[Federal Register Volume 63, Number 236 (Wednesday, December 9, 1998)]
[Notices]
[Pages 68130-68133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32560]



[[Page 68129]]

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Part IV





Department of Housing and Urban Development





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Privacy Act of 1974; Computer Matching Program; Notices

  Federal Register / Vol. 63, No. 236 / Wednesday, December 9, 1998 / 
Notices  

[[Page 68130]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4357-N-01]


Privacy Act of 1974; Notice of Matching Program: Matching Tenant 
Data in Assisted Housing Programs

AGENCY: Office of Administration, HUD.

ACTION: Notice of a computer matching program between the Department of 
Housing and Urban Development (HUD) and the Social Security 
Administration (SSA) and the Internal Revenue Service (IRS).

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SUMMARY: Pursuant to the Computer Matching and Privacy Protection Act 
of 1988, as amended, and the Office of Management and Budget's Guidance 
on the statute, HUD is updating its notice of a matching program 
involving comparisons between income data provided by applicants or 
participants in HUD's assisted housing programs and independent sources 
of income information. The matching program will be carried out to 
detect excessive housing assistance under the National Housing Act, the 
United States Housing Act of 1937, section 101 of the Housing and 
Community Development Act of 1965 and the Native American Housing 
Assistance and Self-Determination Act of 1996. The program provides for 
the verification of the matching results and the initiation of 
appropriate administrative or legal actions, primarily through public 
housing agencies, Indian Tribes and Tribally Designated Housing 
Entities (these three types of entities subsequently are referenced as 
housing agencies [HAs]), and private owners/management agents for 
subsidized multifamily projects.
    This notice provides an overview of computer matching for HUD's 
assisted housing programs. Specifically, this notice describes HUD's 
program for computer matching its tenant data to: (a) The Social 
Security Administration's (SSA) earned income and the Internal Revenue 
Service's (IRS) unearned income data, (b) SSA's wage and social 
security and supplemental security income data, (c) State Wage 
Information Collection Agencies' (SWICAs') wage and unemployment 
benefit claim information, and (d) the Office of Personnel Management's 
personnel data.
    Changes to this notice recognize: (a) A recent statutory change 
providing permanent authority for SSA and IRS disclosures of Federal 
tax return information to HUD, (b) an additional HUD matching program 
objective, i.e., to develop nationwide estimates of excessive housing 
assistance to satisfy a financial reporting requirement, (c) the 
assignment of certain income verification functions to Federal 
employees in HUD's Chicago and Seattle Offices, and (d) HUD's current 
and planned use of a secure electronic facility for transmitting social 
security and supplemental security income data to entities that 
administer HUD's rental assistance programs.

EFFECTIVE DATES: HUD considers this as a continuous matching program. 
The computer matching described in this notice may begin after 
compliance with the reporting requirements cited in section 4 of 
Appendix I to OMB Circular No. A-130--Federal Agency Responsibilities 
for Maintaining Records About Individuals (Transmittal Memorandum No. 
3; February 8, 1996). That section requires that Federal agencies 
provide the Chair of the House Committee on Government Reforms and 
Oversight, the Chair of the Senate Committee on Governmental Affairs, 
and the Office of Management and Budget with notice of the matching 
program and computer matching agreements 40 days before operating the 
program.

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

FOR FURTHER INFORMATION CONTACT: For Privacy Act: Jeanette Smith, 
Departmental Privacy Act Officer, Room 4178, Department of Housing and 
Urban Development, 451 Seventh Street, SW, Washington, DC 20410, 
telephone number (202) 708-2374. A telecommunications device for 
hearing-and speech-impaired individuals (TTY) is available at 1-800-
877-8339 (Federal Information Relay Service). For further information 
from recipient agency: David L. Decker, Director, Computer Matching 
Activities, Office of the Public and Indian Housing Comptroller, Room 
5156, Department of Housing and Urban Development, 451 Seventh Street, 
SW, Washington, DC 20410, telephone number (202) 708-0099, TTY--(202) 
708-0850.
    Director, Asset Recovery Center, Room 2207, Department of Housing 
and Urban Development, 77 West Jackson Boulevard, Chicago, Illinois 
60604, telephone number (312) 353-6236, ext. 2007. Gordon L. 
Brandhagan, Director Asset Recovery Center, Suite 200, Department of 
Housing and Urban Development, 909 First Avenue, Seattle, Washington 
98104, telephone number (206) 220-5313. (These telephone numbers are 
not toll-free.)

