[Federal Register Volume 60, Number 53 (Monday, March 20, 1995)]
[Rules and Regulations]
[Pages 14632-14635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6715]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 200 and 760

[Docket No. R-95-1750; FR-3468-F-02]
RIN 2501-AB83


Participant's Consent To Release of Information

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule implements the amendments made to Section 904 
of the Stewart B. McKinney Homeless Assistance Amendments Act of 1988 
(the McKinney Act) by Section 903 of the Housing and Community 
Development Act of 1992, and Section 3003 of the Omnibus Budget 
Reconciliation Act of 1993. Section 904 of the McKinney Act authorizes 
HUD to require applicants or participants in any HUD program involving 
review of an applicant's or participant's income to sign a consent form 
authorizing HUD, the Housing Agency/Authority, or the owner to verify 
income information by requesting wage and claim data from employers and 
the State agency responsible for the administration of the State 
unemployment laws.

EFFECTIVE DATE: April 19, 1995.

FOR FURTHER INFORMATION CONTACT: Edward Whipple, Director, Occupancy 
Division, Office of Assisted Housing, Room 4206, concerning occupancy 
matters; Barbara D. Hunter, Acting Division Director, Planning and 
Procedures Division, Office of Multifamily Housing Management, Room 
6180 concerning housing assistance programs administered by this 
office; and David L. Decker, Director, Computer Matching Activities, 
Room 5156, concerning computer matching/tenant income verification 
matters. They may be contacted at the Department of Housing and Urban 
Development, 451 Seventh Street, S.W., Washington, D.C. 20410, 
telephone (202) 708-0744, (202) 708-3944 and (202) 708-0099, 
respectively. Hearing or speech-impaired individuals may call 
[[Page 14633]] HUD's TDD number (202) 708-0850. (These telephone 
numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

A. October 12, 1994 Proposed Rule

    On October 12, 1994 (59 FR 51519) HUD published a rule which 
proposed to implement the amendments made to Section 904 of the Stewart 
B. McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544) 
(the McKinney Act) by Section 903 of the Housing and Community 
Development Act of 1992 (Pub. L. 102-550, approved October 28, 1992) 
(the 1992 Act) and Section 3003 of the Omnibus Budget Reconciliation 
Act of 1993 (Pub. L. 103-66, approved August 10, 1993).
    Section 904 of the McKinney Act authorizes HUD to require 
applicants and participants and adult members of their families in any 
HUD program involving initial and periodic review of an applicant's or 
participant's income to sign a consent form authorizing: (1) HUD, the 
Housing Authority/Agency (HA),<SUP>1 or the owner to verify employee 
income information from current or previous employers; and (2) HUD or 
the HA to request wage and claim information from the State agency 
responsible for the administration of the State unemployment laws. In 
accordance with section 904(b) of the McKinney Act, HUD regulations 
make signing the consent form an explicit condition of initial or 
continuing eligibility for participation in the covered programs.

    \1\The preamble to the October 12, 1994 proposed rule referred 
only to Public Housing Agencies (PHAs). Section 903 of the 1992 Act 
required that HUD develop a new consent form. This consent form, 
applicable to Indian Housing Authorities (IHAs) as well as PHAs, was 
released on June 13, 1994 (HUD Notice PIH-94-36 (HA)). IHAs were 
made aware of this new consent form and have utilized it since its 
issuance. Accordingly, the language in the preamble to this final 
rule and in the rule includes PHAs as well as IHAs (collectively 
referred to as HAs).
    Among other revisions, the statutory amendments to Section 904 
limited the scope of the consent form by requiring that it only cover 
information relevant and necessary to meet the requirements of Section 
904. The amendments also authorized the Secretary of HUD to request 
that the Commissioner of Social Security and the Secretary of the 
Treasury release information pursuant to Section 6103 (1)(7)(D)(ix) of 
the Internal Revenue Code of 1986 (26 U.S.C. 6103).
    The preamble to the proposed rule listed the specific changes made 
to Section 904 of the McKinney Act by section 903 of the 1992 Act, 
section 3003 of the Omnibus Budget Reconciliation Act of 1993, and the 
regulatory amendments proposed to be made as a result of the statutory 
changes (see 59 FR 51519-51521). HUD solicited public comments on the 
proposed amendments to parts 200 and 760. By the expiration of the 
public comment period on December 12, 1994, four comments had been 
received.
    The following section of the preamble presents a summary of the 
comments raised by the commenters, and HUD's responses to these 
comments.

