by the 
Department; therefore, this proposed rule does not cover this release 
form.
    Section 3003 of the Omnibus Budget Reconciliation Act of 1993 
requires that applicants and participants sign a consent form 
authorizing the Secretary of HUD to request that the Commissioner of 
Social Security and the Secretary of the Treasury release information 
pursuant to section 6103(l)(7)(D)(ix) of the Internal Revenue Code of 
1986. Information released under this authority would be provided to 
HUD for the sole purpose of verifying income information pertinent to 
the applicant's or participant's eligibility or level of assisted 
housing benefits.
    Also, Section 3003 amends section 904 of the McKinney Act to allow 
HUD to use income return data, pursuant to the Internal Revenue Code. 
This information will include: wages, net earnings from self-
employment, payments of retirement income, and unearned income as 
referenced in sections 6103(l)(7)(A) and 6103(l)7)(B) of the Internal 
Revenue Code. HUD may match this information to information provided by 
applicants or participants when applying for initial or continued 
eligibility for assisted housing programs.

Other Matters

A. Environmental Impact

    In accordance with 40 CFR 1508.4 of the regulations of the Council 
on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations, 
the policies and procedures contained in this proposed rule relate to 
internal administrative procedures whose content does not constitute a 
development decision nor affect the physical condition of project areas 
or building sites and, therefore are categorically excluded from the 
requirements of the National Environmental Policy Act.

B. Executive Order 12612, 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. 
Specifically, the requirements of this proposed rule are directed 
toward applicants and participants in federally assisted housing 
programs. It effects no significant changes in the current 
relationships between the federal government, the states and their 
political subdivisions in connection with these programs.

C. Executive Order 12606, the Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this proposed rule does 
not have potential for significant impact on family formation, 
maintenance, and general well-being, and, thus, is not subject to 
review under the order. Under the proposed rule, applicants and 
participants, and adult members of their families, are required to sign 
and submit consent forms authorizing the verification or collection of 
certain information necessary for determining eligibility for or level 
of assistance under the covered programs. Consent forms to permit 
verification of information provided by the family are already 
required. This proposed rule would prohibit the collection of 
information which is not necessary to verify the income of an applicant 
or participant, and makes the consent form valid for 15 months. No 
significant change in existing HUD policies or programs will result 
from promulgation of this proposed rule, as those policies and programs 
relate to family concerns.

D. Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this proposed rule, and in so 
doing certifies that this proposed rule will not have a significant 
economic impact on a substantial number of small entities. This 
proposed rule relates to applicants and participants in federally 
assisted housing projects but should not have a meaningful economic 
impact on these entities.

E. Regulatory Agenda

    This proposed rule was not listed in the Department's Semiannual 
Agenda of Regulations published on April 25, 1994 (59 FR 20424) in 
accordance with Executive Order 12866 and the Regulatory Flexibility 
Act.

List of Subjects

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, 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 760

    Grant programs--housing and community development, Income 
verification procedures, Indians, Intergovernmental relations, Loan 
programs--housing and community development, Penalties, Public housing, 
Rent subsidies, Reporting and recordkeeping requirements, Wages.

    Accordingly, 24 CFR parts 200 and 760 would be amended as follows:

PART 200--INTRODUCTION

    1. The authority citation for 24 CFR part 200 would continue to 
read as follows:

    Authority: 12 U.S.C. 1701-1715z-18, 1701s, and 1715z-11; 42 
U.S.C. 3535(d), 3543, and 3544.

    2. Section 200.1203 would be amended by revising paragraph (a), to 
read as follows:


Sec. 200.1203  Applicability.

    (a) Information to be covered by consent forms. The information 
covered by consent forms described in this part involves: wage and 
claim information from SWICAs; and wages, net earnings from self-
employment, payments of retirement income and unearned income as 
referenced at sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal 
Revenue Code (26 U.S.C. 6103). In addition, the consent forms may 
authorize the collection of other information from applicants or 
participants to determine eligibility or level of benefits as provided 
in 24 CFR 813.109 and 24 CFR 913.109.
* * * * *
    3. Section 200.1205 would be amended by revising the definition for 
``Consent form'', to read as follows:


Sec. 200.1205  Definitions.

