Combined Income and Rent

SUMMARY: This interim rule amends HUD's current regulations governing

public housing, Indian housing and assisted housing programs by adding

nine exclusions to the definition of annual income. With regard to the

first eight exclusions, the Department has concluded that, for policy

reasons, these payments should not be considered when determining a

family's income in the housing assistance programs involved. In

contrast, the last exclusion is a statutorily required exclusion to the

definition of annual income.

This interim rule also adds a statutory change to the definition of

adjusted income for the Indian housing program, and makes two technical

corrections to the existing regulations.

DATES: Effective Date: This interim rule is effective on May 5, 1995.

Sunset Provision: Sections 215.21(c)(2), (c)(6), (c)(8)(iv) through

(v), and (c)(11) through (c)(15); Secs. 236.3(c)(2), (c)(6), (c)(8)(iv)

through (v), and (c)(11) through (c)(15); Secs. 813.106(c)(2), (c)(6),

(c)(8)(iv) through (v), (c)(11), (c)(12), (c)(14), and (c)(15);

Secs. 905.102(2)(ii), (2)(vi), (2)(viii)(D) through (E), (2)(xi),

(2)(xii), (2)(xv), and (2)(xvi) of the definition of Annual income; and

Secs. 913.106(c)(2), (c)(6), (c)(8)(iv) through (v), (c)(11), (c)(12),

(c)(15), and (c)(16) shall expire and shall not be in effect after May

6, 1996, unless prior to May 6, 1996, the Department publishes changes

in this interim rule as a final rule or publishes a notice in the

Federal Register to extend the effective date.

Comments due date: June 5, 1995.

ADDRESSES: Interested persons are invited to submit comments regarding

this interim rule to the Office of the General Counsel, Rules Docket

Clerk, Room 10276, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410. Communications should refer

to the above docket number and title. A copy of each communication

submitted will be available for public inspection and copying during

regular business hours (7:30 a.m.-5:30 p.m. Eastern Time) at the above

address. Comments sent by FAX will not be accepted.

FOR FURTHER INFORMATION CONTACT: For Public Housing: Bruce Vincent,

Room 4206, telephone number (202) 708-0744; For Native American

Programs: Dominic A. Nessi, Room 4140, telephone number (202) 708-1015;

For Housing: Barbara D. Hunter, Room 6180, telephone number (202) 708-

3944; Department of Housing and Urban Development, 451 Seventh Street

SW, Washington, DC 20410; (TDD: (202) 708-0850). Hearing or speech-

impaired individuals may call HUD's TDD number (202) 708-4594. (These

telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

This interim rule revises HUD's current regulations for public

housing, Indian housing, Section 8 housing and other assisted housing

programs by excluding from annual income the following: (1) Resident

service stipends, (2) adoption assistance payments, (3) student

financial assistance (4) earned income of full-time students, (5) adult

foster care payments, (6) compensation from State or local job training

programs and training of resident management staff, (7) property tax

rebates, (8) homecare payments for developmentally disabled children or

adult family members, and (9) deferred periodic payments of

supplemental security income and social security benefits that are

received in a lump sum.

This interim rule also amends the definition of adjusted income for

Indian Housing programs by allowing a deduction for both child care

expenses and excessive travel expenses, as required by section

103(a)(2) of the Housing and Community Development Act of 1992 (Pub. L.

102-550, approved October 28, 1993; hereafter referred to as ``1992 HCD

Act'').

Finally, this interim rule makes two technical corrections to

existing regulations (see preamble discussion in section I(D).)

A. Discretionary Income Exclusions

By adding the first eight exclusions to the definition of income in

the public housing, Indian housing, section 8 housing, and other

assisted housing programs, the Secretary is merely exercising the

discretion conferred upon him to define family income by section

3(b)(4) of the U.S. Housing Act of 1937 (42 U.S.C. 1437a(b)(4)),

section 101(c)(2) of the Housing and Urban Development Act of 1965 (12

U.S.C. 1701s(c)(2)), and section 236(m) of the National Housing Act (12

U.S.C. 1715z-1(m)). The eight ``discretionary'' income exclusions will

affect the approximately 1.3 million families currently residing in

public and Indian housing developments, the approximately 1.5 million

families participating in the Section 8 Rental Certificate and Voucher

programs, and the approximately 2 million families in privately owned

assisted housing projects under the Section 8 New Construction,

Substantial Rehabilitation, Loan Management Set-aside and Property

Disposition Set-aside programs, the Section 236 Interest Reduction and

Rental Assistance Payments Program, and the Section 215 Rent Supplement

Payments program.

The Department believes these exclusions are essential for

achieving its goals of ensuring economic opportunity, empowering the

poor and expanding affordable housing opportunities. Moreover, HUD

believes that the costs of these additional exclusions will be offset

by long-term future savings because the exclusions will increase the

number of economically self-sufficient families residing in assisted

housing. Finally, because this interim rule promotes long-term upward

mobility, educational achievement and entrepreneurship, the number of

families dependent on welfare and other social services programs may

decline, thereby resulting in future cost savings for other Federal

programs.