SUPPLEMENTARY INFORMATION: This notice supersedes a similar notice 
published in the Federal Register on May 2, 1995 (60 FR 21548).
    The Computer Matching and Privacy Protection Act of 1988, as 
amended (5 U.S.C. 552a) (the CMPP Act), the Office of Management and 
Budget's (OMB's) guidance on this statute entitled ``Final Guidance 
Interpreting the Provisions of Pub. L. 100-503, the Computer Matching 
and Privacy Protection Act of 1988'' (OMB Guidance), and OMB Circular 
No. A-130 require publication of notices of computer matching programs. 
Appendix I to OMB's Revision of Circular No. A-130, ``Transmittal 2, 
Management of Federal Information Resources,'' prescribes Federal 
agency responsibilities for maintaining records about individuals. In 
accordance with the CMPP Act and Appendix I to OMB Circular No. A-130, 
copies of this notice are being provided to the Committee on Government 
Reform and Operations of the House of Representatives, the Committee on 
Governmental Affairs of the Senate, and OMB's Office of Information and 
Regulatory Affairs.
    During Fiscal Year 1998 Federal employees located in HUD's Chicago 
Office have been assigned to: (1) Obtain copies from HAs, private 
owners/management agents' records as needed to verify the incomes of 
tenants who receive rental assistance, (2) compare those records with 
computer matching results, (3) estimate excessive housing assistance 
for the tenants, (4) send letters to tenants and notices to HAs, 
private owners/management agents, and (5) to follow up as necessary on 
the resolution of the income discrepancies.

I. Authority

    This matching program is being conducted pursuant to sections 3003 
and 13403 of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 
103-66, approved August 10, 1993); section 542(b) of the 1998 
Appropriations Act (Pub. L. 106-25); section 904 of the Stewart B. 
McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544); 
section 165 of the Housing and Community Development Act of 1987 (42 
U.S.C. 3543); the National Housing Act (12 U.S.C. 1701-1750g); the 
United States Housing Act of 1937

[[Page 68131]]

(42 U.S.C. 1437-1437o); section 101 of the Housing and Urban 
Development Act of 1965 (12 U.S.C. 1701s); and the Native American 
Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 
et seq.).
    The Omnibus Budget Reconciliation Act of 1993 (Budget 
Reconciliation Act) authorizes HUD to request from the SSA and the IRS 
Federal tax return data as prescribed in section 6103(l)(7) of title 26 
of the United States Code (Internal Revenue Code). The Federal tax 
return data that HUD receives includes income data that individuals 
receive from employers and financial institutions (e.g., income data 
that would be shown on IRS Form W-2's and Form 1099's) for use in 
preparing tax returns. The Budget Reconciliation Act limits HUD's 
access to tax return data and prohibits HUD's redisclosure of tax 
return data to HAs, and private owners/management agents for subsidized 
multifamily projects. However, it allows HUD to disclose the fact that 
discrepancies exist between information provided by tenants and other 
sources, and to request that HAs, private owners and agents reverify 
tenant incomes when income comparisons indicate uncertain eligibility 
benefits or an excessive level of benefits.
    Section 542(b) of HUD's 1998 Appropriation Act (Pub. L. 105-65; 
October 27, 1997) eliminated a September 30, 1998 sunset provision to 
26 U.S.C. 610(l)(7)(D)(ix) of the Internal Revenue Code effectively 
making permanent the authority for SSA and IRS disclosures of Federal 
tax return information to HUD.
    Section 3003 of the Budget Reconciliation Act requires that 
applicants and participants in assisted housing programs sign a consent 
form authorizing the Secretary of HUD to request that the Commissioner 
of Social Security and the Secretary of the Treasury release the 
Federal tax return data. The final rule regarding participants' consent 
to the release of information was published by HUD in the Federal 
Register on March 20, 1995 (61 FR 11112).
    The Stewart B. McKinney Homeless Assistance Amendments Act of 1988 
authorizes HUD and HAs (but not private owners/management agents for 
subsidized multifamily projects) to request wage and claim information 
from State Wage Information Collection Agencies (SWICAs) responsible 
for administering State unemployment laws in order to undertake 
computer matching. This Act authorizes HUD to require applicants and 
participants to sign a consent form authorizing HUD or the HA to 
request wage and claim information from the SWICAs.
    The Housing and Community Development Act of 1987 authorizes HUD to 
require applicants and participants (as well as members of their 
households six years of age and older) in HUD-administered programs 
involving rental assistance to disclose to HUD their social security 
numbers (SSNs) as a condition of initial or continuing eligibility for 
participation in the programs.