B. Comments on the October 12, 1994 Proposed Rule

    Comment. One of the commenters expressed concern over proposed 
Secs. 200.1203 and 200.1205, which permit HUD to require consent to the 
release of ``other information as provided in 24 CFR 813.109 and 24 CFR 
913.109.'' The commenter interpreted the McKinney Act as limiting the 
consent form to the three categories of information listed in Section 
904: (1) Salary and wage information from employers; (2) wage and 
benefit information from State unemployment insurance agencies; and (3) 
income information from the Social Security Administration and the 
Department of the Treasury. The commenter contended that Section 904's 
requirement that HUD independently verify information provided by 
applicants and participants is an insufficient basis for requiring 
consent to release ``other information.'' Furthermore, the commenter 
stated that it is indefensible for HUD to require consent to release 
``other information'' before there is any adverse information to 
verify. Finally, the commenter believed that 24 CFR 813.109 and 24 CFR 
913.109 conflict with 42 U.S.C 3544(b) and should be ``amended or 
repealed accordingly.''
    HUD Response. HUD believes proposed Secs. 200.1203 and 200.1205 are 
necessary to its compliance with statutory mandates. The Omnibus Budget 
Reconciliation Act of 1993 and the McKinney Act require that HUD verify 
information affecting eligibility for, and the level of, assisted 
housing benefits. Furthermore, the Privacy Act, as amended by Public 
Law 100-503, the Computer Matching and Privacy Protection Act of 1988, 
requires that agencies may not suspend, terminate, reduce or make a 
final denial of assistance or payment under a Federal benefit program 
until information is verified.
    HUD notes that the language in proposed Secs. 200.1203 and 200.1205 
only permits consent to the release of ``other information'' necessary 
to determine eligibility or level of benefits. HUD believes that the 
consent form it has implemented, permitting HAs to obtain ``financial 
information'', is consistent with the ``other information'' language, 
since the information needed to determine eligibility or the level of 
benefits frequently is financial in nature.
    Congress intended that the computer matching permitted by the 
consent form result in savings. If an HA or owner were prevented from 
obtaining an applicant's or participant's consent until after acquiring 
adverse information through computer matching, its ability to recoup 
funds or take other administrative or legal action would be seriously 
impaired. Many participants who receive excessive housing assistance 
will not sign the consent form after the HA or owner has obtained 
adverse information. By preventing the verification of the adverse 
information, these participants hinder the HA or owner from taking 
action against the participants and realizing program savings.
    Finally, HUD disagrees with the commenter's statement that 24 CFR 
813.109 and 24 CFR 913.109 need to be amended or repealed. Many recent 
and past laws require verification of information concerning 
applicants' and participants' eligibility for, and levels of, benefits.
    Comment. One commenter questioned the basis for the proposed rule's 
placement of a 15-month limit on the effectiveness of the participant's 
consent for release of information. The commenter felt that the time 
limit would prove burdensome to local HAs, which would be required to 
have the consent form signed at each annual re-examination. The 
commenter suggested that HUD issue a blanket authorization which would 
permit the HA to verify information for the duration of the resident's 
tenancy.
    HUD Response. HUD agrees that making the consent form effective for 
only 15 months increases the paperwork burden on HAs. However, Section 
903(a) of the 1992 Act requires that the consent to release of 
information be limited with respect to time, and only cover information 
relevant and necessary to meet the requirements of Section 904 of the 
McKinney Act.
    Given tenant concerns that the consent form might be used 
improperly to obtain private information, Congress required that HUD 
place a time limit on the consent form's effectiveness. A blanket 
authorization that would be valid for the duration of the resident's 
tenancy, like the one suggested by the [[Page 14634]] commenter, would 
be inconsistent with the explicit instructions given by Congress.
    Congress suggested that the consent for release of information be 
effective for 12 months, the normal period for tenant re-certification 
for continued occupancy. However, the law allows HUD discretion in 
choosing the effective period for the consent form. In order to provide 
leeway for unexpected delays in re-certification, HUD has chosen to 
make the consent form effective for 15 months from the date of 
execution.
    Comment. Two commenters recommended that HUD develop a new 
regulation to accompany the issuance of this final rule. Specifically, 
the commenters urged the issuance of a regulation that would ``clearly 
and unambiguously prohibit the release of [Housing Assistance Program] 
contracts or any other information which might lead to the identity of 
a recipient of Section 8 subsidy assistance, including the addresses of 
properties in which such recipients reside or the names of their 
landlords.'' Neither of the commenters expressed any objection to the 
proposed rule.
    HUD Response. Although the rule recommended by the commenters and 
the proposed rule both have privacy implications, a clear nexus does 
not exist between them. Accordingly, HUD views the issuance of this 
final rule and the commenters' recommendation as independent issues.

