# Restrictions on Assistance to Noncitizens

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URL: https://www.frixlaw.com/law-library/documents/fr%3A94-20710

## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** August 25, 1994

## Text

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.....

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-20710. Public record. Not legal advice.