Restrictions on Assistance to Noncitizens

SUMMARY: This proposed rule would implement section 214 of the Housing

and Community Development Act of 1980, as amended. Section 214

prohibits the Secretary of HUD from making financial assistance

available to persons other than United States citizens, nationals, or

certain categories of eligible noncitizens in HUD's Public Housing and

Indian Housing programs (including homeownership), the section 8

housing assistance payments programs, the Housing Development Grants

program, the section 236 interest reduction and rental assistance

programs, the Rent Supplement program, and the section 235

homeownership program.

DATES: Comments due date: October 24, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding

this proposed rule to the Rules Docket Clerk, Office of the General

Counsel, room 10276, Department of Housing and Urban Development, 451

7th Street, SW., Washington, DC 20410-0500. Comments should refer to

the above docket number and title. A copy of each comment submitted

will be available for public inspection during regular business hours

weekdays at the above address. Facsimile (FAX) comments are not

acceptable.

FOR FURTHER INFORMATION CONTACT: For the covered programs, the

following persons should be contacted:

(1) For Public Housing, Section 8 Certificate, Rental Voucher, and

Moderate Rehabilitation (except Single Room Occupancy--``SRO'')

programs --Edward Whipple, Rental and Occupancy Branch, Office of

Public Housing, Department of Housing and Urban Development, 451

Seventh Street, SW., Washington, DC 20410-5000, telephone (202) 708-

0744;

(2) For Indian Housing programs--Dominic Nessi, Director, Office of

Native American Programs, Department of Housing and Urban Development,

451 Seventh Street, SW., Washington, DC 20410-5000, telephone (202)

708-1015;

(3) For the Section 8 Moderate Rehabilitation SRO program--Barbara

Richards, Acting Director, Office of Special Needs Assistance Programs,

Department of Housing and Urban Development, 451 Seventh Street, SW.,

Washington, DC 20410-7000, telephone (202) 708-4300;

(4) For the other Section 8 programs, the Section 236 programs,

Housing Development Grants and Rent Supplement--Barbara Hunter, Program

Planning Division, Office of Multifamily Management, Department of

Housing and Urban Development, 451 Seventh Street, SW., Washington, DC

20410-8000, telephone (202) 708-3944; and

(5) For the Section 235 homeownership program--William Heyman,

Office of Lender Activities and Land Sales Registration, Office of

Single Family Housing, Department of Housing and Urban Development, 451

Seventh Street, SW., Washington, DC 20410-8000, telephone (202) 708-

1824.

For persons with hearing impairment, the TDD number is (202) 472-

6725. None of the foregoing telephone numbers are toll-free.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act Statement

The information collection requirements contained in this rule have

been submitted to the Office of Management and Budget (OMB) for review

under the Paperwork Reduction Act of 1980. No person may be subjected

to a penalty for failure to comply with these information collection

requirements until they have been approved and assigned an OMB control

number. The OMB control number, when assigned, will be announced by a

separate notice in the Federal Register.

Public reporting burden for the collection of information

requirements contained in this rule is estimated to include the time

for reviewing the instructions, searching existing data sources,

gathering and maintaining the data needed, and completing and reviewing

the collection of information.

Information on the estimated public reporting burden is provided

under the preamble heading Other Matters. Send comments regarding this

burden estimate or any other aspect of this collection of information,

including suggestions for reducing this burden, to the Department of

Housing and Urban Development, Rules Docket Clerk, 451 Seventh Street,

SW., room 10276, Washington, DC 20410; and to the Office of Management

and Budget, Office of Information and Regulatory Affairs, Attention HUD

Desk Officer, room 3001, Washington, DC 20503.

II. Statutory and Regulatory Background

The restrictions on providing housing assistance to noncitizens

with ineligible immigration status have been embodied in statute since

1980. Section 214 of the Housing and Community Development Act of 1980

(94 Stat. 1637) (Section 214) was the original basis for restrictions

on providing assistance to noncitizens with ineligible immigration

status in the assisted housing programs. Section 214 was amended by

section 329(a) of the Housing and Community Development Amendments of

1981 (94 Stat. 408), by section 121(a)(2) of the Immigration Reform and

Control Act of 1986 (``IRCA'', 100 Stat. 3384), and by section 164 of

the Housing and Community Development Act of 1987 (101 Stat. 1860).

(Section 214, as amended by these statutory sections, is codified at 42

U.S.C. 1436a.)

There have been numerous attempts by HUD to implement by regulation

the statutory restrictions on providing assistance to noncitizens with

ineligible immigration status. Rules, both proposed and final, were

published in 1982 (47 FR 18914, and 47 FR 43674), in 1986 (51 FR

15611), and 1988 (53 FR 842, and 53 FR 41038). Despite the publication

of final rules during the period between 1982 and 1988, the statutory

restrictions of section 214 have not been made effective. A detailed

history of the regulatory efforts to implement section 214 (including

why the final rules were not made effective) can be found in the rule

published on January 13, 1988 (53 FR 842).

The most recent proposed rule implementing section 214 (before

publication of this proposed rule) was published on October 19, 1988

(53 FR 41038). The proposed rule published in today's Federal Register

is based on the October 19, 1988 proposed rule, and takes into

consideration public comment received on the October 19, 1988 proposed

rule. The discussion of public comments is set forth in section VII of

this preamble.

III. Procedural Matters

A. No Restrictions on Use of Assistance Until Final Rule Is Published

and Effective

Until a final rule implementing section 214 is published and made

effective, there are no HUD restrictions on the use of assisted housing

by noncitizens with ineligible immigration status. Consequently, until

this proposed rule has reached the final rule stage, covered entities

(i.e., housing authorities, managers of HUD-assisted housing, and

mortgagees in the section 235 FHA insurance program) are not authorized

to take any action based on the eligible immigration status of

applicants and tenants.

B. Using the ``Effective Date of the Final Rule'' as the Critical Date

Rather Than ``Date of Enactment''

Paragraph (c)(1) of section 214 was added by the Housing and

Community Development Act of 1987 (the 1987 Act) and confers discretion

on the Secretary of HUD to continue assistance or defer termination of

assistance on behalf of an individual for whom assistance would

otherwise be terminated if that person was ``receiving such assistance

on the date of enactment of the Housing and Community Development Act

of 1987.''

The term ``date of enactment'' is also found in section 214(d) in

the description of the elderly persons who need not provide

documentation of their immigration status. The statute exempts from

such documentation any individual who is ``62 years of age or older,

and is receiving financial assistance on the date of the enactment of

the Housing and Community Development Act of 1987.''

HUD has determined that the provisions of section 214 are too

complex to be determined self-implementing as of the date of enactment

of the 1987 Act (February 5, 1988). Thus, the restrictions of section

214 will not be felt until a final regulation is published and becomes

effective.

The general Congressional intent of section 214(c)(1) was to

protect ``the sanctity of the family.'' (See remarks of Sen. William

Armstrong, 133 Cong. Rec. S18615, December 21, 1987.) To honor this

intent, HUD believes it is necessary to implement the new protective

provisions at the same time that the restrictions of section 214 become

effective. To do otherwise would be to thwart the pro-family intent of

the Congress by prematurely triggering the statute's protections and

rendering them meaningless for families admitted after the enactment

date, but before a final rule effectively applies the restrictions of

section 214.

In other words, since the exact effect on persons applying for or

participating in the covered HUD programs will not be known until

publication of the final rule, HUD is interpreting the statutory

language to permit lenient treatment to persons receiving assistance on

the effective date of the final rule when all parties affected will

have notice of the methods that HUD has chosen for implementing the

statutory restrictions rather than on the precise date of enactment of

the 1987 Act. To limit lenient treatment to persons receiving

assistance on the precise date of enactment would create a category of

persons (admitted between February 5, 1988 and the final rule's

effective date) who would be denied the new statutory protections

simply because of the time associated with promulgation of a final

rule. Support for this position is found in a House Committee Report in

connection with the 1987 Act (H.R. Rep. No. 100-1222, 100th Cong., 1st

Sess. 49 (1987) (``House Report'')). In that report, the Congress

stated: ``The modifications [made by the 1987 Act] are intended to

clarify the original intent of Congress that families in which at least

one person is eligible are not disqualified and that the rules not be

applied retroactively.'' (House Report at p. 50.)

IV. Reimbursement for Costs of Implementing and Operating Verification

System

Section 214(g) authorizes HUD to reimburse covered entities for the

costs incurred in implementing and operating the system developed by

the Immigration and Naturalization Service (INS) for verifying

immigration status. The INS system is referred to as the Systematic

Alien Verification for Entitlements or SAVE.

Although implementation and operation of the INS verification

system is not specifically addressed in this rule, detailed guidance

will be issued to covered entities at the time of publication of the

final rule. HUD will be developing a method of coordinating with the

INS for verifying immigration status through SAVE, which includes an

automated system, and a manual search capability. HUD anticipates that

the cost of necessary verification inquiries made on the automated

system will be billed directly to HUD.

V. Section 214 Coverage of HUD Programs

A. HUD Programs Covered by Section 214

Paragraph (b) of section 214 states that its restrictions

concerning noncitizens with ineligible immigration status apply to the

provision of ``financial assistance made available pursuant to the

United States Housing Act of 1937, section 235, or 236 of the National

Housing Act, or section 101 of the Housing and Urban Development Act of

1965.''

1. Programs Covered by the 1937 Act

The programs providing financial assistance on behalf of tenants

(or homebuyers) pursuant to the United States Housing Act of 1937 (42

U.S.C. 1437 et seq.) (1937 Act) are the Public and Indian Housing

programs, the Section 8 Housing Assistance Payments programs, and the

Housing Development Grant programs (with respect to low income units

only). All of these programs provide housing, either directly (such as

public housing) or indirectly (such as through Section 8 Certificates),

that is assisted by HUD.

a. Public and Indian Housing Programs. Included among the Public

and Indian Housing programs are the Mutual Help and Turnkey III

Homeownership Opportunity programs. The restrictions against financial

assistance to noncitizens with ineligible immigration status are to be

applied to current homebuyers under the Turnkey III and Mutual Help

programs only to the extent that applying the restrictions would be

consistent with existing contracts. All homeownership contracts

executed after the effective date of the final rule will be covered by

the restrictions. Another homeownership program covered is the HOPE for

Public and Indian Housing Homeownership program developed pursuant to

42 U.S.C. 1437aaa.

b. Section 8 Housing Assistance Payments Programs. The Section 8

Housing Assistance Payments programs include New Construction,

Substantial Rehabilitation, Moderate Rehabilitation, Certificate,

Voucher, State Housing Agency and Farmers Home Administered, Section

202 Housing for the Elderly or Handicapped projects (when section 8

assistance is involved), Loan Management and Property Disposition

projects. While the Rental Rehabilitation program also is operated

under the 1937 Act (section 17 of the 1937 Act), it does not provide

financial assistance to tenants except to the extent tenants

participate in the Section 8 Certificate or Voucher programs, which are

separately covered by the restrictions of section 214.

2. Section 235 of the NHA

The program authorized under section 235 of the National Housing

Act (12 U.S.C. 1715z) (NHA), provides for payments by HUD to the

mortgagee on behalf of a low income mortgagor to reduce the homebuyer's

payments to an affordable level, e.g., the higher of a certain

percentage of income or the amount that would be payable if the

interest charged on the mortgage loan were set at some figure such as

four percent. This program is available to purchasers of single family

homes, and to purchasers of units in cooperatives and condominiums. The

rule will affect mainly new applicants for participation in the

program.

Assistance contracts of section 235 homeowners who executed their

contracts before the effective date of this rule will be honored

without regard to their citizenship or immigration status.

Additionally, mortgagors who refinance their section 235 mortgages

(which were executed before the effective date of the final rule, and

whose assistance contracts were unchanged after that date) with

mortgages insured under section 235(r) of the NHA are not subject to

the section 214 requirements. The reason for the latter exemption is

that many old 235 mortgages bear an interest rate higher than 12

percent. If the section 214 requirements (with the required

recertifications) are made applicable to current 235 mortgagors who

agree to refinance under section 235(r), this may be a disincentive to

refinancing, and also would be detrimental to HUD. The section 235(r)

program is designed to aid HUD in saving millions of dollars in section

235 assistance payments by refinancing the 235 mortgages at a lower

interest rate. Because the 235(r) program was designed specifically to

provide for the refinancing of section 235 mortgages, HUD does not

believe that this is the type of contract modification or program

change that triggers the section 214 requirements.

The rule will largely have an impact on current section 235

homeowners themselves only if a homeowner's mortgage is to be revised

for some reason (other than refinancing under section 235(r)), in which

case the modification will include application of the restrictions on

immigration status as if the mortgagor were an applicant for

participation in the assistance program. Although there may be no new

mortgages insured and assisted under this program, at conveyance of

properties already insured and assisted under the program, purchasers

will be required to demonstrate eligibility in order to be approved for

assistance (and thereafter at each annual recertification, to continue

to receive assistance).

3. Section 236 of the NHA

The section 236 program provides for payments to a mortgagee on

behalf of the owner of a rental housing project designed for occupancy

by low income families in order to reduce the owner's payments to the

amount that would be payable if the interest rate on the mortgage loan

were set at a figure such as one percent. These lower mortgage payments

enable the owner to charge qualified tenants lower than market rate

rents (``basic rents''), although tenants who are not qualified for the

benefits of the program may be charged market rate rents. In addition,

rental assistance payments are available for some units in these

projects to enable the rents charged to tenants who cannot afford the

``basic rent'' to be reduced to an amount based on a percentage of

income, similar to the rents charged in the public housing and section

8 programs. This rule applies to all the tenants of a section 236

project who pay a below market-rate rent. It does not apply to tenants

who pay a market-rate rent. (It should be noted, however, that a market

rent tenant would be required to submit evidence of citizenship or

eligible immigration status if he or she subsequently applied for

tenant-based assistance.)

4. Section 101/Rent Supplement Program

The program authorized under section 101 of the Housing and Urban

Development Act of 1965 (12 U.S.C. 1701s), is the Rent Supplement

program. Under this program, HUD makes payments to a housing owner that

is a private nonprofit entity or limited dividend entity and whose

purchase of the property is financed by a mortgage loan insured under

certain HUD programs, or is financed under a State or local program

approved by HUD. These payments are for the benefit of low income

tenants to enable the owner to charge these tenants rents based on a

percentage of their incomes, similar to the rents charged in the public

housing and section 8 programs.

B. HUD Programs Not Covered by Section 214

HUD-assisted housing programs that are not covered by 42 U.S.C.

1436a, and consequently are not covered by this rule, are: (1) The

section 221(d)(3) and (d)(5) program of interest subsidy for projects

with mortgages insured under those sections of the National Housing Act

(12 U.S.C. 17151); (2) the programs developed to serve the homeless

(see 42 U.S.C. 11361), except for Section 8 Moderate Rehabilitation SRO

program (24 CFR part 882, subpart H); (3) the HOPE Homeownership of

Multifamily Units program developed pursuant to 42 U.S.C. 12871; (4)

the HOPE for Homeownership of Single Family Homes developed pursuant to

42 U.S.C. 12891; (5) the HOME program developed pursuant to 42 U.S.C.

12741; (6) the Supportive Housing for the Elderly program developed

pursuant to 42 U.S.C. 1701q; and (7) the Supportive Housing for Persons

with Disabilities program developed pursuant to 42 U.S.C. 8013.

The above listed programs are not covered unless any of these

programs is used in conjunction with a covered program, such as section

8 housing assistance payments.

