title
Presentation, discussion, and possible action on an order adopting the repeal of 10 TAC Chapter 1, Subchapter D, Uniform Guidance for Recipients of Federal and State Funds, §1.410 Determination of Alien Status for Program Beneficiaries; an order adopting new 10 TAC Chapter 1, Subchapter D, Uniform Guidance for Recipients of Federal and State Funds, §1.410 Determination of Alien Status for Program Beneficiaries; and directing their publication in the Texas Register
end
RECOMMENDED ACTION
recommendation
WHEREAS, pursuant to Tex. Gov’t Code §2306.053, the Texas Department of Housing and Community Affairs (the Department) is authorized to adopt rules governing the administration of the Department and its programs;
WHEREAS, Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) provides that an alien who is not a qualified alien is not eligible for federal public benefits, and Department of Justice (DOJ) guidance provides that each federal agency is required to identify which of their programs are considered federal public benefits for this purpose;
WHEREAS, the U.S. Department of Health and Human Services (USHHS) had previously determined that the Low Income Home Energy Assistance Program (LIHEAP) is a federal public benefit and is subject to PRWORA, and the Department of Energy (DOE) had directed states that as it relates to Qualified Aliens Eligibility for Benefits, they should review guidance provided by HHS under the LIHEAP;
WHEREAS, the U.S. Department of Housing and Urban Development (HUD) in its 2025 federal Grant Agreements for the National Housing Trust Fund, HOME, and Emergency Solutions Grant Programs is now clarifying that PRWORA does apply to those programs (and HUD has not specified if any activity types are excluded), and further allows grantees to use SAVE or an equivalent verification system approved by the federal government, suggesting that the Department could propose its own state legal status system or process as an alternative verification system to SAVE;
WHEREAS, on February 19, 2025, President Trump issued Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders), directing federal agencies, among other actions, to ensure that federally funded programs are operating in compliance with PRWORA, and in response, the USHHS has issued new guidance that the Community Services Block Grant (CSBG) is a federal public benefit and is subject to PRWORA;
WHEREAS, on July 16, 2025, the Federal Register published an order of the U.S. Attorney General stating that block grants are not exempt from PRWORA, withdrawing the 2001 Order of the Attorney General regarding the scope of PRWORA, and utilizing her statutory discretion to not except any benefits from PRWORA beyond those excepted by the statute itself;
WHEREAS, in deference to the Executive Order and the current Final Order by the U.S. Attorney General, staff is recommending that the Department policy now reflect that when there is a lack of federal guidance PRWORA will apply to all single family and Community Affairs programs and activities for commitments made after April 1, 2026, unless there is a specific statutory exemption to PRWORA;
WHEREAS, previous interpretations about the verification process for PRWORA indicated that private nonprofit subrecipients - because they do not have direct authority to access the SAVE system used for verification - did not have to confirm qualified alien status, and therefore in 2019, the Department initiated rule changes for Community Affairs programs to ensure that private nonprofit subrecipients would in fact provide such verifications for LIHEAP and WAP; and this directive did not extend this requirement to private nonprofit subrecipients of state general revenue funds (including the Amy Young Barrier Removal (AYBR), Texas Bootstrap Loan (Bootstrap), and the Homeless Housing and Services (HHSP) programs;
WHEREAS, the Department acknowledges that while PRWORA does not mandate a private nonprofit entity conduct verification, there is nothing in the statute to prohibit such an entity from conducting verification;
WHEREAS, the Department needs to clarify a change in interpretation and policy in its rules on this subject by specifying how PRWORA will be adhered to by Department administrators managing programs determined to be federal (or state) public benefits that trigger the PRWORA requirements and specify how those entities will handle verification of eligible status for any clients served under applicable programs;
WHEREAS, staff is recommending that upon the effective date of this rule, as adopted, in addition to LIHEAP and DOE WAP, all administrators (including governmental and nonprofit administrators) of CSBG, TCAP-RF, ESG, HOME, NHTF, CDBG, AYBR, Bootstrap, and HHSP, and any other single family programs later subject to these requirements, will be required to comply with PRWORA and utilize SAVE, or in the case of HOME, CDBG, NSP, ESG and NHTF the Department’s alternative verification option, including private nonprofit subrecipients, and the verification processes provided for in this rule;
WHEREAS, the rule actions herein are specific only to the Single Family, Homeless, and Community Affairs programs operated by the Department, and no action at this time is being taken relating to the Department’s multifamily portfolio of rental properties or the single family bond or TBA activities; and
WHEREAS, staff has released a draft of this rule for public comment and comment was received from six commenters and such public comment is summarized and responded to in the attached preamble to the rule;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to cause the actions herein in the form presented to this meeting, to be published in the Texas Register, and in connection therewith, make such non-substantive technical corrections as they may deem necessary to effectuate the foregoing including any requested revisions to the preambles.
