Revised Restrictions on Assistance to Noncitizens

SUMMARY: This final rule updates HUD's noncitizens regulations to

incorporate the amendments made to section 214 of the Housing and

Community Development Act of 1980 by section 592 of the Quality Housing

and Work Responsibility Act of 1998 (the ``1998 Act''). Specifically,

section 592 of the 1998 Act provides that PHAs, notwithstanding the

requirements of Section 214, may elect not to affirmatively establish

and verify eligibility before providing financial assistance to an

individual or family. Before this amendment, statutory authority

allowed PHAs to opt-out of compliance with the Section 214 immigration

verification requirements in their entirety. This final rule also makes

final a November 29, 1996 interim rule and takes into consideration the

public comments submitted on the interim rule.

EFFECTIVE DATE: June 11, 1999.

FOR FURTHER INFORMATION CONTACT: For the covered programs, the

following persons should be contacted:

1. For the Public Housing, Section 8 Rental Certificate, Rental

Voucher and Moderate Rehabilitation (except Single Room Occupancy-

``SRO'') programs: Patricia Arnaudo, Office of Public and Indian

Housing, Room 4222, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410, telephone (202) 619-8201;

2. For the Section 8 Moderate Rehabilitation SRO program: John

Garrity, Office of Community Planning and Development, Room 7262,

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

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

3. For the other Section 8 programs, the Section 236 programs, and

Housing Development Grants and Rent Supplement: Helene DeVous, Office

of Housing, Room 6146, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410, telephone (202) 708-2866.

4. For the Section 235 homeownership program: Phillip Murray,

Office of Lender Activities and Program Compliance, Office of Housing,

Room B133, Department of Housing and Urban Development, 451 Seventh

Street, SW, Washington, DC, 20410, telephone (202) 708-1515.

Persons with hearing or speech impairments may access the above

telephone numbers via TTY by calling the Federal Information Relay

Service at 1-800-877-8339. With the exception of the ``800'' number,

none of the foregoing telephone numbers are toll-free.

SUPPLEMENTARY INFORMATION:

I. HUD's Implementation of Section 214 of the Housing and Community

Development Act of 1980

On March 20, 1995 (60 FR 14816), HUD issued its final rule

implementing Section 214 of the Housing and Community Development Act

of 1980 (42 U.S.C. 1436a) (``Section 214'') and that rule became

effective on June 19, 1995. Section 214 prohibits HUD from making

certain financial assistance available to persons other than United

States citizens, nationals, or specified categories of eligible

noncitizens.

HUD's March 20, 1995 final rule promulgated virtually identical

``noncitizens'' regulations for the various HUD programs covered by

Section 214. On March 27, 1996 (61 FR 13614), HUD published a final

rule eliminating the repetitiveness of these duplicative regulations by

consolidating the noncitizens requirements in a new subpart E to 24 CFR

part 5. HUD established part 5 (entitled ``General HUD Program

Requirements; Waivers'') to describe those requirements which are

applicable to one or more program regulations.

II. The November 29, 1996 Interim Rule

On November 29, 1996 (61 FR 60535), HUD published an interim rule

amending its noncitizens regulations to incorporate the amendments made

to Section 214 by the Use of Assisted Housing by Aliens Act of 1996

(title V, Subtitle E of the Illegal Immigration Reform and Immigrant

Responsibility Act of 1996, Public Law 104-208, approved September 30,

1996; 110 Stat. 3009-546) (the ``1996 Immigration Act''). Section 577

of the 1996 Immigration Act directed that HUD's implementing

regulations ``be issued in the form of an interim final rule, which

shall take effect upon issuance.'' Accordingly, the amendments made by

the November 29, 1996 interim rule were effective upon publication, but

also provided members of the public with a 60-day period to submit

their comments on the interim rule.

The most significant changes made to Section 214 by the 1996

Immigration Act, and consequently to HUD's Section 214 regulations by

the November 29, 1996 interim rule, are as follows:

1. HUD's interim noncitizens regulations provide that responsible

entities may not make assistance available to a family applying for

assistance until at least the eligibility of one family member has been

established, and assistance must be prorated based on the number of

individuals in the family for whom eligibility has been affirmatively

established.

2. The interim regulations require that continued financial

assistance be provided to an eligible mixed family after November 29,

1996 (the effective date of the interim rule) be prorated based on the

percentage of family members that are eligible for assistance. An

eligible mixed family is a family containing members with eligible

immigration status, as well as members without such status, and that

meets the criteria for eligibility for continued assistance as

described in Section 214.

3. The interim regulations require that HUD suspend financial

assistance to a family upon determining that the family has knowingly

permitted an ineligible individual to reside on a permanent basis in

the family's unit. The suspension shall be for a period of at least 24

months. This provision does not apply if the ineligible individual has

already been considered in calculating any proration of assistance for

the family.

4. The interim regulations allow responsible entities administering

financial assistance under a Section 214 covered program to require

that individuals who declare themselves to be U.S. citizens verify the

declaration through appropriate documentation (e.g., United States

passport, resident alien card, registration card, social security card,

or other appropriate documentation). Before this amendment, only

individuals who were not U.S. citizens or nationals were required to

present documentation of their eligible immigration status.

