[Federal Register Volume 74, Number 198 (Thursday, October 15, 2009)]
[Proposed Rules]
[Pages 52931-52937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24809]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5 and 908

[Docket No. FR-5351-P-01]
RIN 2501-AD48


Refinement of Income and Rent Determination Requirements in 
Public and Assisted Housing Programs: Implementation of Enterprise 
Income Verification

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: On January 27, 2009, HUD issued a final rule that revised the 
regulations for HUD's public and assisted housing programs to require 
the use of HUD's Enterprise Income Verification system by public 
housing agencies and multifamily housing owners and management agents 
when verifying the employment and income of program participants. 
Consistent with Administration policy to review rules issued during the 
transition from one Administration to another, HUD re-opened the 
January 27, 2009, final rule for public comment, and specifically 
solicited public comment on extending the effective date of the rule. 
While HUD remains committed to full implementation of the Enterprise 
Income Verification system, the public comments submitted on the 
January 27, 2009, final rule highlighted for HUD certain regulatory 
provisions that require further clarification, and ones that were 
extraneous to the purpose of the rule, which is full implementation of 
the Enterprise Income Verification system.
    By final rule published on August 28, 2009, HUD delayed the 
effective date of the January 27, 2009, final rule to January 31, 2010. 
During this period before the final rule takes effect, HUD submits for 
public comment, through this proposed rule, regulatory revisions 
designed to make certain provisions in the January 27, 2009, final rule 
more clear, and return other regulatory provisions to their pre-January 
2009 final rule content.

DATES: Comment Due Date: November 16, 2009.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 10276, Washington, DC 20410-0500. Communications must 
refer to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
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 
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.


[[Page 52932]]


    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available 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 appointment to review the public comments must be 
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). Individuals with speech or 
hearing impairments may access this number via TTY by calling the 
Federal Information Relay Service at 800-877-8339. Copies of all 
comments submitted are available for inspection and downloading at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For Office of Public and Indian 
Housing programs, contact Nicole Faison, Program Advisor for the Office 
of Public Housing and Voucher Programs, Department of Housing and Urban 
Development, 451 7th Street, SW., Room 4214, Washington, DC 20410, 
telephone number 202-402-4267. For Office of Housing Programs, contact 
Gail Williamson, Director of the Housing Assistance Policy Division, 
Department of Housing and Urban Development, 451 7th Street, SW., Room 
6138, Washington, DC 20410, telephone number 202-402-2473. (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

    On January 27, 2009 (74 FR 4832), HUD published a final rule, 
entitled ``Refinement of Income and Rent Determination Requirements in 
Public and Assisted Housing Programs'' (Final Rule). The Final Rule 
revised HUD's public and assisted housing program regulations to 
implement the upfront income verification process for program 
participants and to require the use of HUD's Enterprise Income 
Verification (EIV) system by public housing agencies (PHAs) and owners 
and management agents. The Final Rule followed publication of a June 
19, 2007 (72 FR 33844) proposed rule, and took into consideration the 
public comments received on the June 2007 proposed rule.
    The Final Rule was originally scheduled to become effective on 
March 30, 2009. On February 11, 2009 (74 FR 6839), HUD published a 
notice in the Federal Register seeking public comment on whether to 
delay the effective date of the Final Rule. The February 11, 2009, 
notice was issued in accordance with the memorandum of January 20, 
2009, from the assistant to the President and Chief of Staff, entitled 
``Regulatory Review'' and subsequently published in the Federal 
Register on January 26, 2009 (74 FR 4435). The notice explained that 
HUD was considering a temporary 60-day delay in the effective date to 
allow the Department an opportunity for further review and 
consideration of new regulations, consistent with the Chief of Staff 
memorandum. In addition to soliciting comments specifically delaying 
the effective date, the February 11, 2009, notice also requested 
comment generally on the Final Rule.
    The comment period on the February 11, 2009, notice closed on March 
13, 2009. HUD received 50 public comments. Comments were submitted by a 
variety of organizations including PHAs, property owners, management 
agents, legal aid organizations, community development organizations, 
and public interest organizations. The majority of comments were 
supportive of a delayed effective date. The commenters not only 
supported a delay but sought clarification or changes by HUD of certain 
aspects of the Final Rule, about which questions and comments were 
raised. Among other issues, commenters requested that HUD address the 
need to revise the definition of ``annual income,'' and clarify the 
verification procedures applicable to noncitizens and participants who 
may experience difficulty obtaining social security numbers for their 
children.
    Following publication of the February 11, 2009, Federal Register 
notice, HUD issued a final rule on March 27, 2009 (74 FR 13339), that 
extended the effective date of the Final Rule to September 30, 2009. 
The purpose of this extension was to provide HUD with time to review 
the public comments received in response to the February 11, 2009, 
notice. On August 28, 2009 (74 FR 44285), HUD published a final rule 
that further extended the effective date of the Final Rule to January 
31, 2010. The further extension was undertaken to allow the two HUD 
Assistant Secretaries, who have responsibility for the programs 
affected by the rule, and only recently confirmed, sufficient time to 
review the subject matter of the Final Rule, and to review and consider 
the public comments received on HUD's February 11, 2009, Federal 
Register notice.