VI. Overview of 1994 Proposed Rule

The proposed rule published in today's Federal Register (the 1994

proposed rule) is substantially similar to the proposed rule published

on October 19, 1988 (1988 proposed rule). In many respects, section 214

allows little discretion on the part of HUD to expand or reduce the

statutory provisions by regulation. As noted above, section 214 is very

specific about what HUD programs are covered by the statute. Section

214 is also specific about what categories of noncitizens are eligible

to receive HUD financial assistance, the procedures to be used to

verify immigration status, the types of documentation that must be

submitted and who must submit this documentation, the appeal procedures

to be provided to persons initially determined to have ineligible

status, and the special assistance to be provided to certain families

with members who have eligible status and those who have ineligible

status.

A. Summary of Principal Provisions of 1994 Proposed Rule

The following provides a summary of the principal provisions of the

1994 proposed rule.

1. Eligibility for HUD Financial Assistance

Noncitizens eligible for financial assistance are limited to

statutory categories.

Noncitizen students who are nonimmigrants are excluded from

receiving financial assistance in accordance with section 214.

2. Evidence of Eligible Status (Who Submits What)

For citizens--

A written declaration only. (The proposed rule removes the 1988

proposed rule language concerning suspicion of submission of false

declaration of citizenship.)

For noncitizens 62 years of age or older, and receiving HUD

assistance on the effective date of the rule--

A written declaration, and

Proof of age document.

For all other noncitizens--

A written declaration,

A verification consent form, and

Evidence of immigration status.

Election not to declare eligible status. The 1994 proposed rule

also contains a provision that permits a member of a family to elect

not to contend that he or she has eligible status (i.e., the person

elects not to submit a declaration of eligible status), and if other

members of the family declare eligible status and have eligible status,

the family may be eligible for continued assistance, proration of

assistance (see discussion of proration of assistance under section

VI.A.11 of this preamble), or temporary deferral of termination of

assistance, as appropriate.

Permissible to incorporate declaration in housing application

assistance. The 1994 proposed rule does not prescribe a specific

declaration. A responsible entity may provide for the declaration to be

incorporated in the application for assistance, or make it a separate

document. The declaration, however, must cite the statutory authority

under which it is required to be provided, and the purpose for the

requirement (i.e., that financial assistance is contingent upon the

submission of the form). Additional guidance on implementing the

requirements of section 214, that is to be issued at the time of

publication of the final rule, will include model language for the

declaration, as well as the verification consent form.

3. When to Submit Evidence of Eligible Immigration Status

For applicants, the 1994 proposed rule provides for the responsible

entity to require submission of the evidence by the date the

responsible entity anticipates or has knowledge that verification of

other aspects of eligibility for assistance (i.e., income, family

composition) will occur.

For persons already receiving assistance, the rule provides for the

responsible entity to require submission of evidence at the first

regular reexamination of eligibility (i.e., reexamination of income and

family composition) that occurs after the effective date of the final

rule.

For new occupants in an assisted unit, the rule provides for the

responsible entity to require submission of evidence at the first

interim or regular reexamination following the person's occupancy.

One-time submission for continuous occupancy. The proposed rule

clarifies that evidence of eligible status is required to be submitted

only one time for each family member that maintains continuous

occupancy in an assisted unit.

4. Extension of Time to Submit Evidence

The 1994 proposed rule would require responsible entities to grant

an extension of time in which to submit evidence if the applicant or

tenant submits the declaration of eligible immigration status, and

certifies that the evidence needed to support the declaration is

temporarily unavailable, and prompt and diligent efforts to obtain this

evidence will be undertaken. The proposed rule provides that the

extension may not be for an indefinite period, but allows for the

responsible entity to establish a time period that is sufficient for

the applicant or tenant to obtain the needed evidence.

5. When Verification of Eligible Status is to Occur

For applicants, the 1994 proposed rule provides for the responsible

entity to verify evidence of eligible immigration status at the time

the responsible entity verifies other aspects of eligibility for

assistance (i.e., income, family composition).

For persons already receiving assistance, the rule provides for the

responsible entity to verify evidence of eligible status at the time

that it verifies other aspects of eligibility (i.e., reexamination of

income, family composition) for continued occupancy in the assisted

unit.

Verification of evidence of eligible immigration status is to be

treated the same as any other factor which determines a family's

eligibility for assistance.

6. Verification Procedures

The proposed rule provides for the following verification

procedures in accordance with the INS verification systems:

(1) Primary verification of the immigration status is conducted by

means of an automated system (SAVE) that provides access to the names,

file numbers, and admission numbers of noncitizens;

(2) Secondary verification is a manual search by the INS of its

records to determine an individual's immigration status. If primary

verification fails to confirm eligible immigration status, secondary

verification must be performed. The results of primary verification are

not sufficient to conclude that an individual does not have eligible

immigration status.

(3) No waiver of verification procedures. The proposed rule does

not provide for waiver of the INS verification procedures.

7. Protection of Individual's Privacy

Section 214(d)(3) requires HUD to protect the ``individual's

privacy to the maximum degree possible.'' The 1988 proposed rule

provided that evidence of immigration status submitted by an applicant

or tenant to the responsible entity may be released by the responsible

entity to HUD, or to a Federal, State or local agency under specific

circumstances, or may be released by HUD to any Federal, State, or

local government agency (including the Social Security Administration

and the INS) under specific circumstances, and listed those

circumstances.

The 1994 proposed rule recognizes the impossibility of anticipating

all circumstances under which a responsible entity or HUD may be

required to release information. Accordingly, the 1994 proposed rule

removes the list of circumstances, and provides that (1) the

responsible entity may release the information to HUD and the INS for

purposes of determining eligible immigration status, (2) HUD may

release the information to the INS, and (3) the responsible entity and

HUD may release the information to any other Federal, State or local

government agency in accordance with applicable Federal, State or local

law that requires the release of the evidence to that agency.

8. No Delay, Denial, Reduction, or Termination of Assistance Pending

Verification of Eligible Status or Pending INS Appeal; but Delay for

Applicant Following INS Appeal

Consistent with section 214(d)(4), the 1994 proposed rule provides

that assistance to an applicant may not be delayed, reduced, or denied,

and assistance to a tenant may not be delayed, denied, reduced or

terminated, during the pendency of the verification procedures for

eligible status, or during the pendency of the INS appeal procedure.

Consistent with section 214(d)(5), assistance to an applicant may

not be denied, and assistance to a tenant may not be terminated during

the pendency of the informal hearing procedure provided by the

responsible entity. However, section 214(d)(5) only restricts denial or

termination of assistance. Thus, assistance to an applicant may be

delayed, but not denied, during the pendency of the informal hearing

process.

9. Extension of Time to Request INS Appeal or Informal Hearing

The 1994 proposed rule requires the responsible entity extend the

time for requesting an appeal to the INS or for requesting an informal

hearing upon good cause shown by the applicant or tenant.

10. Continued Assistance/Deferred Termination of Assistance

Consistent with section 214, the 1994 proposed rule provides for

assistance to be continued or termination of assistance temporarily

deferred for certain families and under certain circumstances as set

forth in section 214(c)(1).

11. Proration of Assistance

The 1994 proposed rule provides for proration of assistance for

applicant and tenant families containing family members with eligible

and ineligible immigration status (``mixed families''). The allowance

for proration of assistance departs from HUD's previous position on

this issue. HUD previously took the position that proration was not

authorized by section 214, and even if authorized, not feasible in its

covered programs, particularly in HUD's public housing and section 8

programs. On further consideration, HUD acknowledges that the statutory

language does not prohibit proration of assistance, and HUD has

designed formulas for proration that it believes will make proration of

assistance possible in covered programs.

HUD specifically requests comment from the public on the proration

formulas set forth in Secs. 200.188, 812.11, 905.310(s), and 912.11.

HUD welcomes suggestions on alternative formulas and comments on the

subject of proration of assistance, generally.

12. Other

Additional provisions in the 1994 proposed rule (particularly those

that differ from the 1988 proposed rule) are addressed in the

discussion of public comments on the 1988 proposed rule set forth in

section VII of this preamble.

Documents in Other Languages. One additional provision included in

the 1994 proposed rule is a requirement that for any document or notice

that the rule requires the responsible entity (housing authority,

project owner, mortgagee) to provide an applicant or tenant or to

obtain the signature of the applicant or tenant, the responsible

entity, where feasible, is to provide such document in a language that

is understood by the applicant or tenant if he or she is not proficient

in English.

Nondiscrimination Requirements. The 1994 proposed rule includes a

provision that restricts the responsible entity from administering the

restrictions of section 214 in a manner which discriminates or treats

persons differently because of race, color, religion, national origin,

sex, disability or familial status, as prohibited by the Fair Housing

Act (42 U.S.C. 3601-3619), Title VI of the Civil Rights of 1964 (42

U.S.C. 2000d-2000d-5), and section 504 of the Rehabilitation Act of

1973 (29 U.S.C. 794). Such unlawful actions include determinations of

eligibility and ineligibility, using different requirements to

ascertain that eligibility or ineligibility, and treating persons

differently, if those actions are based on such factors as language,

country of origin, or family associations.

B. Organization of Proposed Rule

Because of the number of HUD programs covered by section 214, this

proposed rule amends several program regulations in three chapters of

HUD's regulations: 24 CFR Chapter II, Chapter VIII, and Chapter IX.

Within these three chapters, conforming amendments are made to several

parts, and four parts are substantially amended to address the

restrictions of section 214. These parts are: parts 200, 812, 905, and

912. The regulations implementing section 214 in each of these four

parts are divided into the following regulatory sections, and generally

follow the order shown below.

Sec. Definitions. (200.181, 812.2, 905.102, 912.2)

Sec. Requirements concerning notices and documents. (200.180a, 812.5a,

905.310(a), 912.5a)

Sec. General provisions (200.182, 812.5, 905.310(b), 912.5)

Sec. Submission of evidence of citizenship or eligible immigration

status. (200.183, 812.6, 905.310(e), 912.6)

Sec. Documents of eligible immigration status. (200.184, 812.7,

905.310(k), 912.7)

Sec. Verification of eligible immigration status. (200.185, 812.8,

905.310(l), 912.8)

Sec. Delay, denial or termination of assistance. (200.186, 812.9,

905.310(m), 912.9)

Sec. Preservation of mixed and other families. (200.187, 812.10,

905.310(f), 912.10)

Sec. Proration of assistance. (200.188, 812.11, 905.310(s), 912.11)

Sec. Prohibition of assistance to noncitizen students. (200.189,

812.12, 905.310(t), 912.12)

Sec. Compliance with nondiscrimination requirements. (200.190, 812.13,

912.13)

Sec. Protection from liability for responsible entities, State and

local agencies and officials. (200.191, 812.14, 905.310(u), 912.14)

Sec. Liability of ineligible families for reimbursement of benefits.

(200.192, 812.15)

VII. Response to Public Comments on 1988 Proposed Rule

This section of the preamble discusses the significant issues and

questions raised by public comments received on the 1988 proposed rule.

The discussion of public comments on the 1988 proposed rule is included

in the preamble to the 1994 proposed rule to assist the public in

understanding why certain provisions in the 1988 proposed rule were

revised or not revised in the 1994 proposed rule.

During the public comment period for the 1988 proposed rule, 20

comments were received. These represented the views of several housing

authorities, two State departments of housing, project owners, an

association of management agents, and an association of housing

officials, legal services organizations, immigration law organizations,

and an advocacy group for the elderly. Many comments made suggestions

criticizing the restrictions for being too broad, the special relief

for being too narrow, or the procedures for giving inadequate

opportunity to applicants to demonstrate eligibility. However, other

comments focused on the burden placed on the entity responsible for

enforcing the restrictions and complained that the procedures were too

complicated and costly.

In addition to the comments received during the comment period of

the 1988 proposed rule, HUD held an informal meeting at HUD

headquarters in February 1994 on the subject of the restrictions

imposed by section 214. This meeting was attended by representatives of

organizations that included, but were not limited to: The Farmers Home

Administration, the Association of Farmworker Opportunity Programs,

California Rural Legal Assistance, Inc., Chicanos for La Causa, New

York Legal Aid Society, National Center for Youth Law, National Council

of La Raza, National Housing Law Project, and the Puerto Rican Legal

Defense and Education Fund. These organizations submitted additional

written comments at, and subsequent to, the meeting. These comments are

part of the docket file for this rule, and are available for inspection

by the public.

The following provides a discussion of the comments received on the

1988 proposed rule, and notes the changes that HUD made, and declined

to make in the 1994 proposed rule as a result of these comments.

A. Restrictions To Apply on Effective Date of Final Rule

As discussed in section III.B. of the preamble, the 1994 proposed

rule uses, as did the 1988 proposed rule, the phrase ``the effective

date of the final rule'' in lieu of the statutory phrase--``date of

enactment'' of the 1987 Act.

B. Eligible Status

1. Noncitizen Eligibility Limited to Statutory Categories

Two housing agencies and a legal services organization stated that

Seasonal Agricultural Workers (SAWs) and Replenishment Agricultural

Workers (RAWs) should be included in the rule's list of noncitizens

with eligible immigration status. These two categories of noncitizens

were authorized to be given temporary lawful resident status by IRCA,

which also granted amnesty to noncitizens who had resided illegally in

the United States since before January 1, 1982. Although a later

amendment to the HUD statute governing eligible immigration status for

these programs (the 1987 Housing Act) clarified that the latter

category of noncitizens have eligible status, it did not refer to the

SAWs and RAWs. For this reason, the 1988 proposed rule did not include

SAWs and RAWs as having eligible status.

However, after reviewing the language of IRCA pertaining to SAWs

and RAWs (amending sections 210 and 210A of the Immigration and

Nationality Act), and consulting with the Immigration and

Naturalization Service (INS) about the interpretation to be given

sections 210(a)(5) and 210A(d)(4) (8 U.S.C. 1160 and 1161), HUD

determined that noncitizens admitted for temporary or permanent lawful

residence under these sections have eligible status, as long as their

status has not expired or changed. In a letter to HUD dated December

17, 1993, the INS noted that as a practical matter, no additional RAWS

were admitted during Federal fiscal years 1990 through 1993, the period

in which RAWS could have been admitted, and stated that no noncitizens

``were or will be admitted as RAWs.'' Consequently, the 1994 proposed

rule includes reference to SAWs, but not RAWs.

One commenter urged that HUD add to its list of the categories of

eligible noncitizens two categories not expressly recognized by the

statute as having such status: (1) Noncitizens who have lived, worked

and paid taxes in the United States for many years and who will become

legal permanent residents in the near future, such as relatives of

citizens or permanent residents; and (2) noncitizens who are so

elderly, ill, or disabled that the INS will not deport them on

humanitarian grounds.

HUD lacks the legal authority to add these categories of

individuals to the list of those eligible for admission to the programs

covered by this rule. However, if individuals meeting these

descriptions already reside in assisted housing, they may qualify for

continued assistance under the regulatory provisions pertaining to

mixed families if they live with citizens or permanent residents, or

for deferral of termination of assistance if they are unable to locate

alternative suitable housing.

2. Ineligibility of Noncitizen Students

Section 214 provides that noncitizen students who are not

immigrants (i.e., are not seeking to establish residency in the United

States) are not eligible for assistance. The Congress passed the

provision concerning nonimmigrant student noncitizens (sec. 164, Pub.

