[Federal Register Volume 64, Number 91 (Wednesday, May 12, 1999)]
[Rules and Regulations]
[Pages 25726-25733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11917]



[[Page 25725]]

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Part IV





Department of Housing and Urban Development





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24 CFR Part 5



Revised Restrictions on Assistance to Noncitizens; Final Rule

  Federal Register / Vol. 64, No. 91 / Wednesday, May 12, 1999 / Rules 
and Regulations  

[[Page 25726]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-4154-F-03]
RIN 2501-AC36


Revised Restrictions on Assistance to Noncitizens

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule updates HUD's noncitizens regulations to 
incorporate the amendments made to section 214 of the Housing and 
Community Development Act of 1980 by section 592 of the Quality Housing 
and Work Responsibility Act of 1998 (the ``1998 Act''). Specifically, 
section 592 of the 1998 Act provides that PHAs, notwithstanding the 
requirements of Section 214, may elect not to affirmatively establish 
and verify eligibility before providing financial assistance to an 
individual or family. Before this amendment, statutory authority 
allowed PHAs to opt-out of compliance with the Section 214 immigration 
verification requirements in their entirety. This final rule also makes 
final a November 29, 1996 interim rule and takes into consideration the 
public comments submitted on the interim rule.

EFFECTIVE DATE: June 11, 1999.

FOR FURTHER INFORMATION CONTACT: For the covered programs, the 
following persons should be contacted:
    1. For the Public Housing, Section 8 Rental Certificate, Rental 
Voucher and Moderate Rehabilitation (except Single Room Occupancy-
``SRO'') programs: Patricia Arnaudo, Office of Public and Indian 
Housing, Room 4222, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410, telephone (202) 619-8201;
    2. For the Section 8 Moderate Rehabilitation SRO program: John 
Garrity, Office of Community Planning and Development, Room 7262, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410, telephone (202) 708-4300;
    3. For the other Section 8 programs, the Section 236 programs, and 
Housing Development Grants and Rent Supplement: Helene DeVous, Office 
of Housing, Room 6146, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410, telephone (202) 708-2866.
    4. For the Section 235 homeownership program: Phillip Murray, 
Office of Lender Activities and Program Compliance, Office of Housing, 
Room B133, Department of Housing and Urban Development, 451 Seventh 
Street, SW, Washington, DC, 20410, telephone (202) 708-1515.
    Persons with hearing or speech impairments may access the above 
telephone numbers via TTY by calling the Federal Information Relay 
Service at 1-800-877-8339. With the exception of the ``800'' number, 
none of the foregoing telephone numbers are toll-free.

SUPPLEMENTARY INFORMATION:

I. HUD's Implementation of Section 214 of the Housing and Community 
Development Act of 1980

    On March 20, 1995 (60 FR 14816), HUD issued its final rule 
implementing Section 214 of the Housing and Community Development Act 
of 1980 (42 U.S.C. 1436a) (``Section 214'') and that rule became 
effective on June 19, 1995. Section 214 prohibits HUD from making 
certain financial assistance available to persons other than United 
States citizens, nationals, or specified categories of eligible 
noncitizens.
    HUD's March 20, 1995 final rule promulgated virtually identical 
``noncitizens'' regulations for the various HUD programs covered by 
Section 214. On March 27, 1996 (61 FR 13614), HUD published a final 
rule eliminating the repetitiveness of these duplicative regulations by 
consolidating the noncitizens requirements in a new subpart E to 24 CFR 
part 5. HUD established part 5 (entitled ``General HUD Program 
Requirements; Waivers'') to describe those requirements which are 
applicable to one or more program regulations.

II. The November 29, 1996 Interim Rule

    On November 29, 1996 (61 FR 60535), HUD published an interim rule 
amending its noncitizens regulations to incorporate the amendments made 
to Section 214 by the Use of Assisted Housing by Aliens Act of 1996 
(title V, Subtitle E of the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996, Public Law 104-208, approved September 30, 
1996; 110 Stat. 3009-546) (the ``1996 Immigration Act''). Section 577 
of the 1996 Immigration Act directed that HUD's implementing 
regulations ``be issued in the form of an interim final rule, which 
shall take effect upon issuance.'' Accordingly, the amendments made by 
the November 29, 1996 interim rule were effective upon publication, but 
also provided members of the public with a 60-day period to submit 
their comments on the interim rule.
    The most significant changes made to Section 214 by the 1996 
Immigration Act, and consequently to HUD's Section 214 regulations by 
the November 29, 1996 interim rule, are as follows:
    1. HUD's interim noncitizens regulations provide that responsible 
entities may not make assistance available to a family applying for 
assistance until at least the eligibility of one family member has been 
established, and assistance must be prorated based on the number of 
individuals in the family for whom eligibility has been affirmatively 
established.
    2. The interim regulations require that continued financial 
assistance be provided to an eligible mixed family after November 29, 
1996 (the effective date of the interim rule) be prorated based on the 
percentage of family members that are eligible for assistance. An 
eligible mixed family is a family containing members with eligible 
immigration status, as well as members without such status, and that 
meets the criteria for eligibility for continued assistance as 
described in Section 214.
    3. The interim regulations require that HUD suspend financial 
assistance to a family upon determining that the family has knowingly 
permitted an ineligible individual to reside on a permanent basis in 
the family's unit. The suspension shall be for a period of at least 24 
months. This provision does not apply if the ineligible individual has 
already been considered in calculating any proration of assistance for 
the family.
    4. The interim regulations allow responsible entities administering 
financial assistance under a Section 214 covered program to require 
that individuals who declare themselves to be U.S. citizens verify the 
declaration through appropriate documentation (e.g., United States 
passport, resident alien card, registration card, social security card, 
or other appropriate documentation). Before this amendment, only 
individuals who were not U.S. citizens or nationals were required to 
present documentation of their eligible immigration status.
    5. The November 29, 1998 interim rule revised the maximum period 
for deferral of termination of assistance provided after November 29, 
1996 from an aggregate of 3 years to an aggregate of 18 months. The 18-
month maximum deferral period does not apply to refugees under section 
207 of the Immigration and Nationality Act or to individuals seeking 
asylum under section 208 of that Act. The maximum deferral period for 
deferrals granted