II. This Proposed Rule

    As noted in the Summary to this proposed rule, the Department 
remains committed to the full and effective implementation of the EIV 
system. The use of upfront income verification will help identify and 
cure inaccuracies in public and assisted housing subsidy 
determinations, which benefits public and assisted housing providers, 
tenants, and taxpayers. Following a thorough review of the subject 
matter of the Final Rule and the issues raised by the comments on the 
February 11, 2009, notice, HUD is proposing, through this rule, to make 
certain changes to the Final Rule, which HUD believes will address the 
issues and concerns raised by the public commenters, and defer other 
issues, to subsequent rulemaking.
    To provide stakeholders, residents, and other interested members of 
the public with the opportunity to offer feedback on the proposed 
regulatory changes, HUD is undertaking additional rulemaking and 
soliciting comments on the proposed amendments for a period of 30 days. 
The regulatory changes proposed by this rule are few and focused, and 
HUD believes that, in light of the prior public comment on the Final 
Rule, a 30-day period presents sufficient time to review and comment on 
the changes.
    HUD welcomes public comment on all aspects of the proposed rule; 
however given the privacy concerns surrounding the disclosure of social 
security numbers (SSNs), the Department specifically requests comments 
on those proposed regulatory requirements pertaining to SSN disclosure. 
All public comments will be considered by HUD in the development of a 
final rule that will, depending upon public comments received in 
response to this proposed rule, and further consideration of issues by 
HUD, supersede provisions of the Final Rule that would otherwise take 
effect on January 31, 2010.
    The following presents a summary of the key changes made to the 
Final Rule, and these changes are directed to: deferring changes to the 
definition of annual income to separate rulemaking that may address 
broader rent and income reforms; deferring any changes to HUD's 
noncitizen regulations, which, given the importance of this issue, 
should be addressed by separate rulemaking; and simplifying SSN 
disclosure and verification processes, to the extent feasible, and 
consistent with

[[Page 52933]]

maintaining confidentiality of these processes.

A. Proposed Amendments to 24 CFR Part 5, Subpart B--Disclosure and 
Verification of Social Security Numbers and Employer Identification 
Numbers; Procedures for Obtaining Income Information

