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Presentation, discussion, and possible action on an order proposing 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 proposing 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 for public comment in the Texas Register
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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 February 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, NSP, 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 therefore drafted a revision of the current rule on this subject, which upon Board approval will be released for public comment and returned to the Board for adoption at a subsequent Board meeting;
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 proposed actions herein in the form presented to this meeting, to be published in the Texas Register for public comment, 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.
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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, Neighborhood Stabilization Program (NSP), 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.
Behind the preamble the rule is provided in blackline form reflecting the changes being recommended.
This rule will be released for public comment and returned to the Board for final adoption.
Attachment 1: Preamble, including required analysis, for proposed 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
The Texas Department of Housing and Community Affairs (the Department) proposes 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. The purpose of the proposed repeal is to eliminate the outdated rule and replace it simultaneously with a new rule that more closely aligns with Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders) issued on February 19, 2025 by President Trump; A.G. Order No. 6335-2025 by the U.S. Attorney General (Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), the federal direction provided in 2025 grant agreements from the Unites States Department of Housing and Urban Development (HUD), and with Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) on Department programs, which provides that an alien who is not a qualified alien is not eligible for any federal public benefit.
Tex. Gov’t Code §2001.0045(b) does not apply to the rule proposed for repeal because there are no costs associated with the repeal.
The Department has analyzed this proposed rulemaking and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX. GOV’T CODE §2001.0221.
Mr. Bobby Wilkinson has determined that, for the first five years the repeal would be in effect:
1. The repeal does not create or eliminate a government program but relates to changes to an existing activity: the implementation of Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders) issued on February 19, 2025 by President Trump, A.G. Order No. 6335-2025 by the U.S. Attorney General (Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), and in the implementation and applicability of Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
2. The repeal does not require a change in work that creates new employee positions.
3. The repeal does not require additional future legislative appropriations.
4. The repeal will not result in an increase in fees paid to the Department, nor in a decrease in fees paid to the Department.
5. The repeal is not creating a new regulation, except that it is being replaced by a new rule simultaneously to provide for revisions.
6. The repeal is not considered to expand an existing regulation.
7. The repeal does not increase the number of individuals subject to the rule’s applicability.
8. The repeal will not negatively or positively affect the state’s economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FLEXIBILITY REQUIRED BY TEX. GOV’T CODE §2006.002.
The Department has evaluated the repeal and determined that the repeal will not create an economic effect on small or micro-businesses or rural communities.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX. GOV’T CODE §2007.043. The repeal does not contemplate or authorize a taking by the Department; therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX. GOV’T CODE §2001.024(a)(6).
The Department has evaluated the repeal as to its possible effects on local economies and has determined that for the first five years the repeal would be in effect there would be no economic effect on local employment; therefore, no local employment impact statement is required to be prepared for the rule.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(5). Mr. Wilkinson has determined that, for each year of the first five years the repeal is in effect, the public benefit anticipated as a result of the changed sections would be an updated and more germane rule. There will not be economic costs to individuals required to comply with the repealed section.
f. FISCAL NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the repeal is in effect, enforcing or administering the repeal does not have any foreseeable implications related to costs or revenues of the state or local governments.
REQUEST FOR PUBLIC COMMENT AND INFORMATION RELATED TO COST, BENEFIT OR EFFECT. The Department requests comments on the rule and also requests information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The public comment period will be held November 21 to December 21, 2025, to receive input on the proposed action. Comments may be submitted to the Texas Department of Housing and Community Affairs, Attn: Brooke Boston at brooke.boston@tdhca.texas.gov. ALL COMMENTS AND INFORMATION MUST BE RECEIVED BY 5:00 p.m., Austin local (Central) time, December 21, 2025.
STATUTORY AUTHORITY. The repeal is made pursuant to Tex. Gov't Code §2306.053, which authorizes the Department to adopt rules. Except as described herein the repeal affects no other code, article, or statute.