L. 100-242, 101 Stat. 1861) in the late fall of 1987, directly targeted

against noncitizen students who are nonimmigrant in very emphatic

language: ``Notwithstanding any other provision of law, the Secretary

of Housing and Urban Development may not make financial assistance

available for the benefit of'' a noncitizen student who is a

nonimmigrant. (Emphasis added) HUD lacks the authority to modify this

mandate. However, the Chinese Student Protection Act of 1992, Public

Law 102-404, dated October 9, 1992, allows certain persons who may have

been admitted to the United States as noncitizen students who are

nonimmigrants to adjust their status to that of lawful permanent

residents of the United States, and thus become eligible noncitizens

under this rule. (See 8 CFR part 245 as amended on July 1, 1993, 58 FR

35832.)

HUD, however, has interpreted the restrictions on assistance to

noncitizen students as not applying to the citizen spouse of a

noncitizen student or to the children of the citizen spouse and

noncitizen student.

C. Submission of Evidence of Eligible Status

1. Documentation Requirements--Who Submits What

One commenter urged HUD to require all applicants and tenants,

whether citizens or noncitizens, to submit documentation establishing

eligibility. The commenter insisted that by doing so, HUD would reduce

the likelihood of discrimination by owners, and ensure that applicants

do not bypass the verification procedures by simply declaring that they

are citizens. In contrast, another commenter insisted that HUD's

requirement that noncitizens and citizens submit documentation of

eligible citizenship or immigration status would only increase the

burden on already-busy property managers.

The 1994 proposed rule maintains documentation requirements because

documentation requirements are imposed by statute. However, the 1994

proposed rule revises the documentation requirements for citizens, and

for noncitizens who are or will be 62 years of age or older and are or

will be residing in assisted housing when these regulations take

effect. The 1994 proposed rule removes the requirement in the 1988

proposed rule that citizens and noncitizens 62 years of age or older

and residing in assisted housing submit a verification consent form.

(See section VI.A.2. of this preamble which describes the documentation

required by the 1994 proposed rule.)

The 1994 proposed rule does not modify the documentation

requirements for all other noncitizens (i.e., those who are not 62

years of age or older and residing in assisted housing) because these

documentation requirements for noncitizens are statutorily prescribed

by the Immigration Reform and Control Act of 1986 (IRCA) (42 U.S.C.

1320b-7). Under IRCA, every individual who declares him or herself to

be a noncitizen with eligible immigration status (except for certain

elderly tenants) must submit immigration documents for verification by

the INS. This requirement applies to every member of a household,

including children.

HUD disagrees with the commenter who suggested that requiring all

tenants and applicants to submit documentation of citizenship or

immigration status would lessen the likelihood of discrimination by

responsible entities. Under both the 1988 and 1994 proposed rules, a

responsible entity is required to ask any individual declaring eligible

immigration status to submit immigration documents for verification

with the INS.

Individuals who declare in writing that they are United States

citizens are not required under IRCA to submit proof of citizenship.

HUD construes this provision to mean that the Congress specifically

intended to exempt citizens from IRCA's document submission and

verification procedures, and this statutory construction is reflected

in the 1994 proposed rule, as it was in the 1988 proposed rule. (See,

also, the discussion between Senators Kennedy and Hawkins at 131 Cong.

Rec. S11414, 11417 (daily ed. September 13, 1985).)

This interpretation is supported by the language contained in Part

A of IRCA. Specifically, section 101 of IRCA (Control of Unlawful

Employment of Aliens) amends the Immigration and Nationality Act by

adding a new section 274A (8 U.S.C. 1324a), which provides at section

274A(b) for the establishment of an employment verification system.

Under section 274A(b), the Congress specifically required an employer

to attest under penalty of perjury that it had verified that an

individual was not an unauthorized noncitizen, and that the

verification was based upon a review of certain statutorily prescribed

documents. These documents include, among others, U.S. passports and

certificates of U.S. citizenship or naturalization. This statutory

scheme is markedly absent under HUD's provisions under Part C of IRCA

(Verification of Status Under Certain Programs). Accordingly, given the

marked absence of these requirements from section 214, HUD is not

imposing a proof of citizenship requirement in the rule.

One commenter urged HUD to exempt persons with disabilities from

the rule's ``citizen and noncitizen status documentation

requirements.'' Another commenter asked that the rule exempt from the

documentation requirements all persons who are covered by HUD's

definition of ``elderly person,'' which would include non-elderly

persons and persons with disabilities. The commenter suggested that the

exemption could be limited to those instances where the individual

actually submitted medical proof of his or her disability.

The documentation requirements under the rule are statutorily

mandated under IRCA, and HUD does not have the discretion to

administratively exempt from those requirements a particular group of

persons. Moreover, section 621 of the Housing and Community Development

Act of 1992 (106 Stat. 3812) (1992 Act), which amended section 3 of the

U.S. Housing Act of 1937 (42 U.S.C. 1437a) (1937 Act), revised the

statutory definition of ``elderly person'' to remove the reference to

persons with disabilities and limit this term to persons who are 62

years or older. (Before the amendment, persons with disabilities were

included in the definition of ``elderly person,'' regardless of the age

of the disabled person.) Accordingly, as amended by the 1992 Act a

person with disabilities meets the 1937 Act definition of ``elderly

person'' if the person is 62 years or older. In light of the amendment

made to the definition of ``elderly person'' by the 1992 Act, HUD

cannot treat disabled persons who are not 62 years of age or older as

if they were elderly persons.

It is important to clarify two related points on this issue. Since

any individual who declares, under penalty of perjury, that he or she

is a United States citizen is not required to submit proof of

citizenship, no documentation requirements are imposed upon a person

with disabilities (or anyone else) who is a U.S. citizen. Similarly,

any person with disabilities who (1) is a noncitizen, (2) is 62 years

of age or older or will be 62 years of age by the time he or she is

required to submit evidence of eligible status, and (3) is receiving

HUD assistance on the effective date of this final rule, is exempt from

the rule's requirements to submit evidence of immigration status. This

person only would be required to submit, in addition to the

declaration, a proof of age document. As a result, even though there is

no specific exemption for persons with disabilities under this rule, it

is still possible that a person with disabilities may not have to

submit immigration status documentation because of the rule's own

general exemptions.

2. Persons Other Than Citizens and Certain Elderly Persons Are Not

Exempt From Documentation Requirements

One commenter argued that the statutory provision establishing the

statutory documentation requirements does not apply to applicants

because section 214(d) requires immigration documents to be submitted

by individuals who are, among other things, ``receiving financial

assistance on the date of the enactment of the Housing and Community

Development Act of 1987.'' (As noted in the discussion under section

VII.A. of this preamble, in both the 1988 and 1994 proposed rules, HUD

replaces the term ``date of enactment'' of the 1987 Act with

``effective date of final rule.'')

Since applicants for HUD assistance could not have been ``receiving

financial assistance on February 5, 1988'' (the date of enactment of

the 1987 Act), the commenter contends that applicants do not need to

submit documents verifying citizenship or eligible immigration status

until they actually become recipients. Consequently, this commenter

asked HUD to include in the rule a prohibition against the removal of

any applicant's name from a waiting list based upon a failure to verify

immigration status with the INS.

HUD disagrees with this interpretation. The 1987 Act amended

section 214 to provide that:

If such an individual is not a citizen or national of the United

States, is not 62 years of age or older, and is receiving financial

assistance on the date of the enactment of the Housing and Community

Development Act of 1987, there must be presented either * * * (alien

registration documents or other documents acceptable to HUD). (42

U.S.C. 1436a(d)(2))

HUD has construed this language to mean that only two classes of

individuals are exempt from the immigration documentation requirements:

(1) Those who declare themselves to be U.S. citizens or nationals; and

(2) noncitizens who are or will be 62 years of age by the time they are

required to submit immigration documents, and who were receiving HUD

financial assistance on the effective date of this final rule. This

second category of persons, however, would be required to present proof

of age.

The commenter proposes that HUD establish an additional exemption

for all applicants to assisted housing. Again, under this

interpretation, the documentation requirements would not be triggered

until the applicant becomes a tenant ``receiving financial

assistance.'' HUD believes that there is no legal basis for adopting

this interpretation of the 1987 Act. There is no evidence in the 1987

Act that the documentation requirements of section 214 were intended to

apply only to tenants. To the contrary, the 1987 Act contains other

provisions that support that the documentation requirements were

intended to cover applicants as well. (See, for example, 42 U.S.C.

1436a(d)(4)(A)(ii) and 1436a(d)(4)(B)(ii), which prohibit HUD from

delaying, denying, reducing or terminating an individual's eligibility

for financial assistance pending INS verification or appeal.)

Moreover, in discussing the proposed implementation of the SAVE

verification system under IRCA, Senator Hawkins specifically remarked:

* * * [I]f the applicant is not a U.S. citizen, the State is

required to use the person's alien file or alien registration number

to verify with the Immigration and Naturalization Service the

alien's immigration status * * * (Emphasis added) (at 131 Cong. Rec.

S11415, daily ed. Sept 13, 1985).

Clearly, the Congress intended the SAVE system to be used to verify the

immigration status of applicants to assisted housing, and not to delay

this process until after the applicant became a tenant receiving HUD

assistance. Consequently, the 1994 proposed rule does not revise the

1988 proposed rule's interpretation of this statutory language.

Two commenters urged HUD to consider an alternative interpretation

concerning the elderly exemption, one which would exempt from the

rule's documentation requirements any individual who not only is 62

years of age or older and receiving HUD financial assistance on the

effective date of the final rule, but an individual who is receiving

HUD financial assistance on the effective date of the final rule, and

who will be 62 years of age by the time he or she is required to submit

evidence of eligible status. This revision would provide individuals

with a longer period of time in which to qualify under the elderly

exemption. HUD agrees that this is the preferable statutory

interpretation, and is consistent with Congressional intent concerning

the protections to be provided to persons already receiving assistance

and elderly persons. Accordingly, the 1994 proposed rule contains this

interpretation.

Another commenter on the ``elderly exemption,'' advocated that the

exemption apply to both current tenants of HUD-assisted housing, and

``to future applicants who are elderly.'' Citing from the House

Committee Report on H.R. 4 (H.R. Rep. No. 100-122, 100th Cong., 1st

Sess. 49 (1987)), the commenter contended that Congress meant to

exclude from the rule's documentation requirements all elderly

individuals, and not just those who were receiving financial assistance

on the effective date of HUD's final rule. The commenter quoted from

page 50 of the House Committee Report:

Elderly persons 62 years or older would only have to certify,

and would not have to provide documentation establishing their

immigration status or nationality.

While it is true that the House version of the 1987 Act would have

extended the elderly exemption to all persons 62 years of age or older,

this language was modified prior to passage of the bill. Under section

164(c)(1) of the 1987 Act, as passed (101 Stat. 1861), the Congress

narrowed the exemption to apply only to an individual who is ``* * *

62 years of age or older, and (who) is receiving financial assistance

on the date of the enactment of the Housing and Community Development

Act of 1987.''

As discussed above, HUD construes this language to mean that the

elderly exemption applies only to individuals who are or will be 62

years of age by the time they would be required to submit evidence of

eligible status, and who are receiving HUD financial assistance on the

effective date of the final rule. Accordingly, HUD has not adopted the

suggested modification in the 1994 proposed rule.

3. Submission of Original Documentation

One commenter argued that elderly persons would be unable to

produce original records proving their age in the time period allowed

by the proposed regulations. HUD notes that the 1988 proposed rule did

not provide any time limit for the submission of documents, including

documents establishing an individual's age. With regard to the

documentation that is needed to establish an individual's age (i.e.,

the types of acceptable documents, and whether original documents must

be submitted or whether some alternative procedure is permissible), the

1994 proposed rule does not prescribe acceptable documentation.

Responsible entities will continue to follow existing procedures used

in the various assisted housing programs to document age (i.e., to

document that a person is an ``elderly person''). HUD also notes that

most individuals who are 62 years of age or older will have readily

available the documents establishing age since those documents are

needed to obtain social security benefits, and other benefits provided

by communities (e.g., discounts for senior citizens).

Several commenters urged HUD to eliminate the requirement in the

1988 proposed rule that applicants and tenants must submit original

immigration documents for verification with the INS. These commenters

asserted that the proposed rule failed to consider the burden this

requirement would impose upon individuals who had to surrender their

INS documents, or upon HAs that would have to implement costly

procedures to keep track of these documents. As an alternative, these

commenters suggested that individuals be permitted to submit certified

copies of INS documents, with original INS documents required only when

the responsible entity has a reasonable suspicion of fraud or

misrepresentation.

HUD has consulted with the INS about whether certified immigration

documents, rather than original INS documents, are acceptable for SAVE

verification. The INS has indicated to HUD that ``* * * only originals

of documents denoting immigration status'' may be used to establish

eligibility through the SAVE system. Consequently, HUD does not have

the discretion to modify this provision of the rule. However, it should

be noted that under no circumstance should a responsible entity retain

in its possession any original INS documents. The responsible entity

should review the original INS document, make photocopies of the

document for its own records, and return the original document to the

applicant or tenant as quickly as possible. This restriction on the

retention of original INS documents by the responsible entity is

included in the 1994 proposed rule.

4. When Documentation Is To Be Submitted

Two commenters noted that the 1988 proposed rule did not contain

time limits for applicants and tenants to submit their immigration

documents. The commenters stated that, to the extent immigration

documents must be submitted within the time period for the general

recertification of eligibility process, it would be ``too brief a

period.''

HUD agrees with the suggestion that owners and housing authorities

(HAs) must provide notice of the time period for submission of

immigration documents. Section VI.A.3 of this preamble describes the

time for submission of documents as provided in the 1994 proposed rule.

The 1994 proposed rule also requires owners and HAs to inform

applicants and tenants of this time period in the notice to applicants

and tenants that advises them that the provision of financial

assistance or continued financial assistance is contingent upon the

submission and verification of immigration documents.

Another commenter asked that the rule clarify that the responsible

entity's notice to tenants and applicants, advising that financial

assistance is contingent upon the submission and verification of

immigration documents, be in writing. HUD intended that this notice be

in writing, and the 1994 proposed rule makes this clarification.

Several commenters asked HUD to include in this notice, as well as

the notice informing ineligible applicants and tenants about the denial

or termination of assistance, of the existence of, and the procedures

for obtaining relief under, the ``preservation of families'' provision.

HUD agrees that both of these notices should inform applicants and

tenants that they may qualify for relief under the preservation of

families provision, and indicate the criteria and procedures for

obtaining such relief, and the 1994 proposed rule adopts this

requirement for notices.

5. Removal of 1988 ``Reason to Suspect'' Provisions

A number of commenters expressed concern that the 1988 proposed

rule authorized an owner or HA to initiate termination procedures

whenever there is evidence of conflicting or inconsistent information

regarding an individual's identity or claimed citizenship status.

Several commenters claimed that the 1988 rule's ``reason to suspect''

provision invites discrimination against anyone who ``appears

foreign,'' and they urged that sanctions be imposed upon responsible

entities that are found to have discriminated on this basis.

The 1994 proposed rule removes this provision. Any false statement

or fraudulent evidence concerning eligibility on the basis of eligible

citizenship or immigration status should be handled in the same manner

that an owner or HA addresses false statements or fraudulent evidence

with respect to other aspects of eligibility. To the extent possible,

eligible citizenship or immigration status should be treated the same

as other factors that are taken into consideration in determining a

person's eligibility for assistance or continued assistance. Except

where mandated by statute (notice requirements, verification

procedures, hearing requirements, special relief provisions), the

proposed rule directs the responsible entity to rely on existing

procedures that are in place and applicable to other eligibility

factors.

