Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 52931 

the provisions of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507) 

are inapplicable. 

Signing Authority 

The amendments contained in this 

document are being issued by CBP in 

accordance with § 0.1(a)(1) of title 19 of 

the CFR (19 CFR 0.1(a)(1)), pertaining to 

the authority of the Secretary of the 

Treasury (or his/her delegate) to 

approve regulations related to certain 

CBP revenue functions. 

List of Subjects 

19 CFR Part 113 

Bonds, Customs duties and 

inspection, Exports, Imports, Reporting 

and recordkeeping requirements. 

19 CFR Part 191 

Administrative practice and 

procedure, Bonds, Claims, Commerce, 

Customs duties and inspection, 

Drawback, Exports, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

For the reasons set forth in the 

preamble, CBP and the Treasury 

Department propose to amend 19 CFR 

parts 113 and 191 as set forth below: 

PART 113—CUSTOMS BONDS 

1. The general authority citation for 

part 113 continues to read as follows: 

Authority: 19 U.S.C. 66, 1623, 1624. 

2. Section 113.62 is amended by 

redesignating paragraph (m) as 

paragraph (n) and adding a new 

paragraph (m) to read as follows: 

§ 113.62 Basic importation and entry bond 

conditions. 

* * * * * 

(m) Agreement to comply with CBP 

regulations applicable to substitution 

drawback claims. In the case of 

imported merchandise that is subject to 

internal revenue tax imposed under the 

Internal Revenue Code of 1986, as 

amended (IRC), the principal agrees not 

to file, or to transfer to a successor the 

right to file, a substitution drawback 

claim involving such tax if the 

substituted merchandise has been, or 

will be, the subject of a removal from 

bonded premises without payment of 

tax, or the subject of a claim for refund 

or drawback of tax, under any provision 

of the IRC. 

* * * * * 

PART 191—DRAWBACK 

3. The general authority citation for 

part 191 continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 

1202 (General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1313, 1624; 

* * * * * 

4. Section 191.32 is amended: 

a. At the end of paragraph (b)(2), by 

removing the word ‘‘and’’; 

b. At the end of paragraph (b)(3), by 

removing the period and adding, in its 

place, ‘‘; and’’; and 

c. By adding a new paragraph (b)(4) to 

read as follows: 

§ 191.32 Substitution drawback. 

* * * * * 

(b) * * * 

(4) For purposes of drawback of 

internal revenue tax imposed under 

Chapters 32, 38, 51, and 52 of the 

Internal Revenue Code of 1986, as 

amended (IRC), drawback granted on 

the export or destruction of substituted 

merchandise will be limited to the 

amount of taxes paid (and not returned 

by refund, credit, or drawback) on the 

substitute merchandise. 

* * * * * 

Approved: October 8, 2009. 

Jayson P. Ahern, 

Acting Commissioner, U.S. Customs and 

Border Protection. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. E9–24789 Filed 10–14–09; 8:45 am] 

BILLING CODE 9111–14–P 

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. 

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 reopened 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. 


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52932 Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 

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 


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Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 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 § 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 

§ 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 § 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 § 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 § 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 § 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 § 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 


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52934 Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 

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, nonsubstantive changes, to the regulations 

at 24 CFR part 5, subpart B. These 

changes include updating crossreferences 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 

§ 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 § 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 § 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 


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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 § 5.216 to read as follows: 

§ 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 § 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. 


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(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 § 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 § 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 § 5.218 by revising 

paragraphs (a), (b) and (c) to read as 

follows: 

§ 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 

§ 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 

§ 5.216; or 

(2) Any of the officials of the entity 

applicant referred to in § 5.216(d) does 

not meet the applicable SSN disclosure, 

and documentation and verification 

requirements specified in § 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 


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Federal Register / Vol. 74, No. 198 / Thursday, October 15, 2009 / Proposed Rules 52937 

with the provisions governing the 

program involved, if the participant 

does not meet the applicable SSN 

disclosure, documentation, and 

verification requirements specified in 

§ 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 § 5.233 to read as 

follows: 

§ 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 CranstonGonzalez 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 § 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. 

§ 5.236 [Amended] 

5. In § 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 § 908.101 to read as follows: 

§ 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 

DEPARTMENT OF THE TREASURY 

Alcohol and Tobacco Tax and Trade 

Bureau 

27 CFR Parts 28 and 44 

[Docket No. TTB–2009–0005; Notice No. 

100] 

RIN 1513–AB77 

Drawback of Internal Revenue Taxes 

AGENCY: Alcohol and Tobacco Tax and 

Trade Bureau, Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Alcohol and Tobacco Tax 

and Trade Bureau proposes to amend its 

regulations to clarify the relationship 

between tax payment under the Internal 

Revenue Code of 1986 and drawback of 

tax under the Tariff Act of 1930. The 

proposal provides conforming 

amendments to reflect proposed 

Customs and Border Protection 

regulations stating that domestic 

merchandise on which no tax is paid 

under the Internal Revenue Code may 

not be substituted for imported 

merchandise for purposes of claims for 

drawback of tax under the customs laws 

and regulations. 

DATES: We must receive your written 

comments on or before December 14, 

2009. 

ADDRESSES: You may send comments on 

this notice to one of the following 

addresses: 

• http://www.regulations.gov: Use the 

comment form for this notice on the 

Federal e-rulemaking portal, 

Regulations.gov, to submit comments 

via the Internet; 

• Mail: Director, Regulations and 

Rulings Division, Alcohol and Tobacco 

Tax and Trade Bureau, P.O. Box 14412, 

Washington, DC 20044–4412. 

• Hand Delivery/Courier in Lieu of 

Mail: Alcohol and Tobacco Tax and 

Trade Bureau, 1310 G Street, NW., Suite 

200–E, Washington, DC 20005. 

See the Public Participation section of 

this notice for specific instructions and 

requirements for submitting comments, 

and for information on how to request 

a public hearing. 

You may view copies of this notice, 

selected supporting materials, and the 

comments we receive about this 

proposal within Docket No. TTB–2009– 

0005 at http://www.regulations.gov. A 

direct link to this docket is posted on 

the TTB Web site at http://www.ttb.gov/ 

regulations_laws/all_rulemaking.shtml 

under Notice No. 100. You also may 

view copies of this notice, all 

supporting materials, and the comments 

we receive about this proposal by 


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