II. Objectives To Be Met by the Matching Program

    HUD's primary objective in implementing the computer matching 
program is to increase the availability of housing assistance to 
individuals who meet the requirements of the housing assistance 
programs. Other objectives include determining the appropriate level of 
housing assistance, identifying and recovering excessive housing 
assistance received by tenants, and deterring future abuses of assisted 
housing programs. Using Federal tax return data, HUD now conducts 
computer matching and income verification program annually for a random 
sample of households that received rental assistance. HUD also conducts 
computer matching involving selected housing agencies, owners and 
agents. HUD plans to start implementing larger-scale computer matching 
in Fiscal Year 1999.
    Based on the computer matching and subsequent HUD analysis of 
tenant-provided information, HUD develops nationwide estimates of the 
extent of excess rental assistance attributable to unreported income. 
HUD uses the estimates for financial statement reporting purposes. In 
addition, HUD sends letters to tenants and notices to HAs and private 
owners/management agents so that these parties may resolve the income 
discrepancies and appropriate administrative or legal actions may be 
taken.
    HUD's various assisted housing programs, available through HAs or 
subsidized multifamily project owners/management agents, require that 
applicants meet certain income and other criteria to be eligible for 
housing assistance. In addition, tenants are required to report the 
amounts and sources of their income on at least an annual basis. The 
matching program identifies tenants receiving excessive housing 
assistance resulting from unreported or underreported family income. 
When the excessive housing assistance is identified, some tenants move 
out of assisted housing units while others agree to repay excessive 
housing assistance. Both these actions increase funds or units 
available to serve other beneficiaries of HUD programs. When tenants 
continue to be eligible for housing assistance, but at a reduced level, 
the tenants will be required to increase their contributions toward 
rent.

III. Program Description

    In this computer matching program, tenant-provided information 
included in HUD's automated files will be compared to data from the SSA 
and the IRS, as well as from SWICAs and the Office of Personnel 
Management (OPM). HUD intends the SSA and IRS matching to be a 
continuing program for assisted housing programs nationwide. HUD will 
normally request that the SSA conduct matching of earned income 
information, and that the IRS conduct matching of unearned income 
information, several times annually. HUD will request SSA matching of 
social security and supplemental security income information monthly. 
In the future, HUD may request this data more frequently for some 
rental assistance programs.
    HUD anticipates that it will conduct SWICA matching in selected 
States. Furthermore, HUD anticipates that SWICA and OPM matching will 
be used only occasionally to supplement SSA and IRS matching and income 
verification. HAs may also request SWICA matching.
    HUD will disclose to the SSA, IRS, and SWICAs only tenant personal 
identifiers, i.e., SSNs, surnames, dates of birth, and sexes. The SSA, 
IRS, and SWICAs will conduct the matching of the HUD-provided personal 
identifiers to personal identifiers included in their automated files. 
Those agencies will provide income data to HUD only for individuals 
with matching personal identifiers.
    The process of income matching between HUD and the OPM varies from 
the above. The OPM will disclose its data to HUD, and HUD will conduct 
the computer matching to OPM data.
    HUD will then compare the SSA, IRS, OPM, and SWICA income data to 
tenant-reported income data included in HUD's system of records known 
as the Tenant Housing Assistance and Contract Verification Data (HUD H-
11), published at 62 FR 11909; March 13, 1997. This comparison will 
identify, based on criteria established by HUD, tenants whose incomes 
require further verification.

