Privacy Act of 1974; Matching Program: Matching Tenant Data in Assisted Housing Programs

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. N-95-3848; FR 3795-N-01]

Privacy Act of 1974; Matching Program: Matching Tenant Data in

Assisted Housing Programs

AGENCY: Office of the Assistant Secretary for Administration, HUD.

ACTION: Notice of matching program.

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SUMMARY: Pursuant to the Computer Matching and Privacy Protection Act

of 1988, as amended, and the Office of Management and Budget's Guidance

on the statute, HUD announces a revised matching program involving

comparisons between income data provided by applicants or participants

in HUD's assisted housing programs and independent sources of income

information. The matching program will be carried out to detect

excessive housing assistance under the National Housing Act, the United

States Housing Act of 1937, and section 101 of the Housing and

Community Development Act of 1965. The program provides for the

verification of the matching results and the initiation of appropriate

administrative or legal actions, primarily through public housing

agencies, Indian housing authorities, and private owners/management

agents for subsidized multifamily projects.

This notice provides an overview of computer matching for HUD's

assisted housing programs. Specifically, this notice:

(1) Adds Social Security Administration (SSA) and Internal Revenue

Service (IRS) data concerning earned and unearned income to the

matching program as independent sources for computer matching;

(2) Describes verification processes for the SSA and IRS matching

that differ from processes previously used;

(3) Expands the matching to cover social security and supplemental

social security income data maintained by the SSA; and

(4) Recognizes the transfer of computer matching/tenant income

verification functions from HUD's Office of Inspector General to

offices that administer the assisted housing programs. Those offices

include the Office of the Assistant Secretary for Public and Indian

Housing and the Office of the Assistant Secretary for Housing--Federal

Housing Commissioner.

This notice also sets forth new starting and ending dates for the

matching program.

EFFECTIVE DATES: HUD anticipates that during the third quarter of

calendar year 1995 it will: (a) Request that SSA and IRS conduct the

initial computer matching, and (b) compare SSA and IRS matching results

to its tenant data.

During the third quarter of calendar year 1995, HUD plans to

initiate the tenant income verification process for a limited number of

organizations that administer HUD assisted housing programs. HUD

anticipates that the tenant income verification process will be

expanded in Fiscal Year 1996 to include more organizations that

administer HUD assisted housing programs. The projected dates for SSA

and IRS matching are effective unless comments are received that result

in a contrary determination, and HUD withdraws this notice.

The computer matching described in this notice may begin after

compliance with the reporting requirements cited in section 4 of

Appendix I to OMB Circular No. A-130--Federal Agency Responsibilities

for Maintaining Records About Individuals (59 FR 37916; July 25, 1994).

That section [[Page 21549]] requires that Federal agencies provide the

Chair of the House Committee on Government Operations, the Chair of the

Senate Committee on Government Affairs, and the Office of Management

and Budget with notice of the matching program and computer matching

agreements 40 days before operating the program.

ADDRESSES: Interested persons are invited to submit comments regarding

this notice to the Rules Docket Clerk, Office of General Counsel, Room

10276, Department of Housing and Urban Development, 451 Seventh Street,

SW, Washington, DC 20410-0500. Communications should refer to the above

docket number and title. Facsimile (FAX) comments are not acceptable. A

copy of each communication submitted will be available for public

inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays at the

above address.

FOR FURTHER INFORMATION CONTACT: For Privacy Act: Jeanette Smith,

Departmental Privacy Act Officer, Room 4178, Department of Housing and

Urban Development, 451 Seventh Street, SW, Washington, DC 20410,

telephone number (202) 708-2374. Hearing- or speech-impaired

individuals may call (202) 708-1112 (Federal Information Relay

Service--TDD). For further information from recipient agency: David L.

Decker, Director, Computer Matching Activities, Office of the Public

and Indian Housing Comptroller, Room 5156, Department of Housing and

Urban Development, 451 Seventh Street, SW, Washington, DC 20410,

telephone number (202) 708-0099, TDD--(202) 708-0850; or Barbara D.

