[Federal Register Volume 72, Number 117 (Tuesday, June 19, 2007)]
[Proposed Rules]
[Pages 33844-33850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11531]



[[Page 33843]]

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Part III





Department of Housing and Urban Development





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24 CFR Parts 5, 92 and 908



 Refinement of Income and Rent Determination Requirements in Public and 
Assisted Housing Programs; Proposed Rule

  Federal Register / Vol. 72, No. 117 / Tuesday, June 19, 2007 / 
Proposed Rules  

[[Page 33844]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 92, and 908

[Docket No. FR-4998-P-01]
RIN 2501-AD16


Refinement of Income and Rent Determination Requirements in 
Public and Assisted Housing Programs

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise HUD's public and assisted 
housing program regulations to implement the process of upfront income 
verification (UIV) of applicants and participants in assistance 
programs by public housing agencies (PHAs), including through use of 
the Enterprise Income Verification (EIV) system. HUD believes that this 
process would help cure deficiencies in public and assisted housing 
rental subsidy determinations identified through quality control 
studies and internal audits. The rule is consistent with HUD's 
comprehensive strategy under the Rental Housing Integrity Improvement 
Project (RHIIP) initiative to reduce by half the number and dollar 
amount of errors in HUD's rental assistance programs. The new 
verification process would be applicable to all assistance applicants 
and participants in the public housing, tenant-based housing choice 
voucher (HCV), and multifamily housing programs. This proposed rule 
would also make one conforming change to the HOME program regarding 
income determinations.

DATES: Comment Due Date: August 20, 2007.

ADDRESSES: Interested persons are invited to submit comments to the 
Office of General Counsel, Rules Docket Clerk, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, 
DC 20410-0001. Communications should refer to the above docket number 
and title and should contain the information specified in the ``Request 
for Comments'' section.
    Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
http://www.regulations.gov. HUD strongly encourages commenters to 
submit comments electronically. Electronic submission of comments 
allows the commenter maximum time to prepare and submit a comment, 
ensures timely receipt by HUD, and enables HUD to make them immediately 
available to the public. Comments submitted electronically through the 
http://www.regulations.gov Web site can be viewed by other commenters 
and interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable. 
In all cases, communications must refer to the docket number and title.
    Public Inspection of Public Comments. All comments and 
communications submitted to HUD will be available, without charge, for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number). Copies of all comments submitted are 
available for inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Nicole Faison, Office of Public and 
Indian Housing, or Gail Williamson, Office of Housing, Department of 
Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 
20410; telephone (202) 708-0744 and (202) 708-3000, respectively (these 
are not toll-free numbers). Persons with hearing or speech impairments 
may access these numbers through TTY by calling the toll-free Federal 
Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) authorizes the Secretary to provide financial assistance in the 
form of rent subsidies for participants in HUD's public and assisted 
housing programs. The regulations implementing this authority are 
located in part 5 of Title 24 of the Code of Federal Regulations. As 
part of the procedures for determining proper rent subsidies, HUD and 
PHAs must conduct income verifications for applicants and participants 
in covered HUD programs. As a condition of obtaining assistance, HUD 
requires the disclosure and verification of Social Security Numbers 
(SSNs), Employer Identification Numbers, and citizen or eligible 
immigration status. With few exceptions, HUD cannot make financial 
assistance available to applicants and participants who do not have 
eligible status with respect to citizenship or noncitizen immigration 
status. However, temporary deferrals of assistance termination may be 
allowable in limited circumstances.
    In addition to these eligibility requirements, HUD requires the 
determination of annual and adjusted income of applicants and 
participants who apply for or receive assistance in the Section 8 and 
public housing programs. ``Annual income'' means, in part, all income 
amounts that a family anticipates to receive in the 12-month period 
following either admission to the covered HUD program or the 
participant's annual income examination effective date. Furthermore, 
PHAs that operate public housing or housing choice voucher (HCV) 
programs are required to electronically submit family characteristics 
data to HUD through certain forms.