The eight ``discretionary'' exclusions to annual income are:

1. Resident Service Stipends. This exclusion exempts from annual

income resident service stipends, but only if the resident service

stipend does not exceed $200 per month. A resident service stipend is a

modest amount (i.e. $200 or less per month) received by a resident for

performing a service for the housing authority or owner, on a part-time

basis, that enhances the quality of life in the assisted housing

development. Such services include, but are not limited to, fire

patrol, hall monitoring, lawn maintenance, resident initiatives

coordination, and resident management.

The Department wants to emphasize that if a housing authority or

owner pays a resident more than $200 per month, then the entire amount

received as a ``stipend'' does not qualify as a resident service

stipend under this interim rule. For example, suppose a housing

authority pays a resident $150 per month for part-time services that

enhance the quality of public housing. That $150 payment would not be

counted in determining the annual income of the resident. Suppose,

however, instead of $150 per month, the [[Page 17389]] housing

authority pays the resident $400 per month. In this latter situation,

the housing authority may not exclude up to $200 per month (the maximum

stipend amount); rather, the entire amount of the payment (i.e. $400)

is included in annual income.

If a resident receives more than $200 per month, even if the

payment is characterized as a ``stipend'', the payment does not qualify

as a resident service stipend under this interim rule. The Department

wishes to point out that there is no limit to the number of stipends a

family may receive. However, each family member may only exclude one

stipend at a time.

On August 24, 1994 (59 FR 43622), the Department published a final

rule which added a resident service stipend exclusion for resident

council officers in the public and Indian Housing programs. The

Department wants to emphasize that today's interim rule expands the

resident service stipend exclusion to all assisted housing programs,

and makes all residents eligible for the resident service stipend

exclusion, regardless of whether the resident is an officer of the

resident council.

2. Adoption Assistance Payments. This exclusion removes from annual

income payments received for the care of adopted children to the extent

that the payments exceed $480 per adopted child. Currently, payments

for the care of foster children are excluded, but similar payments for

the care of adopted children are not. (Although, when determining

adjusted income, adopted children qualify for a $480 deduction, while

foster children do not.)

3. Full Amount of Student Financial Assistance. This exclusion

exempts from annual income all amounts received from student financial

assistance. Student financial assistance is interpreted broadly to

include various scholarships, educational entitlements, grants, work-

study programs and financial aid packages. Currently, the portion of an

educational scholarship available for general living expenses is

included in annual income.

4. Earned Income of Full-Time Students. This exclusion exempts

earnings in excess of $480 for each full-time student 18 years old or

older (except the head of household and spouse). The exemption only

applies to earnings in excess of $480 since the family already receives

a $480 deduction from income for any full-time student.

5. Adult Foster Care Payments. This exclusion removes from the

computation of annual income payments for the care of foster adults

(usually individuals with disabilities, unrelated to the tenant family,

who are unable to live alone). Currently, only payments for the care of

foster children are excluded from annual income. In adding this

exclusion, the Department is not requiring that housing authorities or

owners permit foster adults in assisted housing. As before, each

housing authority or owner will continue to adopt its own policies,

subject to current HUD requirements.

6. State or local employment training programs and training of

resident management staff. This exclusion exempts compensation received

from qualifying employment training programs and training of resident

management staff. To qualify under this exclusion, the compensation

received must be a component of a state or local employment training

program with clearly defined goals and objectives. Moreover, only the

compensation received incident to the training program is excluded

(i.e. any additional income received during the training program, such

as welfare benefits, will continue to be counted as income).

In addition, this exclusion only covers compensation received while

the resident participates in the employment training program, and the

duration of participation must be for a limited period determined in

advance. An example of compensation which falls under this exclusion is

compensation received from on-the-job training and during

apprenticeship programs.

7. State tax rent credits and rebates. This provision excludes

state rent credits and rebates for property taxes paid on a dwelling

unit. The Department is adding this exclusion because the Department

believes that this exclusion will support state efforts to assist low

income persons.

8. Homecare payments. This exclusion exempts amounts paid by a

State agency to families that have developmentally disabled children or

adult family members living at home. States that provide families with

homecare payments do so to offset the cost of services and equipment

needed to keep a developmentally disabled family member at home, rather

than placing the family member in an institution. Since families that

strive to avoid institutionalization should be encouraged, and not

punished, the Department is adding this additional exclusion to income.

The Department wishes to point out that today's interim rule does not

define ``developmentally disabled'' since whether a family member

qualifies as developmentally disabled, and is therefore eligible for

homecare assistance, is determined by each individual State.

B. Exclusion of Deferred Periodic Payments of SSI and Social Security

Received in Lump Sum

Section 103(a)(1) of the 1992 HCD Act amended section 3(b)(4) of

the U.S. Housing Act of 1937 to exclude from annual income, ``any

amounts which would be eligible for exclusion under section 1613(a)(7)

of the Social Security Act (42 U.S.C. 1382b(a)(7).'' Section 1613(a)(7)

of the Social Security Act covers deferred periodic payments received

in a lump sum from supplemental security income (SSI) and social

security benefits.