6. Privacy Issues

One commenter asked HUD to revise the provision in the 1988

proposed rule that granted authority to HUD to share with Federal,

State or local government agencies any information that it obtains

during the verification process. The commenter stated that information

concerning citizenship or eligible immigration status obtained by HAs

and project owners during the verification process should not be used

for any purpose other than to determine eligibility for assistance.

Information contained in the HUD systems of records is subject to

the provisions of the Privacy Act of 1974 (5 U.S.C. 552a). Information

gathered by HAs or private owners is not. However, any information

gathered by these entities could be subject to State or local privacy

laws. The 1988 proposed rule purported to list all the sources to which

the information could be released and the purposes for which the

information could be used. HUD has concluded that a rule cannot

anticipate all the possibilities in which such evidence may be

compelled to be released by HUD or the project owner or HA under

applicable law, and the 1994 proposed rule removes the list of

circumstances in which evidence of eligible status may be released.

(Section VI.A.7 of this preamble describes how the 1994 proposed rule

addresses this issue.)

With respect to the privacy issue, HUD has determined that the

project owner, like HUD, should bear no obligation to control what an

agency (to which the project owner or HUD was required to release

evidence of eligible immigration status) does with this evidence.

Therefore, the 1994 proposed rule provides that neither HUD nor the

responsible entity is responsible for the further use or transmission

of the information released in accordance to applicable law.

7. Security of INS Data Base

A number of commenters mentioned that there is a serious potential

for misuse of the INS data base, particularly when the data base is

being accessed by private entities. They suggested that HUD include

``enhanced protections'' in the rule to safeguard the confidentiality

of information obtained from the data base. Similarly, another

commenter urged that authorized names or approval numbers for INS

document verification be provided to owners and HAs.

With regard to the first comment, HUD points out that the INS

already has protections built into the SAVE system to maintain the

confidentiality of system information, particularly when information is

being accessed by private individuals. In addition, HUD will provide

the INS with the names and approval numbers of project owners or HA

representatives who are authorized to access the SAVE system. The

project owners and HA representatives may use information obtained from

the INS and the applicant only in accordance with the verification

consent form.

D. Documents of Eligible Status

Several commenters advocated recognition of an immigration judge's

decision granting a suspension of deportation as evidence of lawful

admission for permanent residence. Their reasoning was that the Form I-

551, which ordinarily evidences lawful admission for permanent

residence, is issued after the decision and backdated to the date of

the decision but may not be available when an applicant or tenant needs

to establish eligible immigration status.

The INS has informed HUD that the decision of an immigration judge

to suspend deportation is not final when issued. The INS may review

such a decision and reverse it. If the INS decides not to reverse the

decision, or is unable to act within the required review period, a Form

I-551 is issued and the decision becomes final. Therefore, while a copy

of the decision itself is not evidence of final INS action conferring

eligible status, the Form I-551 is. The 1994 proposed rule does not

include a decision to suspend deportation in the list of acceptable

documentation of eligible immigration status, since it is not evidence

of final INS action. However, if an applicant or tenant has only the

judge's order suspending deportation at the time of application or

recertification of income, he or she can appeal to the INS to obtain a

final determination of immigration status and a Form I-551.

The Department of Agriculture contacted HUD about its inclusion of

Form I-688A in the list of documents evidencing eligible immigration

status. Since the housing programs operated by the Department of

Agriculture are to follow the same strictures concerning eligible

noncitizens (with the exception of farm workers' housing) as apply to

HUD programs, the inquiry was whether Form I-688A is evidence of a

grant of eligible status under HUD programs, or whether it is merely

evidence that an individual has applied for eligible status. After

consulting with the INS, HUD determined that it is the latter.

Therefore, the I-688A has been removed from the list of documents that

evidence eligible immigration status in the 1994 proposed rule.

In the 1994 proposed rule, other changes were made to the list of

immigration documents that appeared in the 1988 proposed rule. These

changes were made in response to a 1993 letter from the INS, which

provided information concerning the current status of various

identification documents (i.e., current form numbers, the annotation on

cards, etc.), and HUD will further consult the INS on applicable

immigration documents before issuance of the final rule.

E. Verification of Eligible Immigration Status

1. General

One commenter asked HUD to specifically state in the rule that

eligibility determinations by HAs may not be relied upon by third

persons as evidence of citizenship or immigration status. HUD has not

included the requested language in this 1994 proposed rule because HUD

has no authority to either require or prohibit persons to rely on HA

eligibility determinations as evidence of citizenship or eligible

immigration status.

2. Verification Based Solely on INS Documents

Several commenters objected to the requirement in the 1988 proposed

rule that the responsible entity obtain from the applicant or tenant

either an INS document that contains a photograph, or an additional

document with a photograph, to ensure the alien's identity. These

commenters noted that neither IRCA nor the 1987 Housing Act requires an

individual to submit a photograph when the INS document submitted does

not contain one.

The 1994 proposed rule requires only the submission of the INS

immigration document in whatever form that document may be in (i.e.,

whether it contains a photograph or does not contain a photograph).

3. No Denial or Termination of Assistance Pending Verification Process

Three commenters asserted that the 1988 proposed rule would have

implemented section 121 of IRCA ``* * * in a manner that violates many

of section 121's protections for the public, and without a well-

developed plan with the INS for processing verification requests and

for reimbursement.'' The commenters expressed concern that INS records

may be unreliable, verification could take several months and produce

erroneous results, and the consequences would be that eligible persons

would have assistance denied or terminated.

The 1994 proposed rule closely tracks the statutory protections

found in 42 U.S.C. 1436a (d)(4)(A)(ii) and (d)(4)(B)(ii). These

statutory sections require HUD to provide a ``reasonable opportunity''

to submit documents, and to appeal to the INS. The 1994 proposed rule

requires that a responsible entity not deny admission to an otherwise

eligible applicant to a covered program solely on the basis of

immigration status, when such assistance is available, or terminate

assistance to a tenant, during the ``reasonable opportunity'' to submit

immigration documents, or pending the INS verification process, or the

INS appeal. Under this expansive interpretation, an applicant or tenant

would not be penalized for any delay in verifying eligible immigration

status, irrespective of the cause for the delay.

However, for applicants, the protections against ``delay'' in

providing assistance only extend through the INS appeal process. The

statute does not provide protection for an applicant against delay in

providing assistance during the pendency of the informal hearing

process. While the statute provides that during the pendency of the

informal hearing process, assistance may not be denied or terminated

(42 U.S.C. 1436a(d)(6)(D)), the statute drops reference to ``delay.''

Three commenters noted that the proposed rule failed to establish a

timetable for owners to submit documents to the INS for verification.

They contended that delays in the submission of immigration documents

to the INS could jeopardize a person's eligibility for assistance or

continued assistance, and thereby violate the statutory mandate that

assistance not be delayed, denied, or terminated as a result of the

verification process. These commenters urged HUD to include in the rule

a timetable for the submission and processing of documentation.

The 1994 proposed rule adopts this suggestion although protections

provided by 42 U.S.C. 1436a (d)(4)(A)(ii) and (d)(4)(B)(ii), as

discussed above and incorporated in the rule, renders the issue largely

moot. As discussed above, a responsible entity must admit an otherwise

eligible applicant to an available unit during the period provided to

submit immigration documents, or pending the INS verification, or INS

appeal process. Thus, even if an owner delays the submission to the INS

of an applicant's immigration documents, the delay will not affect the

applicant's ability to obtain assistance if the applicant is otherwise

eligible, and if assistance is available. Nevertheless, the 1994

proposed rule requires that a responsible entity submit to the INS no

later than 10 days following the date of submission copies of

immigration documents that it obtains from applicants and tenants.

HUD has refrained from establishing a specific time period for

processing immigration documents, because this can vary greatly

depending upon the circumstances. However, for the same reasons

discussed above, the failure to establish a processing deadline will

not affect a person's eligibility for assistance or continued

assistance if the person is otherwise eligible for assistance.

4. Purpose of Secondary Verification

One commenter asked whether secondary verification would have to be

instituted whenever the primary verification process is unable to

confirm eligible immigration status, including instances where the

primary system verifies ineligible status.

Assistance to an applicant or tenant may never be denied or

terminated solely on the basis of the primary verification system's

determination of ineligibility. The 1994 proposed rule provides that a

responsible entity must institute secondary verification whenever

primary verification is either unable to confirm eligible status, or

when it verifies ineligible immigration status. The only instance in

which primary verification would be used without the benefit of

secondary verification is when the primary system verifies eligible

immigration status.

A number of commenters asserted that the 1988 proposed rule

improperly characterized the INS secondary verification process as an

appeal. They cited the General Accounting Office's October 1987 Report

on SAVE, in which the INS stated that ``no denial of benefits may be

based solely on primary verification.'' These commenters contend that

secondary verification is not an appeal, but a necessary step because

of inadequacies of the INS primary verification system.

HUD has consulted with the INS concerning IRCA's reference to an

appeals process, and the INS agrees with the commenters that secondary

verification may not substitute for the appeals process under 42 U.S.C.

1436a(d)(4)(A)(i). Further, the INS confirmed that secondary

verification is a necessary step to the denial or termination of

assistance to an individual, and that the INS appeals process cannot be

initiated until after secondary verification establishes that the

individual is not an eligible alien. The 1994 proposed rule therefore

removes the reference to an ``appeal'' that accompanied the ``secondary

verification'' heading in the applicable regulatory sections.

5. Appealing Secondary Verification of Ineligible Status

The 1994 proposed rule includes a discussion of the procedures for

initiating the INS appeal once secondary verification establishes

ineligible status. Under these procedures, the responsible entity must

notify the applicant or tenant of the INS determination of

ineligibility, and of the individual's right to appeal to the INS the

verification decision, to submit additional documentation or a written

explanation in support of the appeal, or to request an informal

hearing. The responsible entity must submit photocopies of these

documents to the appropriate INS district director, together with a

copy of INS Form G-845S (used to process the secondary verification

request) and a cover letter identifying the package as an appeal of the

INS determination of ineligibility. The INS will issue a decision on

the appeal within 30 days from the date of

its receipt of the documents. If the INS is unable to respond within

this time period, it will notify the applicant or tenant and indicate

the reasons for the delay. Pending the outcome of the INS appeal, an

otherwise eligible applicant must be provided with housing assistance,

if such assistance is available, and assistance to a tenant may not be

interrupted.

6. The SAVE System

A few commenters claimed that the 1988 proposed rule's provisions

on the SAVE verification procedures seemed premature, since it appeared

that the necessary coordination with the INS had not yet been

completed. They asked HUD to make clear that a rule would not take

effect until the SAVE process is fully operational.

HUD has been working closely with the INS to implement the SAVE

system for its covered programs, and fully expects to have all of the

necessary coordination completed before the effective date of a final

rule implementing section 214. In addition, HUD plans a delayed

effective date for its final rule. The delay will provide for a period

that is sufficient for project owners and HAs to undergo training on

the SAVE system and become proficient in its use. As a result, HUD

fully expects all necessary coordination with the INS on the use of the

SAVE system to be completed before the effective date of the final rule

implementing section 214.

Other commenters claimed that the 1988 proposed rule failed to

provide the detailed information necessary to implement SAVE such as

how requests for verification would be transmitted to the INS, who

would bear responsibility for lost INS documents, or what line item of

the ``statement of profit or loss'' in HUD Form 92410 should include

the relevant administrative costs.

The procedures for the SAVE system are established by the INS, and

HUD is required to use these procedures. Therefore, elaboration of the

SAVE procedures is not a matter to be established by HUD through

rulemaking. The INS has a handbook governing the procedure, and HUD

will develop supplementary instructions that will assist responsible

entities in following the SAVE procedures. HUD expects to issue

detailed guidance well in advance of the effective date of a final

rule.

F. Reasonable Opportunity to Establish Eligible Status--No Denial or

Termination of Assistance during Reasonable Opportunity Period

Several commenters strongly objected to HUD's interpretation in the

1988 proposed rule of 42 U.S.C. 1436a(d)(4)(A)(ii) and (d)(4)(B)(ii).

These statutory sections state that HUD must provide individuals with

``a reasonable opportunity'' to submit immigration documents for

verification with the INS, and that pending this period HUD may not

``delay, deny, reduce, or terminate (an) individual's eligibility for

financial assistance on the basis of the individual's immigration

status.''

In the 1988 proposed rule, HUD maintained that so long as the

responsible entity continued to process an applicant for purposes of

establishing eligibility for financial assistance, and placed the

applicant's name on a waiting list once eligibility (aside from

eligible immigration status) was established, it was complying with the

requirements of IRCA. HUD reasoned that under this procedure the

applicant's ``eligibility for financial assistance'' would not be

delayed pending the secondary verification, even though assistance

would not actually be provided until eligible immigration status was

verified with the INS.

The commenters argued that delaying assistance because of

immigration verification violates IRCA's prohibition against delaying

assistance during the reasonable opportunity to submit immigration

documents, or pending the INS verification or INS appeal. They further

claimed that the distinction drawn by HUD in the preamble to the 1988

proposed rule between delaying eligibility and delaying financial

assistance violates IRCA as soon as an applicant reaches the top of the

waiting list. The commenters instead advocated admitting applicants

based upon their written declarations of eligibility, and later

evicting them if secondary verification establishes that the tenant is

an ineligible alien.

As discussed under section VII.E.3 of this preamble, HUD has

reconsidered its interpretation of 42 U.S.C. 1436a(d)(4)(A)(ii) and

(d)(4)(B)(ii). The 1994 proposed rule provides that an otherwise

eligible applicant must be admitted to a housing assistance program, if

such assistance is available, during the reasonable opportunity to

submit immigration documents, pending the INS primary or secondary

verification of immigration status, or pending the conclusions of the

INS appeal process. Again, however, as discussed earlier in this

preamble, the statute does not provide identical protection to an

applicant during the informal hearing process. Although assistance may

not be denied pending the conclusion of the informal hearing process,

assistance to an applicant may be delayed.

With regard to tenants, the 1994 proposed rule provides assistance

may not be terminated during the reasonable opportunity to submit

immigration documents, pending the INS primary or secondary

verification, or pending the conclusion of the INS appeal process, or

pending the conclusion of the informal hearing process.

G. Proration of Assistance Permitted

Several commenters disagreed with HUD's analysis in the preamble to

the 1988 proposed rule (53 FR 41046-47) that IRCA's prohibitions

against delaying, denying, reducing or terminating assistance pending

verification also preclude the proration of assistance (i.e.,

permitting a family with ineligible family members to continue to

receive assistance, based only on the eligible members). The commenters

insisted that this language was intended solely to protect individuals

against the loss of benefits during INS verification of immigration

status, and should not be used by HUD to prohibit the proration of

assistance.

As discussed earlier in this preamble, HUD has revised its position

on the issue of proration of assistance. HUD agrees with the commenters

that the statutory language is insufficient to support the prohibition

of proration of assistance. The 1994 proposed rule provides for

proration of assistance for applicants and tenants. Again, HUD

specifically requests comment on the issue of proration of assistance,

on the formulas for prorating assistance as set forth in the proposed

rule, and welcomes suggestions and recommendations on how these

formulas could be improved or made simpler.

