[Federal Register Volume 65, Number 162 (Monday, August 21, 2000)]
[Proposed Rules]
[Pages 50842-50848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20802]



[[Page 50841]]

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Part IV





Department of Housing and Urban Development





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24 CFR Parts 5, 92, et al.



Determining Adjusted Income in HUD Programs Serving Persons With 
Disabilities; Proposed Rule

  Federal Register / Vol. 65, No. 162 / Monday, August 21, 2000 / 
Proposed Rules  

[[Page 50842]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 92, 200, 236, 574, 582, 583, 891, and 982

[Docket No. FR-4608-P-01]
RIN 2501-AC72


Determining Adjusted Income in HUD Programs Serving Persons With 
Disabilities: Requiring Mandatory Deductions for Certain Expenses; and 
Disallowance for Earned Income

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD's regulations in part 5, 
subpart F, to include additional HUD programs in the list of programs 
that must make certain deductions in calculating a family's adjusted 
income. These deductions primarily address expenses related to a 
person's disability, for example medical expenses or attendant care 
expenses. The purpose of this amendment is to expand the benefits of 
these deductions to persons with disabilities served by HUD programs 
not currently covered by part 5, subpart F. Second, the proposed rule 
would add a new regulatory section to part 5 to require for some but 
not all of these same programs the disallowance of increases in income 
as a result of earnings by persons with disabilities. HUD believes that 
making these deductions and disallowance available to persons with 
disabilities through as many HUD programs as possible will assist 
persons with disabilities in obtaining and retaining employment, which 
is an important step toward economic self-sufficiency.

DATES: Comments Due Date: October 20, 2000.

ADDRESSES: Interested persons are invited to submit comments on this 
proposed 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 must 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.

FOR FURTHER INFORMATION CONTACT: For the HOME Investment Partnerships 
Program, contact Mary Kolesar, Office of Community Planning and 
Development, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC, 20410, telephone (202) 708-2470.
    For the Housing Choice Voucher Program, contact Patricia Arnaudo, 
Office of Public and Indian Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC, 20410, telephone 
(202) 708-0744.
    For the Housing Opportunities for Persons with AIDS Program, 
contact David Vos, Office of Community Planning and Development, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC, 20410, telephone (202) 708-1934.
    For the Rent Supplement Program, contact, Willie Spearmon, Office 
of Housing, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410; telephone (202) 708-3000.
    For the Rental Assistance Payment (RAP) Program, contact Willie 
Spearmon, Office of Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW., Washington, DC 20410; telephone 
(202) 708-3000.
    For the Section 202 Supportive Housing Program for the Elderly 
(including Section 202 Direct Loans for Housing for the Elderly and 
Persons with Disabilities), contact Aretha Williams, Office of Housing, 
Department of Housing and Urban Development, 451 Seventh Street, SW., 
Washington, DC 20410, telephone (202) 708-2866.
    For Section 8 Project-Based, contact Willie Spearmon, Office of 
Housing, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410; telephone (202) 708-3000.
    For the Section 811 Supportive Housing Program for Persons with 
Disabilities, contact Gail Williamson, Office of Housing, Department of 
Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 
20410, telephone (202) 708-2866.
    For the Shelter Plus Care Program, contact Jean Whaley, Office of 
Community Planning and Development, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC, 20410, telephone 
(202) 708-2140.
    For the Supportive Housing Program (McKinney Act Homeless 
Assistance), contact Clifford Taffet, Office of Community Planning and 
Development, Department of Housing and Urban Development, 451 Seventh 
Street, SW, Washington, DC, 20410, telephone (202) 708-1234.
    For all of the above telephone numbers, persons with hearing or 
speech-impairments may call 1-800-877-8339 (Federal Information Relay 
Service TTY). (Other than the ``800'' number, the telephone numbers are 
not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