[[Page 25727]]

prior to November 29, 1996 continues to be 3 years.
    6. The interim regulations provide that an individual has a maximum 
period of 30-days, starting from the date of receipt of the notice of 
denial or termination of assistance, to request a fair hearing. HUD 
believes that due process requires that assistance already being 
provided to a tenant may not be delayed, denied, reduced or terminated 
until completion of the fair hearing.
    7. The interim regulations provide that a Public Housing Agency 
(PHA) may elect not to comply with the requirements of 24 CFR part 5, 
subpart E. This amendment was based on the language of subsection 
214(h)(2), which was added by section 575 of the 1996 Immigration Act. 
Subsection 214(h)(2) provided that ``[a] Public Housing Agency . . . 
may elect not to comply with this section.'' The use of the word 
``section'' (as opposed to ``subsection'') in this provision, in a 
strict statutory construction, referred to Section 214 in its entirety.

III. Section 592 of the Quality Housing and Work Responsibility Act 
of 1998

    On October 21, 1998, President Clinton signed into law HUD's fiscal 
year (FY) 1999 Appropriations Act, which includes the Quality Housing 
and Work Responsibility Act of 1998 (title V of the FY 1999 HUD 
Appropriations Act; Public Law 105-276; 112 Stat. 2461) (the ``1998 
Act''). The 1998 Act constitutes a substantial overhaul of HUD's public 
housing and Section 8 assistance programs. The 1998 Act enacts many of 
the reforms originally proposed in Secretary Andrew Cuomo's HUD 2020 
Management Reform Plan, HUD's public housing bill and Congressional 
bills that are directed at revitalizing and improving HUD's public 
housing and Section 8 tenant-based programs.
    Section 592 of the 1998 Act (entitled ``Use of Assisted Housing by 
Aliens'') removed the option of PHAs to elect not to comply with 
Section 214. In its place, the 1998 Act provides that PHAs, 
notwithstanding the requirements of Section 214, may elect not to 
affirmatively establish and verify eligibility before providing 
financial assistance to an individual or family (as discussed above, 
Section 214, and HUD's noncitizens regulations, provide that no 
individual or family applying for financial assistance may receive such 
financial assistance prior to the affirmative establishment and 
verification of eligibility of at least the individual or one family 
member). Section 592 of the 1998 Act was effective upon enactment 
(October 21, 1998).
    On February 18, 1999 (64 FR 8192), HUD published a Notice of 
Initial Guidance in the Federal Register. The notice advises the public 
of those provisions of the 1998 Act that are effective immediately and 
of action that may or should be taken immediately by affected public 
and assisted housing providers. The February 18, 1999 notice advises 
the public that section 592 of the 1998 Act removed the option of PHAs 
to elect not to comply with Section 214. Further, the notice provides 
that in the event a PHA elected to ``opt-out'' of compliance with 
Section 214, the PHA may, but is not required to, immediately commence 
verification of eligibility of families for whom eligibility status 
under Section 214 has not yet been undertaken. A PHA must, however, 
verify eligibility status in accordance with the requirements of 
Section 214 and HUD's implementing regulations at 24 CFR part 5, 
subpart E, no later than the date of the family's annual reexamination.