H. Changing Units or Housing Programs

One commenter asked HUD to revise the provision in the 1988

proposed rule that would require a responsible entity to verify a

tenant's immigration status as a condition of transferring from one

unit to another, or from one housing assistance program to another. The

commenter stated that there may be instances in which the tenant family

has to transfer through no fault of its own during the term of the

lease, and HAs should have the discretion to continue assistance under

such circumstances for a minimum of one year.

HUD agrees that a tenant who transfers from one unit to another

within the same housing project should not be required to verify

eligible immigration status since that tenant would be merely seeking

to continue an existing subsidy, and the 1994 proposed rule adopts this

change. In the case of public housing, even a transfer from one project

to another would be continuation of the existing subsidy and therefore

not involve an ``admission,'' which would require verification of

eligible immigration status, unless the move was from the jurisdiction

of one HA to another HA.

With regard to transfers from one subsidy program to another or

from one housing project to another, immigration status is verified

when HUD regulations require that the tenant be treated like any other

applicant attempting to receive a new form of housing assistance. HUD's

position is not dependent upon whether the change is voluntary or

involuntary, but rather if the change renders the tenant a new

applicant under HUD's regulations. For example, if a family moved from

one section 236 project to another, the move would be considered a new

admission, because each project is separately owned and operated and

the family would be required to satisfy admission criteria of the

management of the project to which it was moving. Therefore, the family

would be asked to submit information about citizenship or eligible

immigration status along with income eligibility information.

I. Hearings

1. Administrative Burden

One commenter claimed that the hearing requirements contained in

the 1988 proposed rule would place a tremendous administrative burden

upon HAs, and would result in overloading its existing hearing officers

with potentially ``hundreds of ineligible alien determinations.'' The

commenter maintained that this would delay proceedings against truly

undesirable residents, such as those involved in drug transactions.

Another commenter suggested that HAs should respond to the increased

administrative burden by delaying the ineligibility determination

hearings until more serious cases are heard, or by developing some

other priority system.

HUD believes that these commenters have overestimated the number of

hearings that will be requested by persons as a result of ineligibility

determinations under this rule. As noted earlier in this preamble, HUD

believes that the majority of applicants and tenants will be citizens

and assert citizenship. Additionally, HUD expects that it is unlikely

that a noncitizen who has been confirmed by the INS verification system

and appeals process to be ineligible for assistance will go to the

trouble of requesting a hearing to contest the final INS decision.

Consequently, HUD expects the administrative burden imposed upon HAs

and project owners as a result of providing these hearings to be

minimal.

2. Expansion of Procedural Protections in Hearing Process

One commenter questioned the legal sufficiency of the 1988 proposed

rule's informal hearings on the denial and termination of assistance.

HUD believes that the hearing process provided under the 1988

proposed rule was legally sufficient, and complied with the

requirements of the 1987 Act. The 1988 proposed rule met the minimum

statutory requirements for a hearing. Under 42 U.S.C. 1436a(d)(6), HUD

is required to make available to an individual who has been determined

to be an ineligible noncitizen ``* * * the applicable fair hearing

process.'' The section lists the minimum statutory criteria needed to

comport with due process requirements, which include: (1) Written

notice of the determination to deny or terminate benefits, and of the

opportunity for a hearing to discuss the determination; (2) a hearing

before an impartial hearing officer; and (3) written notification by

the responsible entity of the decision of the hearing officer.

The 1994 proposed rule adds certain other due process components to

the informal hearing process. These additional components are those

provided by HAs and project owners for termination of tenancy (e.g.,

see 24 CFR 905.340, and 24 CFR 966.56). HUD believes that the type of

hearing provided for termination of tenancy also should be available to

applicants who are denied assistance on the basis of ineligible

immigration status.

3. Timeframes for Requesting Hearings and Issuing Decisions

Four commenters objected to the 1988 proposed rule's 14-day period

for requesting a hearing, claiming that the period is too brief since

it would run from the date on the notice, and not from the date of

receipt. They urged HUD instead to grant a hearing whenever reasonable

cause is shown for a belated hearing request, or whenever there is only

nominal prejudice to the responsible entity. Another commenter asked

HUD to extend the period for requesting a hearing from 14 to 30 days.

While HUD has not entirely adopted either of these suggestions in

the 1994 proposed rule, the 1994 proposed rule provides that a hearing

must be requested within 14 days of the date of mailing the written

notice of ineligibility or the INS appeals decisions (established by

the date of postmark) or the date of personal delivery of the notice

(established by date of actual delivery) to the applicant or tenant. In

addition, the 1994 proposed rule requires the responsible entity to

grant an extension for requesting a hearing upon good cause shown by

the applicant or tenant.

Other commenters objected to the requirement that responsible

entities must provide an applicant or tenant with a written final

decision regarding the decision to deny or terminate benefits within

five days of the informal hearing. They claimed that this five-day

limit does not provide a responsible entity with sufficient time to

investigate and verify additional documentation that may have been

submitted by the applicant or tenant at the hearing. HUD agrees with

these commenters, and the 1994 proposed rule provides that the

responsible entity must provide its written decision within 14 days of

the hearing date.

4. Hearing Officers

Several commenters expressed concern about the qualifications of

hearing officers under the 1988 proposed rule. The commenters cited the

United States Supreme Court's decisions in Schweiker v. McClure, 456

U.S. 188 (1982) and Matthews v. Eldredge, 424 U.S. 319 (1976) in

support of their claims that the requirements for hearing offices

contained in the 1988 proposed rule are constitutionally deficient.

Specifically, a number of commenters asserted that under the

standards established in McClure, a project owner who wants his or her

employee to qualify as a hearing officer must first ensure that the

employee has knowledge of the SAVE program, immigration law, and

relevant program information.

HUD disagrees with this interpretation of the McClure case. In

McClure, the Supreme Court focused on the second of the three factors

cited in Matthews, which considers the risk of an erroneous decision

and the probable value, if any, of additional or substitute due process

safeguards. The Court then noted that in that case the Department of

Health and Human Services by regulation required its carriers to select

as a hearing officer:

[A]n attorney or other qualified individual with the ability to

conduct formal hearings and with a general understanding of medical

matters and terminology. The hearing officer must have a thorough

knowledge of the Medicare program and the statutory authority and

regulations upon which it is based, as well as rulings, policy

statements, and general instructions pertinent to the Medicare

Bureau.'' (Id. at 1188).

The Supreme Court found that because the HHS regulation ensured the

qualifications of hearing officers, the record did not support the

appellee's claims that additional due process safeguards would reduce

the risk of erroneous deprivation of benefits.

However, it is inaccurate to point to the HHS regulatory standards

on the qualification of Medicaid hearing officers as establishing the

minimum constitutional standards needed to comply with due process.

Moreover, contrary to the suggestion of commenters, it is unnecessary

for HUD to require under its rule implementing section 214 that hearing

officers have substantive knowledge of immigration law. The INS has

undisputed expertise in this area, and under the rule any applicant or

tenant who is faced with the denial or termination of benefits because

of ineligible immigration status is guaranteed an opportunity to

directly appeal to the INS the ineligibility determination. As a

result, it would be duplicative and unnecessary to require hearing

officers to have in-depth knowledge of immigration law.

Two commenters contended that the regulatory sections in the 1988

proposed rule which permitted a hearing to be held before an officer or

employee of the owner so long as he or she did not make the initial

decision of ineligibility, violates the 1987 Act's requirement of an

impartial hearing officer. Another commenter claimed that the informal

hearing established in the 1988 proposed rule failed to satisfy

statutory and constitutional requirements, since both the initial

decision and the decision following the hearing are issued by the

owner, and not the owner's designated representative.

HUD disagrees with these comments. Both the 1988 and 1994 proposed

rules provide that an individual who has received a letter denying or

terminating assistance may request an informal hearing at which he or

she can meet with any person designated by the owner * * * other than a

person who made or approved the decision under review, or other than a

person who is a subordinate of the person who made or approved the

decision under review. HUD believes that this language comports with

due process requirements for impartiality and, as a result, the

provision remains unchanged in the 1994 proposed rule.

Another commenter suggested that the rule provide for hearing

officers to be bilingual, or to provide the applicant or tenant with

interpreters when circumstances require.

The 1994 proposed rule does not require hearing officers to be

bilingual. With respect to interpreters, the 1994 proposed rule

provides that an applicant or tenant is entitled to have an interpreter

present at the denial or termination hearing, at his or her own

expense, or at the owner's expense, as may be agreed upon by the

parties. The owner may already have in his employ a person who speaks

the language of the applicant or tenant, and is willing to have this

person serve as an interpreter. Alternatively, the applicant or tenant

may prefer to select their own interpreter.

5. Record of Hearing

Two commenters claimed that it was essential to the fair hearing

procedure that the responsible entity maintain a record of the hearing

for judicial review.

The informal hearing process does not require that a record be

generated and maintained, and HUD declines to impose such requirement

in this rule. The 1994 proposed rule provides for the responsible

entity to allow an audiotape of the hearing, but no transcript is

required to be made that would meet court standards and facilitate

judicial review. In addition, and in accordance with HUD practice in

the administration of many of its programs, the 1994 proposed rule

requires that documents used by the responsible entity in processing an

application or verification of eligibility of a tenant be maintained

for a period of time.

J. Notices

A number of commenters requested that the notice of denial or

termination of assistance include a brief statement of the reasons for

the denial or termination, and an explanation of any documents found to

be missing or inadequate. In addition, four commenters asked that the

rule be revised to require the responsible entity to inform applicants

and tenants not only of the right to obtain a hearing, but also of the

procedures for initiating the hearing and the INS appeal. HUD agrees

with both of these suggestions and has adopted these changes in the

1994 proposed rule.

Other commenters asked that all notices issued under the rule to

applicants and tenants be required to be bilingual or multilingual, as

necessary. As discussed in section VI.A.12 of this preamble, the 1994

proposed rule imposes a duty on the responsible entity to provide,

where feasible, documents or notices in a language that is understood

by the applicant or tenant if the applicant or tenant is not proficient

in English.

K. Removal of Resumption of Assistance and Retention of Assistance

Provisions

Four commenters claimed that HUD's position on the resumption of

assistance to tenants after required evidence is submitted is unduly

harsh. The commenters referred to the preamble of the 1988 proposed

rule, in which HUD stated that after financial assistance for a tenant

is terminated, assistance would not resume unless all of the required

evidence was submitted by the tenant to the owner, ``* * * and

resumption of assistance is authorized in accordance with HUD

requirements.'' (HUD indicated in the 1988 proposed rule that these

requirements would be described in greater detail in program

handbooks.) The commenters maintained that assistance should always be

restored to an eligible family when necessary to prevent homelessness,

or when a delay in the submission of documentation is caused by

circumstances beyond the control of the tenant.

One commenter stated that resuming assistance to a family after

assistance has been terminated can be programmatically burdensome,

since HA units are typically fully leased and there are waiting lists.

This commenter urged HUD to provide HAs, in advance of the

implementation of the final rule, with the handbook requirements on the

resumption of assistance so that necessary procedures can be developed.

Another commenter objected to HUD's statement in the preamble of

the rule that program handbooks would contain the requirements

governing resumption of assistance. The commenter claimed that these

requirements should be published in the final rule and not in a program

handbook.

On further consideration of this issue, HUD has determined that

once assistance to a tenant has been terminated for ineligible

immigration status, the tenant should be treated the same as if the

assistance were terminated for any other reason. No special procedure

needs to be developed for purposes of this rule.

Similarly, the 1988 regulatory provision concerning ``Retention of

Financial Assistance'' has been removed. This provision prohibited a

responsible entity from receiving or retaining financial assistance

paid for the benefit of a tenant admitted for participation in a

program when required evidence of eligible status has not been

submitted or verified by the INS in accordance with the regulations.

This prohibition applies whether a responsible entity admitted a person

who has ineligible immigration status, or who is ineligible on some

other basis (e.g., the person's income makes them ineligible for

assistance).

L. Extensions; Requirement to Grant Upon Good Cause; and Grant or

Denial to be in Writing

Numerous comments were received on the 1988 proposed rule's

provisions on the extension of time for tenants to submit immigration

documents. (See section VII.F of this preamble concerning reasonable

opportunity to submit documents of eligible status by both applicants

and tenants.)

One commenter stated that while the 1988 proposed rule permitted a

tenant under certain circumstances to obtain an extension of time for

the submission of immigration documents, the 1988 rule failed to

consider the financial burden this requirement imposes upon HAs. In

order to implement this provision, the commenter claimed that housing

authorities would have to develop systems to record extensions, and to

monitor tenant compliance, and the rule should provide reimbursement

for these expenses.

While HUD agrees that recording tenant extensions and monitoring

compliance may impose a certain financial cost to responsible entities,

HUD believes that this cost will be minimal. Again, HUD believes that

most tenants will have eligible status, and tenants who are eligible

for assistance will not need to request an extension of time to submit

immigration documents, but will have the documents readily available.

As discussed under section VII.F of this preamble, the 1994 proposed

rule provides that an extension be granted to applicants and tenants

upon good cause shown.

One commenter argued that in the 1988 proposed rule HUD unfairly

required a responsible entity to document in writing the decision to

grant an extension, but failed to impose a similar requirement on the

decision to deny an extension. The commenter claimed that the same

standards that apply to the decision to grant an extension should also

apply to the denial of an extension.

The 1994 proposed rule provides for the granting or denial of an

extension to be in writing, and if the extension is denied, to state

the reasons for the denial.

M. Preservation of Mixed Families and Other Families

1. Proration of Assistance

The preservation of families provision in the 1994 proposed rule

includes proration of assistance, as discussed earlier in this

preamble. Proration of assistance is available to a mixed family (a

family with members with eligible citizenship/immigration status, and

those without eligible immigration status), other than a family

receiving continued assistance or other than a family for which

termination of assistance is temporarily deferred.

2. Continued Assistance and Deferral of Termination of Assistance--

Generally

Section 1436a(c)(1) (42 U.S.C. 1436a(c)(1)) provides that if

assistance is to be terminated to a family that was receiving

assistance when the 1987 Act was enacted, after a final finding of

ineligibility, special relief may be provided under certain

circumstances:

[T]he public housing agency or other local governmental entity

involved (in the case of public housing or assistance under section

8 of the United States Housing Act of 1937) or the Secretary of

Housing and Urban Development (in the case of any other financial

assistance) may, in its discretion, take one of the following

actions:

(A) Permit the continued provision of financial assistance, if

necessary to avoid the division of a family in which the head of

household or spouse is a citizen of the United States, a national of

the United States, or an alien resident of the United States

described in [section 1436a(a)(1)-(6)]. For purposes of this

paragraph, the term ``family'' means a head of household, any

spouse, any parents of the head of household, any parents of the

spouse, and any children of the head of household or spouse.

(B) Defer the termination of financial assistance, if necessary

to permit the orderly transition of the individual and any family

members involved to other affordable housing. Any deferral under

this subparagraph shall be for a 6-month period and may be renewed

by the public housing agency or other entity involved for an

aggregate period of 3 years. At the beginning of each deferral

period, the public housing agency or other entity involved shall

inform the individual and the family members of their ineligibility

for financial assistance and offer them other assistance in finding

other affordable housing.

With respect to continued assistance, these provisions require a

project owner (including a mortgagee) to consider permitting a family

to continue to receive assistance in either of two situations. If the

head of household or spouse is a citizen or national, or has eligible

immigration status, and continued assistance is necessary to avoid

division of the family, the assistance is to be continued indefinitely.