5. The November 29, 1998 interim rule revised the maximum period

for deferral of termination of assistance provided after November 29,

1996 from an aggregate of 3 years to an aggregate of 18 months. The 18-

month maximum deferral period does not apply to refugees under section

207 of the Immigration and Nationality Act or to individuals seeking

asylum under section 208 of that Act. The maximum deferral period for

deferrals granted

[[Page 25727]]

prior to November 29, 1996 continues to be 3 years.

6. The interim regulations provide that an individual has a maximum

period of 30-days, starting from the date of receipt of the notice of

denial or termination of assistance, to request a fair hearing. HUD

believes that due process requires that assistance already being

provided to a tenant may not be delayed, denied, reduced or terminated

until completion of the fair hearing.

7. The interim regulations provide that a Public Housing Agency

(PHA) may elect not to comply with the requirements of 24 CFR part 5,

subpart E. This amendment was based on the language of subsection

214(h)(2), which was added by section 575 of the 1996 Immigration Act.

Subsection 214(h)(2) provided that ``[a] Public Housing Agency . . .

may elect not to comply with this section.'' The use of the word

``section'' (as opposed to ``subsection'') in this provision, in a

strict statutory construction, referred to Section 214 in its entirety.

III. Section 592 of the Quality Housing and Work Responsibility Act

of 1998

On October 21, 1998, President Clinton signed into law HUD's fiscal

year (FY) 1999 Appropriations Act, which includes the Quality Housing

and Work Responsibility Act of 1998 (title V of the FY 1999 HUD

Appropriations Act; Public Law 105-276; 112 Stat. 2461) (the ``1998

Act''). The 1998 Act constitutes a substantial overhaul of HUD's public

housing and Section 8 assistance programs. The 1998 Act enacts many of

the reforms originally proposed in Secretary Andrew Cuomo's HUD 2020

Management Reform Plan, HUD's public housing bill and Congressional

bills that are directed at revitalizing and improving HUD's public

housing and Section 8 tenant-based programs.

Section 592 of the 1998 Act (entitled ``Use of Assisted Housing by

Aliens'') removed the option of PHAs to elect not to comply with

Section 214. In its place, the 1998 Act provides that PHAs,

notwithstanding the requirements of Section 214, may elect not to

affirmatively establish and verify eligibility before providing

financial assistance to an individual or family (as discussed above,

Section 214, and HUD's noncitizens regulations, provide that no

individual or family applying for financial assistance may receive such

financial assistance prior to the affirmative establishment and

verification of eligibility of at least the individual or one family

member). Section 592 of the 1998 Act was effective upon enactment

(October 21, 1998).

On February 18, 1999 (64 FR 8192), HUD published a Notice of

Initial Guidance in the Federal Register. The notice advises the public

of those provisions of the 1998 Act that are effective immediately and

of action that may or should be taken immediately by affected public

and assisted housing providers. The February 18, 1999 notice advises

the public that section 592 of the 1998 Act removed the option of PHAs

to elect not to comply with Section 214. Further, the notice provides

that in the event a PHA elected to ``opt-out'' of compliance with

Section 214, the PHA may, but is not required to, immediately commence

verification of eligibility of families for whom eligibility status

under Section 214 has not yet been undertaken. A PHA must, however,

verify eligibility status in accordance with the requirements of

Section 214 and HUD's implementing regulations at 24 CFR part 5,

subpart E, no later than the date of the family's annual reexamination.

IV. This Final Rule

This rule makes final the amendments in the November 29, 1996

interim rule, and takes into consideration the public comments

submitted on the interim rule. After careful consideration of all the

comments received on the November 29, 1996 interim rule, HUD has made

one change as a result of public comment. Specifically, HUD has revised

the list of documentation that may constitute acceptable evidence of

U.S. citizenship or U.S. nationality (see discussion of public comment

captioned ``Rule Should Specify Acceptable Evidence of Citizenship'' in

section V.B of this preamble).

This final rule updates HUD's noncitizens regulations to

incorporate the amendments made by section 592 of the 1998 Act.

Specifically, the final rule removes Sec. 5.501 (which granted PHAs the

ability to opt-out of compliance with Section 214) and revises

Sec. 5.512 (entitled ``Verification of eligible immigration status'')

to state that PHAs may elect to provide financial assistance to an

individual or family before verifying the eligibility of the individual

or one family member.

This final rule also makes a correction to Sec. 5.508 of the

November 29, 1996 interim rule. The 1996 Immigration Act permits

responsible entities to verify the eligibility of individuals who

declare themselves to be U.S. citizens or nationals. Although the

preamble to the November 29, 1996 interim rule correctly referred to

both U.S. citizens and nationals, Sec. 5.508 of the interim rule, which

implemented this statutory provision, inadvertently failed to refer to

U.S. nationals. This final rule makes the necessary correction to

Sec. 5.508.

This final rule does not implement the provisions of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996 (Public

Law 104-193, approved August 22, 1996; 110 Stat. 2105) which concern

immigration. The changes required by that Act will be the subject of

future rulemaking.