I. This Proposed Rule--Background and Proposed Amendments

    HUD's FY 1999 Appropriations Act, which included the Quality 
Housing and Work Responsibility Act of 1998 (as title V of the FY 1999 
HUD Appropriations Act) (the entire FY 1999 Appropriations Act, 
including title V, is Public Law 105-276, approved October 21, 1998, 
and frequently referred to as the ``Public Housing Reform Act'') 
enacted landmark measures in HUD programs, including many of the 
reforms sought by Secretary Cuomo, such as transforming public housing, 
creating additional housing assistance vouchers, merging the Section 8 
certificate and voucher programs, and enabling more families to obtain 
FHA mortgages to become homeowners. Since the Public Housing Reform Act 
became law, HUD has published many rules and notices implementing the 
important changes in HUD programs required by the Act. While the 
majority of these changes are applicable to HUD's public housing and 
Section 8 programs, HUD has been able to extend, administratively at 
times, the benefits of some of these landmark measures to HUD programs 
not specifically identified by the statute. The particular focus of 
this proposed rule is to extend the benefits of (1) deducting certain 
expenses as provided by the Public Housing Reform Act (currently 
applicable only to public housing and Section 8 housing (tenant-based 
and project-based)); and (2) disregarding certain increases in earned 
income as provided by the Public Housing Reform Act (currently 
applicable only to public housing) to persons with disabilities served 
by certain other HUD programs. These deductions and the disregard of 
earned income constitute an important step in helping persons with 
disabilities find employment and retain employment.
    HUD is aware that the lack of accessible, affordable housing 
continues to be a barrier to the ability of persons with disabilities 
to take advantage of economic opportunities in many communities across 
the country. The availability of accessible, affordable housing and the 
location of that housing can be the key to persons with disabilities in 
obtaining employment. Estimates concerning unemployment indicate that 
the unemployment rate

[[Page 50843]]

