[Federal Register Volume 60, Number 65 (Wednesday, April 5, 1995)]
[Rules and Regulations]
[Pages 17388-17395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8081]




[[Page 17387]]

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Part II





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Secretary



_______________________________________________________________________



24 CFR Part 215, et al.



Combined Income and Rent; Interim Rule

  Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules 
and Regulations   
[[Page 17388]] 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 215, 236, 813, 905, and 913

[Docket No. R-95-1713; FR-3324-I-01]
RIN 2501-AB61


Combined Income and Rent

AGENCY: Office of the Secretary, HUD.

ACTION: Interim rule.

-----------------------------------------------------------------------

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