Section 103(a)(3) of the 1992 HCD Act, however, limits

implementation of the lump sum exclusion unless appropriations are

provided in advance to cover any additional costs resulting from

implementation of the exclusion. The Department has determined that

implementing section 103(a)(1) will not result in any additional costs

to the Department. Accordingly, no additional appropriations are

required to implement section 103(a)(1).

Section 2 of the 1992 HCD Act makes all provisions of that act

effective on the date of enactment--October 28, 1992, unless another

date is specifically provided. Because HUD determined that the

exclusion of deferred periodic payments of SSI and social security

benefits from annual income is effective as of October 28, 1992, and to

limit the number of retroactive adjustments, the Department previously

implemented this exclusion by HUD interim notice, PHA 93-11, issued

March 16, 1993. That notice implemented section 103(a)(1) with respect

to public and Indian Housing programs, and all section 8 programs.

Finally, while section 103(a)(1) does not apply to the Section 215

Rent Supplement Payments program, or the Section 236 Interest Reduction

and Rental Assistance Payments Program, it is a long standing

Departmental policy to use the same definition of annual income for all

of the Department's subsidized housing programs. Accordingly, in

today's interim rule, the Department is extending the exclusion of

deferred periodic payments of SSI and social security benefits from

annual income to the Section 215 Rent Supplement Payments program and

the Section 236 Interest Reduction and Rental Assistance Payments

Program. However, because the Department is adding this exclusion as a

matter of agency discretion, the exclusion is effective as of the

effective date of this interim rule. [[Page 17390]]

C. Change in Definition of Adjusted Income for Indian Housing

Authorities

Section 103(a)(2) of the 1992 HCD Act amended section 3(b)(5) of

the U.S. Housing Act of 1937 to change the definition of adjusted

income for families assisted by an IHA. As amended, section 3(b)(5)

provides a deduction from adjusted income for both child care expenses

(to the extent necessary to enable another member of the family to be

employed or to further his or her education); and excessive travel

expenses (not to exceed $25 per family per week for employment or

education-related travel). (Prior to this amendment, a family was

allowed a deduction from adjusted income for either child care expenses

or excessive travel expenses.)

Section 103(a)(3) of the 1992 HCD Act requires that appropriations

be provided in advance if section 103(a)(2) results in any additional

costs to the Department. The Department has determined that there are

no additional costs associated with the implementation of Section

103(a)(2).

Section 2 of the HCD Act of 1992 makes all provisions of that act

effective on the date of enactment--October 28, 1992, unless another

date is specifically provided. HUD has determined that the change to

the definition of adjusted income is effective as of October 28, 1992.

Finally, to limit the number of retroactive adjustments, the

Department previously implemented this exclusion by a HUD interim

notice, PHA 93-23, issued May 19, 1993.

D. Technical Corrections

Finally, this interim rule contains two technical corrections.

First, this interim rule removes the following parenthetical in

Sec. 913.106(c)(11): ``[t]his provision does not apply to residents

participating in the Family Self-Sufficiency [FSS] Program who are

utilizing the escrow account.'' When the Department implemented section

515(b) of the National Affordable Housing Act of 1990 (Pub.L. 101-625)

(NAHA) in the final rule published on August 24, 1994 (59 FR 43622), it

inadvertently added the above parenthetical to the rule text. Because

section 515(b) of NAHA covers all public housing residents, without

regard to whether a resident participates in the FSS program, this

technical correction is necessary.

The second technical correction amends Sec. 236.72. Currently,

Sec. 236.72 incorrectly references ``adjusted income'' rather than

``annual income.'' This interim rule changes the reference in

Sec. 236.72 to ``annual income.''

II. Other Matters

A. Executive Order 12866

This interim rule was reviewed by the Office of Management and

Budget (OMB) under Executive Order 12866, Regulatory Planning and

Review. Any changes made to the interim rule as a result of that review

are clearly 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.

B. Environmental Impact

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969. The Finding of No Significant Impact is available for

public inspection during regular business hours in the Office of

General Counsel, the Rules Docket Clerk, room 10276, 451 Seventh

Street, SW, Washington, DC 20410.

C. Executive Order 12612, Federalism

The General Counsel has also determined, as the Designated Official

for HUD under section 6(a) of Executive Order 12612, Federalism, that

the policies contained in this interim rule will not have federalism

implications and, thus, are not subject to review under that Order.

Specifically, the interim rule adds additional exclusions to the

definition of income in the assisted housing programs. As such, the

interim rule will not impinge upon the relationship between the Federal

Government and State and local governments, and the interim rule is not

subject to review under the order.

D. Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this interim rule has

potential for significant impact on family formation, maintenance, and

general well-being. Families will benefit from this interim rule by

being allowed additional exclusions from annual income. Accordingly,

since the impact on the family is beneficial, no further review is

considered necessary.