among persons with significant disabilities is in the range of 70% to 
75%, among the highest of disadvantaged groups in the nation. To 
minimize the barriers to accessible, affordable housing, HUD is 
continually examining its programs to determine ways, through 
administrative initiatives or legislative or regulatory changes, that 
may assist in breaking down these barriers. HUD has identified two 
changes that it can make through rulemaking that HUD believes will 
encourage and facilitate employment of persons with disabilities, and 
may be implemented administratively in several HUD programs.
    The first amendment proposed by this proposed rule involves 
extending the applicability of certain mandatory deductions in 
calculating family adjusted income to other HUD programs that serve 
persons with disabilities. Section 508 of the Public Housing Reform Act 
amended section 3(b) of the U.S. Housing Act of 1937 (1937 Act) to 
change the calculation of adjusted income by adding a number of 
mandatory deductions to determine adjusted income. These mandatory 
deductions include disability-related expenses, including medical 
expenses and attendant care expenses, as well as child-care expenses, 
and other expenses that would benefit persons with disabilities. These 
deductions, currently applicable to public housing and Section 8 
housing (tenant-based and project-based), can be found in 24 CFR 
5.611(a) (see the March 29, 2000, final rule at 65 FR 16717, first 
column; see also the definition of ``responsible entity'' in 24 CFR 
5.100, which only covers public housing and Section 8 housing). Because 
several HUD non-public housing or non-Section 8 programs define ``low-
income'' or ``very low-income'' persons or families as they are defined 
or in a manner similar to the 1937 Act, or provide for family income to 
be determined in accordance with the requirements of the 1937 Act, or 
both, HUD can apply the mandatory deductions in Sec. 5.611(a) to 
several HUD programs. In fact, several of the HUD programs included in 
this proposed rule were able to apply the deductions listed in 
Sec. 5.611 before the amendments made by the March 29, 2000 final rule. 
Therefore, it is appropriate and beneficial that these programs 
continue to be able to take advantage of these deductions. The March 
29, 2000 final rule, however, did not address these programs. The March 
29, 2000 final rule was limited to public housing and Section 8 tenant-
based and project-based assistance. This proposed rule is issued to 
continue the applicability of these deductions to non-public housing 
and non-Section 8 housing programs. Although these deductions, because 
of the type of deductible expenses, primarily benefit persons with 
disabilities, the deductions are eligible to all persons and families 
served by the programs listed above, not only persons or families with 
disabilities. Additionally, unless specifically provided in the program 
regulations amended by this proposed rule, these deductions do not 
replace other deductions made available to persons with disabilities or 
to other persons or families as provided in the program regulations.
    The HUD programs to which these deductions, as revised by the March 
29, 2000 final rule, would be applicable are as follows: HOME 
Investment Partnerships Program (HOME Program), Housing Opportunities 
for Persons with AIDS (HOPWA), Rent Supplement Payments Program, Rental 
Assistance Payments Program, Section 202 Supportive Housing for the 
Elderly, Section 202 Direct Loans for Housing for the Elderly and 
Persons with Disabilities,\1\ Section 811 Supportive Housing for 
Persons with Disabilities, the Shelter Plus Care Program, and the 
Supportive Housing Program (McKinney Act Homeless Assistance). As the 
list of HUD programs reflects, many of the programs are not directed to 
providing assistance only to persons with disabilities, but persons 
with disabilities are included in the populations served by these 
programs.
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    \1\ The original name for this program was ``Section 202 Direct 
Loans for Housing for the Elderly and Handicapped.'' This changes 
the name to the more appropriate ``Section 202 Loans for Housing for 
the Elderly and Persons with Disabilities.''
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    With respect to the HOME Program, the regulations for this program 
currently provide (in 24 CFR 92.203) for the calculation of adjusted 
income to apply the deductions in 24 CFR 5.611. However, the 
applicability of these deductions can be clarified and HUD makes the 
clarification in this proposed rule by defining ``responsible entity'' 
in part 5 to include HOME Program participating jurisdictions.
    With respect to the Rent Supplement Program, the regulations for 
this program, previously codified in 24 CFR part 215, were removed from 
title 24 of the Code of Regulations in April 1996 because the Rent 
Supplement Program is an expiring program. New assistance has not been 
provided under this program for many years, and HUD is closing out the 
program. HUD retained a ``savings clause,'' however, to ensure that the 
existing assistance provided by this program continues to be governed 
by the regulations in effect before their removal, and any subsequent 
amendments that HUD may make to these regulations. The savings clause 
is found in 24 CFR part 200, subpart W (see 24 CFR 200.1302). The 
amendments that HUD has made to the Rent Supplement regulations, since 
the 1996 removal, are found in 24 CFR 200.1303.
    The Rental Assistance Payments Program is also an inactive program. 
The regulations for this program are codified in 24 CFR part 236, 
subpart D. Section 236.1 of these regulations provide notice that a 
moratorium against issuance of commitments to insure new mortgages 
under section 236 of the National Housing Act (NHA) was imposed January 
5, 1973. Section 236(n) of the NHA prohibits the insurance of mortgages 
under section 236 after November 30, 1983, except to permit the 
refinance of a mortgage insured under section 236, or to finance 
pursuant to section 236(j)(3), the purchase, by a cooperative or 
nonprofit corporation or association, of a project assisted under 
section 236. As a result of the statutory provisions, HUD removed the 
majority of the regulations in 24 CFR part 236, subpart A, that 
provided the eligibility requirements for section 236 mortgage 
insurance. Subpart A of part 236 also includes a savings clause that 
advises that the regulations formerly in subpart A remain applicable to 
section 236 mortgages. Subpart A includes a regulatory section on 
annual income exclusions. HUD recognized that it was appropriate to 
retain a section on annual income exclusions because these exclusions 
may be revised by statute from time to time. For the Rental Assistance 
Payments Program, this proposed rule amends that applicable provisions 
of subpart A by amending Sec. 236.710, which reference subpart A.
    For both the Rent Supplement Program and the Rental Assistance 
Payments Program, this proposed rule also updates the definitions for 
certain terms, that appear in HUD regulations, including ``disabled 
person'' and ``handicapped person,'' by replacing them with the term 
``person with disabilities'' appears in section 811 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 8013). For the 
definition of ``handicapped families,'' certain Federal Housing 
Administration statutes cross-reference the definition of the term in 
section 202 of the Housing Act of 1959 which program, for purposes of 
providing housing for handicapped and/or disabled persons, was replaced 
by section 811. There is no longer a definition for ``handicapped 
person'' or