IV. This Final Rule

    This rule makes final the amendments in the November 29, 1996 
interim rule, and takes into consideration the public comments 
submitted on the interim rule. After careful consideration of all the 
comments received on the November 29, 1996 interim rule, HUD has made 
one change as a result of public comment. Specifically, HUD has revised 
the list of documentation that may constitute acceptable evidence of 
U.S. citizenship or U.S. nationality (see discussion of public comment 
captioned ``Rule Should Specify Acceptable Evidence of Citizenship'' in 
section V.B of this preamble).
    This final rule updates HUD's noncitizens regulations to 
incorporate the amendments made by section 592 of the 1998 Act. 
Specifically, the final rule removes Sec. 5.501 (which granted PHAs the 
ability to opt-out of compliance with Section 214) and revises 
Sec. 5.512 (entitled ``Verification of eligible immigration status'') 
to state that PHAs may elect to provide financial assistance to an 
individual or family before verifying the eligibility of the individual 
or one family member.
    This final rule also makes a correction to Sec. 5.508 of the 
November 29, 1996 interim rule. The 1996 Immigration Act permits 
responsible entities to verify the eligibility of individuals who 
declare themselves to be U.S. citizens or nationals. Although the 
preamble to the November 29, 1996 interim rule correctly referred to 
both U.S. citizens and nationals, Sec. 5.508 of the interim rule, which 
implemented this statutory provision, inadvertently failed to refer to 
U.S. nationals. This final rule makes the necessary correction to 
Sec. 5.508.
    This final rule does not implement the provisions of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (Public 
Law 104-193, approved August 22, 1996; 110 Stat. 2105) which concern 
immigration. The changes required by that Act will be the subject of 
future rulemaking.
    Readers should note that the regulatory text of this final rule is 
identical to that of the November 29, 1996 interim rule, with the 
exception of the changes implementing section 592 of 1998 Act and the 
changes to Sec. 5.508.

V. Discussion of Public Comments on the November 29, 1996 Interim 
Rule

    The public comment period on the November 29, 1996 interim rule 
closed on January 28, 1997. HUD received twenty-two comments, including 
comments from nonprofit organizations, PHAs, and PHA interest 
organizations. This section of the preamble presents a summary of the 
significant issues raised by the public commenters on the November 29, 
1996 interim rule, and HUD's responses to these comments.

A. Comments on the Statutory PHA ``Opt Out'' Provision (Section 5.501)

    Many of the comments received regarding the PHA ``opt-out'' 
provision were submitted before publication of the November 29, 1996 
interim rule. The vast majority of these comments urged that HUD 
interpret section 575 of the 1996 Immigration Act to permit PHAs to 
opt-out of compliance with Section 214 in its entirety. As noted above, 
the recommended interpretation of section 575 was in fact the position 
adopted by HUD in the November 29, 1996 interim rule and this 
interpretation was based on the statutory language itself.
    Many of these commenters noted that in some cities, such as New 
York City, most ineligible noncitizens are part of families that 
include citizens, nationals, or other eligible persons, and are 
``deeply woven into the fabric of everyday life.'' The commenters wrote 
that it would be a great hardship to such families to penalize these 
ineligible persons. Other commenters wrote that the recommended 
interpretation of the opt-out provision would further HUD's policy of 
``vest[ing] in local public housing agencies the maximum amount of 
responsibility in the administration of their housing programs.''
    HUD Response. As noted above, section 592 of the 1998 Act amended 
the scope of the PHA opt-out provision.

[[Page 25728]]

This final rule updates 24 CFR part 5, subpart E to incorporate the 
amendments made by section 592 of the 1998 Act. Specifically, the final 
rule removes Sec. 5.501 (entitled ``PHA election whether to comply with 
this subpart''), which allowed PHAs to opt-out of compliance with the 
Section 214 requirements. The final rule also amends Sec. 5.512 
(entitled ``Verification of eligible immigration status'') to state 
that PHAs may elect to provide financial assistance to an individual or 
family before verifying the eligibility of the individual or one family 
member.