Readers should note that the regulatory text of this final rule is

identical to that of the November 29, 1996 interim rule, with the

exception of the changes implementing section 592 of 1998 Act and the

changes to Sec. 5.508.

V. Discussion of Public Comments on the November 29, 1996 Interim

Rule

The public comment period on the November 29, 1996 interim rule

closed on January 28, 1997. HUD received twenty-two comments, including

comments from nonprofit organizations, PHAs, and PHA interest

organizations. This section of the preamble presents a summary of the

significant issues raised by the public commenters on the November 29,

1996 interim rule, and HUD's responses to these comments.

A. Comments on the Statutory PHA ``Opt Out'' Provision (Section 5.501)

Many of the comments received regarding the PHA ``opt-out''

provision were submitted before publication of the November 29, 1996

interim rule. The vast majority of these comments urged that HUD

interpret section 575 of the 1996 Immigration Act to permit PHAs to

opt-out of compliance with Section 214 in its entirety. As noted above,

the recommended interpretation of section 575 was in fact the position

adopted by HUD in the November 29, 1996 interim rule and this

interpretation was based on the statutory language itself.

Many of these commenters noted that in some cities, such as New

York City, most ineligible noncitizens are part of families that

include citizens, nationals, or other eligible persons, and are

``deeply woven into the fabric of everyday life.'' The commenters wrote

that it would be a great hardship to such families to penalize these

ineligible persons. Other commenters wrote that the recommended

interpretation of the opt-out provision would further HUD's policy of

``vest[ing] in local public housing agencies the maximum amount of

responsibility in the administration of their housing programs.''

HUD Response. As noted above, section 592 of the 1998 Act amended

the scope of the PHA opt-out provision.

[[Page 25728]]

This final rule updates 24 CFR part 5, subpart E to incorporate the

amendments made by section 592 of the 1998 Act. Specifically, the final

rule removes Sec. 5.501 (entitled ``PHA election whether to comply with

this subpart''), which allowed PHAs to opt-out of compliance with the

Section 214 requirements. The final rule also amends Sec. 5.512

(entitled ``Verification of eligible immigration status'') to state

that PHAs may elect to provide financial assistance to an individual or

family before verifying the eligibility of the individual or one family

member.

B. Comments on the Submission of Evidence of Eligible Status (Section

5.508)

Comment: Nondiscrimination Requirements Should be Codified. Two

commenters suggested that HUD amend the interim rule to explicitly

provide that an entity administering a program covered by Section 214

may not request verification of citizenship based on race, national

origin, or personal characteristics, such as accent, language spoken,

or familial association with a noncitizen.

HUD Response. As Sec. 5.524 makes clear, all regulatory procedures

in the implementation of Section 214 must be administered in accordance

with all applicable nondiscrimination and equal opportunity

requirements, including, but not limited to, title VI of the Civil

Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the implementing

regulations in 24 CFR part 1, section 504 of the Rehabilitation Act of

1973 (29 U.S.C. 794) and the implementing regulations in 24 CFR part 8,

the Fair Housing Act (42 U.S.C. 42 U.S.C. 3601-3619) and the

implementing regulations in 24 CFR part 100. Further, section VI of

this preamble reminds the public that the Section 214 prohibitions on

assistance to noncitizens must be implemented in the uniform manner

prescribed, without regard to race, national origin, or personal

characteristics (e.g., accent language spoken, or familial association

with a noncitizen). The individual regulations for the HUD programs

subject to Section 214 specify the fair housing and civil rights

requirements applicable to each program.

Comment: Senior Noncitizens Should be Subject to Stricter

Verification Procedures. Section 214 provides that certain senior

noncitizens (those 62 years of age or older) need only submit a signed

declaration of eligible immigration status and a proof of age document

for purposes of verifying their eligibility to receive assistance. All

other noncitizens, however, must submit their documentation of eligible

immigration status for verification by the Immigration and

Naturalization Service (INS). Before the amendments made by the 1996

Immigration Act, Section 214 limited this more lenient treatment to

senior noncitizens receiving assistance on June 19, 1995 (the effective

date of HUD's original March 20, 1995 noncitizens rule). The November

29, 1996 interim rule expanded the exemption to include senior

noncitizens receiving assistance on September 30, 1996 (the date of

enactment of the 1996 Immigration Act) or applying for assistance on or

after that date. Two commenters objected to this amendment, and wrote

that the higher standard of documentation should continue to be

required of senior noncitizens who apply after September 30, 1996.

HUD Response. This regulatory amendment merely tracks the revision

made to section 214(d)(4) by the 1996 Immigration Act. Accordingly, HUD

does not have the discretion to modify this provision in the manner

suggested by the commenters.

Comment: Rule Should Specify Acceptable Evidence of Citizenship or

Nationality. The 1996 Immigration Act allows responsible entities

administering financial assistance under a Section 214 covered program

to require that individuals who declare themselves to be U.S. citizens

or nationals to verify the declaration through appropriate

documentation. Before this amendment, only individuals who were not

U.S. citizens or nationals were required to present documentation of

their eligible immigration status.