    1. Applicability of the Social Security Number disclosure 
requirements. HUD's regulations at 24 CFR 5.216 establish requirements 
regarding SSN disclosure and verification. This proposed rule would 
clarify that the SSN disclosure requirements apply to applicants and 
participants in HUD's public and assisted housing programs subject to 
the requirements of 24 CFR part 5, subpart B; however, the disclosure 
requirements are inapplicable to individuals who do not contend 
eligible immigration status under HUD's noncitizens regulations at 24 
CFR part 5, subpart E. The disclosure requirements for such individuals 
continue to be found at 24 CFR 5.508 of the noncitizens regulations. As 
noted above in this preamble, the Final Rule was not directed to 
addressing the noncitizens requirements. Given the significance of the 
issues involved, HUD believes that any changes deemed necessary to the 
noncitizens requirements would more appropriately be the subject of a 
separate rulemaking.
    2. Participant SSN disclosure requirements--``grandfathering'' of 
participants 62 years of age or older and exemption for individuals who 
have already disclosed a valid SSN. This proposed rule would also 
streamline the SSN disclosure requirements for current participants in 
HUD rental assistance programs. Specifically, the proposed rule would 
exempt current participants 62 years of age or older as of January 31, 
2010, from having to disclose an SSN. The Department is sympathetic to 
the burden that such a disclosure requirement might impose on elderly 
residents, many of whom have been residing in their units for many 
years and are otherwise in compliance with all program requirements. 
The proposed rule would also reduce administrative burden by exempting 
those participants who have previously disclosed a valid SSN from 
having to re-provide their SSN for duplicative verification. Under 
proposed Sec.  5.216(e)(1), only those individuals who have not 
previously disclosed a valid SSN or who have been issued a new SSN 
would be subject to the SSN disclosure and verification procedures. The 
proposed changes would reduce administrative burden, and enhance 
privacy protections for individuals and households who have already 
disclosed valid SSNs, as well as reduce the administrative burden for 
the covered housing providers that must collect this information.
    3. Required documentation. Proposed Sec.  5.216(g)(1) would permit 
compliance with the SSN disclosure requirements through submission of a 
valid SSN card issued by the Social Security Administration or an 
original document issued by a federal or state government agency that 
provides the SSN of the individual along with other identifying 
information. In addition, the proposed rule provides for HUD to 
prescribe other acceptable evidence of a SSN through administrative 
instructions. The public comments received in response to the February 
2009, notice noted the possible unforeseen circumstances that might 
delay issuance of a SSN card, even where the individual has a valid SSN 
number. The proposed changes would address such concerns and reduce 
administrative burden by authorizing reliance on the SSN documentation 
provided by another government agency. However, HUD notes that such SSN 
data provided by participants would still be subject to verification by 
PHAs and owners and management agents through use of the EIV system.
    4. Addition of new household members under the age of six. The 
proposed rule would also revise and clarify the applicability of the 
SSN disclosure requirements for households adding new household members 
under the age of six. Public comments on the February 2009, notice made 
HUD cognizant that there may be unforeseen circumstances outside the 
control of a household that may delay the issuance of a SSN for such 
children under the age of six. To address these concerns, proposed 
Sec.  5.216(e)(2)(ii) would provide participants with 90 days to 
provide a SSN for new household members under the age of six. The 
processing entity shall grant an extension of one additional 90-day 
period if the processing entity, in its discretion, determines that the 
participant's failure to provide documentation of a SSN for the child 
under six was due to circumstances that could not have reasonably been 
foreseen and were outside the control of the participant. During the 
period that the processing entity is awaiting documentation of a SSN, 
the child is entitled to all the benefits of being a member of the 
household. Failure of the participant to provide documentation of a SSN 
for the child under six by the deadline, will result in applicable 
penalties as described in Sec.  5.218.
    5. Disclosure requirements upon assignment of new SSN. The proposed 
rule would provide processing entities with additional flexibility to 
determine the timing of disclosure of a newly assigned SSN, by 
providing that if a participant has been assigned a new SSN, the 
participant must disclose the SSN at either the time of receipt of the 
new SSN; at the next interim or regularly scheduled reexamination or 
recertification of family composition or income, or other reexamination 
or recertification; or at such earlier time specified by the processing 
entity. Under the regulations currently in effect the participant is 
not required to disclose a newly assigned SSN until a reexamination or 
recertification of family composition and income.
    6. Exception to required termination of assistance or tenancy due 
to unforeseen circumstances. Under the current regulations in effect, a 
processing entity must terminate the assistance or tenancy, or both, of 
a participant who does not meet the SSN disclosure requirements (see 
Sec.  5.218(c)). As noted above in this preamble, HUD is aware that 
unforeseen circumstances may sometimes delay the issuance of a SSN. 
Accordingly, the proposed rule would revise Sec.  5.218(c) to allow the 
processing entity to defer termination and provide the participant with 
an additional 90 days to disclose a valid SSN, but only if the 
processing entity determines that: (1) failure to comply with the SSN 
requirements was due to circumstances that could not have reasonably 
been foreseen and were outside the control of the household; and (2) 
there is a reasonable likelihood that the participant will be able to 
disclose a SSN by the deadline. Failure of the participant to disclose 
a SSN by the deadline will result in termination.
    7. Required use of EIV--no deferred implementation date for 
multifamily owners and management agents. Consistent with the Final 
Rule, this proposed rule would continue the required use of the EIV 
system by PHAs and multifamily owners and management agents (see Sec.  
5.233 of the Final Rule). However, the proposed rule would no longer 
provide for deferred EIV implementation for owners and management 
agents. Although PHAs have long had experience with EIV, the system was 
relatively new for owners and management agents at the time the Final 
Rule was originally published. Accordingly, HUD provided multifamily 
owners and management agents with an additional six months from the 
rule's effective date to comply with EIV use. The deferral was intended 
to provide owners and management agents with the necessary time to 
become familiar with the EIV system. Given the extension of time for 
implementation

