[Federal Register Volume 69, Number 46 (Tuesday, March 9, 2004)]
[Notices]
[Pages 11033-11036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5201]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4922-N-01]


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

AGENCY: Office of the Chief Information Officer, 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 (OMB) 
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 inappropriate (excessive or insufficient) 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, the Native American Housing Assistance and Self-Determination 
Act of 1996, and the Quality Housing and Work Responsibility Act of 
1998. The program provides for the verification of the matching results 
and the initiation of appropriate administrative or legal actions, 
primarily through public housing agencies (HAs) and owners and agents 
(all collectively referred to as POAs). Indian tribes and tribally 
designated housing entities (TDHEs) are not a mandatory component of 
the computer matching program. Participation by Indian tribes and TDHEs 
is discretionary; however, they may receive and use social security and 
supplemental security income matching information provided by HUD.
    This notice provides an overview of computer matching for HUD's 
assisted housing programs. Specifically, the notice describes HUD's 
program for computer matching of its tenant data to: (a) The SSA's 
earned income and the IRS's unearned income data, (b) SSA's wage, 
social security, supplemental security income and special veterans 
benefits data, (c) State Wage Information Collection Agencies' 
(SWICAs') wage and unemployment benefit claim information, and (d) the 
Office of Personnel Management's (OPM) personnel data.

DATES: Effective Date: Computer matching is expected to begin on April 
8, 2004, unless comments are received which will result in a contrary 
determination, or 40 days from the date a computer matching agreement 
is signed, whichever is later.
    Comments Due Date: April 8, 2004.

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 P8001, 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: Elking Tarver, 
Project Manager, Tenant Assessment Sub-System, Real Estate Assessment 
Center, Department of Housing and Urban Development, 1280 Maryland 
Avenue, SW., Suite 800, Washington, DC 20024-2635, telephone number 
(202) 708-4932, extension 3235.

SUPPLEMENTARY INFORMATION: This notice supersedes a similar notice 
published in the Federal Register on May 5, 2003 (68 FR 23753). Since 
that time, the matching program has been implemented on a large scale. 
In previous years, the computer matching was carried out for random 
samples of households receiving rental assistance or for selected POAs. 
During calendar year 1999, HUD used the matching program for a large-
scale computer matching project involving over 2 million households. 
HUD announced plans for the large-scale implementation of the program 
in 64 FR 49817 (September 14, 1999).
    The Computer Matching and Privacy Protection Act (CMPPA) of 1988, 
an amendment to the Privacy Act of 1974 (5 U.S.C. 552a), OMB's guidance 
on this statute entitled ``Final Guidance Interpreting the Provisions 
of Public Law 100-503, the CMPPA of 1988'' (OMB Guidance), and OMB 
Circular No. A-130 requires publication of notices of computer matching 
programs. Appendix I to OMB's Revision of Circular No. A-130, 
``Transmittal Memorandum No. 4,'' Management of Federal Information 
Resources,'' prescribes Federal agency responsibilities for maintaining 
records about individuals. In with the CMPPA and Appendix I to OMB 
Circular No. A-130, copies of this notice are being provided to the 
Committee on Government Reform and Oversight of the House of 
Representatives, the Committee on Governmental Affairs of the Senate, 
and OMB's Office of Information and Regulatory Affairs.

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. 105-65); 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 (42 U.S.C. 1437-1437z); section 101 
of the Housing and Community Development Act of 1965 (12 U.S.C. 1701s); 
the Native American Housing Assistance and Self-Determination Act of 
1996 (25 U.S.C. 4101 et seq.); and the Quality Housing and Work 
Responsibility Act of 1998 (42 U.S.C. 1437a(f)).
    The Omnibus Budget Reconciliation Act of 1993 (Budget 
Reconciliation Act) authorizes HUD to request from the SSA and the IRS 
Federal tax information as prescribed in section 6103(l)(7) of title 26 
of the United States Code (Internal Revenue Code). 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. 
6103(l)(7)(D)(ix) of the Internal Revenue Code, effectively making 
permanent the authority for SSA and IRS disclosures of federal tax 
information to HUD.
    The Federal tax information 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 and Form 1099) 
for use in preparing tax returns. The Budget Reconciliation Act 
prohibits HUD redisclosure of tax data to POAs. However, it allows HUD 
to disclose the fact that discrepancies

[[Page 11034]]

exist between income information provided by tenants and Federal tax 
information, and to request that POAs reverify tenant incomes when 
income comparisons indicate uncertain eligibility benefits or an 
inappropriate level of benefits.
    Section 3003 of the Budget Reconciliation Act authorizes HUD to 
require 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 information. 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 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 
household 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.
    The Quality Housing and Work Responsibility Act of 1998 (QHWRA), 
section 508(d), 42 U.S.C. 1437a(f) authorizes the Secretary of HUD to 
require disclosure by the tenant to the public housing agency of income 
information received by the tenant from HUD as part of income 
verification procedures of HUD. The QHWRA was amended by Public Law 
106-74, which extended the disclosure requirements to participants in 
section 8, section 202, and section 811 assistance programs. The 
participants are required to disclose the HUD-provided income 
information to owners responsible for determining the participants' 
eligibility or level of benefits.

