Participant's Consent to Release of Information

Federal RegisterOct 12, 1994

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SUMMARY: This rule proposes to implement amendments to section 904 of

the Stewart B. McKinney Homeless Assistance Amendments Act of 1988,

made by section 903 of the Housing and Community Development Act of

1992, and section 3003 of the Omnibus Budget Reconciliation Act of

1993. Section 904 of the McKinney Act authorizes HUD to require

applicants and participants in any HUD program involving initial and

periodic review of an applicant's or participant's income to sign a

consent form authorizing HUD, the PHA, or the owner to verify employee

income information from current or previous employers; and HUD or the

PHA to request wage and claim information from the State agency

responsible for the administration of the State unemployment laws.

DATES: Comments due date: December 12, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding

this proposed rule to the Rules Docket Clerk, room 10276, Office of

General Counsel, Department of Housing and Urban Development, 451

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

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

will be submitted will be available and public inspection and copying

between 7:30 a.m. and 5:30 p.m. weekdays at the above address.

Facsimile (FAX) comments not acceptable.

FOR FURTHER INFORMATION CONTACT: Edward Whipple, Director, Occupancy

Division, Office of Assisted Housing, Room 4206, concerning occupancy

matters; Albert B. Sullivan, Director, Office of Multifamily Housing,

Room 6160 concerning housing assistance programs administered by this

office; and David L. Decker, Director, Computer Matching Activities,

Room 4122, concerning computer matching/tenant income verification

matters. They may be contacted at the Department of Housing and Urban

Development, 451 Seventh Street SW., Washington, DC 20410, telephone

(202) 708-0744, (202) 708-3730 and (202) 708-0099, respectively.

Hearing or speech-impaired individuals may call HUD's TDD number (202)

708-0850. (These telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

This rule proposes to implement section 904 of the Stewart B.

McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544;

hereafter referred to as the ``McKinney Act''), as amended by section

903 of the Housing and Community Development Act of 1992, Pub. L. 102-

550, approved October 28, 1992 (1992 HCD Act) and section 3003 of the

Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, approved

August 10, 1993.

Section 904 of the McKinney Act authorizes HUD to require

applicants and participants and adult members of their families in any

HUD program involving initial and periodic review of an applicant's or

participant's income to sign a consent form authorizing: (1) HUD, the

PHA, or the owner to verify employee income information from current or

previous employers; and (2) HUD or the PHA to request wage and claim

information from the State agency responsible for the administration of

the State unemployment laws. On February 22, 1991, the Department

published a final rule implementing section 904 of the McKinney Act (56

FR 7518). In accordance with section 904(b) of the McKinney Act, HUD

regulations make signing the consent form an explicit condition of

initial or continuing eligibility for participation in the covered

programs. This requirement is designed to ensure that correct

determinations of eligibility for assistance and level of assistance

are made under these programs.

Section 903 of the Housing and Community Development Act of 1992

(1992 Act) amends section 904 of the McKinney Act by adding a

subsection (e) to section 904. Section 904(e) prohibits the Department

from requiring the release of information by third parties as a

condition of receiving housing assistance unless the requested consent

for information is in compliance with the Privacy Act (5 U.S.C. 552a)

and is appropriately limited as to time, relevance and necessity.

The Department notes that Secs. 200.1220(a) and 760.20(a) of HUD's

current regulations (24 CFR 200.1220(a), 24 CFR 760.20(a)) already

require that the collection of employee income, wage and claim

information be conducted, to the extent applicable, in accordance with

the Privacy Act. Accordingly, this rule does not propose to make any

changes to implement this statutory requirement.

Section 904(e) also requires that the consent to release such

information be limited with respect to time, and only cover information

relevant and necessary to meet the requirements of section 904. In

compliance with this statutory mandate, the Department is preposing to

remove the regulatory provisions which authorize the collection of

information, ``including information which can be obtained under other

laws, regulations and handbooks.'' The rule also proposes to make the

consent to release effective for 15 months from the time of execution,

which is responsive to the recommendation in the House conference

report. (H.R. Rep. No. 760, 102 Cong., 2d Sess. at 158 (1992).)

Last, section 903 of 1992 Act requires that the Department develop

a new consent form. This consent form has been issued by the

Department; therefore, this proposed rule does not cover this release

form.

Section 3003 of the Omnibus Budget Reconciliation Act of 1993

requires that applicants and participants sign a consent form

authorizing the Secretary of HUD to request that the Commissioner of

Social Security and the Secretary of the Treasury release information

pursuant to section 6103(l)(7)(D)(ix) of the Internal Revenue Code of

1986. Information released under this authority would be provided to

HUD for the sole purpose of verifying income information pertinent to

the applicant's or participant's eligibility or level of assisted

housing benefits.

Also, Section 3003 amends section 904 of the McKinney Act to allow

HUD to use income return data, pursuant to the Internal Revenue Code.

This information will include: wages, net earnings from self-

employment, payments of retirement income, and unearned income as

referenced in sections 6103(l)(7)(A) and 6103(l)7)(B) of the Internal

Revenue Code. HUD may match this information to information provided by

applicants or participants when applying for initial or continued

eligibility for assisted housing programs.

Other Matters

A. Environmental Impact

In accordance with 40 CFR 1508.4 of the regulations of the Council

on Environmental Quality and 24 CFR 50.20(k) of the HUD regulations,

the policies and procedures contained in this proposed rule relate to

internal administrative procedures whose content does not constitute a

development decision nor affect the physical condition of project areas

or building sites and, therefore are categorically excluded from the

requirements of the National Environmental Policy Act.

B. Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

contained in this 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.

Specifically, the requirements of this proposed rule are directed

toward applicants and participants in federally assisted housing

programs. It effects no significant changes in the current

relationships between the federal government, the states and their

political subdivisions in connection with these programs.

C. Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this proposed rule does

not have potential for significant impact on family formation,

maintenance, and general well-being, and, thus, is not subject to

review under the order. Under the proposed rule, applicants and

participants, and adult members of their families, are required to sign

and submit consent forms authorizing the verification or collection of

certain information necessary for determining eligibility for or level

of assistance under the covered programs. Consent forms to permit

verification of information provided by the family are already

required. This proposed rule would prohibit the collection of

information which is not necessary to verify the income of an applicant

or participant, and makes the consent form valid for 15 months. No

significant change in existing HUD policies or programs will result

from promulgation of this proposed rule, as those policies and programs

relate to family concerns.

D. Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)) has reviewed and approved this proposed rule, and in so

doing certifies that this proposed rule will not have a significant

economic impact on a substantial number of small entities. This

proposed rule relates to applicants and participants in federally

assisted housing projects but should not have a meaningful economic

impact on these entities.

E. Regulatory Agenda

This proposed rule was not listed in the Department's Semiannual

Agenda of Regulations published on April 25, 1994 (59 FR 20424) in

accordance with Executive Order 12866 and the Regulatory Flexibility

Act.

List of Subjects

24 CFR Part 200

Administrative practice and procedure, Claims, Equal employment

opportunity, Fair housing, Home improvement, Housing standards,

Incorporation by reference, Lead poisoning, Loan programs--housing and

community development, Minimum property standards, Mortgage insurance,

Organization and functions (Government agencies), Penalties, Reporting

and recordkeeping requirements, Social security, Unemployment

compensation, Wages.

24 CFR Part 760

Grant programs--housing and community development, Income

verification procedures, Indians, Intergovernmental relations, Loan

programs--housing and community development, Penalties, Public housing,

Rent subsidies, Reporting and recordkeeping requirements, Wages.

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

PART 200--INTRODUCTION

1. The authority citation for 24 CFR part 200 would continue to

read as follows:

Authority: 12 U.S.C. 1701-1715z-18, 1701s, and 1715z-11; 42

U.S.C. 3535(d), 3543, and 3544.

2. Section 200.1203 would be amended by revising paragraph (a), to

read as follows:

Sec. 200.1203 Applicability.

(a) Information to be covered by consent forms. The information

covered by consent forms described in this part involves: wage and

claim information from SWICAs; and wages, net earnings from self-

employment, payments of retirement income and unearned income as

referenced at sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal

Revenue Code (26 U.S.C. 6103). In addition, the consent forms may

authorize the collection of other information from applicants or

participants to determine eligibility or level of benefits as provided

in 24 CFR 813.109 and 24 CFR 913.109.

* * * * *

3. Section 200.1205 would be amended by revising the definition for

``Consent form'', to read as follows:

Sec. 200.1205 Definitions.

* * * * *

Consent form means a consent form or forms approved by HUD to be

signed by applicants and participants for the purpose of obtaining

employee income information from employers; wage and claim information

from SWICAs; return information from the Social Security Administration

(including wages, net earnings from self-employment, payments of

retirement income as referenced at section 6103(l)(7)(A) of the

Internal Revenue Code (26 U.S.C. 6103); and return information for

unearned income (i.e., interest and dividends) from the Internal

Revenue Service as referenced at section 6103(l)(7)(B). Also, the

consent forms may authorize the collection of other information from

applicants or participants to determine eligibility or level of

benefits as provided in 24 CFR 813.109 and 24 CFR 913.109. The consent

form expires after a limited amount of time.

* * * * *

4. Section 200.1210 would be amended by revising paragraph (c), to

read as follows:

Sec. 200.1210 Consent by applicants and participants.

* * * * *

subpart V shall contain, at a minimum, the following:

(1) A provision authorizing HUD to obtain from SWICAs any

information or materials necessary to complete or verify the

application for participation and/or to maintain continued assistance

under a program referred to in Sec. 200.1203;

(2) A provision authorizing HUD or the owner (or mortgagee as

applicable) responsible for determining eligibility for or level of

assistance, to verify with previous or current employers employee

income information pertinent to the applicant's or participant's

eligibility for or level of assistance under a program referred to in

Sec. 200.1203;

(3) A provision authorizing HUD to request tax return information

from the Internal Revenue Service and the Social Security

Administration for the sole purpose of verifying income information

pertinent to the applicant's or participant's eligibility or level of

benefits; and

(4) A statement that the authorization to release the information

requested by the consent form expires 15 months after the consent form

was signed.

PART 760--PROCEDURES FOR OBTAINING WAGE AND CLAIM INFORMATION ABOUT

APPLICANTS AND PARTICIPANTS IN HUD'S SECTION 8 AND PUBLIC HOUSING

PROGRAMS FROM STATE WAGE INFORMATION COLLECTION AGENCIES (SWICAs)

5. The authority citation for part 760 would be revised to read as

follows:

Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437a, 1437d, 1437ee,

1437f, 3535(d), and 3544.

6. Section 760.3 would be amended by revising paragraph (a), to

read as follows:

Sec. 760.3 Applicability.

(a) Information to be covered by consent forms. The information

covered by consent forms described in this part involves wage and claim

information from SWICAs; and wages, net earnings from self-employment,

payments of retirement income, and unearned income as referenced at

sections 6103(l)(7)(A) and 6103(l)(7)(B) of the Internal Revenue Code

(26 U.S.C. 6103). In addition, consent forms may authorize the

collection of other information as identified in 24 CFR 813.109(b) and

24 CFR 913.109(b) for current verification procedures, including

requirements regarding signing and submitting consent forms, for the

covered programs.

* * * * *

7. Section 760.5 would be amended by revising the definition for

``Consent form'', to read as follows:

Sec. 760.5 Definitions.