[[Page 52934]]

that is now provided by extending the effective date of the use of EIV 
to January 31, 2010, HUD determined that a deferral is no longer 
necessary.
    8. Required use of EIV in its entirety. Several commenters on the 
February 11, 2009, notice questioned whether the use of the EIV system 
was required only for income verification or in its entirety. As 
previously noted, HUD is committed to the full and effective 
implementation of the EIV system, and continues to believe that the use 
of upfront income verification will help identify and cure inaccuracies 
in public and assisted housing subsidy determinations, which benefits 
public and assisted housing providers, tenants, and taxpayers. In 
response to the comments, this proposed rule would clarify that 
processing entities must use the EIV system in its entirety as a third-
party source to verify tenant employment and income information during 
mandatory reexaminations or recertifications of family composition and 
income and also to reduce administrative and subsidy payment errors in 
accordance with HUD administrative guidance.
    9. Technical and conforming amendments. The proposed rule would 
also make several technical, non-substantive changes, to the 
regulations at 24 CFR part 5, subpart B. These changes include updating 
cross-references to other regulatory provisions that would be revised 
by the proposed rule, and removing outdated references to HUD programs 
no longer in existence (for example, the obsolete reference to the 
Section 215 program at Sec.  5.216(b)(3)(i)(A)). HUD believes that 
these changes, although technical and conforming in nature, will help 
eliminate confusion, and contribute to clarity.

B. Withdrawal of Amendments to 24 CFR Part 5, Subpart E--Restrictions 
on Assistance to Noncitizens

    The Final Rule would have made several revisions to the 
documentation requirements in HUD's noncitizens regulations, primarily 
to conform to the other amendments pertaining to use of the EIV system. 
As noted elsewhere in this preamble, the intent of the Final Rule was 
not directed to revising or updating the noncitizens requirements. Many 
of the comments submitted in response to the February 11, 2009, notice 
requested clarification regarding the verification procedures 
applicable to noncitizens and posed questions concerning the intent of 
the regulatory changes contained in the Final Rule. Given the 
sensitivity and significance of the issues involved, HUD has decided 
that should any future changes to the noncitizens requirements be 
deemed necessary, they would more appropriately be the subject of a 
separate rulemaking focused exclusively on these policies and 
procedures and providing the public with additional opportunity to 
comment. Accordingly, through this rule, HUD proposes to withdraw the 
January 27, 2009, amendments to the noncitizens regulations, and leaves 
in place the requirements codified in 24 CFR part 5, subpart E, prior 
to revision by the Final Rule.