Deferral of termination of assistance is available to a mixed

family that qualifies for prorated assistance (and does not qualify for

continued assistance) but decides not to accept prorated assistance,

and the responsible entity allows the family time to find other

suitable housing. If granted, the deferral period shall be for an

initial period of six months. The deferral may be renewed for

additional periods so long as the total period does not exceed three

years.

3. Eligibility for These Forms of Relief

Although the language of the statute would only have afforded

relief to families receiving assistance on February 5, 1988, the 1994

proposed rule provides, as did the 1988 proposed rule, that such relief

will be afforded to families receiving assistance at the time the

restrictions on immigration status are imposed. Since the restrictions

are not imposed until the effective date of the final rule, the 1994

proposed rule uses the effective date of the final rule as the critical

date for eligibility for these forms of special relief.

4. Decision to Provide Continued Assistance

a. Project owner discretion. Several commenters objected to the

discretion given project owners under the 1988 proposed rule to

determine whether a family containing at least one ineligible person

could continue to receive assistance. They stated that the statute

authorizes HUD to exercise this discretion, not a private owner. The

commenters expressed concern that private owners would abuse this

discretion, resulting in increased evictions, divisions of families,

and homelessness.

The 1994 proposed rule provides that if the qualifying conditions

are found to exist, the project owner must provide continued assistance

to a family.

A few commenters objected to the provision of the 1988 proposed

rule that permitted project owners to deny special relief to a tenant

who is receiving ``only minimal financial assistance'' if the project

owner determines that the tenant could afford to continue occupancy

without assistance. The commenters stated that this provision is not

authorized by the statute, and that decisions about minimal assistance

and affordability are subjective and must be made by the tenant rather

than the project owner. The 1994 proposed rule does not contain this

provision.

b. HA Discretion. Similar to the concern expressed about the

likelihood of a project owner not granting continued assistance when

the qualifying conditions are satisfied, was the concern expressed by

three commenters that the 1988 proposed rule authorized HAs to not even

consider whether to provide continued assistance to tenants in

occupancy. These commenters stated that implicit in the statutory

authority given to HAs to grant this type of relief to families is the

duty to consider it.

Unlike the statutory language with respect to programs administered

by project owners, which gives the discretion to provide special relief

to HUD, the language applicable to HAs grants the discretion directly

to the HAs. The 1994 proposed rule requires HAs to establish a policy

and the criteria to be followed in determining whether to grant a

family this type of assistance. The rule notes that the statute

establishes certain criteria applicable to continued assistance and

this criteria must be included in the HA's policy guidance.

c. Persons Eligible for Continued Assistance. A number of

commenters took issue with the limit on the type of family to whom

continued assistance is made available. The statute, however,

prescribes the definition of the ``family group'' that is to be

preserved: Head of household, any spouse, any parents of the head of

household, any parents of the spouse, and any children of the head of

household or spouse. The list has been carefully drawn to include not

only common children of the head of household and spouse but also any

other children either of them may have. Other relatives not having the

prescribed relationship to the head of household or spouse (such as an

aunt or uncle) who may have been living in the household and who have

eligible status may be just as integral members of the family, but the

Congress has not included them in the list of persons to be protected.

5. Deferral of Termination of Assistance

a. Discretion to Provide this Type of Relief. The statute permits

HUD (in the case of project owners) or the HA to defer termination of

assistance in certain circumstances. For project owners, the 1994

proposed rule requires project owners to grant this type of relief if a

family meets the qualifying conditions. For HAs, the 1994 proposed rule

permits HAs to determine whether this type of relief will be provided,

but requires the HA, in establishing its standards, to be guided by the

standards set forth in the rule implementing Section 214.

b. Length of the Deferral Period. The statute also requires that

the length of time of any deferral must be six months. The statute

provides that deferrals may be renewed to total as long as 36 months.

Commenters objected to the 1988 proposed rule's provisions that merely

restated these periods. One commenter stated that 36 months exceeded a

reasonable period, arguing in favor of a six month limit, and that a

long deferral period unfairly diverts Federal housing assistance from

eligible applicants. The other objector stated that an HA should have

the discretion to renew deferrals for 12-month periods, to coincide

with the annual recertification date.

The 1994 proposed rule, similar to the 1988 proposed rule,

provides, consistent with Section 214, for the possibility of allowing

subsequent deferrals and that these deferral periods may aggregate to

as long a time as 36 months. Each deferral is to be based on an

examination of the ability of the family to find alternative housing.

Since some housing markets are very tight, HUD believes that owners

should have the flexibility permitted by the statute to allow families

already occupying assisted housing to remain until they are able to

locate other suitable housing.

Two commenters raised the issue of whether deferral of termination

of assistance would be available to persons with ineligible immigration

status. The commenters appeared to believe that to obtain such relief,

the ``family'' must have children.

Temporary deferral of termination of assistance is not limited to

families with children. An ineligible individual residing in Federally

assisted housing could qualify for a deferral of termination of

assistance if the individual could demonstrate that reasonable attempts

to locate other suitable housing were unsuccessful. Recognizing that

barrier-free housing suitable for mobility-impaired individuals is not

readily available in the private market, it is likely that such an

individual could make the necessary showing. (More permanent relief, in

the form of continuation of assistance, might also be possible for a

disabled person who is a member of a multi-person family that meets the

special family definition, e.g., a family consisting of a disabled

undocumented alien and a citizen spouse.)

The 1988 proposed rule provided that, with respect to a tenant

whose termination of assistance has been deferred once, an owner must

make a determination of the availability of affordable housing and a

decision about whether to extend the deferral of termination of

assistance in sufficient time that the tenant can be notified at least

60 days before the expiration of the deferral period of whether

termination will be deferred again.

A few commenters stated that this notice: (1) Must be given in

writing at least 60 days before the expiration of the deferral period;

(2) must be given in accordance with formal notice procedures (stating

the reasons for any decision not to extend the deferral period, which

must be based on relevant factors); and (3) must include an offer of a

hearing.

HUD agrees that adequate notice must be given before the expiration

of the deferral in all cases, and the 1994 proposed rule adopts this

suggestion.

6. Availability of Alternative Housing

Under the deferral of termination of assistance provisions, what is

important to an ineligible tenant is the type of evidence necessary to

demonstrate that ``reasonable efforts'' have been made to find

``affordable housing'' of ``appropriate size''. Several commenters

wanted HUD to provide specific guidelines for these terms to assure

that decisions are not arbitrary. Commenter suggestions with respect to

``affordable housing'' were that this term must refer to housing for

which the rent does not exceed that amount that would be paid in

accordance with section 3(a) of the 1937 Act for a unit in the public

housing program, and housing that is required to meet HUD's Section 8

Housing Quality Standards. Another commenter suggested that this term

should refer to housing located in the same community as that in which

the tenant is currently residing, and that ``appropriate size'' be

established with reference to HUD housing programs.

If ``affordable housing'' and ``appropriate size'' of unit were

defined as suggested by the commenters, it is likely that the only

housing that would satisfy the test would be HUD-assisted housing. In

many markets, housing assisted by HUD under the 1937 Act is the only

resource available to poor families that meets those specifications,

and, therefore, the test of the availability of other affordable

housing would have little meaning. Consequently, HUD declines to define

the ``affordable housing'' alternative in the terms suggested.

However, HUD agrees that some guidance on the subject is needed,

and the 1994 proposed rule provides guidance. The rule provides that

other affordable housing refers to housing that is not substandard,

that is of appropriate size for the family and that can be rented for

an amount not exceeding the amount that the family pays for rent,

including utilities, plus 25 percent.

N. Protection From Liability

One commenter noted that although the 1988 proposed rule protected

from liability both project owners and mortgagees who comply with the

rule's verification requirements, only mortgagees are affirmatively

sanctioned under the rule for noncompliance with the verification

procedures. (See Sec. 235.13(g) of 1988 proposed rule, and

Sec. 235.13(d) of 1994 proposed rule.) The commenter asked HUD to

extend similar sanctions under part 200 to all project owners.

HUD has reviewed ``invalid certification'' language applicable to

mortgagees, and notes that under that provision, a mortgagee in the

section 235 program who falsely certifies to HUD that it has verified a

mortgagor's citizenship or immigration documents, must repay to HUD the

full amount of assistance payments made on behalf of the mortgagor. The

provision also prohibits any additional assistance payments from being

made on the mortgagor's behalf.

One commenter stated that while the 1988 proposed rule provides HAs

with flexibility in implementation, it also increases their potential

liability, and asked that the rule be revised to reduce this exposure.

Another commenter asked that HAs be indemnified for any wrongful

determinations of eligibility.

HUD has not adopted either of these suggestions, since responsible

entities that follow the statutory verification and due process

requirements are protected from liability under both the 1987 Act and

IRCA. Under section 1436a(e) (added by IRCA), HUD is prohibited from

taking:

* * * any compliance, disallowance, penalty, or other regulatory

action against an entity with respect to any error in the entity's

determination to make an individual eligible for financial

assistance based on citizenship or immigration status * * * (if such

eligibility is based upon the responsible entity's complying with

the verification and other procedural due process requirements

mandated under IRCA.)

And, section 1436a(f)(1), added by the 1987 Act, provides that:

Notwithstanding any other provision of law, no agency or

official of a State or local government shall have any liability for

the design or implementation of the Federal verification system * *

* if the implementation by the State or local agency or official is

in accordance with Federal rules and regulations.

Because a responsible entity that follows the verification and due

process requirements established in the final rule is statutorily

protected from liability, HUD has not revised the requirements in the

1994 proposed rule to include any additional protections.

O. Reexamination of Income

Two commenters argued that the requirement for annual verification

of the immigration status of any tenant family containing one or more

non-citizen members is an unnecessary burden for project owners, HAs,

and tenants. The commenters that immigration status rarely changes, and

that any additional burden encountered because of an applicant's lack

of citizenship might result in discrimination by project owners against

all noncitizens.

HUD agrees that the burden of requiring an annual recertification

and verification of immigration status of all noncitizen members of

tenant families outweighs any benefit to be obtained, and the 1994

proposed rule revises the reexamination provisions to restrict the

requirement for submission of a declaration (and documentation and

verification of immigration status, where an alien is involved) to new

individuals joining the household--other than by birth to one of the

occupants.

P. Miscellaneous

1. Cost

Several of the commenters on the 1988 proposed rule complained that

the requirement that the immigration status of all applicants be

documented and verified under these procedures which include the offer

of hearings at several points would be expensive and time-consuming.

One commenter estimated that it would need to hire 56 additional

housing assistants, at a cost of $2 million, as well as conduct

training of its employees, at a cost of $250,000, and spend $800,000 on

notifying applicants of the requirements. Several HA commenters

suggested that HUD reimburse them for additional staff time. Another

commenter speculated that some landlords would withdraw from

participation in HUD programs rather than put up with the extra burdens

and costs of the new requirement.

HUD is aware that the verification procedure prescribed by IRCA is

not without cost. The Federal government will incur the cost of the

computerized verification system (SAVE) operated by the INS. The cost

of operating that system will not be billed to the HA or project owner

accessing the system but to HUD, for each inquiry made to the system.

For HAs and project owners in most areas of the country, the cost of

the verification system will not be substantial, because most

applicants and tenants will certify that they are citizens. For HAs and

project owners located in the parts of the country where the

concentration of noncitizen residents is greatest, there will be

greater impact. However, the additional cost will be only a small,

incremental change in the overall cost of processing applications and

reexaminations.

One small HA advocated that HUD at least provide grants to small

HAs who must computerize to accomplish the required verification. HUD

sees no reason that any HA would need to computerize in order to

implement these requirements. All that is necessary to access the SAVE

system is a touch-tone telephone.

2. Implementation Timing

HAs indicated that the rule should not be implemented until the INS

verification program is fully operational and readily available for

their use. As stated earlier in this preamble, HUD is in full agreement

with that desire. The SAVE system is operational. Funds have been

budgeted for billing the cost of SAVE access for HUD programs to HUD.

After the publication of the final rule, arrangements will be made to

issue identifying codes to the many administrators of HUD-assisted

housing.

3. Other Changes

A number of the sections in the 1994 proposed rule have been

revised and restructured for ease of understanding and clarity of

complex provisions.

In the 1994 proposed rule, HUD has changed the minimum retention

period for documents from 3 years to 5 years. This makes the retention

period coincide with the statute of limitations for criminal

prosecution and the ongoing needs for computer matching to verify

tenant income. The five-year retention requirement does not impose a

burden on HAs and private project owners, because HAs and project

owners currently retain the records concerning the initial

certification, regular recertification and interim recertification for

at least five years.

VIII. Other Matters

Executive Order 12866

This proposed rule was reviewed by the Office of Management and

Budget under Executive Order 12866 as a significant regulatory action.

Any changes made in this proposed rule as a result of that review are

clearly identified in the docket file for this proposed rule, which is

available for public inspection in the Office of HUD's Rules Docket

Clerk, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-0500.

Environmental Review

A Finding of No Significant Impact with respect to the environment

was made in accordance with HUD regulations in 24 CFR part 50 that

implement section 102(2)(C) of the National Environmental Policy Act of

1969 (42 U.S.C. 4332). The Finding is available for public inspection

between 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules

Docket Clerk at the above address.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this proposed rule before publication, and

by approving it, certifies that this rule does not have a significant

economic impact on a substantial number of small entities. HUD believes

that the rule, when implemented, will have only a minimal impact on

small housing project owners, small mortgagees and small housing

agencies, since the procedures specified to implement the restrictions

are to require owners and HAs to use an easily accessible (by

telephone) automated system for verifying immigration status. HUD has

arranged for the cost of the automated verification system, established

by the Immigration and Naturalization Service, to be billed directly to

HUD. The only other significant element of cost or delay in

administration of HUD programs that may be encountered by small

entities as a result of this rule is the requirement for a fair

hearing, on request, for any applicant or tenant found to be

ineligible. This procedure is specifically required by 42 U.S.C. 1436a.

However, HUD does not believe that the cost or delay will be

significant because HUD anticipates that small housing agencies,

project owners and mortgagees will find that the majority of applicants

or tenants are eligible to receive HUD assistance, and therefore fair

hearings to determine eligibility on the basis of immigration status

will be minimal.

Therefore, HUD concludes that this rule will not have a significant

economic impact on a substantial number of small entities, and that to

the extent possible, HUD has minimized the economic impact on all

entities, consistent with the Secretary's responsibilities under

section 1436a.

Executive Order on 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 proposed 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.

This proposed rule addresses immigration, a topic exclusively the

province of the Federal government, and the effect is the direct result

of the statute that imposes the restriction against assistance to

noncitizens, rather than a result of HUD's exercise of discretion in

promulgating a rule to implement the statute.

Executive Order on The Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that the provisions of this

proposed rule, while affecting the composition and well-being of

families, are strictly the result of the statute that imposes the

restriction. The only families upon whom the statute and the rule have

an impact are those containing individuals with ineligible immigration

status who are not receiving the benefit of assisted housing, or whose

continued receipt of assisted housing is not necessary in order to

avoid the division of the family. However, even for families that

contain members with ineligible status, the rule strives to maintain

the unity of the family under the regulatory provisions concerning

special assistance to mixed families.

Regulatory Agenda

This proposed rule was listed as sequence number 1525 in the

Department's Semiannual Agenda of Regulations published on April 25,

1994 (59 FR 20424, 20433), under Executive Order 12866 and the

Regulatory Flexibility Act.