II. This Proposed Rule

    This proposed rule would address HUD's priority of reducing errors, 
including overpayment of subsidy to PHAs, caused by incorrect income 
determinations and rent calculations in HUD's public and assisted 
housing programs. This proposed rule would make several significant 
revisions to the regulations that govern the public housing, tenant-
based, and project-based rental assistance programs, as described 
below.

Proposed Changes to Part 5

    The proposed revisions to Sec.  5.216 would eliminate the threshold 
that sets 6 years of age as the minimum age that triggers the 
requirement for documentation of SSNs. The revisions would require any 
individual applying for or participating in the public housing, HCV, or 
multifamily housing project-based programs to disclose his or her SSN. 
Further, the rule would remove the provision allowing certification 
that a child who is at least 6 years of age has not been assigned an 
SSN, or that a particular SSN submitted has been assigned to an 
individual, but that acceptable documentation to verify the SSN cannot 
be provided.
    Each applicant and participant family would be required to submit a 
complete and accurate SSN assigned to each family member in the 
household. Additionally, the applicant would be required to submit 
valid documentation, such as a Social Security card or other 
documentation, necessary to verify the SSN of an individual. The 
requirement is consistent with the Housing and Community Development 
Act of 1987 (42 U.S.C. 3543), the Internal Revenue Code (IRC), and with 
SSN disclosure

[[Page 33845]]

requirements for other federally assisted programs such as Temporary 
Assistance for Needy Families (TANF), the Food Stamp Program, Social 
Security (SS), and Supplemental Security Income (SSI). This requirement 
would significantly enhance HUD's ability to prevent and detect fraud, 
waste, and abuse in HUD's programs, without appreciably increasing the 
administrative burden on PHAs and private owners of multifamily housing 
projects, or causing a hardship to applicants or participants.
    The proposed changes to Sec.  5.218 would clarify that the penalty 
for failure to provide required documentation is denial or termination 
of individual assistance.
    The proposed new Sec.  5.233 would mandate the use of UIV 
techniques for PHAs. Multifamily owners and management agents would be 
required to use UIV, subject to the availability of EIV or computer 
matching agreements with federal, state, and local government agencies 
or private agencies. UIV is the verification of income, before and 
during a family's reexamination, through an independent source that 
systematically and uniformly maintains income information in 
computerized form for a large number of individuals. UIV allows 
entities to validate the accuracy of a family's self-reported household 
income and reduces the incidence of fraud, waste, and abuse in public 
and assisted housing programs.
    Under this proposed rule, UIV will be required and replaces the 
more time-consuming and less accurate third-party verification process. 
That process involves contacting individual employers identified by the 
family and reviewing handwritten documents reporting income. Under 
proposed Sec.  5.233, processing entities (as defined in Sec.  5.214) 
will be required to use one of the prescribed UIV methods, which may 
include computer matching agreements with a federal, state, or local 
government agency or private agencies; use of HUD's systems such as 
EIV; or direct requests to federal, state, or local government agencies 
or private agencies. Proposed Sec.  5.233(b) also provides penalties 
for failure to implement a UIV process.
    Independent third-party verification will be used to complement 
upfront verification of income using the EIV system, such as when a 
tenant disputes the EIV data. Income data older than 12 months 
contained in the EIV system must not be used in verifying annual 
income. The mandate to use upfront verification of income will reduce 
errors and incidences of unreported and underreported family household 