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``handicapped families'' in the Section 202 or Section 811 statutes. 
Section 811, however, does have a definition of ``person with 
disabilities'' which is generally synonymous with the regulatory terms 
used for FHA programs.
    The second amendment proposed by this proposed rule is to expand 
the ``earned income disregard'' that is now applicable only to HUD's 
public housing program to the calculation of income for persons with 
disabilities in four HUD programs that statutorily permit this 
expansion. HUD's public housing regulations provide in 24 CFR 960.255 
for the exclusion from the calculation of annual income those increases 
in income that result from employment, participation in an economic 
self-sufficiency or other job training program, or assistance received 
from a state program for temporary assistance for needy families 
(TANF). The four HUD programs for which HUD has the authority to 
implement the earned income disregard for persons with disabilities 
are: HOME, the Housing Choice Voucher Program (which is the merged 
Section 8 certificate and voucher programs, the Section 8 tenant-based 
programs), HOPWA, and Supportive Housing Program (McKinney Act Homeless 
Assistance). In extending the earned-income disregard to these four HUD 
programs, HUD recognizes that the Public Housing Reform Act 
specifically directed the earned-income disregard to be applied to 
public housing. Application of the earned-income disregard to Section 8 
assistance (tenant-based or project-based) was not explicitly addressed 
in the statute, as it was for public housing and as were other changes 
that explicitly addressed both public housing and Section 8 housing 
programs. HUD has determined, however, that the language of the statute 
provides the flexibility to extend the earned-income disregard to 
Section 8 tenant-based rental assistance programs. HUD is therefore 
extending the earned-income disregard to the four programs identified 
above that provide for Section 8 tenant-based rental assistance, but at 
this time, however, HUD is limiting the extension of the earned-income 
disregard, to persons with disabilities, the group served by HUD with 
the highest unemployment rate. HUD is analyzing the extension of the 
earned-income disregard to all families served by HUD in these 
programs, and welcomes comment on this issue.
    The specifics of the mandatory deductions to be made are found in 
Sec. 5.611 of this proposed rule, and for the earned income disregard 
in new Sec. 5.617 that is added by this proposed rule. The March 29, 
2000 final rule removed the previous version of Sec. 5.617, captioned 
``Reexamination and verification'' which addressed income reexamination 
and verification. With the removal of this regulatory section, HUD is 
using Sec. 5.617 to address disregard of earned income for persons with 
disabilities. In addition to these amendments, HUD amends Sec. 5.601 of 
subpart F to include reference to the HUD programs to which 
applicability of the mandatory deductions and earned income disregard 
is being proposed by this rule. HUD amends the definitions in 
Sec. 5.603 to include a definition of ``responsible entity'' to cover 
the entities that have responsibility for administering the HUD program 
to be referenced in Sec. 5.601. HUD also makes conforming amendments to 
the regulations that govern these programs (e.g., the regulations in 
parts 200, 236, 574, etc.) to provide a cross-reference to the amended 
and, if applicable, the new regulatory section in part 5, subpart F. By 
the time of issuance of the final rule, HUD may determine that 
additional conforming amendments must be made in the covered program 
regulations, and HUD will make these additional amendments at the final 
rule stage.
    HUD believes that the regulatory changes proposed by this rule 
represent an important step forward in helping to remove financial 
barriers that make it difficult for persons with disabilities who are 
seeking to obtain employment, and to keep employment once obtained. The 
hope is that the financial savings to a person with disabilities that 
this proposed rule would provide presents an incentive to that person 
to continue working, or if not working, to seek employment. 
Additionally, HUD believes that not only are the changes beneficial to 
the persons with disabilities that are served by the HUD programs 
identified above, they are also beneficial to the owners and entities 
that administer the HUD assisted housing for these persons and 
families. These proposed amendments provide, to the extent permitted by 
statute, greater uniformity in determining annual income for HUD 
programs that serve persons with disabilities, and hopefully through 
this uniformity minimize the administrative burden that results from 
the different requirements under different programs for persons and 
families in similar or identical circumstances.

II. Findings and Certifications

Environmental Impact

    In accordance with 24 CFR 50.19(c)(1) of HUD's regulations, this 
proposed rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, or manufactured 
housing. Therefore, this proposed rule is categorically excluded from 
the requirements of the National Environmental Policy Act (42 U.S.C. 
4321 et seq.).