E. Regulatory Flexibility Act

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

U.S.C. 605(b)) has reviewed and approved this interim rule, and in so

doing certifies that this interim rule will not have a significant

economic impact on a substantial number of small entities. With regard

to the lump sum exclusion, the number of lump sum exclusions in any one

project will be minor, and will not significantly impact any HA. With

regard to the remaining income exclusions, since HUD will supplement

any lost rental income from the added exclusions, the exclusions will

not have an economic impact on housing authorities.

F. Regulatory Agenda

This interim rule was listed as item number 1748 in the

Department's Semiannual Agenda of Regulations published on November 14,

1994, (59 FR 57632, 57646) in accordance with Executive Order 12866 and

the Regulatory Flexibility Act.

G. Catalog of Federal Domestic Assistance

The Catalog of Federal Domestic Assistance program number(s) are

14.146, 14.147, 14.850 and 15.141.

H. Justification for Interim Rulemaking

In general, the Department publishes a rule for public comment

before issuing a rule for effect, in accordance with its own

regulations on rulemaking, 24 CFR part 10. However, part 10 does

provide for exceptions from that general rule where the agency finds

good cause to omit advance notice and public participation. The good

cause requirement is satisfied when prior public procedure is

``impracticable, unnecessary, or contrary to the public interest.'' (24

CFR 10.1)

The Department finds that good cause exists to publish this interim

rule for effect without first soliciting public comment because the

interim rule adds nine exclusions to the definition of annual income,

which will benefit residents and tenants, without adversely affecting

any other group. The first eight exclusions will affect approximately

1.3 million families currently residing in public and Indian housing

developments, approximately 1.5 million families participating in the

Section 8 Rental Certificate and Voucher programs, and approximately 2

million families in private-owned assisted housing projects under

certain HUD programs.

As stated earlier in this preamble, the Department believes these

exclusions are essential for achieving its goals of ensuring economic

opportunity, empowering the poor and expanding affordable housing

opportunities. Moreover, the Department believes that the costs of

these additional exclusions will be offset by long term future savings

because the exclusions will increase the number of economically

[[Page 17391]] self-sufficient families residing in assisted housing.

Finally, because this interim rule promotes long-term upward mobility,

educational achievement and entrepreneurship, the number of families

dependent on welfare and other social services programs may decline,

thereby resulting in future cost savings for other Federal programs.

For these reasons, the Department believes that delaying

implementation would be contrary to public interest.

I. Sunset of Interim Rule

In accordance with the Department's policy on interim rules, the

amendments made by this interim rule shall expire on the twelve-month

anniversary date of the effective date of this interim rule unless

extended by notice published in the Federal Register, or adopted by a

final rule published on or before the twelve-month anniversary date of

the effective date of this interim rule.

List of Subjects

24 CFR Part 215

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements.

24 CFR Part 236

Grant programs--housing and community development, Low and moderate

income housing, Mortgage insurance, Rent subsidies, Reporting and

recordkeeping requirements.

24 CFR Part 813

Grant programs--housing and community development, Rent subsidies,

Reporting and recordkeeping requirements, Utilities.

24 CFR Part 905

Aged, Energy conservation, Grant programs--housing and community

development, Grant programs--Indians, Homeownership, Indians,

Individuals with disabilities, Lead poisoning, Loan programs--housing

and community development, Loan programs--Indians, Low and moderate

income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 913

Grant programs--housing and community development, Public housing,

Reporting and recordkeeping requirements.

Accordingly, 24 CFR parts 215, 236, 813, 905, and 915 are amended

as follows:

PART 215--RENT SUPPLEMENT PAYMENTS

1. The authority citation for 24 CFR part 215 continues to read as

follows:

Authority: 12 U.S.C. 1701s; 42 U.S.C. 3535(d).

2. A new Sec. 215.2 is added to subpart A to read as follows:

Sec. 215.2 Effective date of regulation.

Sections 215.21(c)(2), (c)(6), (c)(8)(iv) through (v), and (c)(11)

through (c)(15) shall expire and shall not be in effect after May 6,

1996, unless prior to May 6, 1996, the Department publishes changes in

this interim rule as a final rule or publishes a notice in the Federal

Register to extend the effective date.

3. Section 215.21 is amended by revising paragraphs (b)(4), (b)(5),

and (c) to read as follows:

Sec. 215.21 Annual income.

* * * * *

(b) * * *

(4) The full amount of periodic payments received from Social

Security, annuities, insurance policies, retirement funds, pensions,

disability or death benefits, and other similar types of periodic

receipts, including a lump sum payment for the delayed start of a

periodic payment (but see paragraph (c)(13) of this section);

(5) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation and severance pay (but

see paragraph (c)(3) of this section);

* * * * *

(c) Annual income does not include the following:

(1) Income from employment of children (including foster children)

under the age of 18 years;

(2) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone);

(3) Lump-sum additions to Family assets, such as inheritances,

insurance payments (including payments under health and accident

insurance and worker's compensation), capital gains and settlement for

personal or property losses (but see paragraph (b)(5) of this section);

(4) Amounts received by the Family, that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(5) Income of a Live-in Aide, as defined in Sec. 215.1;