C. Withdrawal of Amendments to 24 CFR Part 5, Subpart F (Family Income 
and Payment Requirements) and 24 CFR Part 92 (HOME Investment 
Partnerships Program)

    The Final Rule would have revised the definition of annual income 
for HUD's public and assisted housing programs codified at Sec.  5.609. 
Specifically, the Final Rule would have added new provisions regarding 
the use of historical income amounts for purposes of determining annual 
income, and made other technical changes to the determination of annual 
income. The Final Rule would also have made a conforming change to the 
annual income provisions of the HOME Investment Partnership program at 
24 CFR 92.203.
    Many of the comments on HUD's February 11, 2009, notice questioned 
the annual income provisions of the Final Rule, and requested 
additional clarification and revisions. Given the comments received on 
the issue expressing uncertainty about the changes to annual income in 
the Final Rule, the possibility of legislation that would make, within 
the near future, statutory changes to annual income provisions, and the 
fact that such changes are not necessary to implementation of the EIV 
system, the Department has decided to maintain the definition of annual 
income currently in effect; that is, this proposed rule leaves the 
content of Sec.  5.609 as it was prior to amendment by the January 27, 
2009, final rule. Should HUD determine that additional rulemaking on 
the subject of annual income is necessary or appropriate, HUD will 
provide the public with the opportunity to comment on any proposed 
changes to the regulations.

III. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this proposed 
rule under Executive Order 12866 (entitled ``Regulatory Planning and 
Review''). OMB determined that this proposed 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).
    The January 27, 2009, final rule was determined an economically 
significant rule based on full implementation of EIV, which the January 
27, 2009, final rule would achieve by mandating its use by all HUD 
housing providers. The rulemaking initiated by this proposed rule does 
not propose to alter full use of EIV. As stated earlier in this 
preamble, HUD is committed to full implementation of EIV. This proposed 
rule is limited to address certain regulatory amendments in the January 
27, 2009, final rule that caused confusion and which amendments were 
not central or necessary to full implementation of EIV. The 
clarifications made by this rule do not result in an impact on the 
economy of $100 million or more.
    The docket file is available for public inspection in the 
Regulations Division, Office of General Counsel, Department of Housing 
and Urban Development, 451 Seventh Street, SW., Room 10276, 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) 402-3055 (this is not a toll-
free number). Individuals with speech or hearing impairments may access 
this number via TTY by calling the Federal Information Relay Service at 
800-877-8339.

Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB 
Control Numbers 2577-0220 and 2502-0204. 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.

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

[[Page 52935]]

number of small entities. Implementation of HUD's EIV system, which the 
Refinement of Income and Rent Determination rulemaking addresses is 
concerned with those entities that are responsible for making 
eligibility determinations and income reexaminations or 
recertifications 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. The purpose 
of this proposed rule is not to interfere with full implementation of 
HUD's EIV system, now scheduled to take effect on January 31, 2010, but 
is limited to clarifying certain regulatory amendments of the January 
27, 2009, final rule that required further clarification, and proposing 
to remove other regulatory amendments that were determined not 
necessary for implementation of EIV. Accordingly, this proposed rule 
does not alter the small entity impact analysis made in the January 27, 
2009, final rule nor does this proposed rule, which makes certain 
clarifying amendments, result in a significant economic impact on a 
substantial number of small entities.
    Notwithstanding HUD's determination that this rule does not have a 
significant economic impact on a substantial number of small entities, 
HUD 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

    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.)

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.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, 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 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 and 908, as amended in the final rule 
published on January 27, 2009, at 74 FR 4832, as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

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

    Authority:  42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 
3535(d), and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

    2. Revise Sec.  5.216 to read as follows:


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

    (a) General. The requirements of this section apply to applicants 
and participants as described in this section, except this section is 
inapplicable to individuals who do not contend eligible immigration 
status under subpart E of this part (see Sec.  5.508).
    (b) 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 (g)(1) of this 
section to verify each such SSN.
    (c) 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 SSN 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 (g)(1) of this 
section to verify each such SSN.
    (d) Disclosure required of certain officials of entity applicants. 
Each officer, director, principal stockholder, 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 (g)(1) of this 
section to verify each SSN.
    (e) Disclosure required of participants. (1) Initial disclosure. 
(i) Each participant, except those age 62 or older as of January 31, 
2010, whose initial determination of eligibility under the program 
involved was begun before January 31, 2010, must submit the information 
described in paragraph (e)(1)(ii) of this section, if the participant 
has:
    (A) Not previously disclosed a SSN;
    (B) Previously disclosed a SSN that HUD or the SSA determined was 
invalid; or
    (C) Been issued a new SSN.