Three commenters recommended that HUD provide greater specificity

regarding what documentation constitutes acceptable evidence of

citizenship and nationality. One of the commenters noted that two of

the documents listed as examples in Sec. 5.508 (a resident alien card

and a Social Security Card) do not constitute adequate evidence of

citizenship or nationality. The commenter wrote that several of the

other listed examples, such as a ``registration card'' or ``other

appropriate documentation,'' were too vague. One commenter suggested

that acceptable proof of citizenship should include a signed

declaration of citizenship accompanied by proof that a timely request

for supporting documentation has been made. According to the commenter,

this would ease the situation encountered by applicants who have

difficulty obtaining original birth certificates from distant

jurisdictions.

HUD Response. The commenters are correct that neither a resident

alien card nor a Social Security Card is evidence of U.S. citizenship

or U.S. nationality. Therefore, HUD has removed the references to these

documents, as well as the reference to a ``registration card'', from

Sec. 5.508(b)(1). If HUD determines that additional examples are

necessary, HUD will more appropriately provide them through notice,

handbook, or other non-regulatory guidance.

C. Comments on Verification of Eligible Status: Timing of Procedure and

Proration of Assistance (Section 5.512)

Comment: Verification of All Household Members Should be Required

Before Admission. HUD's noncitizens regulations provide that

responsible entities may not make assistance available to a family

applying for assistance until at least the eligibility of one family

member has been established, and assistance must be prorated based on

the number of individuals in the family for whom eligibility has been

affirmatively established.

Several commenters indicated that proration of rent for newly

admitted families due to an inability to complete the verification of

eligibility of all family members before admission is a problem, both

to the applicant and to the housing provider. They wrote that families

who have not yet moved in will choose not to pay a prorated rent. If

families are admitted with full subsidy after verification of

eligibility of only one family member, the family and housing provider

will both suffer losses if proration becomes required, since it is

unlikely that the family will be able to pay the higher rent and

eviction will follow.

Three commenters suggested that this perceived difficulty might be

resolved by requiring verification of all household members before

admission. The commenters wrote that this would not constitute an undue

delay in the provision of assistance. According to two of these

commenters, housing providers usually receive verification within one

to two weeks after submission of the appropriate documentation. The

commenters noted that the regulations grant individuals and families up

to 30 days to submit the required documentation--a longer time period

than what the commenters' experience indicates it takes to complete the

entire verification process.

HUD Response. Subsection 214(d)(4)(B)(ii), as amended by the 1996

Immigration Act, prohibits the delay, denial, reduction, or termination

of assistance to an applicant or tenant

[[Page 25729]]

pending the completion of the verification process. Assistance to newly

admitted families may not be prorated based on the inability of the

responsible entity to complete verification for all family members.

The commenters are correct in noting that assistance may need to be

prorated if the verification process determines that one or more family

members is not eligible. HUD acknowledges that families may be unable

to pay the higher rent resulting from proration. Nevertheless, the

requirement that assistance be prorated based on the number of

individuals in the family for whom eligibility has been affirmatively

established is statutorily mandated by the 1996 Immigration Act.

Comment: Rent Should be Retroactively Reduced Following

Verification of Status for All Family Members. Another commenter

suggested that, where assistance was initially prorated because the

status of all the family members had not been established, the rent

should be reduced retroactively to the date of admission following

verification of the eligible status of all the family members.

HUD Response. As noted in the response the preceding comment,

responsible entities may not prorate assistance to a family before the

completion of the verification process.

D. Comments on Delay, Denial, Reduction, or Termination of Assistance

(Section 5.514)

Comment: Verification Should be Completed Before Admission. One

commenter praised HUD's interpretation that assistance to a tenant not

be delayed, denied, reduced, or terminated until the completion of an

informal hearing when a timely request for such a hearing is made. This

contrasted with the opinion of another commenter, who stated that,

although it was the intent of the Congress to not delay assistance to

current program participants, no such authority exists regarding

applicants. Accordingly, this commenter wrote all aspects of

eligibility need to be verified before a family is admitted.

HUD Response. HUD's noncitizens regulations track the statutory

language of the 1996 Immigration Act. Specifically, subsection

214(d)(4)(B)(ii), as amended by the 1996 Immigration Act, prohibits the

delay, denial, reduction, or termination of assistance to an applicant

or tenant pending the completion of the verification process.

Comment: What Constitutes ``Knowingly'' Permitting an Ineligible

Person to Reside in an Assisted Housing Unit? Several commenters wrote

to express uncertainty regarding Sec. 5.514(c)(1)(iii), which provides

that assistance to an applicant shall be denied, and a tenant's

assistance shall be terminated, if--

(iii) The responsible entity determines that a family member has

knowingly permitted another individual who is not eligible for

assistance to reside (on a permanent basis) in the public or

assisted housing unit of the family member. Such termination shall

be for a period of not less than 24 months * * *

Several commenters asked for greater clarity regarding what

constitutes ``knowingly'' permitting an ineligible person to reside in

an assisted unit on a permanent basis. One of the commenters suggested

that a deliberate intention to deceive the housing provider (i.e.,

knowledge about the ineligible status and intentionally permitting

permanent residence in the unit), should be the basis for the

imposition of sanctions.