Regulatory Planning and Review

    The Office of Management and Budget has reviewed this proposed rule 
under Executive Order 12866 (captioned ``Regulatory Planning and 
Review'') and determined that this proposed rule is a ``significant 
regulatory action'' as defined in section 3(f) of the Order (although 
not an economically significant regulatory action under the Order). Any 
changes made to this proposed rule as a result of that review are 
identified in the docket file, which is available for public inspection 
during regular business hours (7:30 a.m. to 5:30 p.m.) at the Office of 
the General Counsel, Rules Docket Clerk, Room 10276, U.S. Department of 
Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 
20410-0500.

Regulatory Flexibility Act

    The Secretary has reviewed this proposed rule before publication 
and by approving it certifies, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities. This proposed rule is limited to expanding existing mandatory 
expense deductions and earned income disregard to the calculation of 
income for persons with disabilities in other HUD programs by which the 
program participants will benefit, and the owners of the housing 
assisted by these programs will benefit from the uniformity in the 
program administration this proposed rule presents and the simplicity. 
Notwithstanding HUD's determination that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities, HUD specifically invites comment regarding any less 
burdensome alternatives to this proposed rule that

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will meet HUD's objectives as described in this proposed rule.

Executive Order 13132, Federalism

    This proposed rule does not have federalism implications and does 
not impose substantial direct compliance costs on State and local 
governments or preempt State law within the meaning of Executive Order 
13132 (entitled ``Federalism'').

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) requires Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and on 
the private sector. This proposed rule does not impose, within the 
meaning of the UMRA, any Federal mandates on any State, local, or 
tribal governments or on the private sector.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Individuals with disabilities, 
Loan programs--housing and community development, Low and moderate 
income housing, Mortgage insurance, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements.

24 CFR Part 92

    Administrative practice and procedure, Grant programs--housing and 
community development, Grant programs--Indians, Low and moderate income 
housing, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

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 574

    AIDS, Community facilities, Disabled, Emergency shelter, Grant 
programs--health programs, Grant programs--housing and community 
development, Grant programs--social programs, Homeless, Housing, Low 
and moderate income housing, Nonprofit organizations, Rent subsidies, 
Reporting and recordkeeping requirements, Technical assistance.

24 CFR Part 582

    Homeless, Rent subsidies, Reporting and recordkeeping requirements, 
Supportive housing programs--housing and community development, 
Supportive services.

24 CFR Part 583

    Homeless, Rent subsidies, Reporting and recordkeeping requirements, 
Supportive housing programs--housing and community development, 
Supportive services.

24 CFR Part 891

    Aged, Capital advance programs, Civil rights, Grant programs--
housing and community development, Individuals with disabilities, Loan 
programs--housing and community development, Low and moderate income 
housing, Mental health programs, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 982

    Grant programs--Housing and community development, Housing, Rent 
subsidies.
    Accordingly, HUD proposes to amend parts 5, 92, 200, 236, 574, 582, 
583, 891 and 982 of title 24 of the Code of Federal Regulations as 
follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for part 5 continues to read as follows:

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.
    2. The heading for subpart F is revised to read as follows:

Subpart F--Section 8 and Public Housing, and Other HUD Assisted 
Housing Serving Persons with Disabilities: Family Income and Family 
Payment; Occupancy Requirements for Section 8 Project-Based 
Assistance

    3. Section 5.601 is revised to read as follows:


Sec. 5.601  Purpose and applicability.