[[Page 52936]]

    (ii) Each participant subject to the disclosure requirements under 
paragraph (e)(1)(i) of this section must submit the following 
information to the processing entity at the next interim or regularly 
scheduled reexamination or recertification of family composition or 
income, or other reexamination or recertification for the program 
involved:
    (A) The complete and accurate SSN assigned to the participant and 
to each member of the participant's household; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify each such SSN.
    (2) Subsequent disclosure. Once a participant has disclosed and the 
processing entity has verified each SSN, the following rules apply:
    (i) Addition of new household who is at least six years of age. 
When the participant requests to add a new household member who is at 
least six years of age, the participant must provide the following to 
the processing entity at the time of the request, or at the time of 
processing the interim reexamination or recertification of family 
composition that includes the new member(s):
    (A) The complete and accurate SSN assigned to each new member; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify the SSN for each new member.
    (ii) Addition of household member who is under the age of six. (A) 
When a participant seeks to include or add a household member who is 
under the age of six and who has no SSN, the participant shall be 
required to provide the complete and accurate SSN assigned to each new 
child and the documentation referred to in paragraph (g)(1) of this 
section to verify the SSN for each new child within 90 calendar days of 
the child being added to the household.
    (B) The processing entity shall grant an extension of one 
additional 90-day period if the processing entity, in its discretion, 
determines that the participant's failure to comply was due to 
circumstances that could not have reasonably been foreseen and were 
outside the control of the participant. During the period that the 
processing entity is awaiting documentation of a SSN, the processing 
entity shall include the child as part of the assisted household and 
the child shall be entitled to all the benefits of being a household 
member. If upon expiration of the provided time period, the participant 
fails to produce a SSN, the processing entity shall follow the 
provisions of Sec.  5.218.
    (iii) Assignment of new SSN. If the participant or any member of 
the participant's household has been assigned a new SSN, the 
participant must submit the following to the processing entity at 
either the time of receipt of the new SSN; at the next interim or 
regularly scheduled reexamination or recertification of family 
composition or income, or other reexamination or recertification; or at 
such earlier time specified by the processing entity:
    (A) The complete and accurate SSN assigned to the participant or 
household member involved; and
    (B) The documentation referred to in paragraph (g)(1) of this 
section to verify the SSN of each individual.
    (f) 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 (g)(2) of this 
section to verify the EIN.
    (g) Required documentation. (1) SSN. The documentation necessary to 
verify the SSN of an individual who is required to disclose his or her 
SSN under paragraphs (a) through (e) of this section is:
    (i) A valid SSN card issued by the SSA;
    (ii) An original document issued by a federal or state government 
agency, which contains the name of the individual and the SSN of the 
individual, along with other identifying information of the individual; 
or
    (ii) Such other evidence of the SSN as HUD may prescribe in 
administrative instructions.
    (2) EIN. The documentation necessary to verify an EIN of an entity 
applicant that is required to disclose its EIN under paragraph (f) of 
this section is the official, written communication from the Internal 
Revenue Service (IRS) assigning the EIN to the entity applicant, or 
such other evidence of the EIN as HUD may prescribe in administrative 
instructions.
    (h) Effect on assistance applicants. (1) Except as provided in 
paragraph (h)(2) of this section, if the processing entity determines 
that the assistance applicant is otherwise eligible to participate in a 
program, the assistance applicant may retain its place on the waiting 
list for the program, but cannot become a participant until it can 
provide:
    (i) The complete and accurate SSN assigned to each member of the 
household; and
    (ii) The documentation referred to in paragraph (g)(1) of this 
section to verify the SSN of each such member.
    (2) For applicants to the Section 8 Moderate Rehabilitation Single 
Room Occupancy (SRO) Program for Homeless Individuals under 24 CFR part 
882, subpart H, the documentation required in paragraph (h)(1) of this 
section must be provided to the processing entity within 90 days from 
the date of admission into the program. The processing entity shall 
grant an extension of one additional 90-day period if the processing 
entity, in its discretion, determines that the applicant's failure to 
comply was due to circumstances that could not have reasonably been 
foreseen and were outside the control of the applicant. If upon 
expiration of the provided time period, the individual fails to produce 
a SSN, the processing entity shall follow the provisions of Sec.  
5.218.
    (i) Rejection of documentation. The processing entity must not 
reject documentation referred to in paragraph (g) of this section, 
except as HUD may otherwise prescribe through publicly issued notice.
    3. Amend Sec.  5.218 by revising paragraphs (a), (b) and (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:
    (1) The entity applicant does not meet the EIN disclosure, 
documentation, and verification requirements specified in Sec.  5.216; 
or
    (2) Any of the officials of the entity applicant referred to in 
Sec.  5.216(d) does not meet the applicable SSN disclosure, and 
documentation and verification requirements specified in Sec.  5.216.
    (c) Termination of assistance or termination of tenancy of 
participants. (1) The processing entity must terminate the assistance 
or terminate the tenancy, or both, of a participant, in accordance