* * * * *
    Consent form means a consent form or forms approved by HUD to be 
signed by applicants and participants for the purpose of obtaining 
employee income information from employers; wage and claim information 
from SWICAs; return information from the Social Security Administration 
(including wages, net earnings from self-employment, payments of 
retirement income as referenced at section 6103(l)(7)(A) of the 
Internal Revenue Code (26 U.S.C. 6103); and return information for 
unearned income (i.e., interest and dividends) from the Internal 
Revenue Service as referenced at section 6103(l)(7)(B). Also, the 
consent forms may authorize the collection of other information from 
applicants or participants to determine eligibility or level of 
benefits as provided in 24 CFR 813.109 and 24 CFR 913.109. The consent 
form expires after a limited amount of time.
* * * * *
    4. Section 200.1210 would be amended by revising paragraph (c), to 
read as follows:


Sec. 200.1210  Consent by applicants and participants.

* * * * *
    (c) Consent form requirements. The consent form required by this 
subpart V shall contain, at a minimum, the following:
    (1) A provision authorizing HUD to obtain from SWICAs any 
information or materials necessary to complete or verify the 
application for participation and/or to maintain continued assistance 
under a program referred to in Sec. 200.1203;
    (2) A provision authorizing HUD or the owner (or mortgagee as 
applicable) responsible for determining eligibility for or level of 
assistance, to verify with previous or current employers employee 
income information pertinent to the applicant's or participant's 
eligibility for or level of assistance under a program referred to in 
Sec. 200.1203;
    (3) A provision authorizing HUD to request tax return information 
from the Internal Revenue Service and the Social Security 
Administration for the sole purpose of verifying income information 
pertinent to the applicant's or participant's eligibility or level of 
benefits; and
    (4) A statement that the authorization to release the information 
requested by the consent form expires 15 months after the consent form 
was signed.

PART 760--PROCEDURES FOR OBTAINING WAGE AND CLAIM INFORMATION ABOUT 
APPLICANTS AND PARTICIPANTS IN HUD'S SECTION 8 AND PUBLIC HOUSING 
PROGRAMS FROM STATE WAGE INFORMATION COLLECTION AGENCIES (SWICAs)

    5. The authority citation for part 760 would be revised to read as 
follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437a, 1437d, 1437ee, 
1437f, 3535(d), and 3544.

    6. Section 760.3 would be amended by revising paragraph (a), to 
read as follows:


Sec. 760.3  Applicability.

    (a) Information to be covered by consent forms. The information 
covered by consent forms described in this part involves wage and claim 
information from SWICAs; and wages, net earnings from self-employment, 
payments of retirement income, and unearned income as referenced at 
sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal Revenue Code 
(26 U.S.C. 6103). In addition, consent forms may authorize the 
collection of other information as identified in 24 CFR 813.109(b) and 
24 CFR 913.109(b) for current verification procedures, including 
requirements regarding signing and submitting consent forms, for the 
covered programs.
* * * * *
    7. Section 760.5 would be amended by revising the definition for 
``Consent form'', to read as follows:


Sec. 760.5  Definitions.

* * * * *
    Consent form means a consent form or forms approved by HUD to be 
signed by applicants and participants for the purpose of obtaining 
employee income information from employers; wage and claim information 
from SWICAs; return information from the Social Security Administration 
(including wages, net earnings from self-employment, payments of 
retirement income as referenced at section 6103(l)(7)(A) of the 
Internal Revenue Code (26 U.S.C. 6103); and return information for 
unearned income (i.e., interest and dividends) from the Internal 
Revenue Service as referenced at section 6103(l)(7)(B) (26 U.S.C. 
6103). Also, the consent forms may authorize the collection of other 
information from applicants or participants to determine eligibility or 
level of benefits as provided in 24 CFR 813.109 and 24 CFR 913.109. The 
consent form expires after a limited amount of time.
* * * * *
    8. Section 760.10 would be amended by revising paragraph (c), to 
read as follows:


Sec. 760.10  Consent by applicants and participants.

* * * * *
    (c) Consent form requirements. The consent form required by this 
subpart B shall, at a minimum, contain the following:
    (1) A provision authorizing HUD and PHAs to obtain from SWICAs any 
information or materials necessary to complete or verify the 
application for participation or to maintain continued assistance under 
a program referred to in Sec. 760.3;
    (2) A provision authorizing HUD, PHAs, or the owner responsible for 
determining eligibility for or level of assistance, to verify with 
previous or current employers income information pertinent to the 
applicant's or participant's eligibility for or level of assistance 
under a program referred to in Secs. 200.1203, 813.109 and 913.109 of 
this title;
    (3) A provision authorizing HUD to request income return 
information from the Internal Revenue Service and the Social Security 
Administration for the sole purpose of verifying income information 
pertinent to the applicant's or participant's eligibility or level of 
benefits; and
    (4) A statement that the authorization to release the information 
requested by the consent form expires 15 months after the consent form 
was signed.

    Dated: September 30, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-24835 Filed 10-11-94; 8:45 am]
BILLING CODE 4210-32-P