income. UIV also will help to streamline the verification process, 
making it easier for responsible entities to verify family-reported 
income.
    As proposed, the rule would provide PHAs the option of upfront 
verification of income for assistance applicants and participants using 
either the EIV system or obtaining such data through direct computer 
matching agreements with a federal, state, or local government agency 
or a private agency. Since multifamily owners and management agents may 
not be able to easily enter into such computer matching agreements and 
can only use the current EIV system for residents already receiving 
subsidy, the Department is considering limiting their use of the EIV 
system to verify income for recertification of existing families in 
multifamily project-based rental assistance programs. If the Department 
adopts this position, multifamily owners and management agents would 
continue to use third-party verification for applicants at move-in 
certification. The Department is interested in receiving public comment 
regarding this proposed position.
    Under the proposed revisions to Sec.  5.508(b), with respect to 
individuals applying for assistance, responsible entities would be 
required to obtain adequate proof of U.S. citizenship or legal status, 
which includes, but is not limited to, a U.S. birth certificate, U.S. 
passport, Social Security card, Alien Registration card, Employment 
Authorization card, Temporary Resident card, or other appropriate 
documentation. The revision would help to ensure that only eligible 
families will be able to receive assistance in HUD's rental assistance 
programs.
    Under the proposed revisions to Sec.  5.516, temporary deferral of 
termination of assistance may be available to families receiving 
assistance under a program covered by section 214 of the Housing and 
Community Development Act of 1980 (42 U.S.C. 1436a) and who either 
include a refugee under section 207 of the Immigration and Nationality 
Act (8 U.S.C. 1157) or an individual seeking asylum under section 208 
of the Immigration and Nationality Act (8 U.S.C. 1158).
    In Sec.  5.518, the rule proposes to eliminate temporary deferrals 
of termination of assistance for families with noncitizen members. 
Those families who include a refugee under section 207 of the 
Immigration and Nationality Act, or an individual seeking asylum under 
section 208 of that Act, may continue to be eligible for temporary 
deferral of termination of assistance. The deferral period for all 
other families with noncitizen members has expired.
    The revisions proposed to Sec.  5.609 would change the definition 
of annual income from anticipated future income to actual income 
received. The existing regulations at 24 CFR 5.609 require responsible 
entities to calculate a family's rent payment and subsidy amount using 
anticipated annual income. Under this proposed rule, actual annual 
income will be used in determining a family's eligibility and 
assistance level in assisted programs, and will be based on amounts 
received from a source outside the family during the 12-month period 
prior to admission or prior to the effective date of the annual 
reexamination. If, however, the processing entity believes more current 
verified income data exists, the entity must use and annualize this 
income data to determine annual income. HUD notes that a substantial 
number of administrators of assisted housing programs are basing annual 
income on the prior year's income. The rationale in support of this 
approach is that past income is a known amount, whereas anticipated 
future income is a projected amount, based on predictions and future 
circumstances, which are susceptive to error and fraud.
    The proposed change in the definition of annual income will both 
simplify the family income verification process and significantly 
eliminate associated costs of income verifications. This is because the 
EIV system containing quarterly wage, employer information, weekly/bi-
weekly unemployment benefit payments, monthly SS and SSI benefits, and 
Medicare deductions and/or buy-ins can be used at no cost to the 
processing entities.