Hunter, Acting Director, Planning and Procedures Division, Office of

Multifamily Housing Management, Room 6180, Department of Housing and

Urban Development, 451 Seventh Street, SW, Washington, DC 20410,

telephone number (202) 708-3944, TDD--(202) 708-4594. (These telephone

numbers are not toll-free.)

SUPPLEMENTARY INFORMATION: This notice supersedes a similar notice

published in the Federal Register on December 12, 1991 (56 FR 64793).

The Computer Matching and Privacy Protection Act of 1988, as

amended (5 U.S.C. 552a) (the CMPP Act), the Office of Management and

Budget's (OMB's) guidance on this statute entitled ``Final Guidance

Interpreting the Provisions of Public Law 100-503, the Computer

Matching and Privacy Protection Act of 1988'' (OMB Guidance), and OMB

Circular No. A-130 require publication of notices of computer matching

programs. OMB's Guidance augments the ``OMB Guidelines on the

Administration of the Privacy Act of 1974'' that were issued July 1,

1975. Appendix I to OMB's Revision of Circular No. A-130, ``Transmittal

2, Management of Federal Information Resources,'' prescribes Federal

agency responsibilities for maintaining records about individuals. In

accordance with the CMPP Act and Appendix I to OMB Circular No. A-130,

copies of this notice are being provided to the Committee on Government

Operations of the House of Representatives, the Committee on

Governmental Affairs of the Senate, and OMB's Office of Information and

Regulatory Affairs.

I. Authority

This matching program is being conducted pursuant to sections 3003

and 13403 of the Omnibus Budget Reconciliation Act of 1993 (Pub. L.

103-66, approved August 10, 1993); section 904 of the Stewart B.

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

section 165 of the Housing and Community Development Act of 1987 (42

U.S.C. 3543); the National Housing Act (12 U.S.C. 1701-1750g); the

United States Housing Act of 1937 (42 U.S.C. 1437-1437o); and section

101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s).

The Omnibus Budget Reconciliation Act of 1993 (Budget

Reconciliation Act) authorizes HUD to request from the Social Security

Administration (SSA) and the Internal Revenue Service (IRS) return

information as prescribed in section 6103(l)(7) of title 26 of the

United States Code (Internal Revenue Code). The Budget Reconciliation

Act limits HUD's access to tax return data and prohibits HUD's

redisclosure of tax return data to public housing agencies and Indian

housing authorities (collectively referred to as HAs), and private

owners/management agents for subsidized multifamily projects. However,

it allows HUD to disclose the fact that discrepancies exist between

information provided by the tenant and other sources, and to request

reverification of income in light of the tenant's uncertain eligibility

for, or level of, benefits.

The Budget Reconciliation Act requires that applicants and

participants in assisted housing programs sign a consent form

authorizing the Secretary of HUD to request that the Commissioner of

Social Security and the Secretary of the Treasury release the return

information. A final rule regarding participants' consent to the

release of information was published by HUD in the Federal Register on

March 20, 1995 (60 FR 14632).

The Stewart B. McKinney Homeless Assistance Amendments Act of 1988

authorizes HUD and HAs (but not private owners/management agents for

subsidized multifamily projects) to request wage and claim information

from State Wage Information Collection Agencies (SWICAs) responsible

for administering State unemployment laws in order to undertake

computer matching. This Act authorizes HUD to require applicants and

participants to sign a consent form authorizing HUD or the HA to

request wage and claim information from the SWICAs.

The Housing and Community Development Act of 1987 authorizes HUD to

require applicants and participants (as well as members of their

households six years of age and older) in HUD-administered programs

involving rental assistance to disclose to HUD their social security

numbers (SSNs) as a condition of initial or continuing eligibility for

participation in the programs.