Public Reporting Burden

The information collection requirements contained in Secs. 200.183,

200.185, 200.186, 200.187, 235.13, 812.6, 812.8, 812.9, 812.10,

905.310, 912.6, 912.8, 912.9, and 912.10 of this rule have been

submitted to the Office of Management and Budget (OMB) for review under

the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520) and have been

assigned OMB control numbers 2502-0356 and 2577-0093. In accordance

with OMB regulations codified at 5 CFR 1320.13 and 1320.15, the

following chart is provided to describe the collection of information

requirements.

Tabulation of Annual Reporting Burden; Proposed Rule--Restriction on Assistance to Noncitizens

----------------------------------------------------------------------------------------------------------------

No. of

Description of No. of responses Total

information Section of 24 respondents per annual Hours per Total hours

collection CFR affected respondents responses response

----------------------------------------------------------------------------------------------------------------

Notification to 905.310(g), 3,300 700 2,310,000 .01............ 23,100

tenants and 912.6.

applicants in Public

& Indian Housing.

Denials, 905.310(m)(4), 3,300 19 62,700 .10 (6 minutes) 6,270

terminations, (r), 912.9,

extensions deferrals. 912.10.

Notification and 812.6, 812.9, 2,470,777 1 2,470,777 .05 (3 minutes) 123,539

verification, 812.10.

denial, termination

in section 8.

Notification and 200.183, 412,315 1 412,315 .05............ 20,616

verification, 200.186,

denial, termination 200.187, 235.13.

in FHA subsidized.

Extensions........... 812.6(h), 144,155 1 144,155 .16............ 23,065 (10

200.183(h). min.)

Recordkeeping--Public 905.310(q), 3,300 761 2,511,300 .01............ 25,113

and Indian Housing. 912.9(h).

Recordkeeping in 812.9(h)........ 2,470,777 1 2,470,777 .05............ 125,539

section 8.

Recordkeeping in FHA 200.186(h), 412,315 1 412,315 .05............ 20,616

subsidized. 235.13.

----------------

Total annual ................ ........... ........... ........... ............... 405,458

burden.

----------------------------------------------------------------------------------------------------------------

List of Subjects

24 CFR Part 200

Administrative practice and procedure, Claims, Equal employment

opportunity, Fair housing, 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 215

Grant Programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 235

Condominiums, Cooperatives, Grant programs--housing and community

development, Low and moderate income housing, Mortgage insurance,

Reporting and recordkeeping requirements.

24 CFR Part 236

Grant programs--housing and community development, Low and moderate

income housing, Mortgage insurance, Rent subsidies, Reporting and

recordkeeping requirements.

24 CFR Part 247

Grant programs--housing and community development, Loan programs--

housing and community development, Low and moderate income housing,

Rent subsidies.

24 CFR Part 812

Low and moderate income housing, Reporting and recordkeeping

requirements.

24 CFR Part 850

Grant programs--housing and community development, Low and moderate

income housing, Reporting and recordkeeping requirements.

24 CFR Part 880

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 881

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 882

Grant programs--housing and community development, Homeless, Lead

poisoning, Manufactured homes, Rent subsidies, Reporting and

recordkeeping requirements.

24 CFR Part 883

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 884

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements, Rural areas.

24 CFR Part 886

Grant programs--housing and community development, Lead poisoning,

Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 887

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 900

Grant programs--housing and community development, Rent subsidies.

24 CFR Part 904

Grant programs--housing and community development, Loan programs--

housing and community development, Public housing.

24 CFR Part 905

Aged, Energy conservation, Grant programs--housing and community

development, Grant programs--Indians, Homeownership, Indians,

Individuals with disabilities, Lead poisoning, Loan programs--housing

and community development, Loan programs--Indians, Low and moderate

income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 912

Grant programs--housing and community development, Public housing,

Reporting and recordkeeping requirements.

24 CFR Part 960

Aged, Grant programs--housing and community development,

Individuals with disabilities, Public housing.

Accordingly, title 24 of the Code of Federal Regulations, parts

200, 215, 235, 236, 247, 812, 859, 880, 881, 882, 883, 884, 886, 887,

900, 904, 905, 912 and 960 would be amended as follows:

PART 200--INTRODUCTION

1. The authority citation for part 200 would be revised to read as

follows:

Authority: 12 U.S.C. 1701-715z-18; 42 U.S.C. 1436a and 3535(d).

2. A new subpart G, consisting of Secs. 200.180 through 200.192,

would be added to read as follows:

Subpart G--Restrictions on Assistance to Noncitizens

Sec.

200.180 Applicability.

200.180a Requirements concerning documents.

200.181 Definitions.

200.182 General provisions.

200.183 Submission of evidence of citizenship or eligible

immigration status.

200.184 Documents of eligible immigration status.

200.185 Verification of eligible immigration status.

200.186 Delay, denial, reduction or termination of assistance.

200.187 Preservation of mixed families and other families.

200.188 Proration of assistance.

200.189 Prohibition of assistance to noncitizen students.

200.190 Compliance with nondiscrimination requirements.

200.191 Protection from liability for project owners, State and

local government agencies and officials.

200.192 Liability of ineligible tenants for reimbursement of

benefits.

Subpart G--Restrictions on Assistance to Noncitizens

Sec. 200.180 Applicability.

(a) Covered programs/assistance. This subpart implements the

statutory restrictions on providing financial assistance to benefit

individuals who are not in eligible status with respect to citizenship

or noncitizen immigration status. This subpart is applicable to

financial assistance provided under:

(1) Section 235 Program assistance. Section 235 of the National

Housing Act (12 U.S.C. 1715-z) (the Section 235 Program), and for which

the implementing regulations are codified in 24 CFR part 235;

(2) Section 236 Program assistance (below market rent only).

Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants

paying below market rent only) (the Section 236 Program), and for which

the implementing regulations are codified in 24 CFR part 236, subpart

D; or

(3) Rent Supplement Program assistance. Section 101 of the Housing

and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent

Supplement Program), and for which the implementing regulations are

codified in 24 CFR part 215.

(b) When financial assistance is considered paid. Covered financial

assistance is considered to be provided (or paid), and the restrictions

on providing covered financial assistance to noncitizens with

ineligible immigration status are applicable as follows:

(1) Payment under Section 235 Program. Financial assistance is

considered to be paid under the Section 235 program on behalf of a

mortgagor when:

(i) The dwelling unit is subject to a mortgage insured under

section 235 of the National Housing Act (and part 235 of this chapter);

and

(ii) Assistance payments are made to the mortgagee on behalf of the

mortgagor under a contract between the mortgagee and the Secretary in

accordance with section 235(b) of the National Housing Act, unless

those assistance payments are pro-rated in accordance with

Sec. 200.188.

(2) Payment under Section 236 Program. Financial assistance is

considered to be paid under the Section 236 program on behalf of a

tenant or cooperative unit purchaser when:

(i) The project is subject to a mortgage insured or the project is

assisted under section 236 of the National Housing Act (and part 236 of

this chapter) for which interest reduction payments are paid under a

contract between the mortgagee and the Secretary; and

(ii) The monthly rental charge paid to the owner for the dwelling

unit is less than the HUD-approved market rent, whether or not rental

assistance payments are also paid under a contract in accordance with

section 236(f)(2) and part 236, subpart D, of this chapter, unless

those assistance payments are prorated in accordance with Sec. 200.188.

(3) Payment under Rent Supplement Program. Financial assistance is

considered to be paid under the Rent Supplement program administered

under section 101 of the Housing and Urban Development Act of 1965 when

rent supplement payments are paid under a contract between the project

owner and the Secretary in accordance with that section and part 215 of

this chapter, unless those assistance payments are prorated in

accordance with Sec. 200.188.

(c) Covered individuals and entities--(1) Covered individuals/

persons and families. The provisions of this subpart apply to both

applicants for assistance and persons already receiving assistance

covered under this subpart (i.e., tenants, homebuyers, cooperative

members; see definition of ``tenant'' in Sec. 200.181). Unless the

context clearly indicates otherwise, the terms ``individual,''

``person'' or ``family,'' or the plural of these terms, as used in this

subpart apply to both an applicant and a tenant, or an applicant family

or a tenant family.

(2) Covered entities. The provisions of this subpart apply to both

project owners (as defined in Sec. 200.181) and mortgagees under the

Section 235 homeownership program. Unless the context clearly indicates

otherwise, the term ``project owner'' as used in this subpart includes

mortgagee.

(d) Administration of restrictions on providing assistance. Project

owners shall administer the restrictions on providing assistance to

noncitizens with ineligible immigration status in accordance with the

requirements of this subpart.

Sec. 200.180a Requirements concerning documents.

For any notice or document (decision, declaration, consent form,

etc.) that this subpart requires the project owner to provide to an

individual, or requires the project owner to obtain the signature of an

individual, the project owner, where feasible, must arrange for the

notice or document to be provided to the individual in a language that

is understood by the individual if the individual is not proficient in

English. (See 24 CFR 8.6 of HUD's regulations for requirements

concerning communications with persons with disabilities.)

Sec. 200.181 Definitions.

Assisted dwelling unit means a dwelling unit for which financial

assistance is considered to be paid, as determined in accordance with

Sec. 200.180.

Child means a member of the family, other than the family head or

spouse, who is under 18 years of age.

Citizen means a citizen or national of the United States.

Evidence of citizenship or eligible immigration status means the

documents which must be submitted to evidence citizenship or eligible

immigration status. (See Sec. 200.186(b).)

Family. Except as may be otherwise specified in this subpart, the

term ``family'' for purposes of this subpart shall have the same

meaning as provided in the definition section of the regulations for

each of the following programs: the Section 235 Program, Section 236

Program, and the Rent Supplement Program. (See, respectively, 24 CFR

235.5, 24 CFR 236.2, 24 CFR 215.1).

Financial assistance or covered financial assistance. See

Sec. 200.180.

Head of household means the adult member of the family who is the

head of the household for purposes of determining income eligibility

and rent.

HUD means the Department of Housing and Urban Development.

INS means the U.S. Immigration and Naturalization Service.

Mixed family means a family whose members include those with

citizenship or eligible immigration status, and those without

citizenship or eligible immigration status.

National means a person who owes permanent allegiance to the United

States, for example, as a result of birth in a United States territory

or possession.

Noncitizen means a person who is neither a citizen nor national of

the United States.

Project owner means the person or entity that owns the housing

project containing the assisted dwelling unit. For purposes of this

subpart, this term includes the mortgagee, in the case of a Section 235

mortgage.

Section 214 means section 214 of the Housing and Community

Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214

restricts HUD from making financial assistance available for

noncitizens unless they meet one of the six statutory categories of

eligible immigration status.

Tenant means for the Rent Supplement program and the section 236

program, an individual or a family renting an assisted dwelling unit or

occupying such a dwelling unit as a cooperative member. For purposes of

simplifying the language in this subpart to include the section 235

homeownership program, the term tenant will also be used to include a

homebuyer, where appropriate.

Sec. 200.182 General provisions.

(a) Restrictions on assistance. Financial assistance under the

programs covered by this subpart is restricted to:

(1) Citizens, or

(2) Noncitizens who have eligible immigration status in one of the

following categories:

(i) A noncitizen lawfully admitted for permanent residence, as

defined by section 101(a)(20) of the Immigration and Nationality Act

(INA), as an immigrant, as defined by section 101(a)(15) of the INA (8

U.S.C. 1101(a)(20) and 1101(a)(15), respectively) [immigrants]. (This

category includes a noncitizen admitted under section 210 or 210A of

the INA (8 U.S.C. 1160 or 1161), [special agricultural worker], who has

been granted lawful temporary resident status);

(ii) A noncitizen who entered the United States before January 1,

1972, or such later date as enacted by law, and has continuously

maintained residence in the United States since then, and who is not

ineligible for citizenship, but who is deemed to be lawfully admitted

for permanent residence as a result of an exercise of discretion by the

Attorney General under section 249 of the INA (8 U.S.C. 1259);

(iii) A noncitizen who is lawfully present in the United States

pursuant to an admission under section 207 of the INA (8 U.S.C. 1157)

[refugee status]; pursuant to the granting of asylum (which has not

been terminated) under section 208 of the INA (8 U.S.C. 1158) [asylum

status]; or as a result of being granted conditional entry under

section 203(a)(7) of the INA (8 U.S.C. 1153(a)(7)) before April 1,

1980, because of persecution or fear of persecution on account of race,

religion, or political opinion or because of being uprooted by

catastrophic national calamity;

(iv) A noncitizen who is lawfully present in the United States as a

result of an exercise of discretion by the Attorney General for

emergent reasons or reasons deemed strictly in the public interest

under section 212(d)(5) of the INA (8 U.S.C. 1182(d)(5)) [parole

status];

(v) A noncitizen who is lawfully present in the United States as a

result of the Attorney General's withholding deportation under section

243(h) of the INA (8 U.S.C. 1253(h)) [threat to life or freedom]; or

(vi) A noncitizen lawfully admitted for temporary or permanent

residence under section 245A of the INA (8 U.S.C. 1255a) [amnesty

granted under INA 245A].

(b) Family eligibility for assistance. (1) A family shall not be

eligible for assistance unless every member of the family residing in

the unit is determined to have eligible status, as described in

paragraph (a) of this section;

(2) Despite the ineligibility of one or more family members, a

mixed family may be eligible for one of the three types of assistance

provided in Sec. 200.187. A family without any eligible members and

receiving assistance on [insert the effective date of the final rule]

may be eligible for temporary deferral of termination of assistance as

provided in Sec. 200.187.

Sec. 200.183 Submission of evidence of citizenship or eligible

immigration status.

(a) General. Eligibility for assistance or continued assistance

under a program covered by this subpart is contingent upon a family's

submission to the project owner of the documents described in paragraph

(b) of this section for each family member. If one or more family

members do not have citizenship or eligible immigration status, the

family members may exercise the election not to contend to have

eligible immigration status as provided in paragraph (e) of this

section, and the provisions of Sec. 200.187 shall apply.

(b) Evidence of citizenship or eligible immigration status. Each

family member, regardless of age, must submit the following evidence to

the project owner.

(1) For citizens, the evidence consists of a signed declaration of

U.S. citizenship;

(2) For noncitizens who are 62 years of age or older or who will be

62 years of age or older and receiving assistance under a covered

program on [insert the effect date of the final rule], the evidence

consists of:

(i) A signed declaration of eligible immigration status; and

(ii) Proof of age document.

(3) For all other noncitizens, the evidence consists of:

(i) A signed declaration of eligible immigration status;

(ii) The INS documents listed in Sec. 200.184; and

(iii) A signed verification form.

(c) Declaration. (1) For each family member, the family must submit

to the project owner a written declaration, signed under penalty of

perjury, by which the family member declares whether he or she is a

U.S. citizen or a noncitizen with eligible immigration status.

(i) For each adult, the declaration must be signed by the adult.

(ii) For each child, the declaration must be signed by an adult

residing in the assisted dwelling unit who is responsible for the

child.

(2) The written declaration may be incorporated as part of the

application for housing assistance or may constitute a separate

document.

(d) Verification consent form--(1) Who signs. Each noncitizen who

declares eligible immigration status must sign a verification consent

form as follows.

(i) For each adult, the form must be signed by the adult.

(ii) For each child, the form must be signed by an adult residing

in the assisted dwelling unit who is responsible for the child.

(2) Notice of release of evidence by project owner. The

verification consent form shall provide that evidence of eligible

immigration status may be released by the project owner without

responsibility for the further use or transmission of the evidence by

the entity receiving it, to:

(i) HUD, as required by HUD;

(ii) The INS; and, if applicable;

(iii) Another Federal agency, or a State or local government agency

in accordance with Federal, State or local law that requires the

release of the evidence to that agency.