C. Adoption of Proposed Rule

    HUD adopts as its final rule the proposed rule published on October 
12, 1994, without change.

II. Other Matters

A. Executive Order 12866

    This rule was reviewed by the Office of Management and Budget under 
Executive Order 12866, Regulatory Planning and Review. Any changes made 
to the rule as a result of that review are clearly identified in the 
docket file, which is available for public inspection in the Office of 
the Department's Rules Docket Clerk, Room 10276, 451 Seventh St., SW., 
Washington, DC 20410.

B. Environmental Impact

    In accordance with 40 CFR 1508.4 of the regulations of the Council 
on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations, 
the policies and procedures contained in this final rule relate to 
internal administrative procedures whose content does not constitute a 
development decision nor affect the physical condition of project areas 
or building sites and, therefore, are categorically excluded from the 
requirements of the National Environmental Policy Act.
C. Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this final rule will not have substantial direct effects 
on States or their political subdivisions, or the relationship between 
the Federal government and the States, or on the distribution of power 
and responsibilities among the various levels of government. 
Specifically, the requirements of this final rule are directed toward 
applicants and participants in federally assisted housing programs. It 
effects no significant changes in the current relationships between the 
Federal government, the States and their political subdivisions in 
connection with these programs.

D. Executive Order 12606, the Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this final rule does not 
have potential for significant impact on family formation, maintenance, 
and general well-being, and, thus, is not subject to review under the 
Order. Under this final rule, applicants and participants, and adult 
members of their families, are required to sign and submit consent 
forms authorizing the verification or collection of certain information 
necessary for determining eligibility for or level of assistance under 
the covered programs. Consent forms to permit verification of 
information provided by the family are already required. This rule 
change prohibits the collection of information which is not necessary 
to verify the income of an applicant or participant, and makes the 
consent form valid for 15 months. No significant change in existing HUD 
policies or programs will result from promulgation of this final rule, 
as those policies and programs relate to family concerns.

E. Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this final rule, and in so 
doing certifies that this final rule will not have a significant 
economic impact on a substantial number of small entities. This final 
rule relates to applicants and participants in federally assisted 
housing projects but should not have a meaningful economic impact on 
these entities.

F. Regulatory Agenda

    This final rule was not listed in HUD's Semiannual Agenda of 
Regulations published on November 14, 1994 (59 FR 57632) in accordance 
with Executive Order 12866 and the Regulatory Flexibility Act.

List of Subjects

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 760

    Grant programs--housing and community development, Income 
verification procedures, Indians, Intergovernmental relations, Loan 
programs--housing and community development, Penalties, Public housing, 
Rent subsidies, Reporting and recordkeeping requirements, Wages.

    Accordingly, 24 CFR parts 200 and 760 are amended as follows:

PART 200--INTRODUCTION

    1. The authority citation for 24 CFR part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1701-1715z-18, 1701s, and 1715z-11; 42 
U.S.C. 3535(d), 3543, and 3544.

    2. Section 200.1203 is amended by revising paragraph (a), to read 
as follows:


Sec. 200.1203  Applicability.

    (a) Information to be covered by consent forms. The information 
covered by consent forms described in this part involves: wage and 
claim information from SWICAs; and wages, net earnings from self-
employment, payments of retirement income and unearned income as 
referenced at sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal 
Revenue Code (26 U.S.C. 6103). In addition, the consent forms may 
authorize the collection of other information from applicants or 
participants to determine eligibility or level of benefits as provided 
in 24 CFR 813.109 and 24 CFR 913.109.
* * * * * [[Page 14635]] 
    3. Section 200.1205 is amended by revising the definition for 
``Consent form'', to read as follows:


Sec. 200.1205  Definitions.

* * * * *
    Consent form means a consent form or forms approved by HUD to be 
signed by applicants and participants for the purpose of obtaining 
employee income information from employers; wage and claim information 
from SWICAs; return information from the Social Security Administration 
(including wages, net earnings from self-employment, payments of 
retirement income as referenced at section 6103(l)(7)(A) of the 
Internal Revenue Code (26 U.S.C. 6103); and return information for 
unearned income (i.e., interest and dividends) from the Internal 
Revenue Service as referenced at section 6103(l)(7)(B) (26 U.S.C. 
6103). Also, the consent forms may authorize the collection of other 
information from applicants or participants to determine eligibility or 
level of benefits as provided in 24 CFR 813.109 and 24 CFR 913.109. The 
consent form expires after a limited amount of time.
* * * * *
    4. Section 200.1210 is amended by revising paragraph (c), to read 
as follows:


Sec. 200.1210  Consent by applicants and participants.