II. Objectives To Be Met by the Matching Program

HUD's primary objective in implementing the computer matching

program is to increase the availability of housing assistance to

individuals who meet the requirements of the housing assistance

programs. Other objectives include identifying and recouping excessive

housing assistance received by tenants, and deterring future abuses of

assisted housing programs.

HUD's various assisted housing programs, available through HAs or

subsidized multifamily project owners/management agents, require that

applicants meet certain income and other criteria to be eligible for

housing assistance. In addition, tenants are required to report the

amount and sources of their income on at least an annual basis. The

matching program will identify tenants receiving excessive housing

assistance resulting from unreported or underreported family income.

When the excessive housing assistance is identified, these tenants

frequently move out of assisted housing units, increasing funds or

units available to serve the intended beneficiaries of HUD programs.

Further, program administrators may collect excessive housing

assistance from those tenants. Some tenants may continue to receive

housing assistance but will be required to increase their contributions

toward rent, and to re-pay excessive housing assistance.

III. Program Description

In this computer matching program, tenant-provided information

included [[Page 21550]] in HUD's automated files will be compared to

data from the SSA and the IRS, as well as from SWICAs and the Office of

Personnel Management (OPM). HUD intends the SSA and IRS matching to be

a continuing program for assisted housing programs nationwide. HUD will

normally request that the SSA conduct matching of earned income

information, and that the IRS conduct matching of unearned income

information, on an annual basis. HUD will request SSA matching of

social security and supplemental social security income information

monthly. Initially HUD may limit the matching or the verification

process to selected HAs and private owners/management agents to test

the effectiveness of the computer matching and tenant income

verification processes.

HUD anticipates that it will only conduct SWICA matching in

selected States. Furthermore, HUD anticipates that the extent of SWICA

and OPM matching will decrease in future years, after the effectiveness

of SSA and IRS matching and income verification has been demonstrated.

HAs may also request SWICA matching.

HUD will disclose to the SSA, IRS, and SWICAs only tenant personal

identifiers, i.e., SSNs, surnames, dates of birth, and sex. The SSA,

IRS, and SWICAs will conduct the matching of the HUD-provided personal

identifiers to personal identifiers included in their automated files.

Those agencies will provide income data to HUD only for individuals

with matching personal identifiers.

The process of income matching between HUD and the OPM varies from

the above. The OPM will disclose its data to HUD, and HUD will actually

conduct the computer matching to OPM data.

HUD will then compare the SSA, IRS, OPM, and SWICA income data to

tenant-reported income data included in HUD's system of records known

as the Tenant Housing Assistance and Contract Verification Data (HUD H-

11). This comparison will identify, based on criteria established by

HUD, tenants whose income(s) require further verification.

A. Income Verification

HUD will normally request that HAs or private owners/management

agents verify matching results as described below. However, under

certain limited circumstances HUD may verify tenant income(s) with

independent income sources. For example, such circumstances may include

when: (a) HUD declares an HA in breach of an annual contributions

contract; or (b) the tenant fails to disclose SSA and IRS data, the

tenant has committed other serious violations, and HUD's analysis of

the data could support legal actions. HUD may send letters to employers

to request income data, but HUD will not disclose tax return data to

HAs, private owners/management agents, employers, or payors.

(1) Verification of SSA and IRS Data Referenced in Section 6103(l)(7)

of the Internal Revenue Code

Since HUD cannot redisclose tax return data directly to HAs or

private owners/management agents, HUD plans to notify tenants of

discrepancies between the tenant-reported income and the SSA and IRS

data. HUD will supply the tenant with income information taken directly

from SSA and IRS data and request that the tenant provide this

information to the HA or private owner/management agent. Concurrently,

HUD will notify the HA or the private owner/management agent that a

discrepancy exists between information provided by the tenant and other

sources and will request reverification of the tenant's income. This

notification will not include any tax return information.

Income information that tenants disclose to the HA or private

owners/management agents will be verified directly with the income

source or with the tenant. Tenants who fail to report to the HA or

private owner/management agent after HUD's initial notice will receive

a second notice sent by the HA or private owner/management agent. If

the tenant still fails to provide the information to the HA or private

owner/management agent, the HA or private owner/management agent may

then terminate housing assistance, after providing the tenant an

opportunity to grieve any adverse action.