[[Page 52937]]

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.
    (2) The processing entity may defer termination and provide the 
participant with an additional 90 days to disclose a SSN, but only if 
unless the processing entity, in its discretion, determines that:
    (i) The failure to meet these requirements was due to circumstances 
that could not have reasonably been foreseen and were outside the 
control of the participant; and
    (ii) There is a reasonable likelihood that the participant will be 
able to disclose a SSN by the deadline.
    (3) Failure of the participant to disclose a SSN by the deadline 
specified in paragraph (c)(2) of this section will result in 
termination of the assistance or tenancy, or both, of the participant.
* * * * *
    4. Add a new Sec.  5.233 to read as follows:


Sec.  5.233  Mandated use of HUD's Enterprise Income Verification (EIV) 
System.

    (a) Programs subject to this section and requirements. (1) The 
requirements of this section apply to entities administering assistance 
under the:
    (i) Public Housing program under 24 CFR part 960;
    (ii) Section 8 Housing Choice Voucher (HCV) program under 24 CFR 
part 982;
    (iii) Moderate Rehabilitation program under 24 CFR part 882;
    (iv) Project-based Voucher program under 24 CFR part 983;
    (v) Project-based Section 8 programs under 24 CFR parts 880, 881, 
883, 884, 886, and 891;
    (vi) Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q);
    (vii) Section 811 of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 8013);
    (viii) Sections 221(d)(3) and 236 of the National Housing Act (12 
U.S.C. 1715l(d)(3) and 1715z-1); and
    (ix) Rent Supplement program under section 101 of the Housing and 
Urban Development Act of 1965 (12 U.S.C. 1701s).
    (2) Processing entities must use HUD's EIV system in its entirety:
    (i) As a third-party source to verify tenant employment and income 
information during mandatory reexaminations or recertifications of 
family composition and income, in accordance with Sec.  5.236 and 
administrative guidance issued by HUD; and
    (ii) To reduce administrative and subsidy payment errors in 
accordance with HUD administrative guidance.
    (b) Penalties for noncompliance. Failure to use the EIV system in 
its entirety may result in the imposition of sanctions and/or the 
assessment of disallowed costs associated with any resulting incorrect 
subsidy or tenant rent calculations, or both.


Sec.  5.236  [Amended]

    5. In Sec.  5.236(b)(3)(i)(A), remove ``215''.

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

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

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

    7. Revise Sec.  908.101 to read as follows:


Sec.  908.101  Purpose.

    The purpose of this part is to require Public Housing Agencies 
(PHAs), including Moving to Work (MTW) 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, including the Family Self-Sufficiency (FSS) Addendum. 
Applicable program entities must retain at a minimum, the last three 
years of the form HUD-50058, and supporting documentation, during the 
term of each assisted lease, and for a period of at least 3 years from 
the end of participation (EOP) date, to support billings to HUD and to 
permit an effective audit. Electronic retention of form HUD-50058 and 
HUD-50058-FSS and supporting documentation fulfills the retention 
requirement under this section.

    Dated: September 23, 2009.
Shaun Donovan,
Secretary.
[FR Doc. E9-24809 Filed 10-14-09; 8:45 am]
BILLING CODE 4210-67-P