* * * * *
    (c) Consent form requirements. The consent form required by this 
subpart V shall contain, at a minimum, the following:
    (1) A provision authorizing HUD to obtain from SWICAs any 
information or materials necessary to complete or verify the 
application for participation and/or to maintain continued assistance 
under a program referred to in Sec. 200.1203;
    (2) A provision authorizing HUD or the owner (or mortgagee as 
applicable) responsible for determining eligibility for or level of 
assistance, to verify with previous or current employers employee 
income information pertinent to the applicant's or participant's 
eligibility for or level of assistance under a program referred to in 
Sec. 200.1203;
    (3) A provision authorizing HUD to request tax return information 
from the Internal Revenue Service and the Social Security 
Administration for the sole purpose of verifying income information 
pertinent to the applicant's or participant's eligibility or level of 
benefits; and
    (4) A statement that the authorization to release the information 
requested by the consent form expires 15 months after the consent form 
was signed.
    (5) These requirements may be contained in more than one consent 
form.

PART 760--PROCEDURES FOR OBTAINING WAGE AND CLAIM INFORMATION ABOUT 
APPLICANTS AND PARTICIPANTS IN HUD'S SECTION 8 AND PUBLIC HOUSING 
PROGRAMS FROM STATE WAGE INFORMATION COLLECTION AGENCIES (SWICAs)

    5. The authority citation for part 760 is revised to read as 
follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437a, 1437d, 1437ee, 
1437f, 3535(d), and 3544.

    6. Section 760.3 is amended by revising paragraph (a), to read as 
follows:


Sec. 760.3  Applicability.

    (a) information to be covered by consent forms. The information 
covered by consent forms described in this part involves wage and claim 
information from SWICAs; and wages, net earnings from self-employment, 
payments of retirement income, and unearned income as referenced at 
sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal Revenue Code 
(26 U.S.C. 6103). In addition, consent forms may authorize the 
collection of other information as identified in 24 CFR 813.109(b) and 
24 CFR 913.109(b) for current verification procedures, including 
requirements regarding signing and submitting consent forms, for the 
covered programs.
* * * * *
    7. Section 760.5 is amended by revising the definition for 
``Consent form'', to read as follows:


Sec. 760.5  Definitions.

* * * * *
    Consent form means a consent form or forms approved by HUD to be 
signed by applicants and participants for the purpose of obtaining 
employee income information from employers; wage and claim information 
from SWICAs; return information from the Social Security Administration 
(including wages, net earnings from self-employment, payments of 
retirement income as referenced at section 6103(l)(7)(A) of the 
Internal Revenue Code (26 U.S.C. 6103); and return information for 
unearned income (i.e., interest and dividends) from the Internal 
Revenue Service as referenced at section 6103(l)(7)(B) (26 U.S.C. 
6103). Also, the consent forms may authorize the collection of other 
information from applicants or participants to determine eligibility or 
level of benefits as provided in 24 CFR 813.109 and 24 CFR 913.109. The 
consent form expires after a limited amount of time.
* * * * *
    8. Section 760.10 is amended by revising paragraph (c), to read as 
follows:


Sec. 760.10  Consent by applicants and participants.

* * * * *
    (c) Consent form requirements. The consent form required by this 
subpart B shall, at a minimum, contain the following:
    (1) A provision authorizing HUD and HAs to obtain from SWICAs any 
information or materials necessary to complete or verify the 
application for participation or to maintain continued assistance under 
a program referred to in Sec. 760.3;
    (2) A provision authorizing HUD, HAs, or the owner responsible for 
determining eligibility for or level of assistance, to verify with 
previous or current employers income information pertinent to the 
applicant's or participant's eligibility for or level of assistance 
under a program referred to in Secs. 200.1203, 813.109 and 913.109 of 
this title;
    (3) A provision authorizing HUD to request income return 
information from the Internal Revenue Service and the Social Security 
Administration for the sole purpose of verifying income information 
pertinent to the applicant's or participant's eligibility or level of 
benefits; and
    (4) A statement that the authorization to release the information 
requested by the consent form expires 15 months after the consent form 
was signed.

    Dated: March 3, 1995.
Henry G. Cisneros,
Secretary.
[FR Doc. 95-6715 Filed 3-17-95; 8:45 am]
BILLING CODE 4210-32-P