Proposed Changes to 24 CFR Part 92

    A conforming revision to Sec.  92.203 of HUD's regulations 
implementing the HOME program (24 CFR part 92) would change the method 
for determining the income eligibility of participants in the HOME 
program from projected annual income to actual income received in the 
12-month period prior to the income eligibility determination. 
Participating jurisdictions must use the most recent verified income 
data for the family.

Proposed Changes to 24 CFR Part 908

    Under Sec.  908.101 of HUD's regulations implementing electronic 
transmissions of required family data (24 CFR part 908), PHAs that 
operate public housing and/or HCV programs are required to 
electronically submit family characteristics data to HUD through HUD 
forms 50058 and 50058-FSS. This

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proposed rule would require in Sec.  908.101 that PHAs retain Form HUD-
50058 file documentation, during the term of each assisted lease, and 
for at least 3 years thereafter, for use as the official source 
document to support all billings by the PHA to HUD. This requirement is 
expected to facilitate a speedy and effective confirmatory review or 
audit by HUD and/or independent auditors and strengthen HUD controls.

III. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866 (entitled, ``Regulatory Planning and Review''). 
This rule was determined to be economically significant under E.O. 
12866. The docket file is available for public inspection between the 
hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office 
of General Counsel, Room 10276, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410-0500. Due to 
security measures at the HUD Headquarters building, please schedule an 
appointment to review the docket file by calling the Regulations 
Division at (202) 708-3055 (this is not a toll-free number). Persons 
with hearing or speech impairments may access the above telephone 
number via TTY by calling the toll-free Federal Information Relay 
Service at 800-877-8339.
    The Economic Analysis prepared for this rule is also available for 
public inspection and on HUD's Web site at http://www.hud.gov. A 
summary of the findings contained in the Economic Analysis follows.
    A. Rulemaking Goals and Focus of Economic Analysis. This proposed 
rule clarifies ambiguous language in program regulations, strengthens 
internal controls in programs, and facilitates the full implementation 
of the process of UIV of the income of assisted families, including 
requiring the use of the Enterprise Income Verification (EIV) system.
    B. Basis for Economically Significant Determination Under E.O. 
12866. HUD determined that the proposed rule would be an economically 
significant rule under E.O. 12866 because the rule would result in 
transfers of funding levels to and among stakeholders of $100 million 
more a year.
    C. Findings. This economic analysis finds that, while the 
implementation of the proposed rule would improve on the integrity of 
the programs, it is unclear if it would lead to a reduction or increase 
in subsidy. It is not entirely clear how those currently benefiting 
from over subsidy will react to the correct level of subsidy; i.e., 
formerly over-subsidized households may withdraw from the programs and 
be replaced by households with lower incomes. Furthermore, there is 
likely to be neither a reduction in outlay for rent subsidies nor an 
increase in the number of program participants as a result of this 
rule.
    Although recent studies suggest that the EIV and other third-party 
verification help to identify overpaid subsidy and rent determination 
errors due to underreported or unreported income, and that actions 
taken against the households with income discrepancies would result in 
savings in subsidy and result in the recovery of a portion of the 
overpaid subsidy, HUD's experience indicates that its program integrity 
improvement efforts are likely to result in some higher-income tenants 
leaving assisted housing and being replaced with lower-income tenants.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
The proposed rule is concerned with those entities that are responsible 
for making eligibility determinations and income reexaminations under 
sections 3 and 5 of the United States Housing Act of 1937 and tenant-
based and project-based housing assistance under section 8 of the 
United States Housing Act of 1937. Specifically, the proposed rule 
would strengthen HUD's internal controls, refine regulations where 
unclear, and facilitate the full implementation of UIV techniques. 
Under the definition of ``small governmental jurisdiction'' in section 
601(5) of RFA, the provisions of RFA are applicable only to those few 
PHAs that are part of a political jurisdiction with a population of 
fewer than 50,000 persons. Therefore, the number of entities 
potentially affected by this rule is not substantial.
    Notwithstanding HUD's determination that this rule does not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments from all entities, including small 
entities, regarding less burdensome alternatives to this rule that will 
meet HUD's objectives as described in this preamble.

Environmental Impact

    In accordance with 24 CFR 50.19(c)(6), this proposed rule involves 
statutorily required and/or discretionary establishment and review of 
interest rates, loan limits, building cost estimates, prototype costs, 
fair market rent schedules, HUD-determined prevailing wage rates, 
income limits and exclusions with regard to eligibility for or 
calculation of HUD housing assistance or rental assistance, and similar 
rate and cost determinations and related external administrative or 
fiscal requirements or procedures that do not constitute a development 
decision affecting the physical condition of specific project areas or 
building sites. Accordingly, under 24 CFR 50.19(c)(6), this proposed 
rule is categorically excluded from environmental review under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)

Paperwork Reduction Act

    The information collection requirements contained in this rule have 
been submitted to 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. Interested persons are invited to submit 
comments regarding the information collection requirements contained in 
this rule. Comments must be received within 60 days from the date of 
this rule.
    The burden of the information collections in this proposed rule is 
estimated as follows:

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                                       Reporting and Recordkeeping Burden
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                                                                                     Estimated
                                                                     Number of     average time      Estimated
                Section reference                    Number of     responses per        for        annual burden
                                                      parties       respondent      requirement     (in hours)
                                                                                    (in hours)
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908.101, 960, 982, 984, Part 5; Form HUD-50058              4127              69              60         284,763
 (New Admission)................................
908.101, 960, 982, 984, Part 5; Form HUD-50058              4127             934              31       1,991,553
 (Recertification)..............................
908.101, 960, 982, 984, Part 5; Form HUD-50058                18             814              60          14,652
 MTW (New Admission)............................
908.101, 960, 982, 984, Part 5; Form HUD-50058                18          10,985              31         102,161
 MTW (Recertification)..........................
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    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Under the provisions of 5 CFR part 1320, OMB is required to make a 
decision concerning this collection of information between 30 and 60 
days after today's publication date. Therefore, a comment on the 
information collection requirements is best assured of having its full 
effect if OMB receives the comment within 30 days of today's 
publication. This time frame does not affect the deadline for comments 
to the agency on the proposed rule, however. Comments must refer to the 
proposal by name and docket number (FR-4998) and be sent to:

HUD Desk Officer, Office of Management and Budget, New Executive Office 
Building, Washington, DC 20503, Fax: (202) 395-6974,
    and
Aneita Waites, Reports Liaison Officer, Office of the Assistant 
Secretary for Public and Indian Housing, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from promulgating a 
regulation that has federalism implications and either imposes 
substantial direct compliance costs on state and local governments and 
is not required by statute, or preempts state law, unless the relevant 
requirements of section 6 of the Executive Order are met. This rule 
does not have federalism implications and does not impose substantial 
direct compliance costs on state and local governments or preempt state 
law within the meaning of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This proposed rule would 
not impose any federal mandate on any state, local, or tribal 
government, or on the private sector, within the meaning of the UMRA.

Catalog of Federal Domestic Assistance.

    The Catalog of Federal Domestic Assistance number applicable to the 
program affected by this rule is 14.855.

List of Subjects

24 CFR part 5

    Administrative practice and procedure, Aged, Claims, Grant 
programs-housing and community development, 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.

24 CFR part 92

    Administrative practice and procedure, Grant programs-housing and 
community development, Low and moderate income housing, Manufactured 
homes, Rent subsidies, Reporting and recordkeeping requirements.

24 CFR part 908

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

    Accordingly, for the reasons described in the preamble, HUD 
proposes to amend 24 CFR parts 5, 92, and 908 to read as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS

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

    Authority: 42 U.S.C. 3535(d)

    2. Revise Sec.  5.216 to read as follows:


Sec.  5.216  Disclosure and verification of Social Security and 
Employer Identification Numbers.

    (a) Disclosure required of assistance applicants. Each assistance 
applicant must submit the following information to the processing 
entity when the assistance applicant's eligibility under the program 
involved is being determined:
    (1) The complete and accurate SSN assigned to the assistance 
applicant and to each member of the assistance applicant's household; 
and
    (2) The documentation referred to in paragraph (f)(1) of this 
section to verify each such SSN.
    (b) Disclosure required of individual owner applicants. Each 
individual owner applicant must submit the following information to the 
processing entity when the individual owner applicant's eligibility 
under the program involved is being determined:
    (1) The complete and accurate SSNs assigned to the individual owner 
applicant and to each member of the individual owner applicant's 
household who will be obligated to pay the debt evidenced by the 
mortgage or loan documents; and
    (2) The documentation referred to in paragraph (f)(1) of this 
section to verify the SSNs.
    (c) Disclosure required of certain officials of entity applicants. 
Each officer, director, principal stockholder,

[[Page 33848]]