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 rental assistance to 
individuals who meet the requirements of the rental assistance 
programs. Other objectives include determining the appropriate level of 
rental assistance, and deterring and correcting abuse in assisted 
housing programs. In meeting these objectives HUD also is carrying out 
a responsibility under 42 U.S.C. 1437f(K) to ensure that income data 
provided to POAs by household members is complete and accurate. Using 
Federal tax information, HUD conducts a computer matching and income 
verification program annually for a random sample of households that 
received rental assistance. Based on the computer matching and 
subsequent HUD analysis of tenant-provided information, HUD develops 
nationwide estimates of the extent of excess rental assistance, and 
uses the estimates for financial statement reporting purposes. HUD 
implemented a large-scale computer matching project in Fiscal Year 2000 
that used 1998 information from other Federal agencies. HUD sends 
letters to tenants and notices to POAs so that these parties may 
resolve the income discrepancies.
    HUD's various assisted housing programs, available through POAs, 
require that applicants meet certain income and other criteria to be 
eligible for rental assistance. In addition, tenants generally are 
required to report the amounts and sources of their income at least 
annually. However, under the QHWRA of 1998, public housing agencies may 
now offer tenants the option to pay a flat rent, or an income-based 
rent. Those tenants who select a flat rent will be required to 
recertify income at least every three years. In addition, the Changes 
to the Admissions and Occupancy Final Rule (65 FR 16692; March 29, 
2000) specified that household composition must be recertified annually 
for tenants who select a flat rent or and income-based rent.
    The matching program identifies tenants receiving inappropriate 
(excessive or insufficient) rental assistance resulting from under or 
over-reported household income. When excessive rental assistance 
amounts are identified, some tenants move out of assisted housing 
units; other tenants agree to repay excessive rental assistance. These 
actions may increase rental assistance or number of units available to 
serve other beneficiaries of HUD programs. When tenants continue to be 
eligible for rental assistance, but at a reduced level, the tenants 
will be required to increase their contributions toward rent.
    Tribes and TDHEs set admission and eligibility requirements 
pursuant to the requirements contained in the Native American Housing 
Assistance and Self-Determination Act of 1996. They are not required to 
provide tenant data to the Department. Therefore, their participation 
is discretionary.

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. HUD will normally request that the SSA conduct matching of 
earned income information and that the IRS conduct matching of unearned 
income information at least annually. The Federal tax information 
matching normally occurs in the first quarter of the Federal fiscal 
year, which begins in October and uses Federal tax information for the 
prior tax year.
    HUD will also request SSA matching of social security, supplemental 
security income, and special veterans benefits information monthly for 
residents due to be recertified in four months, and daily (on the 
receipt of new certifications) for residents. The daily process is 
currently used only for HUD's Office of Housing's Rental Assistance 
Programs and may be expanded to the Office of Public and Indian 
Housing's rental assistance programs. Indian Tribes and Tribally 
Designated Housing Entities may receive and use social security and 
supplemental security income matching information provided by HUD.
    HUD may also request SWICA matching to supplement SSA and IRS 
matching and income verification. Public housing agencies, but not 
owners and management agents, may also request SWICA matching.
    HUD will disclose to the SSA, IRS, and SWICAs only tenant personal 
identifiers, i.e., SSNs, surnames, and dates of birth. 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 income data obtained from the sources cited 
above to tenant-reported income data included in HUD's system of 
records known as the Tenant Eligibility Verification Files (HUD/REAC-1) 
published at 65 FR

[[Page 11035]]

52777; August 30, 2000. HUD/REAC-1 receives tenant data from the Tenant 
Housing Assistance and Contract Verification Data (HUD/H-11), published 
at 62 FR 11909, March 13, 1997. The tenant income comparisons identify, 
based on criteria established by HUD, tenants whose incomes require 
further verification to determine if the tenants received appropriate 
levels of rental assistance.