HUD Response. HUD believes that ``knowingly'' has the everyday

meaning normally associated with the term. Specifically, the word

``knowingly,'' as used in this provision of the 1996 Immigration Act,

means that a tenant possesses knowledge that an ineligible individual

is residing (on a permanent basis) in the unit.

Comment: What Constitutes ``Termination'' of Assistance Under

Section 5.514(c)(1)(iii)? As noted above, HUD's noncitizens regulations

at 24 CFR 5.514(c)(1)(iii) provide that, if a family member knowingly

permits an ineligible individual to reside in an assisted housing unit,

the family member's assistance must be ``terminated'' for a period of

not less than 24 months. Several commenters questioned whether the

effect of this termination is that the formerly assisted family is

required to reapply for assistance after the expiration of the

prescribed period (or immediately upon termination, with a required

wait of the prescribed period), or whether assistance is to be

automatically reinstated after the prescribed period.

HUD Response. Termination of assistance under Sec. 5.514(c)(1)(iii)

would be no different than termination of assistance for any other

reason under the individual program requirements for each of the HUD

programs covered by Section 214. For example, recipients of Section 8

tenant-based assistance who violate Sec. 5.514(c)(1)(iii) are subject

to the termination procedures described in 24 CFR part 982, subpart L

(``Family Obligations; Denial and Termination of Assistance'').

Comment: Maximum Period or Termination Should Exceed 24 Months. One

commenter wrote that HUD should establish conditions for imposing a

termination period longer than the statutory minimum 24 month sanction.

Subsection 214(d)(6), and HUD's implementing regulation at

Sec. 5.514(c)(1)(iii), provides that HUD shall terminate assistance for

a period of ``not less than 24 months.''

HUD Response. At this time, HUD is not amending 24 CFR part 5,

subpart E to incorporate the recommendations made by the commenter. The

establishment of regulatory criteria for the imposition of termination

periods greater than 24 months would constitute a substantive revision

of HUD's noncitizens regulations. Accordingly, HUD would implement such

changes only after providing the public with notice and the opportunity

to comment. HUD would not include the revisions suggested by the

commenter in a final rule issued for effect. Should HUD decide to

provide for termination periods of greater than 24 months, it will

issue a future rulemaking accompanied by a request for public comment.

Comment: Time Period for Requesting Hearing Should Conform to

Hearing Procedures Established by Responsible Entity. One commenter

recommended that the time period for requesting a hearing on a negative

determination be consistent with the amount of time established by the

responsible entity for all terminations of assistance (such as 10

days).

HUD Response. The regulatory language of Sec. 5.514 conforms to the

language of the 1996 Immigration Act, which provides that the Secretary

of HUD shall provide a ``reasonable period, not to exceed 30 days'' to

appeal an INS eligibility determination. At this time, HUD is not

revising its noncitizens regulations to permit the establishment of

less than a 30-day period for requesting an informal hearing. Such a

change would constitute a substantive revision to the November 29, 1996

interim rule, and could not be implemented through a rule issued for

effect. In the event HUD determines that responsible entities should be

provided with the flexibility to modify the 30-day period for

requesting a hearing, it will implement the change using notice and

comment rulemaking procedures.

E. Comments on Deferral of Termination of Assistance for Ineligible

Families (Section 5.518)

Comment: Requested Clarifications Regarding Eligibility and Timing

for Temporary Deferral of Termination of Assistance. One commenter

asked under what circumstances anyone would now receive a deferral of

termination of

[[Page 25730]]

assistance. According to the commenter, deferrals were only given to

those families living and receiving assistance in Section 214 covered

properties on or before June 19, 1995. Another question raised was

whether a family that chose proration of assistance before November 29,

1996 and that chooses deferral of termination after that date is

limited to a deferral of 18 months.

HUD Response. HUD believes that it would be the exceptional case in

which a family would be eligible for deferral of termination of

assistance in 1999. As the commenter notes the statute provides

deferral of termination of assistance for families living and receiving

assistance in Section 214 covered properties on or before June 19,

1995. It is conceivable that the verification process or appeals

process may have significantly delayed a final eligibility

determination such that a family receiving assistance on or before June

19, 1995 would now find themselves faced with termination of assistance

(due to lack of eligibility), and would therefore be eligible for

deferral of termination of assistance. Again, however, HUD believes

that this would be the exception.

With respect to a family that is eligible for deferral of

termination and chooses deferral of termination of assistance after

November 29, 1996, the period of deferral of termination is limited to

18 months.

F. Comments on Continued Full Assistance to Ineligible Family Members

(Section 5.518)

Comment: Rule Should be Clarified Regarding Continued Assistance

Provided Before November 29, 1996. One commenter wrote that it was not

completely clear that ``continued assistance,'' for purposes of

families receiving housing assistance before November 29, 1996, means

non-prorated assistance. The commenter requested that Sec. 5.518(a)(2)

be revised to clarify this provision of the 1996 Immigration Act. In

addition, this commenter wrote that the aggregate deferral period for a

tenant who was granted a temporary deferral before November 29, 1996,

is three years from the date the first deferral was granted.