end
BACKGROUND
Two primary laws directly address noncitizen eligibility for federal housing programs. The first is Section 214 of the Housing and Community Development Act of 1980, as amended. It applies to specified programs; primarily, federal rental assistance programs administered by the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA), including the Public Housing, Housing Choice Voucher, Section 8 project-based rental assistance programs, and rural rental assistance. The law makes eligible for assistance certain categories of noncitizens, including most categories of immigrants, while excluding unauthorized immigrants and those in most types of temporary status (e.g., tourists, students, and temporary workers).
The second law is Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193). Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), provides that an alien who is not a qualified alien is not eligible for any federal public benefit. The Department of Justice (DOJ) provided guidance that each federal agency is required to identify which of their programs are considered federal public benefits for this purpose. In cases where PRWORA applies, the Department has historically delegated that responsibility to its subrecipients. The primary method for verification of qualified status is through a system called SAVE (Systematic Alien Verification for Entitlements), which historically has been a fee-based inter-governmental initiative designed to help federal, state, tribal, and local government agencies confirm citizenship, U.S. national and qualified alien status prior to granting benefits. SAVE access is granted directly to the Department and other governmental entities. Fees are currently suspended as of April 1, 2025.
Department Determination Regarding Applicability of PRWORA
Not all cognizant federal agencies have made their determinations as provided for in the DOJ guidance. The U.S. Department of Health and Human Services (USHHS) had previously determined that the Low Income Home Energy Assistance Program (LIHEAP) is a federal public benefit and is subject to PRWORA, and the Department of Energy (DOE) had directed states that as it relates to Qualified Aliens Eligibility for Benefits, they should review guidance provided by HHS under the LIHEAP. TDHCA also has applied PRWORA to AYBR, Bootstrap, and HHSP for governmental subrecipients, but not for nonprofit subrecipients. USHHS had not included Community Services Block Grant (CSBG) and the U.S. Department of Housing and Urban Development (HUD) had not made a written determination on its programs administered by the Department, except for certain activities in ESG.
To date the TDHCA policy on this issue was that for federal agencies not having made a determination, the PRWORA requirements were not triggered for those programs. For the federal programs for which such guidance had been given, the Department had provided rules to give clear guidance to subrecipients on the requirements to verify eligible status.
In September HUD provided the Department with its 2025 federal Grant Agreements for the National Housing Trust Fund, HOME, and Emergency Solutions Grant Programs which reflect that PRWORA does apply to those programs. The Grant Agreements indicate that verification can occur through either SAVE or an equivalent verification system approved by the federal government. Staff believes that this suggests that the Department could propose its own state legal status system or process as an alternative verification system to SAVE.
On February 19, 2025, President Trump issued Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders), directing federal agencies, among other actions, to ensure that federally funded programs are operating in compliance with PRWORA. In response, the USHHS issued new guidance that CSBG is a federal public benefit and is now subject to PRWORA as well.
The PRWORA statute provides exceptions to ineligibility for certain federal public benefits, including programs, services, or assistance specified by the U.S. Attorney General “. . .in the Attorney General’s sole and unreviewable discretion after consultation with appropriate Federal agencies and departments . . .” The Attorney General published a new Final Order regarding the scope of PRWORA on July 16, 2025, that included a finding that block grants are not exempt from PRWORA, withdrew the previous 2001 Order of the Attorney General regarding the scope of PRWORA, and utilized her statutory discretion to not except any benefits from PRWORA beyond those excepted by the statute itself.