B. Comments on the Submission of Evidence of Eligible Status (Section 
5.508)

    Comment: Nondiscrimination Requirements Should be Codified. Two 
commenters suggested that HUD amend the interim rule to explicitly 
provide that an entity administering a program covered by Section 214 
may not request verification of citizenship based on race, national 
origin, or personal characteristics, such as accent, language spoken, 
or familial association with a noncitizen.
    HUD Response. As Sec. 5.524 makes clear, all regulatory procedures 
in the implementation of Section 214 must be administered in accordance 
with all applicable nondiscrimination and equal opportunity 
requirements, including, but not limited to, title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the implementing 
regulations in 24 CFR part 1, section 504 of the Rehabilitation Act of 
1973 (29 U.S.C. 794) and the implementing regulations in 24 CFR part 8, 
the Fair Housing Act (42 U.S.C. 42 U.S.C. 3601-3619) and the 
implementing regulations in 24 CFR part 100. Further, section VI of 
this preamble reminds the public that the Section 214 prohibitions on 
assistance to noncitizens must be implemented in the uniform manner 
prescribed, without regard to race, national origin, or personal 
characteristics (e.g., accent language spoken, or familial association 
with a noncitizen). The individual regulations for the HUD programs 
subject to Section 214 specify the fair housing and civil rights 
requirements applicable to each program.
    Comment: Senior Noncitizens Should be Subject to Stricter 
Verification Procedures. Section 214 provides that certain senior 
noncitizens (those 62 years of age or older) need only submit a signed 
declaration of eligible immigration status and a proof of age document 
for purposes of verifying their eligibility to receive assistance. All 
other noncitizens, however, must submit their documentation of eligible 
immigration status for verification by the Immigration and 
Naturalization Service (INS). Before the amendments made by the 1996 
Immigration Act, Section 214 limited this more lenient treatment to 
senior noncitizens receiving assistance on June 19, 1995 (the effective 
date of HUD's original March 20, 1995 noncitizens rule). The November 
29, 1996 interim rule expanded the exemption to include senior 
noncitizens receiving assistance on September 30, 1996 (the date of 
enactment of the 1996 Immigration Act) or applying for assistance on or 
after that date. Two commenters objected to this amendment, and wrote 
that the higher standard of documentation should continue to be 
required of senior noncitizens who apply after September 30, 1996.
    HUD Response. This regulatory amendment merely tracks the revision 
made to section 214(d)(4) by the 1996 Immigration Act. Accordingly, HUD 
does not have the discretion to modify this provision in the manner 
suggested by the commenters.
    Comment: Rule Should Specify Acceptable Evidence of Citizenship or 
Nationality. The 1996 Immigration Act allows responsible entities 
administering financial assistance under a Section 214 covered program 
to require that individuals who declare themselves to be U.S. citizens 
or nationals to verify the declaration through appropriate 
documentation. Before this amendment, only individuals who were not 
U.S. citizens or nationals were required to present documentation of 
their eligible immigration status.
    Three commenters recommended that HUD provide greater specificity 
regarding what documentation constitutes acceptable evidence of 
citizenship and nationality. One of the commenters noted that two of 
the documents listed as examples in Sec. 5.508 (a resident alien card 
and a Social Security Card) do not constitute adequate evidence of 
citizenship or nationality. The commenter wrote that several of the 
other listed examples, such as a ``registration card'' or ``other 
appropriate documentation,'' were too vague. One commenter suggested 
that acceptable proof of citizenship should include a signed 
declaration of citizenship accompanied by proof that a timely request 
for supporting documentation has been made. According to the commenter, 
this would ease the situation encountered by applicants who have 
difficulty obtaining original birth certificates from distant 
jurisdictions.
    HUD Response. The commenters are correct that neither a resident 
alien card nor a Social Security Card is evidence of U.S. citizenship 
or U.S. nationality. Therefore, HUD has removed the references to these 
documents, as well as the reference to a ``registration card'', from 
Sec. 5.508(b)(1). If HUD determines that additional examples are 
necessary, HUD will more appropriately provide them through notice, 
handbook, or other non-regulatory guidance.

C. Comments on Verification of Eligible Status: Timing of Procedure and 
Proration of Assistance (Section 5.512)

    Comment: Verification of All Household Members Should be Required 
Before Admission. HUD's noncitizens regulations provide that 
responsible entities may not make assistance available to a family 
applying for assistance until at least the eligibility of one family 
member has been established, and assistance must be prorated based on 
the number of individuals in the family for whom eligibility has been 
affirmatively established.
    Several commenters indicated that proration of rent for newly 
admitted families due to an inability to complete the verification of 
eligibility of all family members before admission is a problem, both 
to the applicant and to the housing provider. They wrote that families 
who have not yet moved in will choose not to pay a prorated rent. If 
families are admitted with full subsidy after verification of 
eligibility of only one family member, the family and housing provider 
will both suffer losses if proration becomes required, since it is 
unlikely that the family will be able to pay the higher rent and 
eviction will follow.
    Three commenters suggested that this perceived difficulty might be 
resolved by requiring verification of all household members before 
admission. The commenters wrote that this would not constitute an undue 
delay in the provision of assistance. According to two of these 
commenters, housing providers usually receive verification within one 
to two weeks after submission of the appropriate documentation. The 
commenters noted that the regulations grant individuals and families up 
to 30 days to submit the required documentation--a longer time period 
than what the commenters' experience indicates it takes to complete the 
entire verification process.
    HUD Response. Subsection 214(d)(4)(B)(ii), as amended by the 1996 
Immigration Act, prohibits the delay, denial, reduction, or termination 
of assistance to an applicant or tenant

[[Page 25729]]

pending the completion of the verification process. Assistance to newly 
admitted families may not be prorated based on the inability of the 
responsible entity to complete verification for all family members.
    The commenters are correct in noting that assistance may need to be 
prorated if the verification process determines that one or more family 
members is not eligible. HUD acknowledges that families may be unable 
to pay the higher rent resulting from proration. Nevertheless, the 
requirement that assistance be prorated based on the number of 
individuals in the family for whom eligibility has been affirmatively 
established is statutorily mandated by the 1996 Immigration Act.
    Comment: Rent Should be Retroactively Reduced Following 
Verification of Status for All Family Members. Another commenter 
suggested that, where assistance was initially prorated because the 
status of all the family members had not been established, the rent 
should be reduced retroactively to the date of admission following 
verification of the eligible status of all the family members.
    HUD Response. As noted in the response the preceding comment, 
responsible entities may not prorate assistance to a family before the 
completion of the verification process.