or other official of an entity applicant must submit the following 
information to the processing entity when the entity applicant's 
eligibility under the program involved is being determined:
    (1) The complete and accurate SSN assigned to each such individual; 
and
    (2) The documentation referred to in paragraph (f)(1) of this 
section to verify each SSN.
    (d) Disclosure required of participants. (1) Initial disclosure. 
Each participant whose initial determination of eligibility under the 
program involved was begun before [INSERT EFFECTIVE DATE OF FINAL RULE] 
must submit the following information to the processing entity at the 
next interim or regularly scheduled income reexamination for the 
program involved:
    (i) The complete and accurate SSN assigned to the participant and 
to each member of the participant's family; and
    (ii) The documentation referred to in paragraph (f)(1) of this 
section to verify each such SSN.
    (2) Subsequent disclosure. Once a participant has disclosed and the 
processing entity has verified every SSN, the following rules apply:
    (i) If the participant's household adds a new member, the 
participant must submit to the processing entity, at the next interim 
or regularly scheduled income reexamination that includes the new 
members:
    (A) The complete and accurate SSN assigned to each new member; and
    (B) The documentation referred to in paragraph (f)(1) of this 
section to verify the SSN for each new member.
    (ii) If the participant or any member of the participant's 
household obtains a previously undisclosed SSN, or has been assigned a 
new SSN, the participant must submit the following to the processing 
entity at the next interim or regularly scheduled income reexamination:
    (A) The complete and accurate SSN assigned to the participant or 
household member involved; and
    (B) The documentation referred to in paragraph (f)(1) of this 
section to verify the SSN of each such individual.
    (iii) Additional SSN disclosure and verification requirements, 
including the nature of the disclosure, the verification required, and 
the time and manner for making the disclosure and verification, may be 
specified in administrative instructions by:
    (A) HUD; and
    (B) In the case of the public housing program or the programs under 
24 CFR parts 882 and 982, the PHA.
    (e) Disclosure required of entity applicants. Each entity applicant 
must submit the following information to the processing entity when the 
entity applicant's eligibility under the program involved is being 
determined:
    (1) Any complete and accurate EIN assigned to the entity applicant; 
and
    (2) The documentation referred to in paragraph (f)(2) of this 
section to verify the EIN.
    (f) Required documentation. (1) Social Security Numbers. The 
documentation necessary to verify the SSN of an individual who is 
required to disclose his or her SSN under paragraphs (a) through (d) of 
this section is a valid SSN card issued by the Social Security 
Administration (SSA), or such other evidence of the SSN as HUD and, 
where applicable, the PHA may prescribe in administrative instructions.
    (2) Employer Identification Numbers. The documentation necessary to 
verify any EIN of an entity applicant that is required to disclose its 
EIN under paragraph (e) of this section is the official, written 
communication from the IRS assigning the EIN to the entity applicant, 
or such other evidence of the EIN as HUD may prescribe in 
administrative instructions.
    (g) Effect on assistance applicants. (1) If the processing entity 
determines that the assistance applicant is otherwise eligible to 
participate in a program, the assistance applicant may become a 
participant in the program, provided it submits to the processing 
entity the documentation required under paragraph (f)(1) of this 
section within the time period specified in paragraph (g)(3) of this 
section. During such period, the assistance applicant will retain the 
position that it occupied in the program at the time the determination 
of eligibility was made, including its place on any waiting list 
maintained for the program, if applicable.
    (2) Effect on participants. If the processing entity determines 
that the participant otherwise continues to be eligible to participate 
in the program, participation may continue, provided that the 
participant submits to the processing entity the documentation required 
under paragraph (f)(1) of this section within the time period specified 
in paragraph (g)(3) of this section.
    (3) Time for submitting documentation. The time period referred to 
in paragraphs (g)(1) and (2) of this section is 60 calendar days from 
the date of application submission or the effective date of the 
reexamination, except that the processing entity may, at its 
discretion, extend this period for up to an additional 60 days if the 
individual is at least 62 years of age and is unable to submit the 
required documentation within the initial 60-day period.
    (h) Rejection of documentation. The processing entity may reject 
documentation referred to in paragraph (f) of this section only for 
such reasons as HUD and the PHA may prescribe in applicable 
administrative instructions.
    (i) Information on SSNs and EINs. (1) Information regarding SSNs 
and SSN cards may be obtained by contacting the local SSA Office or 
consulting SSA regulations.
    (2) Information regarding EINs may be obtained by contacting the 
local office of the IRS or consulting the appropriate regulations for 
the IRS.
    3. Amend Sec.  5.218 by revising paragraph (a), the introductory 
text of paragraph (b), and paragraph (c) to read as follows:


Sec.  5.218  Penalties for failing to disclose and verify Social 
Security and Employer Identification Numbers.