A. Income Verification

    HUD will normally request that POAs verify matching results as 
described below. However, under certain circumstances, HUD Program 
staff or HUD Office of Inspector General (OIG), may verify tenant 
incomes with independent income sources. For example, such 
circumstances may include: (a) when HUD declares a public housing 
agency 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 data to POAs.
(1) Verification of SSA and IRS Data Referenced in Section 6103(l)(7) 
of the Internal Revenue Code
    Since HUD cannot redisclose tax data directly to POAs, HUD will 
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 POA. Concurrently, HUD will 
notify the POA 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 POAs will not include any 
tax information.
    Income information that tenants disclose to the POAs will be 
verified directly with the income source or with the tenant. HUD has 
determined that POAs may consider the Federal tax information that 
tenants disclose to the POAs as verified if the tenant does not contest 
the accuracy of this information when offered an opportunity to do so. 
If the tenant contests the Federal tax information, the POA must verify 
it with the entities that provided the information to the SSA or the 
IRS.
    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, Supplemental Security Income and 
Special Veterans Benefits Data
    Unlike the income information supplied by the SSA and the IRS for 
tax purposes, SSA's social security, supplemental security income and 
special veterans benefits data may be disclosed to POAs. (The Foster 
Care Independence Act of 1999; Public Law 106-169 provided a new Title 
VIII of the Social Security Act, which authorized special benefits for 
certain World War II veterans.) Therefore, after receiving this data 
from the SSA and comparing it to tenant-reported income, HUD will 
disclose the SSA social security, supplemental security income and 
special veterans benefits data to POAs. These disclosures will include 
information on monthly social security, supplemental security income, 
and special veterans benefits data and, where applicable, income 
discrepancy information between tenant-reported data, as reported by 
POAs, and the income amounts provided by the SSA. POAs will use this 
information in periodic verifications of tenant incomes that are 
required to determine program eligibility and rental assistance 
amounts. HUD has implemented secure electronic facilities for 
transmitting social security, supplemental security income and special 
veterans benefits data to all POAs.
(3) Verification of SWICAs Data
    HUD will disclose matching results for SWICAs wage and unemployment 
claim data directly to HAs. The comparison of SWICAs data and the 
tenant-reported data will reveal whether income verification is 
necessary. If the tenant contest the accuracy of the SWICA reported 
information, HAs must then obtain wage information directly from the 
tenants' employers, including information from prior years, when 
appropriate. The SWICAs unemployment claim data must be verified with 
the tenants. Verification of the income data with employers would only 
be required if tenants dispute the SWICAs data.
(4) Verification of OPM Data
    HUD will disclose matching results for OPM personnel data to POAs. 
The OPM data, when compared to the tenant-reported data, provides an 
indicator that income verification is necessary. The POA may then 
obtain current or prior wage information directly from employers when 
appropriate.

B. Administrative or Legal Actions

    Regarding all the matching described in this notice, HUD 
anticipates that POAs will take appropriate action in consultation with 
tenants to: (1) resolve income disparities between tenant-reported and 
independent income source data, and (2) use correct income amounts in 
determining housing rental assistance.
    POAs must compute the rent in full compliance with all applicable 
occupancy regulations. POAs must ensure that they use the correct 
income and correctly compute the rent.
    The POAs may not suspend, terminate, reduce, or make a final denial 
of any housing assistance to any tenant as the result of information 
produced by this matching program until: (a) The tenant has received 
notice from the POA of its findings and informing the tenant 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, POAs will resolve 
income discrepancies in consultation with tenants.
    Additionally, serious violations, which POAs, HUD Program staff, or 
HUD OIG verify, should be referred for full investigation and 
appropriate civil and/or criminal proceedings.

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). POAs 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-

[[Page 11036]]

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 system of records known as 
the Tenant Eligibility Verification Files (HUD/REAC-1). The HUD/REAC-1 
records are specifically exempt from certain provisions of the Privacy 
Act, as described in notices published on February 28, 1994 (59 FR 
9406) and March 30, 1994 (59 FR 14869).
    HUD may also coordinate SWICAs 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 SWICAs 
and HUD.
    In addition, tenants SSNs may be matched to the OPM's General 
Personnel Records (OPM/GOVT-1) and the Civil Service Retirement and 
Insurance Records System (OPM/Central-1). 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 POAs 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 SWICA. 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: March 1, 2004.
Karen S. Jackson,
General Deputy Technology Officer.
[FR Doc. 04-5201 Filed 3-8-04; 8:45 am]
BILLING CODE 4210-72-P