In deference to the Executive Order, the new Final Order by the U.S. Attorney General, and the policy direction provided by HHS and HUD, staff is recommending that the Department policy now be revised - rather than exclude any programs for which federal guidance has not been issued from having to comply with PRWORA, TDHCA will include any programs for which federal guidance is lacking (with the exclusion of multifamily funding used on affordable rental properties and assistance provided through the Department’s Texas Homeownership Program). Therefore, for single family and community affairs programs with commitments made on or after February 1, 2026, only those activities for which the PRWORA statute provides a clear exemption or where federal guidance has been issued explicitly determining that an activity is not a federal public benefit, will be excluded by the Department from verification requirements.
The rule action item, and this summary, are specific only to the Single Family, Homeless, and Community Affairs programs operated by the Department - no action at this time is being taken relating to the Department’s multifamily portfolio of rental properties or the single family bond or TBA activities.
Therefore, the federal Department programs for which all Administrators will be required to verify eligibility include:
• Community Affairs Programs: CSBG, LIHEAP, and WAP
• Single Family and Homelessness Programs: HOME Program, , Community Development Block Grant (CDBG) and the Emergency Solutions Grant Program (ESG).
In addition, to the extent the Department has not considered Bootstrap, AYBR, and HHSP subject to this rule or did not require nonprofit subrecipients to ensure alien status had been verified, it will now do so as well, with the exception of an activity that meets an exception under §1611(b)(1)(D) of PRWORA. TCAP-RF, to the extent used for single family activities, will also be subject to this rule.
Taken together the total funding awards for these program are expected to be approximately $307 million in assistance in 2026 to households.
Applicability and Policy for Subrecipients
It should be noted that not all verification must occur through the SAVE system. Subrecipients through programs that have been operating under PRWORA already, such as the LIHEAP and WAP programs, have been given guidance and a matrix that details how they first can ascertain Citizenship or U.S. National status, including, at present, a passport, birth certificate, or an adoption decree. Only if the items specified in the matrix are not confirmed, would a subrecipient need to verify through SAVE. This clarification that initial verification can be done alternatively, as further provided in a subrecipient’s contract, is being added into the rule.
Previously interpretations about the verification process for PRWORA indicated that private nonprofit subrecipients - because they do not have direct access to the SAVE system used for verification - did not have to confirm qualified alien status at all even for federal programs covered by PRWORA. Roughly three quarters of LIHEAP and WAP subrecipients are such private nonprofits. The units of local government do comply with the federal requirement by determining eligible status of applicants and household members via SAVE. In 2019, for LIHEAP and WAP, the Department issued a revision to this rule that gave nonprofit subrecipients of the Department in these programs several options to confirm qualified alien status; one of those options was voluntary compliance. At that time all of the subrecipients in these programs were also performing SAVE verification. It should be noted that private nonprofit subrecipients of the AYBR, HHSP, and Bootstrap programs are not determining eligible status at this time.
PRWORA does not mandate an entity conduct verification, however there is nothing in the statute to prohibit such an entity from conducting verification. Therefore, staff is recommending and drafting the attached rule to explicitly require that all recipients of the above noted programs will be required to comply with PRWORA and all Administrators must conduct verification. Administrators that are units of local government will be required to use SAVE. Administrators that are nonprofit entities - including those already subject to, but not performing verifications, such as AYBR and Bootstrap - will have the following options.
• To have the Department provide the verification, directly or through a third-party contractor, which would require the Administrator to gather and transmit - but not verify - the appropriate client level information and documentation; or
• To have the Administrator voluntarily agree to participate in using the SAVE system, which is the option that creates the least delay in providing services to the clients (this option is reliant on the Department being able to revise its contract with the Department of Homeland Security); or
• To allow the Administrator to procure a separate party to perform such verification services on their behalf.
All Administrators will be required to select one of these options at the time of contract execution or for HOME Single Family activities before executing a Household Commitment Contract.
This rule was released for public comment and comment was received from six commenters. That comment is summarized and responded to in the rule preamble below.
Additionally, one clarifying revision was made - after further review of guidance from HUD, the Neighborhood Stabilization Program (NSP) is not included by HUD in what PRWORA applies to.