    (a) Denial of eligibility of assistance applicants and individual 
owner applicants. The processing entity must deny the eligibility of an 
assistance applicant or individual owner applicant in accordance with 
the provisions governing the program involved, if the assistance or 
individual owner applicant does not meet the applicable SSN disclosure, 
documentation, and verification requirements as specified in Sec.  
5.216.
    (b) Denial of eligibility of entity applicants. The processing 
entity must deny the eligibility of an entity applicant in accordance 
with the provisions governing the program involved; if:
* * * * *
    (c) Termination of assistance or tenancy of participants. The 
processing entity must terminate the assistance or tenancy, or both, of 
a participant, in accordance with the provisions governing the program 
involved, if the participant does not meet the applicable SSN 
disclosure, documentation, and verification requirements specified in 
Sec.  5.216. For assistance or tenancy under the Section 8 Housing 
Choice Voucher (HCV) and Public Housing programs, the PHA must prorate 
the family's assistance, as described in 24 CFR 5.520(c)(2) and 24 CFR 
5.520(d), respectively. Processing entities shall prorate the family's 
assistance, in accordance with 24 CFR 5.520(b) for the Rent Supplement 
program authorized under section 101 of the Housing and Urban 
Development Act of 1965, the Section 236 program authorized under 
section 236 of the National Housing Act, and 24 CFR 5.520(c) for the 
assistance

[[Page 33849]]

programs under section 8 of the 1937 Act.
* * * * *
    4. Add a new Sec.  5.233 to read as follows:


Sec.  5.233  Mandated use of upfront income verification (UIV) 
techniques.

    (a) Programs subject to this section and requirements. Entities 
administering Public Housing, Housing Choice Voucher (HCV), moderate 
rehabilitation, project-based voucher, project-based certificate, 
project-based rental assistance, and programs administered by the 
Office of Housing must verify tenant income data, before or during a 
family's initial examination and reexamination, through an independent 
source that systematically and uniformly maintains income information 
in computerized form for a large number of individuals. This technique 
is known as the UIV technique. Income data older than 12 months 
contained in the EIV system must not be used in verifying annual 
income. Processing entities must obtain data for upfront verification 
of income through the following methods:
    (1) Via use of HUD systems (such as the EIV system), or
    (2) By submitting direct computer matching agreements with a 
federal, state, or local government agency or a private agency.
    (b) Penalties for noncompliance. Failure to implement a UIV process 
may result in the assessment of disallowed costs and/or sanctions 
against the processing entity.
    5. Amend Sec.  5.508 by revising paragraphs (b)(1), (b)(2), and 
(b)(3) to read as follows:


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

* * * * *
    (b) Evidence of citizenship or eligible immigration status. * * *
    (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 must request verification of the declaration by 
requiring presentation of a U.S. passport, U.S. birth certificate, 
Social Security card, Alien Registration card, Employment Authorization 
card, Temporary Resident card, or other appropriate documentation, as 
provided by Section 214.
    (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, adequate evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) Proof of age document.
    (3) For all other noncitizens, adequate evidence consists of:
    (i) A signed declaration of eligible immigration status; and
    (ii) One of the Section 214 documents listed in Sec.  5.508(b)(1) 
and referred to in Sec.  5.510.
    6. Amend Sec.  5.516 by revising 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. In 
accordance with Sec.  5.518, 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 either include a 
refugee under section 207 of the Immigration and Nationality Act, or an 
individual seeking asylum under section 208 of the Immigration and 
Nationality Act.
* * * * *
    7. Amend Sec.  5.518 by revising paragraph (b), removing paragraph 
(c), and redesignating existing paragraph (d) as paragraph (c) to read 
as follows:


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

* * * * *
    (b) Temporary deferral of termination of assistance. (1) 
Eligibility for this type of assistance. If a family was receiving 
assistance under a Section 214-covered program on June 19, 1995, and 
the family includes a refugee under section 207 of the Immigration and 
Nationality Act or an individual seeking asylum under section 208 of 
the Immigration and Nationality Act, the family may be eligible for 
temporary deferral of termination of assistance if necessary to permit 
the family additional time for the orderly transition of those family 
members with ineligible status, and any other family members involved, 
to other affordable housing. Other affordable housing is used in the 
context of transition of an ineligible family from a rent level that 
reflects HUD assistance to a rent level that is unassisted; the term 
refers to housing that is not substandard; that is of appropriate size 
for the family; and that can be rented for an amount not exceeding the 
amount that the family pays for rent, including utilities, plus 25 
percent.
    (2) Housing-covered programs: Conditions for granting temporary 
deferral of termination of assistance. The responsible entity shall 
grant a temporary deferral of termination of assistance to a mixed 
family if the family is assisted under a Housing-covered program and 
the family was receiving assistance under a Section 214-covered program 
on June 19, 1995, and the family includes a refugee under section 207 
of the Immigration and Nationality Act or an individual seeking asylum 
under section 208 of the Immigration and Nationality Act.
* * * * *
    8. Amend Sec.  5.609 by revising paragraph (a), removing existing 
paragraph (d), redesignating existing paragraphs (b) and (c) as 
paragraphs (c) and (d), respectively, and adding a new paragraph (b) to 
read as follows:


Sec.  5.609  Annual income.

    (a) Annual income means all amounts, monetary or not, which:
    (1) Go to, or on behalf of, the family head or spouse (even if 
temporarily absent) or to any other family member; or
    (2) Are amounts received from a source outside the family during 
the 12-month period prior to admission or the annual reexamination 
effective date; and
    (3) Which are not specifically excluded in paragraph (d) of this 
section.
    (4) Annual income also means amounts derived (during the 12-month 
period) from assets to which any member of the family has access.
    (b) If the processing entity believes that the most recent income 
data documents a change in the family's annual income, the entity must 
use and annualize this income data to determine the family's annual 
income for the 12-month period.
* * * * *

PART 92--HOME INVESTMENT PARTNERSHIP PROGRAM

    9. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

    10. Amend Sec.  92.203 by revising paragraph (d)(1) to read as 
follows:


Sec.  92.203  Income determination.

* * * * *
    (d)(1) The participating jurisdiction must calculate the annual 
income of the family based upon the income received by the family 
during the 12-month period preceding the time the participating 
jurisdiction determines the family is income-eligible. However, the 
participating jurisdiction must obtain the most recent verified income 
data

[[Page 33850]]

available. If the participating jurisdiction determines that this data 
would change the family's annual income (e.g., due to an increase or 
decrease in hourly wages), the participating jurisdiction must use this 
data to determine the family's income for the 12-month period. Annual 
income shall include income from all family members. Income or asset 
enhancement derived from the HOME-assisted project shall not be 
considered in calculating annual income.
* * * * *

PART 908--ELECTRONIC TRANSMISSION OF REQUIRED FAMILY DATA FOR 
PUBLIC HOUSING, AND THE SECTION 8 RENTAL CERTIFICATE, RENTAL 
VOUCHER, AND MODERATE REHABILITATION PROGRAMS

    11. The authority citation for part 908 continues to read as 
follows:

    Authority: 42 U.S.C. 1437f, 3535d, 3543, 3544, and 3608a.

    12. Revise Sec.  908.101 to read as follows:


Sec.  908.101  Purpose.

    The purpose of this part is to require Public Housing Agencies 
(PHAs) that operate public housing, Indian housing, or Section 8 Rental 
Certificate, Housing Choice Voucher (HCV), Rental Voucher, and Moderate 
Rehabilitation programs to electronically submit certain data to HUD 
for those programs. These electronically submitted data are required 
for HUD forms HUD-50058, Family Report; and HUD-50058-FSS, Family Self-
Sufficiency Addendum. Applicable program entities must retain Form HUD-
50058 during the term of each assisted lease, and for at least 3 years 
thereafter, to support billings to HUD and permit an effective audit.

    Dated: May 18, 2007.
Roy A. Bernardi,
Deputy Secretary.
 [FR Doc. E7-11531 Filed 6-18-07; 8:45 am]
BILLING CODE 4210-67-P