Food Stamp Program: Income Exemption for Homeless Households in Transitional Housing Required by the Mickey Leland Childhood Hunger Relief Act

DEPARTMENT OF AGRICULTURE

7 CFR Parts 272 and 273

[Amendment No. 346]

RIN 0584-AA96

Food Stamp Program: Income Exemption for Homeless Households in

Transitional Housing Required by the Mickey Leland Childhood Hunger

Relief Act

AGENCY: Food and Nutrition Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule finalizes a proposed rulemaking published on April

11, 1994. It amends food stamp regulations to implement Section 13914

of the Mickey Leland Childhood Hunger Relief Act, which requires that

the full value of any public or general assistance housing payments

made to a third party on behalf of a household residing in transitional

housing for the homeless be excluded from the household's income for

food stamp purposes.

EFFECTIVE DATE: This rule is effective September 1, 1994.

FOR FURTHER INFORMATION CONTACT: Judith M. Seymour, Eligibility and

Certification Rulemaking Section, Certification Policy Branch, Program

Development Division, Food and Nutrition Service, USDA, 3101 Park

Center Drive, Alexandria, Virginia, 22302, (703) 305-2496.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant for the

purposes of Executive Order 12866, and therefore, has not been reviewed

by the Office of Management and Budget.

Executive Order 12372

The Food Stamp Program is listed in the Catalog of Federal Domestic

Assistance under No. 10.551. For the reasons set forth in the final

rule and related notice(s) to 7 CFR 3015, subpart V (48 FR 29115, June

24, 1983), this Program is excluded from the scope of Executive Order

12372 which requires intergovernmental consultation with State and

local officials.

Regulatory Flexibility Act

This final rule has been reviewed with regard to the requirements

of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601, et seq.).

Ellen Haas, the Assistant Secretary for Food and Consumer Services, has

certified that this final rule does not have a significant economic

impact on a substantial number of small entities. State and local

welfare agencies will be the most affected to the extent that they

administer the Program.

Paperwork Reduction Act

This final rule does not contain reporting or recordkeeping

requirements subject to approval by the Office of Management and Budget

(OMB) under the Paperwork Reduction Act of 1980 (44 U.S.C. 3507).

Executive Order 12778

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This rule is intended to have preemptive effect

with respect to any State or local laws, regulations or policies which

conflict with its provisions or which would otherwise impede its full

implementation. This rule is not intended to have retroactive effect

unless so specified in the ``effective date'' paragraph of this

preamble. Prior to any judicial challenge to the provisions of this

rule or the application of its provisions, all applicable

administrative procedures must be exhausted. In the Food Stamp Program

the administrative procedures are as follows: (1) for program benefit

recipients--State administrative procedures issued pursuant to 7 U.S.C.

2020(e)(10) and 7 CFR 273.15; (2) for State agencies--administrative

procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for

rules related to non-quality control (QC) liabilities); (3) for program

retailers and wholesalers--administrative procedures issued pursuant to

7 U.S.C. 2023 set out at 7 CFR 278.8.

Background

On April 11, 1994, the Department published a proposed rule at 59

FR 17050, to implement Section 13914 of Chapter 3, Title XIII of the

Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66 (the Mickey

Leland Childhood Hunger Relief Act) (the 1993 Leland Act). Section

13914 revised section 5(k)(2)(F) of the Food Stamp Act of 1977, as

amended, 7 U.S.C. 2014(k)(2)(F), to require that the full amount of any

public assistance/general assistance (PA/GA) housing assistance

payments made to a third party on behalf of a household residing in

transitional housing for the homeless be excluded from a household's

income for food stamp purposes.

Comments were solicited on the provisions of the proposed

rulemaking through June 10, 1994. This final action addresses the

commenters' concerns. Comments which were unclear or not pertinent to

this rulemaking are not addressed in this preamble. Readers are

referred to the proposed rule for a more complete understanding of this

final action.

The Department received 2 comment letters on the proposed rule,

both supportive of the proposed provision. The first commenter wrote

that although the immediate crisis of homelessness is lifted when a

household enters a transitional housing program, the household may

continue to face the threat of homelessness for some time to come. The

commenter felt that it only made sense, therefore, to disregard

transitional housing payments as income for food stamp purposes because

the increased food stamps which would result could very well make the

difference as to whether or not a household is able to remain in its

residence.