D. Comments on Delay, Denial, Reduction, or Termination of Assistance 
(Section 5.514)

    Comment: Verification Should be Completed Before Admission. One 
commenter praised HUD's interpretation that assistance to a tenant not 
be delayed, denied, reduced, or terminated until the completion of an 
informal hearing when a timely request for such a hearing is made. This 
contrasted with the opinion of another commenter, who stated that, 
although it was the intent of the Congress to not delay assistance to 
current program participants, no such authority exists regarding 
applicants. Accordingly, this commenter wrote all aspects of 
eligibility need to be verified before a family is admitted.
    HUD Response. HUD's noncitizens regulations track the statutory 
language of the 1996 Immigration Act. Specifically, subsection 
214(d)(4)(B)(ii), as amended by the 1996 Immigration Act, prohibits the 
delay, denial, reduction, or termination of assistance to an applicant 
or tenant pending the completion of the verification process.
    Comment: What Constitutes ``Knowingly'' Permitting an Ineligible 
Person to Reside in an Assisted Housing Unit? Several commenters wrote 
to express uncertainty regarding Sec. 5.514(c)(1)(iii), which provides 
that assistance to an applicant shall be denied, and a tenant's 
assistance shall be terminated, if--

    (iii) The responsible entity determines that a family member has 
knowingly permitted another individual who is not eligible for 
assistance to reside (on a permanent basis) in the public or 
assisted housing unit of the family member. Such termination shall 
be for a period of not less than 24 months * * *

    Several commenters asked for greater clarity regarding what 
constitutes ``knowingly'' permitting an ineligible person to reside in 
an assisted unit on a permanent basis. One of the commenters suggested 
that a deliberate intention to deceive the housing provider (i.e., 
knowledge about the ineligible status and intentionally permitting 
permanent residence in the unit), should be the basis for the 
imposition of sanctions.
    HUD Response. HUD believes that ``knowingly'' has the everyday 
meaning normally associated with the term. Specifically, the word 
``knowingly,'' as used in this provision of the 1996 Immigration Act, 
means that a tenant possesses knowledge that an ineligible individual 
is residing (on a permanent basis) in the unit.
    Comment: What Constitutes ``Termination'' of Assistance Under 
Section 5.514(c)(1)(iii)? As noted above, HUD's noncitizens regulations 
at 24 CFR 5.514(c)(1)(iii) provide that, if a family member knowingly 
permits an ineligible individual to reside in an assisted housing unit, 
the family member's assistance must be ``terminated'' for a period of 
not less than 24 months. Several commenters questioned whether the 
effect of this termination is that the formerly assisted family is 
required to reapply for assistance after the expiration of the 
prescribed period (or immediately upon termination, with a required 
wait of the prescribed period), or whether assistance is to be 
automatically reinstated after the prescribed period.
    HUD Response. Termination of assistance under Sec. 5.514(c)(1)(iii) 
would be no different than termination of assistance for any other 
reason under the individual program requirements for each of the HUD 
programs covered by Section 214. For example, recipients of Section 8 
tenant-based assistance who violate Sec. 5.514(c)(1)(iii) are subject 
to the termination procedures described in 24 CFR part 982, subpart L 
(``Family Obligations; Denial and Termination of Assistance'').
    Comment: Maximum Period or Termination Should Exceed 24 Months. One 
commenter wrote that HUD should establish conditions for imposing a 
termination period longer than the statutory minimum 24 month sanction. 
Subsection 214(d)(6), and HUD's implementing regulation at 
Sec. 5.514(c)(1)(iii), provides that HUD shall terminate assistance for 
a period of ``not less than 24 months.''
    HUD Response. At this time, HUD is not amending 24 CFR part 5, 
subpart E to incorporate the recommendations made by the commenter. The 
establishment of regulatory criteria for the imposition of termination 
periods greater than 24 months would constitute a substantive revision 
of HUD's noncitizens regulations. Accordingly, HUD would implement such 
changes only after providing the public with notice and the opportunity 
to comment. HUD would not include the revisions suggested by the 
commenter in a final rule issued for effect. Should HUD decide to 
provide for termination periods of greater than 24 months, it will 
issue a future rulemaking accompanied by a request for public comment.
    Comment: Time Period for Requesting Hearing Should Conform to 
Hearing Procedures Established by Responsible Entity. One commenter 
recommended that the time period for requesting a hearing on a negative 
determination be consistent with the amount of time established by the 
responsible entity for all terminations of assistance (such as 10 
days).
    HUD Response. The regulatory language of Sec. 5.514 conforms to the 
language of the 1996 Immigration Act, which provides that the Secretary 
of HUD shall provide a ``reasonable period, not to exceed 30 days'' to 
appeal an INS eligibility determination. At this time, HUD is not 
revising its noncitizens regulations to permit the establishment of 
less than a 30-day period for requesting an informal hearing. Such a 
change would constitute a substantive revision to the November 29, 1996 
interim rule, and could not be implemented through a rule issued for 
effect. In the event HUD determines that responsible entities should be 
provided with the flexibility to modify the 30-day period for 
requesting a hearing, it will implement the change using notice and 
comment rulemaking procedures.