(3) Notice of release of evidence by HUD. The verification consent

form also shall notify the individual of the possible release of

evidence of eligible immigration status by HUD. Evidence of eligible

immigration status shall only be released to the INS for purposes of

establishing eligibility for financial assistance and not for any other

purpose. HUD is not responsible for the further use or transmission of

the evidence or other information by the INS.

(e) Individuals who do not contend that they have eligible status.

If one or more members of a family elect not to contend that they have

eligible immigration status, and other members of the family establish

their citizenship or eligible immigration status, the family may be

eligible for prorated assistance under Sec. 200.188, despite the fact

that no declaration or documentation of eligible status is submitted

for one or more members of the family. The family must, however,

identify to the project owner, the family member (or members) who will

elect not to contend that he or she has eligible immigration status.

(f) Notification of requirements of section 214--(1) When notice is

to be issued. Notification of the requirement to submit evidence of

citizenship or eligible immigration status, as required by this

section, or to elect not to contend that one has eligible status, as

provided by paragraph (e) of this section, shall be given by the

project owner as follows:

(i) Applicant's notice. Notification of the requirement to submit

evidence of eligible status shall be given to each applicant at the

time of application for assistance. Applicants whose applications are

pending on [insert the effective date of the final rule] shall be

notified of the requirement to submit evidence of eligible status as

soon as possible after [insert the effective date of the final rule].

(ii) Tenant's notice. Notification of the requirement to submit

evidence of eligible status shall be given to each tenant at the time

of, and together with, the project owner's notice of regular

reexamination of tenant income, but not later than one year following

[insert the effective date of the final rule].

(iii) Timing of mortgagor's notice. A mortgagor receiving section

235 assistance must be notified of the requirement to submit evidence

of eligible status in accordance with Sec. 235.13(b)(2).

(2) Form and content of notice. The notice shall:

(i) State that financial assistance is contingent upon the

submission and verification, as appropriate, of evidence of citizenship

or eligible immigration status as required by paragraph (a) of this

section;

(ii) Describe the type of evidence that must be submitted, and

state the time period in which that evidence must be submitted (see

paragraph (g) of this section concerning when evidence must be

submitted); and

(iii) State that assistance will be prorated, denied or terminated,

as appropriate, upon a final determination of ineligibility after all

appeals have been exhausted (see Sec. 200.186 concerning INS appeal,

and informal hearing process by the project owner) or, if appeals are

not pursued, at a time to be specified in accordance with HUD

requirements. Tenants also shall be informed of how to obtain

assistance under the preservation of families provisions of

Sec. 200.187.

(g) When evidence of eligible status is required to be submitted.

The project owner shall require evidence of eligible status to be

submitted at the times specified in paragraph (g) of this section,

subject to any extension granted in accordance with paragraph (h) of

this section.

(1) Applicants. For applicants, project owners must ensure that

evidence of eligible status is submitted not later than the date the

project owner anticipates or has knowledge that verification of other

aspects of eligibility for assistance will occur (see Sec. 200.185(a)).

(2) Tenants. For tenants (i.e., persons already receiving the

benefit of assistance in a covered program on [insert the effective

date of the final rule]), evidence of eligible status is required to be

submitted as follows:

(i) For financial assistance in the form of rent supplement

payments or section 236 basic rent tenancy or rental assistance

payments, the tenant shall, in accordance with the provisions of

Secs. 215.55(a) and 236.80(a) of this chapter, submit the required

evidence at the first regular reexamination after [insert the effective

date of the final rule].

(ii) For financial assistance in the form of section 235 assistance

payments, the mortgagor shall submit the required evidence in

accordance with Sec. 235.13(c) of this chapter.

(3) New occupants of assisted units. For any new occupant of an

assisted unit (e.g., a new family member comes to reside in the

assisted unit), the required evidence shall be submitted at the first

interim or regular reexamination following the person's occupancy.

(4) Changing participation in a HUD program. Whenever a family

applies for admission to a program covered by this subpart, evidence of

eligible status is required to be submitted in accordance with the

requirements of this subpart unless the family already has submitted

the evidence to the project owner for a covered program.

(5) One-time evidence requirement for continuous occupancy. For

each family member, the family is required to submit evidence of

eligible status only one time during continuously assisted occupancy

under any covered program.

(h) Extensions of time to submit evidence of eligible status--(1)

When extension must be granted. The project owner shall extend the

time, provided in paragraph (g) of this section, to submit evidence of

eligible immigration status if the family member:

(i) Submits the declaration required under Sec. 200.183(a)

certifying that any person for whom required evidence has not been

submitted is a noncitizen with eligible immigration status; and

(ii) Certifies that the evidence needed to support a claim of

eligible immigration status is temporarily unavailable, additional time

is needed to obtain and submit the evidence; and prompt and diligent

efforts will be undertaken to obtain the evidence.

(2) Prohibition on indefinite extension period. Any extension of

time, if granted, shall be for a specific period of time. The

additional time provided should be sufficient to allow the individual

the time to obtain the evidence needed. The project owner's

determination of the length of the extension needed shall be based on

the circumstances of the individual case.

(3) Grant or denial of extension to be in writing. The project

owner's decision to grant or deny an extension as provided in paragraph

(h)(1) of this section shall be issued to the family by written notice.

If the extension is granted, the notice shall specify the extension

period granted. If the extension is denied, the notice shall explain

the reasons for denial of the extension.

(i) Failure to submit evidence or to establish eligible status. If

the family fails to submit required evidence of eligible immigration

status within the time period specified in the notice, or any extension

granted in accordance with paragraph (h) of this section, or if the

evidence is timely submitted but fails to establish eligible

immigration status, the project owner shall proceed to deny, prorate or

terminate assistance, or provide continued assistance or temporary

deferral of termination of assistance, as appropriate, in accordance

with the provisions of Secs. 200.186 and 200.187.

Sec. 200.184 Documents of eligible immigration status.

(a) General. A project owner shall request and review original

documents of eligible immigration status. The project owner shall

retain photocopies of the documents for its own records and return the

original documents to the family.

(b) Acceptable evidence of eligible immigration status. The

original of one of the following documents is acceptable evidence of

eligible immigration status, subject to verification in accordance with

Sec. 200.185.

(1) Form I-551, Alien Registration Receipt Card (for permanent

resident aliens);

(2) Form I-94, Arrival-Departure Record, with one of the following

annotations:

(i) ``Admitted as Refugee Pursuant to section 207'';

(ii) ``Section 208'' or ``Asylum'';

(iii) ``Section 243(h)'' or ``Deportation stayed by Attorney

General'';

(iv) ``Paroled Pursuant to Sec. 212(d)(5) of the INA'';

(3) If Form I-94, Arrival-Departure Record, is not annotated, then

accompanied by one of the following documents:

(i) A final court decision granting asylum (but only if no appeal

is taken);

(ii) A letter from an INS asylum officer granting asylum (if

application is filed on or after October 1, 1990) or from an INS

district director granting asylum (if application filed before October

1, 1990);

(iii) A court decision granting withholding or deportation; or

(iv) A letter from an INS asylum officer granting withholding of

deportation (if application filed on or after October 1, 1990).

(4) Form I-688, Temporary Resident Card, which must be annotated

``section 245A'' or ``section 210'';

(5) Form I-688B, Employment Authorization Card, which must be

annotated ``Provision of Law 274a.12(11)'' or ``Provision of Law

274a.12'';

(6) A receipt issued by the INS indicating that an application for

issuance of a replacement document in one of the above-listed

categories has been made and the applicant's entitlement to the

document has been verified; or

(c) Other acceptable evidence. If other documents are determined to

constitute acceptable evidence of eligible immigration status, they

will be announced by HUD in a notice published in the Federal Register.

Sec. 200.185 Verification of eligible immigration status.

(a) When verification is to occur. Verification of eligible

immigration status shall be conducted by the project owner

simultaneously with verification of other aspects of eligibility for

assistance or continued eligibility for assistance under a covered

program. The project owner shall verify eligible immigration status in

accordance with the INS procedures described in this section.

(b) Primary verification.--(1) Automated verification system.

Primary verification of the immigration status of the person is

conducted by the project owner through the INS automated system (INS

Systematic Alien Verification for Entitlements (SAVE)). The INS SAVE

system provides access to names, file numbers and admission numbers of

noncitizens.

(2) Failure of primary verification to confirm eligible immigration

status. If the INS SAVE system does not verify eligible immigration

status, secondary verification must be performed.

(c) Secondary verification.--(1) Manual search of INS records.

Secondary verification is a manual search by the INS of its records to

determine an individual's immigration status. The project owner must

request secondary verification, within 10 days of receiving the results

of the primary verification, if the primary verification system does

not confirm eligible immigration status, or if the primary verification

system verifies immigration status that is ineligible for assistance

covered by this subpart.

(2) Secondary verification initiated by project owner. Secondary

verification is initiated by the project owner forwarding photocopies

of the original INS documents listed in Sec. 200.184 (front and back),

attached to the INS document verification request form G-845S (Document

Verification Request), to a designated INS office for review. (Form G-

845S is available from the local INS Office.)

(3) Failure of secondary verification to confirm eligible

immigration status. If the secondary verification does not confirm

eligible immigration status, the project owner shall issue to the

family the notice described in Sec. 200.186(d), which includes

notification of appeal to the INS of the INS finding on immigration

status (see Sec. 200.186(d)(4)).

(d) Exemption from liability for INS verification. The project

owner shall not be liable for any action, delay, or failure of the INS

in conducting the automated or manual verification.

Sec. 200.186 Delay, denial, reduction or termination of assistance.

(a) General. Assistance to a family may not be delayed, denied,

reduced or terminated because of the immigration status of a family

member except as provided in this section.

(b) Restrictions on delay, denial, reduction or termination of

assistance.--(1) Restrictions on reduction, denial or termination of

assistance. Assistance to an applicant shall not be reduced or denied,

and assistance to a tenant shall not be delayed, denied, reduced, or

terminated, on the basis of ineligible immigration status of a family

member if:

(i) The primary and secondary verification of any immigration

documents that were timely submitted has not been completed;

(ii) The family member for whom required evidence has not been

submitted has moved from the assisted dwelling unit;

(iii) The family member who is determined not to be in an eligible

immigration status following INS verification has moved from the

assisted dwelling unit;

(iii) The INS appeals process under Sec. 200.186(e) has not been

concluded; or

(iv) For a tenant, the informal hearing process under

Sec. 200.186(f) has not been concluded.

(2) Restrictions on denial or termination. Assistance to an

applicant shall not be denied, and assistance to a tenant shall not be

terminated, on the basis of ineligible immigration status of a family

member if:

(i) Assistance is prorated in accordance with Sec. 200.188;

(ii) Assistance for a mixed family is continued in accordance with

Sec. 200.187; or

(iii) Deferral of termination of assistance is granted in

accordance with Sec. 200.187.

(3) When delay of assistance to an applicant is permissible.

Assistance to an applicant may be delayed after the conclusion of the

INS appeal process, but not denied until the conclusion of the informal

hearing process, if an informal hearing is requested by the family.

(c) Events causing denial or termination of assistance.--(1)

General. Assistance to an applicant shall be denied, and a tenant's

assistance shall be terminated, in accordance with the procedures of

this section, upon the occurrence of any of the following events:

(i) Evidence of citizenship (i.e., the declaration) and eligible

immigration status is not submitted by the date specified in

Sec. 200.183(g) or by the expiration of any extension granted in

accordance with Sec. 200.183(h); or

(ii) Evidence of citizenship and eligible immigration status is

timely submitted, but INS primary and secondary verification does not

verify eligible immigration status of a family member; and

(iii) The family does not pursue INS appeal or informal hearing

rights as provided in this section; or

(iv) INS appeal and informal hearing rights are pursued, but the

final appeal or hearing decisions are decided against the family

member.

(2) Termination of assisted occupancy. For termination of assisted

occupancy, see paragraph (i) of this section.

(d) Notice of denial or termination of assistance. The notice of

denial or termination of assistance shall advise the family:

(1) That financial assistance will be denied or terminated, and

provide a brief explanation of the reasons for the proposed denial or

termination of assistance;

(2) That the family may be eligible for proration of assistance as

provided under Sec. 200.188;

(3) In the case of a tenant, the criteria and procedures for

obtaining relief under the preservation of families provision in

Sec. 200.187;

(4) That the family has a right to request an appeal to the INS of

the results of secondary verification of immigration status and to

submit additional documentation or a written explanation in support of

the appeal in accordance with the procedures of paragraph (e) of this

section;

(5) That the family has a right to request an informal hearing with

the project owner either upon completion of the INS appeal or in lieu

of the INS appeal as provided in paragraph (f) of this section;

(6) For applicants, the notice shall advise that assistance may not

be delayed until the conclusion of the INS appeal process, but

assistance may be delayed during the pendency of the informal hearing

process.

(e) Appeal by applicant to the INS.--(1) Submission of request for

appeal to project owner. Upon receipt of notification by the project

owner that INS secondary verification failed to confirm eligible

immigration status, the family may request an appeal to the INS by

communicating that request to the project owner within 14 days of the

date the project owner mails or delivers the notice under paragraph (d)

of this section.

(2) Extension of time to request an appeal. The project owner shall

extend the period of time for requesting an appeal (for a specified

period) upon good cause shown.

(3) Forwarding the appeal to INS. If the family requests an appeal

to the INS, the project owner shall forward to the designated INS

office any additional documentation or written explanation provided by

the family in support of the appeal. This material must include a copy

of the INS document verification request form G-845S (used to process

the secondary verification request) and a cover letter indicating that

the family is requesting an appeal of the INS immigration status

verification results. (Form G-845S is available from the local INS

Office.)

(4) Decision by INS.--(i) When decision will be issued. The INS

will issue to the project owner a decision within 30 days of its

receipt of documentation concerning the family's appeal of the

verification of immigration status. If, for any reason, the INS is

unable to issue a decision within the 30 day time period, the INS will

inform the project owner of the reasons for the delay, and the project

owner will inform the family of the reasons for the delay.

(ii) Notification of INS decision and of informal hearing

procedures. When the project owner receives the INS decision, the

project owner shall notify the family of the INS determination, of the

reasons for the determination, and of the family's right to request an

informal hearing on the PHA's ineligibility determination in accordance

with the procedures of paragraph (f) of this section.

(5) No delay, denial, reduction, or termination of assistance until

completion of INS appeal process; direct appeal to INS. Pending the

completion of the INS appeal under this section, assistance may not be

delayed, denied, reduced or terminated on the basis of immigration

status.

(f) Informal hearing.--(1) When request for hearing is to be made.

After notification of the INS decision on appeal, or in lieu of request

of appeal to the INS, the family may request that the project owner

provide a hearing. This request must be made either within 14 days of

the date the project owner mails or delivers the notice under paragraph

(d) of this section, or within 14 days of the mailing of the INS appeal

decision issued in accordance with paragraph (e) of this section

(established by the date of postmark).

(2) Extension of time to request hearing. The project owner shall

extend the period of time for requesting a hearing (for a specified

period) upon good cause shown.

(3) Informal hearing procedures. A family who submits a timely

request for a hearing with the project owner shall have an opportunity

for:

(i) Hearing before an impartial individual. The family shall be

provided a hearing before any person(s) designated by the project owner

(including an officer or employee of the project owner), other than a

pe

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