A. Income Verification

    HUD will normally request that HAs or private owners/management 
agents

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verify matching results as described below. However, under certain 
limited circumstances, HUD may verify tenant incomes with independent 
income sources. For example, such circumstances may include: (a) When 
HUD declares an HA in breach of an annual contributions contract; or 
(b) when tenants fail to disclose SSA and IRS data, or the tenants 
commit other serious violations, and HUD's analysis of the data could 
support legal actions. HUD may send letters to employers to request 
income data, but HUD will not disclose tax return data to HAs, private 
owners/management agents, employers, or payers.
    (1) Verification of SSA and IRS Data Referenced in Section 
6103(l)(7) of the Internal Revenue Code
    Since HUD cannot redisclose tax return data directly to HAs or 
private owners/management agents, HUD plans to notify tenants of 
discrepancies between the tenant-reported income and the SSA and IRS 
data. HUD will supply the tenants with their income information taken 
directly from SSA and IRS data and request that the tenants provide 
this information to the HA or private owner/management agent. 
Concurrently, HUD will notify the HA or the private owner/management 
agent that a discrepancy exists between information provided by the 
tenants and other sources and will request reverification of the 
tenants' incomes. The notifications to the HAs and private owners/
management agents will not include any tax return information.
    Income information that tenants disclose to the HA or private 
owners/management agents will be verified directly with the income 
source or with other tenant-provided information. Tenants who fail to 
report to the HA or private owner/management agent after HUD's initial 
notice will receive a second notice sent by the HA or private owner/
management agent. If the tenants still fail to provide the information 
to the HA or private owner/management agent, the HA or private owner/
management agent may then terminate housing assistance, after providing 
the tenants an opportunity to challenge any adverse action.
    The SSA and the IRS have advised HUD that the process described in 
the preceding paragraph is consistent with the intent of section 
6103(l)(7) of the Internal Revenue Code, as the intent of the matching 
is to create a dialogue between the benefit recipient and the benefit 
provider.
    (2) Verification of Social Security and Supplemental Security 
Income Data
    Unlike the income information supplied by the SSA and the IRS for 
tax purposes, SSA's social security and supplemental security income 
data may be disclosed to HAs and private owners/management agents. 
Therefore, after receiving this data from the SSA and comparing it to 
tenant-reported income, HUD will disclose the SSA social security and 
supplemental security income data to HAs and private owners/management 
agents. These disclosures will include information on monthly social 
security and supplemental security income data and, where applicable, 
income discrepancy information between previous tenant-reported data 
and the income amounts provided by the SSA. HAs and private owners/
management agents will use this information in periodic verifications 
of tenant incomes that are required to determine program eligibility 
and rental assistance amounts.
    HUD has implemented a secure electronic facility for transmitting 
social security and supplemental security income data to all HAs. HUD 
plans to expand this facility to provide the same type of data to 
private owners/ management agents, who previously received the 
information from the SSA.
    (3) Verification of SWICA Data
    HUD will disclose matching results for SWICA wage and unemployment 
claim data directly to HAs, but not to private owners/management 
agents. The comparison of SWICA wage information and the tenant-
reported data will reveal whether income verification is necessary. HAs 
must then obtain wage information directly from the tenants' employers, 
including information from prior years, when appropriate. The SWICA 
unemployment claim data must be verified with the tenants. Verification 
with the SWICA would only be required if tenants dispute the SWICA 
claim data.
    (4) Verification of OPM Data
    HUD will disclose matching results for OPM data to HAs and private 
owners/management agents. The OPM data, when compared to the tenant-
reported data, provides an indicator that income verification is 
necessary. The HAs and private owners/management agents may then obtain 
wage information directly from employers, including information from 
prior years when appropriate.

B. Administrative or Legal Actions

    Regarding all the matching described in this notice, HUD 
anticipates that HAs and private owners/management agents will take 
appropriate actions in consultation with tenants to: (1) Resolve prior 
income disparities between tenant-reported and independent income 
source data, and (2) use correct income amounts in determining rental 
assistance.
    After verifying that the tenants had access to income that the 
tenants did not report, the HAs or private owners/management agents 
will:
    (1) Notify the tenants in writing of any findings;
    (2) Calculate the unreported income and excessive housing 
assistance received by the family;
    (3) Offer the tenants an opportunity to contest any findings;
    (4) Provide a grievance hearing or a right to contest to the 
tenants, if requested; and
    (5) Initiate, as appropriate, administrative or legal actions to 
resolve the tenants' underpayments of rent, using guidelines in HUD 
regulations and handbooks.
    The HAs and private owners/management agents may not suspend, 
terminate, reduce, or make a final denial of any housing assistance to 
any individual as the result of information produced by this matching 
program until: (a) The individual has received notice from the HA or 
private owner/management agent of its findings and informing the 
individual of the opportunity to contest such findings and (b) either 
the notice period provided in applicable regulations of the program, or 
30 days, whichever is later, has expired. In most cases, HAs and 
private owners/management agents will resolve income discrepancies in 
consultation with tenants.
    In legal actions, HAs and private owners/management agents may 
refer cases to local law enforcement entities or HUD's Office of 
Inspector General (OIG) for possible investigation and prosecution, 
either criminal or civil. Referrals to the OIG should involve only 
egregious cases.