E. Comments on Deferral of Termination of Assistance for Ineligible 
Families (Section 5.518)

    Comment: Requested Clarifications Regarding Eligibility and Timing 
for Temporary Deferral of Termination of Assistance. One commenter 
asked under what circumstances anyone would now receive a deferral of 
termination of

[[Page 25730]]

assistance. According to the commenter, deferrals were only given to 
those families living and receiving assistance in Section 214 covered 
properties on or before June 19, 1995. Another question raised was 
whether a family that chose proration of assistance before November 29, 
1996 and that chooses deferral of termination after that date is 
limited to a deferral of 18 months.
    HUD Response. HUD believes that it would be the exceptional case in 
which a family would be eligible for deferral of termination of 
assistance in 1999. As the commenter notes the statute provides 
deferral of termination of assistance for families living and receiving 
assistance in Section 214 covered properties on or before June 19, 
1995. It is conceivable that the verification process or appeals 
process may have significantly delayed a final eligibility 
determination such that a family receiving assistance on or before June 
19, 1995 would now find themselves faced with termination of assistance 
(due to lack of eligibility), and would therefore be eligible for 
deferral of termination of assistance. Again, however, HUD believes 
that this would be the exception.
    With respect to a family that is eligible for deferral of 
termination and chooses deferral of termination of assistance after 
November 29, 1996, the period of deferral of termination is limited to 
18 months.

F. Comments on Continued Full Assistance to Ineligible Family Members 
(Section 5.518)

    Comment: Rule Should be Clarified Regarding Continued Assistance 
Provided Before November 29, 1996. One commenter wrote that it was not 
completely clear that ``continued assistance,'' for purposes of 
families receiving housing assistance before November 29, 1996, means 
non-prorated assistance. The commenter requested that Sec. 5.518(a)(2) 
be revised to clarify this provision of the 1996 Immigration Act. In 
addition, this commenter wrote that the aggregate deferral period for a 
tenant who was granted a temporary deferral before November 29, 1996, 
is three years from the date the first deferral was granted.
    HUD Response. Section 5.518(a)(2) provides, a family granted 
continued assistance before November 29, 1996 is entitled to receive 
non-prorated assistance. A family granted continued assistance after 
November 29, 1996 must receive prorated assistance. In response to the 
commenter's second comment, Sec. 5.518(b)(3) provides that the 
``aggregate deferral period for deferrals granted prior to November 29, 
1996 shall not exceed 3 years.''
    Comment: Reference to Refugees and Asylees is Confusing. One 
commenter wrote that the reference to refugees and asylees in 
Sec. 5.518(b)(3) was confusing, since these individuals have eligible 
status under the statute and their presence in a family would not be 
cause for terminating assistance or deferring termination any more than 
the presence of a citizen would be.
    HUD Response. The language of Sec. 5.518(b)(3) exempting certain 
categories of noncitizens from the 18-month maximum deferral period 
tracks the statutory language of the 1996 Immigration Act. The language 
serves to remind responsible entities of the statutory exemption. 
Accordingly, the language has been retained.

VI. Nondiscrimination in the Implementation of Section 214

    HUD reiterates the statement made in the March 20, 1995 final rule 
and the November 29, 1996 interim rule that all regulatory procedures 
in implementation of Section 214 must be administered in the uniform 
manner prescribed without regard to race, national origin, or personal 
characteristics (e.g., accent, language spoken, or familial association 
with a noncitizen).

VII. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this final rule 
under Executive Order 12866, Regulatory Planning and Review. OMB 
determined that this interim rule is a ``significant regulatory 
action,'' as defined in section 3(f) of the Order (although not 
economically significant, as provided in section 3(f)(1) of the Order). 
Any changes made to the final rule subsequent to its submission to OMB 
are identified in the docket file, which is available for public 
inspection in the office of the Department's Rules Docket Clerk, Room 
10276, 451 Seventh Street, SW, Washington, DC 20410-0500.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4; approved March 22, 1995) (UMRA) establishes requirements for 
Federal agencies to assess the effects of their regulatory actions on 
State, local, and tribal governments, and the private sector. This rule 
does not impose any Federal mandates on any State, local, or tribal 
governments, or on the private sector, within the meaning of the UMRA.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed this final rule before publication and by 
approving it certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. As explained 
in the preamble to the November 29, 1996 interim rule, the 
implementation of HUD's noncitizen requirements have only a minimal 
impact on small housing project owners, small mortgagees, and small 
housing agencies. The amendments made final by this rule do not alter 
that previous determination. This final rule does not require the 
creation of new procedures or impose significant additional costs on 
responsible entities. Rather, the requirements of the final rule can be 
satisfied through the use of existing procedures. For example, the 
final rule prohibits responsible entities from making assistance 
available to a noncitizen until the necessary documentation 
establishing eligible immigration status is verified. This requirement 
can be fulfilled by utilizing the existing verification procedures. 
Likewise, current methods may be used to prorate the assistance 
provided to an eligible mixed family receiving continued assistance.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made at the interim rule stage 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. 4223). That finding 
continues to be applicable to this final rule and is available for 
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the 
Office of the Rules Docket Clerk, Office of General Counsel, Room 
10276, Department of Housing and Urban Development, 451 Seventh Street, 
SW, Washington, DC.