    This subpart states HUD requirements on the following subjects:
    (a) Determining annual and adjusted income of families who apply 
for or receive assistance in the Section 8 (tenant-based and project-
based) and public housing programs;
    (b) Determining payments by and utility reimbursements to families 
assisted in these programs;
    (c) Additional occupancy requirements that apply to the Section 8 
project-based assistance programs. These additional requirements 
concern:
    (1) Income-eligibility and income-targeting when a Section 8 owner 
admits families to a Section 8 project or unit;
    (2) Owner selection preferences;
    (3) Owner reexamination of family income and composition.
    (d) Determining adjusted income, as provided in Sec. 5.611(a) and 
(b), for families who apply for or receive assistance under the 
following programs: HOME Investment Partnerships Program (24 CFR part 
92); Rent Supplement Payments Program (24 CFR part 200, subpart W); 
Rental Assistance Payments Program (24 CFR part 236, subpart D); 
Housing Opportunities for Persons with AIDS (24 CFR part 574); Shelter 
Plus Care Program (24 CFR part 582); Supportive Housing Program 
(McKinney Act Homeless Assistance) (24 CFR part 583); Section 202 
Supportive Housing Program for the Elderly (24 CFR 891, subpart B); 
Section 202 Direct Loans for Housing for the Elderly and Persons with 
Disabilities (24 CFR part 891, subpart E) and the Section 811 
Supportive Housing for Persons with Disabilities (24 CFR part 891, 
subpart C). Unless specified in the regulations for each of the 
programs listed in paragraph (d) of this section or in another 
regulatory section of this part 5, subpart F, the regulations in part 
5, subpart F, generally are not applicable to these programs.
    (e) Determining earned income disregard for persons with 
disabilities, as provided in Sec. 5.617, for the following programs: 
HOME Investment Partnerships Program (24 CFR part 92); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Supportive 
Housing Program (McKinney Act Homeless Assistance) (24 CFR part 583); 
and the Housing Choice Voucher Program (24 CFR part 982).
    4. In Sec. 5.603, paragraph (a)(1) is revised and a new definition 
of ``responsible entity'' is added to paragraph (b) to read as follows:


Sec. 5.603  Definitions.

* * * * *
    (a) Terms found elsewhere in part 5.

[[Page 50846]]

    (1) Subpart A. The terms 1937 Act, elderly person, public housing, 
public housing agency (PHA), responsible entity and Section 8 are 
defined in Sec. 5.100.
* * * * *
    (b) * * *
    Responsible entity. For Sec. 5.611, in addition to the definition 
of ``responsible entity'' in Sec. 5.100, and for Sec. 5.617, in 
addition to only that part of the definition of ``responsible entity'' 
in Sec. 5.100 which addresses the Section 8 program covered by 
Sec. 5.617 (public housing is not covered by Sec. 5.617), ``responsible 
entity'' means:
    (1) For the HOME Investment Partnerships Program, the participating 
jurisdiction, as defined in 24 CFR 92.2;
    (2) For the Rent Supplement Payments Program, the owner of the 
multifamily project;
    (3) For the Rental Assistance Payments Program, the owner of the 
Section 236 project;
    (4) For the Housing Opportunities for Persons with AIDS (HOPWA) 
program, the applicable ``State'' or ``unit of general local 
government'' or ``nonprofit organization'' as these terms are defined 
in 24 CFR 574.3, that administers the HOPWA Program;
    (5) For the Shelter Plus Care Program, the ``Recipient'' as defined 
in 24 CFR 582.5;
    (6) For the Supportive Housing Program, the ``recipient'' as 
defined in 24 CFR 583.5;
    (7) For the Section 202 Supportive Housing Program for the Elderly, 
the ``Owner'' as defined in 24 CFR 891.205;
    (8) For the Section 202 Direct Loans for Housing for the Elderly 
and Persons with Disabilities), the ``Borrower'' as defined in 24 CFR 
891.505; and
    (9) For the Section 811 Supportive Housing Program for Persons with 
Disabilities, the ``owner'' as defined in 24 CFR 891.305.
* * * * *
    5. Revise Sec. 5.611 to read as follows:


Sec. 5.611  Adjusted income.

    Adjusted income means annual income (as determined by the 
responsible entity, defined in Sec. 5.100 and Sec. 5.603) of the 
members of the family residing or intending to reside in the dwelling 
unit, after making the following deductions:
    (a) Mandatory deductions. In determining adjusted income, the 
responsible entity must deduct the following amounts from annual 
income:
    (1) $480 for each dependent;
    (2) $400 for any elderly family or disabled family;
    (3) The sum of the following, to the extent the sum exceeds three 
percent of annual income:
    (i) Unreimbursed medical expenses of any elderly family or disabled 
family; and
    (ii) Unreimbursed reasonable attendant care and auxiliary apparatus 
expenses for each member of the family who is a person with 
disabilities, to the extent necessary to enable any member of the 
family (including the member who is a person with disabilities) to be 
employed. This deduction may not exceed the earned income received by 
family members who are 18 years of age or older and who are able to 
work because of such attendant care or auxiliary apparatus; and
    (4) Any reasonable child care expenses necessary to enable a member 
of the family to be employed or to further his or her education.
    (b) Additional deductions. (1) For public housing, a PHA may adopt 
additional deductions from annual income. The PHA must establish a 
written policy for such deductions.
    (2) For the HUD programs listed in Sec. 5.601(d), the responsible 
entity shall calculate such other deductions as required and permitted 
by the applicable program regulations.
    6. A new Sec. 5.617 is added to read as follows:


Sec. 5.617  Self-sufficiency incentives for persons with disabilities--
Disallowance of increase in annual income.