HUD Response. Section 5.518(a)(2) provides, a family granted

continued assistance before November 29, 1996 is entitled to receive

non-prorated assistance. A family granted continued assistance after

November 29, 1996 must receive prorated assistance. In response to the

commenter's second comment, Sec. 5.518(b)(3) provides that the

``aggregate deferral period for deferrals granted prior to November 29,

1996 shall not exceed 3 years.''

Comment: Reference to Refugees and Asylees is Confusing. One

commenter wrote that the reference to refugees and asylees in

Sec. 5.518(b)(3) was confusing, since these individuals have eligible

status under the statute and their presence in a family would not be

cause for terminating assistance or deferring termination any more than

the presence of a citizen would be.

HUD Response. The language of Sec. 5.518(b)(3) exempting certain

categories of noncitizens from the 18-month maximum deferral period

tracks the statutory language of the 1996 Immigration Act. The language

serves to remind responsible entities of the statutory exemption.

Accordingly, the language has been retained.

VI. Nondiscrimination in the Implementation of Section 214

HUD reiterates the statement made in the March 20, 1995 final rule

and the November 29, 1996 interim rule that all regulatory procedures

in implementation of Section 214 must be administered in the uniform

manner prescribed without regard to race, national origin, or personal

characteristics (e.g., accent, language spoken, or familial association

with a noncitizen).

VII. Findings and Certifications

Executive Order 12866, Regulatory Planning and Review

The Office of Management and Budget (OMB) reviewed this final rule

under Executive Order 12866, Regulatory Planning and Review. OMB

determined that this interim rule is a ``significant regulatory

action,'' as defined in section 3(f) of the Order (although not

economically significant, as provided in section 3(f)(1) of the Order).

Any changes made to the final rule subsequent to its submission to OMB

are identified in the docket file, which is available for public

inspection in the office of the Department's Rules Docket Clerk, Room

10276, 451 Seventh Street, SW, Washington, DC 20410-0500.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (Public Law

104-4; approved March 22, 1995) (UMRA) establishes requirements for

Federal agencies to assess the effects of their regulatory actions on

State, local, and tribal governments, and the private sector. This rule

does not impose any Federal mandates on any State, local, or tribal

governments, or on the private sector, within the meaning of the UMRA.

Regulatory Flexibility Act

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

U.S.C. 605(b)) has reviewed this final rule before publication and by

approving it certifies that this rule will not have a significant

economic impact on a substantial number of small entities. As explained

in the preamble to the November 29, 1996 interim rule, the

implementation of HUD's noncitizen requirements have only a minimal

impact on small housing project owners, small mortgagees, and small

housing agencies. The amendments made final by this rule do not alter

that previous determination. This final rule does not require the

creation of new procedures or impose significant additional costs on

responsible entities. Rather, the requirements of the final rule can be

satisfied through the use of existing procedures. For example, the

final rule prohibits responsible entities from making assistance

available to a noncitizen until the necessary documentation

establishing eligible immigration status is verified. This requirement

can be fulfilled by utilizing the existing verification procedures.

Likewise, current methods may be used to prorate the assistance

provided to an eligible mixed family receiving continued assistance.

Environmental Impact

A Finding of No Significant Impact with respect to the environment

was made at the interim rule stage 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. 4223). That finding

continues to be applicable to this final rule and is available for

public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk, Office of General Counsel, Room

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

SW, Washington, DC.

Executive Order 12612, Federalism

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

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

contained in this final have no federalism implications, and that the

policies are not subject to review under the Order. This interim 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

[[Page 25731]]

discretion in promulgating a rule to implement the statute.

List of Subjects in 24 CFR Part 5

Administrative practice and procedure, Aged, Claims, Drug abuse,

Drug traffic control, Grant programs--housing and community

development, Grant programs--Indians, Grant programs--low and moderate

income housing, Indians, Individuals with disabilities,

Intergovernmental relations, Loan programs--housing and community

development, Low and moderate income housing, Mortgage insurance,

Penalties, Pets, Public housing, Rent subsidies, Reporting and

recordkeeping requirements, Social security, Unemployment compensation,

Wages.

Accordingly, for the reasons stated in the preamble, 24 CFR part 5

is amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

1. The authority citation for 24 CFR part 5 continues to read as

follows:

Authority: 42 U.S.C. 3535(d), unless otherwise noted.

Subpart E--Restrictions on Assistance to Noncitizens

2. The authority citation for subpart E continues to read as

follows:

Authority: 42 U.S.C. 1436a and 3535(d).

Sec. 5.501 [Removed]

3. Remove Sec. 5.501.

4. Section 5.508 is amended by revising paragraphs (b)(1), (b)(2),

(h)(2) and (h)(3) to read as follows:

Sec. 5.508 Submission of evidence of citizenship, or eligible

immigration status.

* * * * *

(b) * * *

(1) For U.S. citizens or U.S. nationals, the evidence consists of a

signed declaration of U.S. citizenship or U.S. nationality. The

responsible entity may request verification of the declaration by

requiring presentation of a United States passport or other appropriate

documentation, as specified in HUD guidance.