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 final have no federalism implications, and that the 
policies are not subject to review under the Order. This interim 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

[[Page 25731]]

discretion in promulgating a rule to implement the statute.

List of Subjects in 24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Grant programs--low and moderate 
income housing, Indians, Individuals with disabilities, 
Intergovernmental relations, Loan programs--housing and community 
development, Low and moderate income housing, Mortgage insurance, 
Penalties, Pets, Public housing, Rent subsidies, Reporting and 
recordkeeping requirements, Social security, Unemployment compensation, 
Wages.

    Accordingly, for the reasons stated in the preamble, 24 CFR part 5 
is amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for 24 CFR part 5 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.

Subpart E--Restrictions on Assistance to Noncitizens

    2. The authority citation for subpart E continues to read as 
follows:

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


Sec. 5.501  [Removed]

    3. Remove Sec. 5.501.
    4. Section 5.508 is amended by revising paragraphs (b)(1), (b)(2), 
(h)(2) and (h)(3) to read as follows:


Sec. 5.508  Submission of evidence of citizenship, or eligible 
immigration status.

* * * * *
    (b) * * *
    (1) For U.S. citizens or U.S. nationals, the evidence consists of a 
signed declaration of U.S. citizenship or U.S. nationality. The 
responsible entity may request verification of the declaration by 
requiring presentation of a United States passport or other appropriate 
documentation, as specified in HUD guidance.
    (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 September 30, 1996 or applying for assistance on or 
after that date, the evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
* * * * *
    (h) * * *
    (2) Thirty-day extension period. Any extension of time, if granted, 
shall not exceed thirty (30) days. The additional time provided should 
be sufficient to allow the individual 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 (which shall not exceed thirty (30) days). 
If the extension is denied, the notice shall explain the reasons for 
denial of the extension.
* * * * *
    5. Section 5.510 is amended by revising paragraph (b) to read as 
follows:


Sec. 5.510  Documents of eligible immigration status.

* * * * *
    (b) Acceptable evidence of eligible immigration status. Acceptable 
evidence of eligible immigration status shall be the original of a 
document designated by INS as acceptable evidence of immigration status 
in one of the six categories mentioned in Sec. 5.506(a) for the 
specific immigration status claimed by the individual.
    6. Section 5.512 is amended by:
    a. Revising paragraph (a);
    b. Adding new paragraph (b); and
    c. Redesignating existing paragraphs (b) through (d) as paragraphs 
(c) through (e), respectively to read as follows:


Sec. 5.512  Verification of eligible immigration status.

    (a) General. Except as described in paragraph (b) of this section 
and Sec. 5.514, no individual or family applying for assistance may 
receive such assistance prior to the verification of the eligibility of 
at least the individual or one family member. Verification of 
eligibility consistent with Sec. 5.514 occurs when the individual or 
family members have submitted documentation to the responsible entity 
in accordance with Sec. 5.508.
    (b) PHA election to provide assistance before verification. A PHA 
that is a responsible entity under this subpart may elect to provide 
assistance to a family before the verification of the eligibility of 
the individual or one family member.
* * * * *
    7. Section 5.514 is amended by:
    a. Revising paragraph (b);
    b. Revising paragraph (c)(1);
    c. Revising paragraph (e)(1); and
    d. Revising paragraph (f)(1), to read as follows:


Sec. 5.514  Delay, denial, reduction or termination of assistance.

* * * * *
    (b) Restrictions on delay, denial, reduction or termination of 
assistance. (1) Restrictions on reduction, denial or termination of 
assistance for applicants and tenants. Assistance to an applicant or 
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;
    (iv) The INS appeals process under Sec. 5.514(e) has not been 
concluded;
    (v) Assistance is prorated in accordance with Sec. 5.520; or
    (vi) Assistance for a mixed family is continued in accordance with 
Secs. 5.516 and 5.518; or
    (vii) Deferral of termination of assistance is granted in 
accordance with Secs. 5.516 and 5.518.
    (2) Restrictions on delay, denial, reduction or termination of 
assistance pending fair hearing for tenants. In addition to the factors 
listed in paragraph (b)(1) of this section, assistance to a tenant 
cannot be delayed, denied, reduced or terminated until the completion 
of the informal hearing described in paragraph (f) of this section.
    (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. 5.508(g) or by the expiration of any extension granted in 
accordance with Sec. 5.508(h);
    (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