(6) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(7) The special pay to a Family member serving in the Armed Forces

who is exposed to hostile fire;

(8) (i) Amounts received under training programs funded by HUD;

(ii) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan to Attain

Self-Sufficiency (PASS);

(iii) Amounts received by a participant in other publicly assisted

programs which are specifically for or in reimbursement of out-of-

pocket expenses incurred (special equipment, clothing, transportation,

child care, etc.) and which are made solely to allow participation in a

specific program;

(iv) A resident service stipend. A resident service stipend is a

modest amount (not to exceed $200 per month) received by a resident for

performing a service for the owner, on a part-time basis, that enhances

the quality of life in the development. Such services may include, but

are not limited to, fire patrol, hall monitoring, lawn maintenance, and

resident initiatives coordination. No Resident may receive more than

one such stipend during the same period of time; or

(v) Compensation from State or local employment training programs

and training of a family member as resident management staff. Amounts

excluded by this provision must be received under employment training

programs with clearly defined goals and objectives, and are excluded

only for a limited period as determined in advance;

(9) Temporary, nonrecurring or sporadic income (including gifts);

(10) For all initial determinations and reexaminations of income

carried out on or after April 23, 1993, reparation payments paid by a

foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era;

(11) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(12) Adoption assistance payments in excess of $480 per adopted

child;

(13) Deferred periodic payments of supplemental security income and

social security benefits that are received in a lump sum payment;

(14) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes paid on the

dwelling unit;

(15) Amounts paid by a State agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and [[Page 17392]] equipment needed to keep the

developmentally disabled family member at home; or

(16) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under section 101 of the Housing and Urban Development Act

of 1965 (12 U.S.C. 1701s). A notice will be published in the Federal

Register and distributed to housing owners identifying the benefits

that qualify for this exclusion. Updates will be published and

distributed when necessary.

* * * * *

PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENT FOR

RENTAL PROJECTS

4. The authority citation for 24 CFR part 236 continues to read as

follows:

Authority: 12 U.S.C. 1715b and 1715z-1; 42 U.S.C. 3535(d).

5. Section 236.3 is amended by revising the section heading,

paragraphs (b)(4), (b)(5), and (c) to read as follows:

Sec. 236.3 Annual income.

* * * * *

(b) * * *

(4) The full amount of periodic payments received from Social

Security, annuities, insurance policies, retirement funds, pensions,

disability or death benefits, and other similar types of periodic

receipts, including a lump sum payment for the delayed start of a

periodic payment (but see paragraph (c)(13) of this section);

(5) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation and severance pay (but

see paragraph (c)(3) of this section);

* * * * *

(c) Annual income does not include the following:

(1) Income from employment of children (including foster children)

under the age of 18 years;

(2) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone);

(3) Lump-sum additions to Family assets, such as inheritances,

insurance payments (including payments under health and accident

insurance and worker's compensation), capital gains and settlement for

personal or property losses (but see paragraph (b)(5) of this section);

(4) Amounts received by the Family, that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(5) Income of a Live-in Aide, as defined in Sec. 236.2;

(6) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(7) The special pay to a Family member serving in the Armed Forces

who is exposed to hostile fire;

(8) (i) Amounts received under training programs funded by HUD;

(ii) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan to Attain

Self-Sufficiency (PASS);

(iii) Amounts received by a participant in other publicly assisted

programs which are specifically for or in reimbursement of out-of-

pocket expenses incurred (special equipment, clothing, transportation,

child care, etc.) and which are made solely to allow participation in a

specific program;

(iv) A resident service stipend. A resident service stipend is a

modest amount (not to exceed $200 per month) received by a resident for

performing a service for the owner, on a part-time basis, that enhances

the quality of life in the development. Such services may include, but

are not limited to, fire patrol, hall monitoring, lawn maintenance, and

resident initiatives coordination. No Resident may receive more than

one such stipend during the same period of time; or

(v) Compensation from State or local employment training programs

and training of a family member as resident management staff. Amounts

excluded by this provision must be received under employment training

programs with clearly defined goals and objectives, and are excluded

only for a limited period as determined in advance;

(9) Temporary, nonrecurring or sporadic income (including gifts);

(10) For all initial determinations and reexaminations of income

carried out on or after April 23, 1993, reparation payments paid by a

foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era;

(11) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(12) Adoption assistance payments in excess of $480 per adopted

child;

(13) Deferred periodic payments of supplemental security income and

social security benefits that are received in a lump sum payment.

(14) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes paid on the

dwelling unit;

(15) Amounts paid by a State agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and equipment needed to keep the developmentally

disabled family member at home; or

(16) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under section 236 of the National Housing Act. A notice will

be published in the Federal Register and distributed to housing owners

identifying the benefits that qualify for this exclusion. Updates will

be published and distributed when necessary.

* * * * *

6. A new Sec. 236.6 is added to subpart A to read as follows:

Sec. 236.6 Effective date.

Sections 236.3(c)(2), (c)(6), (c)(8)(iv) through (v), and (c)(11)

through (c)(15) shall expire and shall not be in effect after May 6,

1996, unless prior to May 6, 1996, the Department publishes changes to

this interim rule as a final rule or publishes a notice in the Federal

Register to extend the effective date.

