FSP; Income Exemption for Homeless Households in Transitional Housing Required by the Mickey Leland Childhood Hunger Relief Act

SUMMARY: This rule proposes to amend Food Stamp Program regulations to

implement section 13914 of the Omnibus Budget Reconciliation Act of

1993 (Mickey Leland Childhood Hunger Relief Act), which amended section

5(k)(2)(F) of the Food Stamp Act of 1977 to require 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. The provision in this rule supersedes an earlier proposed

regulatory change contained in a rulemaking published in the Federal

Register on February 3, 1992. The earlier proposed rule would have

implemented section 1721 of the Mickey Leland Memorial Domestic Hunger

Relief Act and section 906 of the Food, Agriculture, Conservation, and

Trade Act Amendments of 1991, which allowed households living in

transitional housing to exclude from their income for food stamp

purposes only a portion of any public or general assistance housing

payments made to a third party on their behalf.

DATES: Comments must be received on or before June 10, 1994 to be

assured of consideration.

ADDRESSES: Comments should be submitted to 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. Comments may also

be datafaxed to the attention of Ms. Seymour at (703) 305-2454. All

written comments will be open for inspection at the office of the Food

and Nutrition Service during regular business hours (8:30 a.m. to 5

p.m., Monday through Friday) at 3101 Park Center Drive, Alexandria,

Virginia, Room 720.

FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed

rulemaking should be addressed to Ms. Seymour at the above address or

by telephone at (703) 305-2496.

SUPPLEMENTARY INFORMATION:

Classification

Executive Order 12866

This proposed rule is being issued in conformance with Executive

Order 12866.

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 part 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 proposed 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 proposed 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 proposed 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 February 3, 1992, the Department published a proposed rule at 57

FR 3961 to implement section 1721 of the Mickey Leland Domestic Hunger

Relief Act (Pub.L. 101-624, Title XVII, 104 Stat. 3786, November 28,

1990) (the 1991 Leland Act) and section 906 of the Food, Agriculture,

Conservation, and Trade Act Amendments of 1991 (Pub.L. 102-237, 105

Stat. 1818, December 13, 1991). The proposed provision would have

revised, in its entirety, paragraph (c)(1)(ii)(D) of 7 CFR 273.9 to

allow an income exclusion for households living in transitional housing

of an amount equal to 50 percent of the maximum shelter allowance

provided to families receiving Aid to Families with Dependent Children

(AFDC) residing in permanent housing under a State agency's approved

AFDC plan which included an identifiable AFDC shelter allowance or

component. The proposed rule specified that this provision would not

apply to those States which did not have a separately identifiable

shelter allowance or component in their approved AFDC plans. Comments

were solicited on the provisions of the proposed rulemaking through

March 4, 1992, and a total of three comments were received.

Subsequent to publication of the proposed rule and prior to the

publication of a final rule, section 13914 of Chapter 3 Title XIII of

the Omnibus Budget Reconciliation Act of 1993, Public Law 103-66 (the

Mickey Leland Childhood Hunger Relief Act), (the 1993 Leland Act)

revised section 5(k)(2)(F) of the Food Stamp Act, 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. Because section 13914 of the 1993 Leland Act supersedes

section 1721 of the 1991 Leland Act and section 906 of the Food,

Agriculture, Conservation, and Trade Act Amendments of 1991, the

Department is not finalizing the provision of the February 3, 1992

proposed rule. Instead, the Department is proposing a new revision of

paragraph (c)(1)(ii)(D) of 7 CFR 273.9 that implements section 13914 of

the 1993 Leland Act.

In regard to the three comments received on the February 3, 1992

proposed rule, two are still pertinent to this rulemaking and the

Department addresses them below. The third comment referred to the

regulatory language of the proposed rule, which has been superseded,

and therefore is no longer pertinent and will not be addressed.

The first commenter wrote to support the Department's decision to

make the definition of ``transitional housing'' flexible. In the

preamble of the proposed rule (57 FR 3962), the Department chose not to

promulgate regulations which would define the term ``transitional

housing.'' The Department felt that the intent of the 1991 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 Department of Housing and Urban

Development's (HUD) definition of transitional housing as an evaluation

criterion. The commenter was pleased with this decision as HUD's

flexible definition does not require the absence of cooking facilities

for housing to be considered transitional and does not exclude any

specific type of housing. The commenter noted that the omission of any

type of temporary housing, such as welfare hotels, from this provision

would unfairly make eligibility for the exclusion contingent upon the

chance assignment of households to temporary housing.

The Department notes that the definition of transitional housing

set forth in and referred to in the February 3, 1992 proposed rule, set

forth in section 422(12)(A) of the Stewart B. McKinney Homeless

Assistance Act, Public Law 100-77, 42 U.S.C. 11382(12)(A), was repealed

by section 1403(a) of the Housing and Community Development Act of

1992, Public Law 102-550, Title XIV (Stewart B. McKinney Homeless

Housing Assistance Amendments Act of 1992) 106 Stat. 4013, October 28,

1992 (the 1992 McKinney Act). Section 424(b) of the 1992 McKinney Act,

42 U.S.C. 11384(b), now states that 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.'' Like its predecessor, the current 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 housing. The Department wishes to emphasize in this

proposed rule that it still intends to afford State agencies latitude

in determining whether housing is transitional.

The second commenter asked that the Department write a provision

that would allow food stamps to be issued to homeless households in

transitional housing on an immediate, emergency basis, perhaps by

issuing only half the amount of stamps for which households may be

eligible. The commenter argued that households often encounter delays

in receiving benefits because of problems providing information that

has been lost in their moves. The commenter also felt that five working

days is a unduly long time to wait to receive food stamps, especially

if a weekend is involved. The Food Stamp Act of 1977, as amended, is

specific regarding the procedures for expedited service of benefits.

Section 11(e)(9) of the Food Stamp Act, 7 U.S.C. 2020(e)(9), allows

State agencies to have up to five days (calendar days, not working

days) after the date of application to issue benefits to a household

eligible for expedited service. The Department has no authority to

change this time period. However, State agencies are not prohibited

from issuing benefits to household eligible for expedited services in

less than five days so long as the procedural and other requirements

for expedited service are met.

Implementation

Section 13971 of the 1993 Leland Act requires that the provisions

of this rulemaking be effective September 1, 1994. Prior to September

1, 1994, State agencies should continue to follow the requirements of

section 1781 of the 1991 Leland Act, which allows households living in

transitional housing to exclude from their income for food stamp

purposes only a portion of any PA/GA housing assistance payments made

to third parties on their behalf. On September 1, 1994, State agencies

must implement the provision of this rulemaking, which allows

households living in transitional housing to exclude from their income

for food stamp purposes only the full amount of any PA/GA housing

assistance payments made to third parties on their behalf. Any

variances resulting from implementation of the provision 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). 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.

List of Subjects in 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, part 273 is proposed to be amended as follows:

1. The authority citation for part 273 continues to read as

follows:

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

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

2. 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: March 31, 1994.

Ellen Haas,

Assistant Secretary for Food and Consumer Services.

[FR Doc. 94-8503 Filed 4-8-94; 8:45 am]

BILLING CODE 3410-30-U