[[Page 25732]]

    (A) The family does not pursue INS appeal or informal hearing 
rights as provided in this section; or
    (B) INS appeal and informal hearing rights are pursued, but the 
final appeal or hearing decisions are decided against the family 
member; or
    (iii) The responsible entity determines that a family member has 
knowingly permitted another individual who is not eligible for 
assistance to reside (on a permanent basis) in the public or assisted 
housing unit of the family member. Such termination shall be for a 
period of not less than 24 months. This provision does not apply to a 
family if the ineligibility of the ineligible individual was considered 
in calculating any proration of assistance provided for the family.
* * * * *
    (e) Appeal to the INS. (1) Submission of request for appeal. Upon 
receipt of notification by the responsible entity that INS secondary 
verification failed to confirm eligible immigration status, the 
responsible entity shall notify the family of the results of the INS 
verification, and the family shall have 30 days from the date of the 
responsible entity's notification, to request an appeal of the INS 
results. The request for appeal shall be made by the family 
communicating that request in writing directly to the INS. The family 
must provide the responsible entity with a copy of the written request 
for appeal and proof of mailing.
* * * * *
    (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 30 
days of receipt of the notice described in paragraph (d) of this 
section, or within 30 days of receipt of the INS appeal decision issued 
in accordance with paragraph (e) of this section.
* * * * *
    8. Section 5.516 is amended by revising the introductory text of 
paragraph (c) to read as follows:


Sec. 5.516  Availability of preservation assistance to mixed families 
and other families.

* * * * *
    (c) Assistance available to other families in occupancy. Temporary 
deferral of termination of assistance may be available to families 
receiving assistance under a Section 214 covered program on June 19, 
1995, and who have no members with eligible immigration status, as set 
forth in paragraphs (c)(1) and (2) of this section.
* * * * *
    9. Section 5.518 is amended by revising paragraphs (a), (b)(3) and 
(b)(5) to read as follows:


Sec. 5.518  Types of preservation assistance available to mixed 
families and other families.

    (a) Continued assistance. (1) General. A mixed family may receive 
continued housing assistance if all of the following conditions are met 
(a mixed family assisted under a Housing covered program must be 
provided continued assistance if the family meets the following 
conditions):
    (i) The family was receiving assistance under a Section 214 covered 
program on June 19, 1995;
    (ii) The family's head of household or spouse has eligible 
immigration status as described in Sec. 5.506; 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.
    (2) Proration of continued assistance. A family entitled to 
continued assistance before November 29, 1996 is entitled to continued 
assistance as described in paragraph (a) of this section. A family 
entitled to continued assistance after November 29, 1996 shall receive 
prorated assistance as described in Sec. 5.520.
    (b) * * *
    (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 for deferrals provided after November 29, 1996 shall 
not exceed a period of eighteen months. The aggregate deferral period 
for deferrals granted prior to November 29, 1996 shall not exceed 3 
years. These time periods do not apply to a family which includes a 
refugee under section 207 of the Immigration and Nationality Act or an 
individual seeking asylum under section 208 of that Act.
* * * * *
    (5) Determination of availability of affordable housing at end of 
each deferral period. (i) Before the end of each deferral period, the 
responsible entity must satisfy the applicable requirements of either 
paragraph (b)(5)(i)(A) or (B) of this section. Specifically, the 
responsible entity must:
    (A) For Housing covered programs: Make a determination that one of 
the two conditions specified in paragraph (b)(2) of this section 
continues to be met (note: affordable housing will be determined to be 
available if the vacancy rate is five percent or greater), the owner's 
knowledge and the tenant's evidence indicate that other affordable 
housing is available; or
    (B) For Section 8 or Public Housing covered programs: 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 consolidated plan (if applicable, as 
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.
    (ii) The responsible entity must also:
    (A) 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 exceeds the maximum 
deferral period). This time period does not apply to a family which 
includes a refugee under section 207 of the Immigration and Nationality 
Act or an individual seeking asylum under section 208 of that Act, and 
a determination was made that other affordable housing is not 
available; or
    (B) 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 
the maximum deferral period (unless the family includes a refugee under 
section 207 of the Immigration and Nationality Act or an individual 
seeking asylum under section 208 of that Act), or a determination has 
been made that other affordable housing is available.
* * * * *
    10. Section 5.526 is revised to read as follows:


Sec. 5.526  Protection From liability for responsible entities and 
State and local government agencies and officials.

    (a) Protection from liability for responsible entities. Responsible 
entities are protected from liability as set forth in Section 214(e) 
(42 U.S.C 1436a(e)).

[[Page 25733]]

    (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. 5.512, as long as the 
implementation by the State and local government agency or official is 
in accordance with prescribed HUD rules and requirements.

    Dated: April 30, 1999.
Andrew Cuomo,
Secretary.
[FR Doc. 99-11917 Filed 5-11-99; 8:45 am]
BILLING CODE 4210-32-P