7. Section 236.72 is amended by revising paragraph (a) and the

first sentence in paragraph (b) introductory text, to read as follows:

Sec. 236.72 Guidelines for assisted admission.

(a) Maximum income. The annual income of an applicant shall not

exceed the maximum income limits established by the Secretary.

(b) Ability to pay rent. The project owner or the owner's managing

agent may, in its discretion, admit an applicant for assisted admission

whose annual income meets the requirement in paragraph (a) of this

section if, in its discretion, the applicant has an adequate income to

pay the basic monthly rental charge. * * *

* * * * *

PART 813--DEFINITION OF INCOME, INCOME LIMITS, RENT AND

REEXAMINATION OF FAMILY INCOME FOR THE SECTION 8 HOUSING ASSISTANCE

PAYMENTS PROGRAMS AND RELATED PROGRAMS

8. The authority citation for 24 CFR part 813 is revised to read as

follows:

[[Page 17393]] Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437n,

and 3535(d).

9. A new Sec. 813.1 is added to read as follows:

Sec. 813.1 Effective date.

Sections 813.106(c)(2), (c)(6), (c)(8)(iv) through (v), (c)(11),

(c)(12), (c)(14), and (c)(15) shall expire and shall not be in effect

after May 6, 1996, unless prior to May 6, 1996, the Department

publishes changes to this interim rule as a final rule or publishes a

notice in the Federal Register to extend the effective date.

10. Section 813.106 is amended by revising paragraphs (b)(4),

(b)(5), and (c), to read as follows:

Sec. 813.106 Annual income.

* * * * *

(b) * * *

(4) The full amount of periodic payments received from Social

Security, annuities, insurance policies, retirement funds, pensions,

disability or death benefits, and other similar types of periodic

receipts, including a lump sum payment for the delayed start of a

periodic payment (but see paragraph (c)(13) of this section);

(5) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation and severance pay (but

see paragraph (c)(3) of this section);

* * * * *

(c) Annual income does not include the following:

(1) Income from employment of children (including foster children)

under the age of 18 years;

(2) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone);

(3) Lump-sum additions to Family assets, such as inheritances,

insurance payments (including payments under health and accident

insurance and worker's compensation), capital gains and settlement for

personal or property losses (but see paragraph (b)(5) of this section);

(4) Amounts received by the Family, that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(5) Income of a live-in Aide, as defined in Sec. 813.102;

(6) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(7) The special pay to a Family member serving in the Armed Forces

who is exposed to hostile fire;

(8) (i) Amounts received under training programs funded by HUD;

(ii) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan to Attain

Self-Sufficiency (PASS);

(iii) Amounts received by a participant in other publicly assisted

programs which are specifically for or in reimbursement of out-of-

pocket expenses incurred (special equipment, clothing, transportation,

child care, etc.) and which are made solely to allow participation in a

specific program;

(iv) A resident service stipend. A resident service stipend is a

modest amount (not to exceed $200 per month) received by a resident for

performing a service for the owner, on a part-time basis, that enhances

the quality of life in the development. Such services may include, but

are not limited to, fire patrol, hall monitoring, lawn maintenance, and

resident initiatives coordination. No Resident may receive more than

one such stipend during the same period of time; or

(v) Compensation from State or local employment training programs

and training of a family member as resident management staff. Amounts

excluded by this provision must be received under employment training

programs with clearly defined goals and objectives, and are excluded

only for a limited period as determined in advance;

(9) Temporary, nonrecurring or sporadic income (including gifts);

(10) For all initial determinations and reexaminations of income

carried out on or after April 23, 1993, reparation payments paid by a

foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era;

(11) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(12) Adoption assistance payments in excess of $480 per adopted

child;

(13) Deferred periodic payments of supplemental security income and

social security benefits that are received in a lump sum payment.

(14) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes paid on the

dwelling unit;

(15) Amounts paid by a State agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and equipment needed to keep the developmentally

disabled family member at home; or

(16) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under the United States Housing Act of 1937. A notice will

be published in the Federal Register and distributed to PHAs and owners

identifying the benefits that qualify for this exclusion. Updates will

be published and distributed when necessary.

* * * * *

PART 905--INDIAN HOUSING PROGRAMS

11. The authority citation for 24 CFR part 905 continues to read as

follows:

Authority: 25 U.S.C. 450e(b); 42 U.S.C. 1437a, 1437aa, 1437bb,

1437cc, 1437ee; and 3535(d).

12. In Sec. 905.102, the definition for ``Adjusted income'' is

amended by revising paragraph (5) and by adding a new paragraph (6) to

the definition, and the definition for ``Annual income'' is amended by

revising paragraphs (1)(iv), (1)(v), and (2) of the definition, to read

as follows:

Sec. 905.102 Definitions.

* * * * *

Adjusted income. * * *

* * * * *

(5) Child care expenses, as defined in this definition; and

(6) Excessive travel expenses, not to exceed $25 per family per

week, for employment or education-related travel.