(2) For noncitizens who are 62 years of age or older or who will be

62 years of age or older and receiving assistance under a Section 214

covered program on September 30, 1996 or applying for assistance on or

after that date, the evidence consists of:

(i) A signed declaration of eligible immigration status; and

(ii) Proof of age document.

* * * * *

(h) * * *

(2) Thirty-day extension period. Any extension of time, if granted,

shall not exceed thirty (30) days. The additional time provided should

be sufficient to allow the individual the time to obtain the evidence

needed. The responsible entity's determination of the length of the

extension needed shall be based on the circumstances of the individual

case.

(3) Grant or denial of extension to be in writing. The responsible

entity's decision to grant or deny an extension as provided in

paragraph (h)(1) of this section shall be issued to the family by

written notice. If the extension is granted, the notice shall specify

the extension period granted (which shall not exceed thirty (30) days).

If the extension is denied, the notice shall explain the reasons for

denial of the extension.

* * * * *

5. Section 5.510 is amended by revising paragraph (b) to read as

follows:

Sec. 5.510 Documents of eligible immigration status.

* * * * *

(b) Acceptable evidence of eligible immigration status. Acceptable

evidence of eligible immigration status shall be the original of a

document designated by INS as acceptable evidence of immigration status

in one of the six categories mentioned in Sec. 5.506(a) for the

specific immigration status claimed by the individual.

6. Section 5.512 is amended by:

a. Revising paragraph (a);

b. Adding new paragraph (b); and

c. Redesignating existing paragraphs (b) through (d) as paragraphs

(c) through (e), respectively to read as follows:

Sec. 5.512 Verification of eligible immigration status.

(a) General. Except as described in paragraph (b) of this section

and Sec. 5.514, no individual or family applying for assistance may

receive such assistance prior to the verification of the eligibility of

at least the individual or one family member. Verification of

eligibility consistent with Sec. 5.514 occurs when the individual or

family members have submitted documentation to the responsible entity

in accordance with Sec. 5.508.

(b) PHA election to provide assistance before verification. A PHA

that is a responsible entity under this subpart may elect to provide

assistance to a family before the verification of the eligibility of

the individual or one family member.

* * * * *

7. Section 5.514 is amended by:

a. Revising paragraph (b);

b. Revising paragraph (c)(1);

c. Revising paragraph (e)(1); and

d. Revising paragraph (f)(1), to read as follows:

Sec. 5.514 Delay, denial, reduction or termination of assistance.

* * * * *

(b) Restrictions on delay, denial, reduction or termination of

assistance. (1) Restrictions on reduction, denial or termination of

assistance for applicants and tenants. Assistance to an applicant or

tenant shall not be delayed, denied, reduced, or terminated, on the

basis of ineligible immigration status of a family member if:

(i) The primary and secondary verification of any immigration

documents that were timely submitted has not been completed;

(ii) The family member for whom required evidence has not been

submitted has moved from the assisted dwelling unit;

(iii) The family member who is determined not to be in an eligible

immigration status following INS verification has moved from the

assisted dwelling unit;

(iv) The INS appeals process under Sec. 5.514(e) has not been

concluded;

(v) Assistance is prorated in accordance with Sec. 5.520; or

(vi) Assistance for a mixed family is continued in accordance with

Secs. 5.516 and 5.518; or

(vii) Deferral of termination of assistance is granted in

accordance with Secs. 5.516 and 5.518.

(2) Restrictions on delay, denial, reduction or termination of

assistance pending fair hearing for tenants. In addition to the factors

listed in paragraph (b)(1) of this section, assistance to a tenant

cannot be delayed, denied, reduced or terminated until the completion

of the informal hearing described in paragraph (f) of this section.

(c) Events causing denial or termination of assistance. (1)

General. Assistance to an applicant shall be denied, and a tenant's

assistance shall be terminated, in accordance with the procedures of

this section, upon the occurrence of any of the following events:

(i) Evidence of citizenship (i.e., the declaration) and eligible

immigration status is not submitted by the date specified in

Sec. 5.508(g) or by the expiration of any extension granted in

accordance with Sec. 5.508(h);

(ii) Evidence of citizenship and eligible immigration status is

timely submitted, but INS primary and secondary verification does not

verify eligible immigration status of a family member; and

[[Page 25732]]

(A) The family does not pursue INS appeal or informal hearing

rights as provided in this section; or

(B) INS appeal and informal hearing rights are pursued, but the

final appeal or hearing decisions are decided against the family

member; or

(iii) The responsible entity determines that a family member has

knowingly permitted another individual who is not eligible for

assistance to reside (on a permanent basis) in the public or assisted

housing unit of the family member. Such termination shall be for a

period of not less than 24 months. This provision does not apply to a

family if the ineligibility of the ineligible individual was considered

in calculating any proration of assistance provided for the family.

* * * * *

(e) Appeal to the INS. (1) Submission of request for appeal. Upon

receipt of notification by the responsible entity that INS secondary

verification failed to confirm eligible immigration status, the

responsible entity shall notify the family of the results of the INS

verification, and the family shall have 30 days from the date of the

responsible entity's notification, to request an appeal of the INS

results. The request for appeal shall be made by the family

communicating that request in writing directly to the INS. The family

must provide the responsible entity with a copy of the written request

for appeal and proof of mailing.