The SSA and the IRS have advised HUD that the process described in

the preceding paragraph is consistent with the intent of section

6103(l)(7) of the Internal Revenue Code, as the intent of the matching

is to create a dialogue between the benefit recipient and the benefit

provider.

(2) Verification of Social Security and Supplemental Social Security

Income Data

Unlike the income return information supplied by the SSA and the

IRS, HUD may disclose SSA Title 2 (social security) and Title 16

(supplemental social security income) data to HAs and private owners/

management agents. Therefore, after receiving this data from the SSA

and comparing it to tenant-reported income, HUD will disclose the SSA

social security and supplemental social security income data to HAs and

private owners/management agents. These disclosures will be limited to

those instances in which a significant disparity exists between the SSA

and the tenant-reported data. HAs and private owners/management agents

will then notify the tenant if a disparity exists that affects the

tenant's housing assistance.

(3) Verification of SWICA Data

HUD will disclose matching results for SWICA wage and unemployment

claim data directly to HAs, but not to private owners/management

agents. The comparison of SWICA wage information and the tenant-

reported data will reveal whether income verification is necessary. The

HA must then obtain wage information directly from the tenants'

employer(s), including information from prior years when appropriate.

The SWICA unemployment claim data must be verified with the tenant.

Verification with the SWICA would only be required if the tenant

disputes the SWICA claim data.

(4) Verification of OPM Data

HUD will disclose matching results for OPM data to HAs and private

owners/management agents. The OPM data, when compared to the tenant-

reported data, provides an indicator that income verification is

necessary. The HAs and private owners/management agents may then obtain

wage information directly from the employer(s), including information

from prior years when appropriate.

B. Administrative or Legal Actions

Regarding all the matching described in this notice, HUD

anticipates that HAs and private owners/management agents will take

appropriate actions in consultation with the tenant to resolve the

disparities between tenant-reported and independent income source data.

If appropriate, the HAs and private owners/management agents will

increase the tenant's contribution toward rent, i.e., reduce the

housing assistance provided.

After verifying that the tenant had access to income that the

tenant did not report, the HA or project owner/management agent will:

(1) Notify the tenant in writing of any findings;

(2) Calculate the unreported income and excessive housing

assistance received by the family;

(3) Offer the tenant an opportunity to contest any findings;

(4) Provide a grievance hearing or a right to contest to the

tenant, if requested; and [[Page 21551]]

(5) Initiate, as appropriate, administrative or legal actions to

resolve the tenant's underpayment of rent, using guidelines in HUD

regulations and handbooks.

The HAs and private owners/management agents may not suspend,

terminate, reduce, or make a final denial of any housing assistance to

any individual as the result of information produced by this matching

program until: (a) The individual has received notice from that agency

containing a statement of its findings and informing the individual of

the opportunity to contest such findings; and (b) either the notice

period provided in applicable regulations of the program, or 30 days,

whichever is later, has expired. In most cases, the discrepancy will be

resolved through consultation between the tenant and the HA or private

owner/management agent.

In legal actions, HAs and private owners/management agents may

refer cases to local law enforcement entities or HUD's Office of

Inspector General (OIG) for possible investigation and prosecution,

either criminally or civilly. Referrals to the OIG should involve only

egregious cases.

C. Reporting on Computer Matching/Income Verification Results

HUD plans to prescribe a methodology (probably electronic) for HAs

and private owners/management agents to report computer matching/income

verification results to HUD. The reporting methodology will measure the

effectiveness of the computer matching program. In developing the

methodology, HUD will avoid imposing any unnecessary burden on HAs and

private owners/management agents. The reporting requirement will be

submitted to OMB for approval under the Paperwork Reduction Act of 1980

(44 U.S.C. Chapter 35), and a notice of this submission will be

published in the Federal Register.