* * * * *

Annual income. * * *

(1) * * *

(iv) The full amount of periodic payments received from Social

Security, annuities, insurance policies, retirement funds, pensions,

disability or death benefits, and other similar types of periodic

receipts, including a lump sum payment for the delayed start of a

periodic payment (but see paragraph (2)(xiv) of this definition);

(v) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation and severance pay (but

see paragraph (2)(iii) of this definition);

* * * * *

(2) Annual income does not include the following:

(i) Income from employment of children (including foster children)

under the age of 18 years;

(ii) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone);

(iii) Lump-sum additions to Family assets, such as inheritances,

insurance payments (including payments under [[Page 17394]] health and

accident insurance and worker's compensation), capital gains and

settlement for personal or property losses (but see paragraph (1)(v) of

this definition);

(iv) Amounts received by the Family, that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(v) Income of a Live-in Aide;

(vi) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(vii) The special pay to a Family member serving in the Armed

Forces who is exposed to hostile fire;

(viii)(A) Amounts received under training programs funded by HUD;

(B) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan to Attain

Self-Sufficiency (PASS);

(C) Amounts received by a participant in other publicly assisted

programs which are specifically for or in reimbursement of out-of-

pocket expenses incurred (special equipment, clothing, transportation,

child care, etc.) and which are made solely to allow participation in a

specific program;

(D) A resident service stipend. A resident service stipend is a

modest amount (not to exceed $200 per month) received by an Indian

housing resident for performing a service for the IHA, on a part-time

basis, that enhances the quality of life in Indian housing. Such

services may include, but are not limited to, fire patrol, hall

monitoring, lawn maintenance, and resident initiatives coordination. No

Resident may receive more than one such stipend during the same period

of time; or

(E) Compensation from State or local employment training programs

and training of a family member as resident management staff. Amounts

excluded by this provision must be received under employment training

programs with clearly defined goals and objectives, and are excluded

only for a limited period as determined in advance by the IHA;

(ix) Temporary, nonrecurring or sporadic income (including gifts);

(x) For all initial determinations and reexaminations of income

carried out on or after April 23, 1993, reparation payments paid by a

foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era;

(xi) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(xii) Adoption assistance payments in excess of $480 per adopted

child;

(xiii) The earnings and benefits to any resident resulting from the

participation in a program providing employment training and supportive

services in accordance with the Family Support Act of 1988, section 22

of the U.S. Housing Act of 1937 (42 U.S.C. 1437t), or any comparable

Federal, State, Tribal or local law during the exclusion period. For

purposes of this paragraph (2)(xiii) of this definition, the following

definitions apply.

(A) Comparable Federal, State, Tribal or local law means a program

providing employment training and supportive services that:

(1) Is authorized by a Federal, State, Tribal or local law;

(2) Is funded by the Federal, State, Tribal or local government;

(3) Is operated or administered by a public agency; and

(4) Has as its objective to assist participants in acquiring

employment skills.

(B) Exclusion period means the period during which the resident

participates in a program described in this definition, plus 18 months

from the date the resident begins the first job acquired by the

resident after completion of such program that is not funded by public

housing assistance under the U.S. Housing Act of 1937. If the resident

is terminated from employment without good cause, the exclusion period

shall end.

(C) Earnings and benefits means the incremental earnings and

benefits resulting from a qualifying employment training program or

subsequent job;

(xiv) Deferred periodic payments of supplemental security income

and social security benefits that are received in a lump sum payment.

(xv) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes on the dwelling

unit;

(xvi) Amounts paid by a State agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and equipment needed to keep the developmentally

disabled family member at home; or

(xvii) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under the United States Housing Act of 1937. A notice will

be published in the Federal Register and distributed to IHAs

identifying the benefits that qualify for this exclusion. Updates will

be published and distributed when necessary.

* * * * *

13. A new Sec. 905.103 is added to subpart A to read as follows:

Sec. 905.103 Effective date.

In Secs. 905.102, paragraphs (2)(ii), (2)(vi), (2)(viii) (D)

through (E), (2)(xi), (2)(xii), (2)(xv), and (2)(xvi) of the definition

of Annual income shall expire and shall not be in effect after May 6,

1996, unless prior to May 6, 1996, the Department publishes changes to

this interim rule as a final rule or publishes a notice in the Federal

Register to extend the effective date.

PART 913--DEFINITION OF INCOME, INCOME LIMITS, RENT AND

REEXAMINATION OF FAMILY INCOME FOR THE PUBLIC HOUSING PROGRAM

14. The authority citation for 24 CFR part 913 continues to read as

follows:

Authority: 42 U.S.C. 1437a, 1437d, 1437n and 3535(d).

15. A new Sec. 913.1 is added to read as follows:

Sec. 913.1 Effective date.

Sections 913.106 (c)(2), (c)(6), (c)(8) (iv) through (v), (c)(11),

(c)(12), (c)(15), and (c)(16) shall expire and shall not be in effect

after May 6, 1996, unless prior to May 6, 1996, the Department

publishes changes to this interim rule as a final rule or publishes a

notice in the Federal Register to extend the effective date.