* * * * *

(f) Informal hearing. (1) When request for hearing is to be made.

After notification of the INS decision on appeal, or in lieu of request

of appeal to the INS, the family may request that the responsible

entity provide a hearing. This request must be made either within 30

days of receipt of the notice described in paragraph (d) of this

section, or within 30 days of receipt of the INS appeal decision issued

in accordance with paragraph (e) of this section.

* * * * *

8. Section 5.516 is amended by revising the introductory text of

paragraph (c) to read as follows:

Sec. 5.516 Availability of preservation assistance to mixed families

and other families.

* * * * *

(c) Assistance available to other families in occupancy. Temporary

deferral of termination of assistance may be available to families

receiving assistance under a Section 214 covered program on June 19,

1995, and who have no members with eligible immigration status, as set

forth in paragraphs (c)(1) and (2) of this section.

* * * * *

9. Section 5.518 is amended by revising paragraphs (a), (b)(3) and

(b)(5) to read as follows:

Sec. 5.518 Types of preservation assistance available to mixed

families and other families.

(a) Continued assistance. (1) General. A mixed family may receive

continued housing assistance if all of the following conditions are met

(a mixed family assisted under a Housing covered program must be

provided continued assistance if the family meets the following

conditions):

(i) The family was receiving assistance under a Section 214 covered

program on June 19, 1995;

(ii) The family's head of household or spouse has eligible

immigration status as described in Sec. 5.506; and

(iii) The family does not include any person (who does not have

eligible immigration status) other than the head of household, any

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

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

spouse.

(2) Proration of continued assistance. A family entitled to

continued assistance before November 29, 1996 is entitled to continued

assistance as described in paragraph (a) of this section. A family

entitled to continued assistance after November 29, 1996 shall receive

prorated assistance as described in Sec. 5.520.

(b) * * *

(3) Time limit on deferral period. If temporary deferral of

termination of assistance is granted, the deferral period shall be for

an initial period not to exceed six months. The initial period may be

renewed for additional periods of six months, but the aggregate

deferral period for deferrals provided after November 29, 1996 shall

not exceed a period of eighteen months. The aggregate deferral period

for deferrals granted prior to November 29, 1996 shall not exceed 3

years. These time periods do not apply to a family which includes a

refugee under section 207 of the Immigration and Nationality Act or an

individual seeking asylum under section 208 of that Act.

* * * * *

(5) Determination of availability of affordable housing at end of

each deferral period. (i) Before the end of each deferral period, the

responsible entity must satisfy the applicable requirements of either

paragraph (b)(5)(i)(A) or (B) of this section. Specifically, the

responsible entity must:

(A) For Housing covered programs: Make a determination that one of

the two conditions specified in paragraph (b)(2) of this section

continues to be met (note: affordable housing will be determined to be

available if the vacancy rate is five percent or greater), the owner's

knowledge and the tenant's evidence indicate that other affordable

housing is available; or

(B) For Section 8 or Public Housing covered programs: Make a

determination of the availability of affordable housing of appropriate

size based on evidence of conditions which when taken together will

demonstrate an inadequate supply of affordable housing for the area in

which the project is located, the consolidated plan (if applicable, as

described in 24 CFR part 91), the responsible entity's own knowledge of

the availability of affordable housing, and on evidence of the tenant

family's efforts to locate such housing.

(ii) The responsible entity must also:

(A) Notify the tenant family in writing, at least 60 days in

advance of the expiration of the deferral period, that termination will

be deferred again (provided that the granting of another deferral will

not result in aggregate deferral periods that exceeds the maximum

deferral period). This time period does not apply to a family which

includes a refugee under section 207 of the Immigration and Nationality

Act or an individual seeking asylum under section 208 of that Act, and

a determination was made that other affordable housing is not

available; or

(B) Notify the tenant family in writing, at least 60 days in

advance of the expiration of the deferral period, that termination of

financial assistance will not be deferred because either granting

another deferral will result in aggregate deferral periods that exceed

the maximum deferral period (unless the family includes a refugee under

section 207 of the Immigration and Nationality Act or an individual

seeking asylum under section 208 of that Act), or a determination has

been made that other affordable housing is available.

* * * * *

10. Section 5.526 is revised to read as follows:

Sec. 5.526 Protection From liability for responsible entities and

State and local government agencies and officials.

(a) Protection from liability for responsible entities. Responsible

entities are protected from liability as set forth in Section 214(e)

(42 U.S.C 1436a(e)).

[[Page 25733]]

(b) Protection from liability for State and local government

agencies and officials. State and local government agencies and

officials shall not be liable for the design or implementation of the

verification system described in Sec. 5.512, as long as the

implementation by the State and local government agency or official is

in accordance with prescribed HUD rules and requirements.

Dated: April 30, 1999.

Andrew Cuomo,

Secretary.

[FR Doc. 99-11917 Filed 5-11-99; 8:45 am]

BILLING CODE 4210-32-P