§1.410. Determination of Alien Status for Program Beneficiaries
Attachment 2: Preamble, including required analysis, for proposed 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
The Texas Department of Housing and Community Affairs (the Department) proposes 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. The purpose of the proposed rule is to eliminate the outdated rule and replace it simultaneously with a new rule that more closely aligns with Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders) issued on February 19, 2025 by President Trump, A.G. Order No. 6335-2025 by the U.S. Attorney General (Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), the federal direction provided in 2025 grant agreements from the Unites States Department of Housing and Urban Development (HUD), and in the implementation and applicability of Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) on Department programs, which provides that an alien who is not a qualified alien is not eligible for any federal public benefit.
Tex. Gov’t Code §2001.0045(b) does apply to the rule proposed because there are some costs associated with this action. However, in order to ensure compliance with Executive Order 14218, A.G. Order No. 6335-2025 by the U.S. Attorney General (Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), the federal HUD grant agreements, and PRWORA this rule is being revised. Sufficient existing state and/or federal administrative funds associated with the applicable programs are available to offset costs. No additional funds will be needed to implement this rule.
The Department has analyzed this rulemaking and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX. GOV’T CODE §2001.0221.
Mr. Bobby Wilkinson has determined that, for the first five years the new sections would be in effect:
1. The rule does not create or eliminate a government program but relates to changes to an existing activity: the verification of program participant eligibility as it relates to the implementation of Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders) issued on February 19, 2025 by President Trump, A.G. Order No. 6335-2025 by the U.S. Attorney General (Revised Specification Pursuant to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), the federal direction provided in the Department’s 2025 grant agreements from HUD, and in the implementation and applicability of Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
2. The rule may require a change in work that could require the creation of approximately 2 new employee positions to perform the client verifications.
3. The new section does not require additional future legislative appropriations.
4. The new section will not result in an increase in fees paid to the Department, nor in a decrease in fees paid to the Department.
5. The new section is not creating a new regulation.
6. The new section does expand on an existing regulation.
7. The new section will increase the number of individuals subject to the rule’s applicability as well as increase the number of Department subrecipients subject to the rule in an effort to ensure that public benefits are being used only for qualified households.
8. The new section will not negatively or positively affect the state’s economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FLEXIBILITY REQUIRED BY TEX. GOV’T CODE §2006.002.
The Department has evaluated the new section and determined that it will not create an economic effect on small or micro-businesses or rural communities.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX. GOV’T CODE §2007.043. The new section does not contemplate or authorize a taking by the Department; therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX. GOV’T CODE §2001.024(a)(6).
The Department has evaluated the new section as to its possible effects on local economies and has determined that for the first five years the new section would be in effect there would be no economic effect on local employment; therefore, no local employment impact statement is required to be prepared for the rule.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(5). Mr. Wilkinson has determined that, for each year of the first five years the new section is in effect, the public benefit anticipated as a result of the new section would be a rule that is in alignment with Executive Order 14218 (Ending Taxpayer Subsidization of Open Borders) issued on February 19, 2025 by President Trump, in compliance with direction provided by HUD for the HOME and NHTF programs, and in the implementation and applicability of Section 401(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and therefore ensures that public benefits are not received by unqualified aliens. There will not be economic costs to individuals required to comply with the new section.
f. FISCAL NOTE REQUIRED BY TEX. GOV’T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the new section is in effect, enforcing or administering the sections may have some costs to the state to implement the verification process and to the Department’s subrecipients in administering the rule changes. However, sufficient state or federal administrative funds associated with the applicable programs are already available to offset costs. No additional funds will be required.
REQUEST FOR PUBLIC COMMENT AND INFORMATION RELATED TO COST, BENEFIT OR EFFECT. The Department requests comments on the rule and also requests information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The public comment period will be held November 21 to December 21, 2025, to receive input on the proposed action. Comments may be submitted to the Texas Department of Housing and Community Affairs, Attn: Brooke Boston at brooke.boston@tdhca.texas.gov. ALL COMMENTS AND INFORMATION MUST BE RECEIVED BY 5:00 p.m., Austin local (Central) time, December 21, 2025.
STATUTORY AUTHORITY. The new section is made pursuant to Tex. Gov't Code §2306.053, which authorizes the Department to adopt rules. Except as described herein the new section affects no other code, article, or statute.