16. Section 913.106 is amended by revising paragraphs (b)(4),

(b)(5), and (c) to read as follows:

Sec. 913.106 Annual income.

* * * * *

(b) * * *

(4) The full amount of periodic payments received from Social

Security, annuities, insurance policies, retirement funds, pensions,

disability or death benefits, and other similar types of periodic

receipts, including a lump-sum payment for the delayed start of a

periodic payment (but see paragraph (c)(14) of this section);

(5) Payments in lieu of earnings, such as unemployment and

disability compensation, worker's compensation and severance pay (but

see paragraph (c)(3) of this section);

* * * * *

(c) Annual income does not include the following:

(1) Income from employment of children (including foster children)

under the age of 18 years; [[Page 17395]]

(2) Payments received for the care of foster children or foster

adults (usually individuals with disabilities, unrelated to the tenant

family, who are unable to live alone);

(3) Lump-sum additions to family assets, such as inheritances,

insurance payments (including payments under health and accident

insurance and worker's compensation), capital gains and settlement for

personal or property losses (but see paragraph (b)(5) of this section);

(4) Amounts received by the Family, that are specifically for, or

in reimbursement of, the cost of medical expenses for any family

member;

(5) Income of a live-in Aide, as defined in Sec. 913.102;

(6) The full amount of student financial assistance paid directly

to the student or to the educational institution;

(7) The special pay to a Family member serving in the Armed Forces

who is exposed to hostile fire;

(8) (i) Amounts received under training programs funded by HUD;

(ii) Amounts received by a disabled person that are disregarded for

a limited time for purposes of Supplemental Security Income eligibility

and benefits because they are set aside for use under a Plan to Attain

Self-Sufficiency (PASS);

(iii) Amounts received by a participant in other publicly assisted

programs which are specifically for or in reimbursement of out-of-

pocket expenses incurred (special equipment, clothing, transportation,

child care, etc.) and which are made solely to allow participation in a

specific program;

(iv) A resident service stipend. A resident service stipend is a

modest amount (not to exceed $200 per month) received by a public

housing resident for performing a service for the PHA, on a part-time

basis, that enhances the quality of life in public housing. Such

services may include, but are not limited to, fire patrol, hall

monitoring, lawn maintenance, and resident initiatives coordination. No

Resident may receive more than one such stipend during the same period

of time; or

(v) Compensation from State or local employment training programs

and training of a family member as resident management staff. Amounts

excluded by this provision must be received under employment training

programs with clearly defined goals and objectives, and are excluded

only for a limited period as determined in advance by the PHA;

(9) Temporary, nonrecurring or sporadic income (including gifts);

(10) For all initial determinations and reexaminations of income

carried out on or after April 23, 1993, reparation payments paid by a

foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era;

(11) Earnings in excess of $480 for each full-time student 18 years

old or older (excluding the head of household and spouse);

(12) Adoption assistance payments in excess of $480 per adopted

child;

(13) The earnings and benefits to any resident resulting from the

participation in a program providing employment training and supportive

services in accordance with the Family Support Act of 1988, section 22

of the U.S. Housing Act of 1937 (42 U.S.C. 1437 et seq.), or any

comparable Federal, State, or local law during the exclusion period.

For purposes of this paragraph, the following definitions apply.

(i) Comparable Federal, State or local law means a program

providing employment training and supportive services that--

(A) Is authorized by a Federal, State or local law;

(B) Is funded by the Federal, State or local government;

(C) Is operated or administered by a public agency; and

(D) Has as its objective to assist participants in acquiring

employment skills.

(ii) Exclusion period means the period during which the resident

participates in a program described in this section, plus 18 months

from the date the resident begins the first job acquired by the

resident after completion of such program that is not funded by public

housing assistance under the U.S. Housing Act of 1937 (42 U.S.C. 1437

et seq.). If the resident is terminated from employment without good

cause, the exclusion period shall end.

(iii) Earnings and Benefits means the incremental earnings and

benefits resulting from a qualifying employment training program or

subsequent job;

(14) Deferred periodic payments of supplemental security income and

social security benefits that are received in a lump sum payment.

(15) Amounts received by the family in the form of refunds or

rebates under state or local law for property taxes paid on the

dwelling unit;

(16) Amounts paid by a State agency to a family with a

developmentally disabled family member living at home to offset the

cost of services and equipment needed to keep the developmentally

disabled family member at home; or

(17) Amounts specifically excluded by any other Federal statute

from consideration as income for purposes of determining eligibility or

benefits under a category of assistance programs that includes

assistance under the United States Housing Act of 1937. A notice will

be published in the Federal Register and distributed to PHAs

identifying the benefits that qualify for this exclusion. Updates will

be published and distributed when necessary.

* * * * *

Dated: January 26, 1995.

Henry G. Cisneros,

Secretary.

[FR Doc. 95-8081 Filed 4-4-95; 8:45 am]

BILLING CODE 4210-32-P