IV. Records To Be Matched

SSA and IRS will actually conduct the matching of tenant SSNs and

additional identifiers (such as surnames and dates of birth) to tenant

data that HUD supplies from its system of records known as the Tenant

Housing Assistance and Contract Verification Data (HUD H-11). Within

HUD, this system of records includes two automated systems known as the

Multifamily Tenant Characteristics System (a system for programs under

the Office of the Assistant Secretary for Public and Indian Housing)

and the Tenant Rental Assistance Certification System (a system for

programs under the Office of the Assistant Secretary for Housing--

Federal Housing Commissioner). HAs and private owners/management agents

for subsidized multifamily projects provide HUD with the data included

in HUD H-11.

The SSA will match the HUD H-11 records to the SSA's Earnings

Recording and Self-Employment Income System (HHS/SSA/OSR, 09-60-0059)

(Earnings Record); Master Beneficiary Record (HHS/SSA/OSR, 09-60-0090)

(MBR); and Supplemental Security Income Record (HHS/SSA/OSR, 09-60-

0103) (SSR). The IRS will match the HUD H-11 records to its Wage and

Information Returns (IRP) Master File (Treas/IRS 22.061). The IRS also

refers to this file as the Information Return Master File (IRMF).

HUD's Assistant Secretary for Public and Indian Housing (PIH) will

place matching data into its Tenant Eligibility Verification Files

(HUD/PIH-1), as provided in a notice published in today's Federal

Register. The HUD/PIH-1 files are specifically exempt from certain

provisions of the Privacy Act, as described in a notice published on

February 28, 1994 (59 FR 9406) and a notice published on March 30, 1994

(59 FR 14869). HUD's Assistant Secretary for Housing--Federal Housing

Commissioner will consider matching data as a component of HUD H-11.

HUD may also coordinate SWICA income computer matches for its

rental assistance programs using tenants' SSNs and surnames. SWICAs

will match tenant records to machine-readable files of quarterly wage

data and unemployment insurance benefit data. Results from this

matching will be provided to HUD or HAs, which will then determine

whether tenants have unreported or underreported income. The matching

will be done in accordance with a written agreement between the SWICA

and HUD.

In addition, tenants' SSNs may be matched to the OPM's General

Personnel Records (OPM/GOVT-1), the Civil Service Retirement and

Insurance Records System (OPM/Central-1), and the Department of

Defense's Defense Manpower Data Center Data Base (S322.10.DMDC). The

tenant data may be matched to the SSA's Master Files of Social Security

Number Holders (HHS/SSA/OSR, 09-60-0058) and Death Master Files for the

purpose of validating SSNs contained in tenant records. These records

will also be used to validate SSNs for all applicants, tenants, and

household members who are six (6) years of age and over to identify

noncompliance with program eligibility requirements. HUD will compare

tenant SSNs provided by HAs or private owners/management agents to

reveal duplicate SSNs and potential duplicate housing assistance.

V. Period of the Match

The computer matching program will be conducted according to

agreements between HUD and the SSA, IRS, OPM, and SWICAs. The computer

matching agreements for the planned matches will terminate either when

the purpose of the computer matching program is accomplished, or 18

months from the date the agreement is signed, whichever comes first.

The agreement may be extended for one 12-month period, with the

mutual agreement of all involved parties, if the following conditions

are met:

(1) Within 3 months of the expiration date, all Data Integrity

Boards review the agreement, find that the program will be conducted

without change, and find a continued favorable examination of benefit/

cost results; and

(2) All parties certify that the program has been conducted in

compliance with the agreement.

The agreement may be terminated, prior to accomplishment of the

computer matching purpose or 18 months from the date the agreement is

signed (whichever comes first), by the mutual agreement of all involved

parties within 30 days of written notice.

Dated: March 22, 1995.

Marilynn A. Davis,

Assistant Secretary for Administration.

[FR Doc. 95-10685 Filed 5-1-95; 8:45 am]

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