C. Public Reporting Burden on Computer Matching/Income Verification 
Results

    The information collection requirements contained in Secs. 5.609 
and 5.617 have been submitted to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). 
In accordance with the Paperwork Reduction Act, HUD may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless the collection displays a currently valid OMB 
control number.
    HUD plans to use automated approaches for monitoring use of social 
security and supplemental security income data. Further, HUD plans to 
request feedback from HAs, and private owners/management agents 
concerning

[[Page 68133]]

the use of Federal tax return data that tenants disclose to entities 
that administer HUD's rental assistance programs. In developing the 
methodology, HUD will avoid imposing any unnecessary burden on HAs and 
private owners/management agents.

IV. Records To Be Matched

    SSA and IRS will conduct the matching of tenant SSNs and additional 
identifiers (such as surnames and dates of birth) to tenant data that 
HUD supplies from its system of records known as the Tenant Housing 
Assistance and Contract Verification Data (HUD H-11). Within HUD, this 
system of records includes two automated systems known as the 
Multifamily Tenant Characteristics System (a system for programs under 
the Office of the Assistant Secretary for Public and Indian Housing) 
and the Tenant Rental Assistance Certification System (a system for 
programs under the Office of the Assistant Secretary for Housing--
Federal Housing Commissioner). HAs and private owners/management agents 
for subsidized multifamily projects provide HUD with the tenant data 
that is included in HUD H-11.
    The SSA will match the HUD H-11 records to the SSA's Earnings 
Recording and Self-Employment Income System (HHS/SSA/OSR, 09-60-0059) 
(Earnings Record); Master Beneficiary Record (HHS/SSA/OSR, 09-60-0090) 
(MBR); and Supplemental Security Income Record (HHS/SSA/OSR, 09-60-
0103) (SSR). The IRS will match the HUD H-11 records to its Wage and 
Information Returns (IRP) Master File (Treas/IRS 22.061). The IRS also 
refers to this file as the Information Return Master File (IRMF).
    HUD will place matching data into its Tenant Eligibility 
Verification Files (HUD/PIH-1), described at 60 FR 21545 (May 2, 1995.) 
The HUD/PIH-1 files are specifically exempt from certain provisions of 
the Privacy Act, as described in a notice published on February 28, 
1994 (59 FR 9406) and a notice published on March 30, 1994 (59 FR 
14869).
    HUD may also coordinate SWICA income computer matches for its 
rental assistance programs using tenants' SSNs and surnames. SWICAs 
will match tenant records to machine-readable files of quarterly wage 
data and unemployment insurance benefit data. Results from this 
matching will be provided to HUD or HAs, which will then determine 
whether tenants have unreported or underreported income. The matching 
will be done in accordance with a written agreement between the SWICA 
and HUD.
    In addition, tenants' SSNs may be matched to the OPM's General 
Personnel Records (OPM/GOVT-1), the Civil Service Retirement and 
Insurance Records System (OPM/Central-1), and the Department of 
Defense's Defense Manpower Data Center Data Base (S322.10.DMDC). Tenant 
data may be matched to the SSA's Master Files of Social Security Number 
Holders (HHS/SSA/OSR, 09-60-0058) and Death Master Files for the 
purpose of validating SSNs contained in tenant records. These records 
will also be used to validate SSNs for all applicants, tenants, and 
household members who are six (6) years of age and over to identify 
noncompliance with program eligibility requirements. HUD will compare 
tenant SSNs provided by HAs or private owners/management agents to 
reveal duplicate SSNs and potential duplicate housing assistance.

V. Period of the Match

    The computer matching program will be conducted according to 
agreements between HUD and the SSA, IRS, OPM, and SWICAs. The computer 
matching agreements for the planned matches will terminate either when 
the purpose of the computer matching program is accomplished, or 18 
months from the date the agreement is signed, whichever comes first.
    The agreements may be extended for one 12-month period, with the 
mutual agreement of all involved parties, if the following conditions 
are met:
    (1) Within 3 months of the expiration date, all Data Integrity 
Boards review the agreement, find that the program will be conducted 
without change, and find a continued favorable examination of benefit/
cost results; and
    (2) All parties certify that the program has been conducted in 
compliance with the agreement.
    The agreement may be terminated, prior to accomplishment of the 
computer matching purpose or 18 months from the date the agreement is 
signed (whichever comes first), by the mutual agreement of all involved 
parties within 30 days of written notice.

    Dated: November 25, 1998.
Joseph F. Smith,
Acting Assistant Secretary for Administration.
[FR Doc. 98-32560 Filed 12-8-98; 8:45 am]
BILLING CODE 4210-01-P