The second commenter supported the Department's decision to use the

Department of Housing and Urban Development's (HUD) current definition

of transitional housing, established in Section 1403(a) of the Stewart

B. McKinney Homeless Housing Assistance Amendments Act of 1992, Title

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

550 (the 1992 McKinney Act), 42 U.S.C. 11384(b), as the criteria for

evaluating whether housing programs are transitional. In the preamble

of the proposed rule (59 FR at 17051), the Department chose not to

promulgate regulations which would further define the term

``transitional housing.'' The Department felt that the intent of the

1993 Leland Act would best be served by allowing State agencies to make

case-by-case determinations as to whether housing for homeless

households was transitional or permanent using the 1992 McKinney Act's

definition as an evaluation criterion. Housing is transitional if its

purpose ``is to facilitate the movement of homeless individuals and

families to permanent housing within 24 months or such longer period as

the Secretary [of Housing and Urban Development] determines

necessary.'' 42 U.S.C. 11384(b). This definition of transitional

housing does not exclude specific types of housing and does not require

the presence of cooking facilities for a dwelling to be considered

transitional housing.

The commenter felt that the breadth and inclusiveness of the

McKinney Act's definition of transitional housing is the strength of

the proposed rule. The commenter wrote that the definition ``helps each

locale to devise a continuum of care that meets its particular needs by

permitting it to use the form of transitional housing that is best

suited to the local system.'' However, the commenter hoped that the

Department's intention to afford State agencies latitude in determining

whether housing is transitional will not mean that local transitional

housing programs will have to conform to arbitrary State definitions of

transitional housing in order for clients to get all of the food stamps

to which they should be entitled.

It is the Department's intention that all types of housing meant to

be transitional should be considered as such for the purposes of the

exclusion granted by Section 13914 of the 1993 Leland Act. Thus, the

Department encourages State agencies when administering the exclusion

to adopt a flexible definition of transitional housing so that clients

participating in local housing programs meant to be transitional will

not be denied the exclusion.

No other comments were received on the provision of the proposed

rule. Therefore, the Department is adopting the proposed rule as final

without change.

Implementation

Section 13971 of the 1993 Leland Act requires that the provisions

of this rulemaking be effective and implemented September 1, 1994. The

provision must be implemented for all households that newly apply for

Program benefits on or after the required implementation date. The

current caseload shall be converted to these provisions at the

household's request, at the time of recertification, or when the case

is next reviewed, whichever occurs first. The State agency must provide

restored benefits to such households back to the required

implementation date or the date of application whichever is later. If

for any reason a State agency fails to implement on the required

implementation date, restored benefits shall be provided, if

appropriate, back to the required implementation date or the date of

application whichever is later. Any variances resulting from

implementation of the provisions of this amendment shall be excluded

from Quality Control error analysis for 120 days from this required

implementation date in accordance with 7 CFR 275.12(d)(2)(vii).

List of Subjects

7 CFR Part 272

Alaska, Civil Rights, Food Stamps, Grant programs-social programs,

Reporting and recordkeeping requirements.

7 CFR Part 273

Administrative practice and procedure, Aliens, Claims, Food stamps,

Fraud, Grant programs-social programs, Penalties, Records, Reporting

and recordkeeping requirements, Social security, Students.

Accordingly, 7 CFR Parts 272 and 273 are amended as follows:

1. The authority citation for 7 CFR Parts 272 and 273 continues to

read as follows:

Authority: 7 U.S.C. 2011-2032.

PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES

2. In Sec. 272.1, paragraph (g)(136) is added to read as follows:

Sec. 272.1 General terms and conditions.

* * * * *

(g) Implementation * * *

(136) Amendment No. 346. The provision of Amendment No. 346

regarding an income exclusion for homeless households living in

transitional housing is effective and must be implemented no later than

September 1, 1994. Any variances resulting from implementation of the

provisions of this amendment shall be excluded from error analysis for

120 days from this required implementation date in accordance with 7

CFR 275.12(d)(2)(vii). The provision must be implemented for all

households that newly apply for Program benefits on or after the

required implementation date. The current caseload shall be converted

to these provisions at the household's request, at the time of

recertification, or when the case is next reviewed, whichever occurs

first. The State agency must provide restored benefits to such

households back to the required implementation date or the date of

application whichever is later. If for any reason a State agency fails

to implement on the required implementation date, restored benefits

shall be provided, if appropriate, back to the required implementation

date or the date of application, whichever is later.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

3. In Sec. 273.9, paragraph (c)(1)(ii)(D) is revised to read as

follows:

Sec. 273.9 Income and deductions.

* * * * *

(c) Income exclusions. * * *

(1) * * *

(ii) * * *

(D) Housing assistance payments made to a third party on behalf of

a household residing in transitional housing for the homeless;

* * * * *

Dated: August 2, 1994.

Ellen Haas,

Assistant Secretary for Food and Consumer Services.

[FR Doc. 94-21187 Filed 8-26-94; 8:45 am]

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