    (a) The disallowance of increase in annual income provided by this 
section is applicable only to the following programs: HOME Investment 
Partnerships Program (24 CFR part 92); Housing Opportunities for 
Persons with AIDS (24 CFR part 574); Supportive Housing Program (24 CFR 
part 583); and the Housing Choice Voucher Program (24 CFR part 982).
    (b) Definitions. The following definitions apply for purposes of 
this section.
    Disallowance. Exclusion from annual income.
    Previously unemployed includes a person with disabilities who has 
earned, in the twelve months previous to employment, no more than would 
be received for 10 hours of work per week for 50 weeks at the 
established minimum wage.
    Qualified family. A disabled family residing in housing assisted 
under one of the programs listed in paragraph (a) of this section or 
receiving tenant-based rental assistance under one of the programs 
listed in paragraph (a) of this section:
    (1) Whose annual income increases as a result of employment of a 
family member who is a person with disabilities and who was previously 
unemployed for one or more years prior to employment;
    (2) Whose annual income increases as a result of increased earnings 
by a family member who is a person with disabilities during 
participation in any economic self-sufficiency or other job training 
program; or
    (3) Whose annual income increases, as a result of new employment or 
increased earnings of a family member who is a person with 
disabilities, during or within six months after receiving assistance, 
benefits or services under any state program for temporary assistance 
for needy families funded under Part A of Title IV of the Social 
Security Act, as determined by the responsible entity in consultation 
with the local agencies administering temporary assistance for needy 
families (TANF) and Welfare-to-Work (WTW) programs. The TANF program is 
not limited to monthly income maintenance, but also includes such 
benefits and services as one-time payments, wage subsidies and 
transportation assistance--provided that the total amount over a six-
month period is at least $500.
    (c) Disallowance of increase in annual income.
    (1) Initial twelve month exclusion. During the cumulative twelve 
month period beginning on the date a member who is a person with 
disabilities of a qualified family is first employed or the family 
first experiences an increase in annual income attributable to 
employment, the responsible entity must exclude from annual income (as 
defined in the regulations governing the applicable program listed in 
paragraph (a) of this section) of a qualified family any increase in 
income of the family member who is a person with disabilities as a 
result of employment over prior income of that family member.
    (2) Second twelve month exclusion and phase-in. During the second 
cumulative twelve month period after the date a member who is a person 
with disabilities of a qualified family is first employed or the family 
first experiences an increase in annual income attributable to 
employment, the responsible entity must exclude from annual income of a 
qualified family fifty percent of any increase in income of such family 
member as a result of employment over income of that family member 
prior to the beginning of such employment.
    (3) Maximum four year disallowance. The disallowance of increased 
income of an individual family member who is

[[Page 50847]]

a person with disabilities as provided in paragraph (c)(1) or (c)(2) is 
limited to a lifetime 48 month period. The disallowance only applies 
for a maximum of twelve months for disallowance under paragraph (c)(1) 
and a maximum of twelve months for disallowance under paragraph (c)(2), 
during the 48 month period starting from the initial exclusion under 
paragraph (c)(1) of this section.
    (d) Inapplicability to admission. The disallowance of increases in 
income as a result of employment of persons with disabilities under 
this section does not apply for purposes of admission to the program 
(including the determination of income eligibility or any income 
targeting that may be applicable).

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

    7. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

    8. In Sec. 92.203, a new paragraph (d)(3) is added to read as 
follows:


Sec. 92.203  Income determinations.

* * * * *
    (d) * * *
    (3) The participating jurisdiction must follow the requirements in 
Sec. 5.617 when making subsequent income determinations of persons with 
disabilities who are tenants in HOME-assisted rental housing or who 
receive tenant-based rental assistance.

PART 200--INTRODUCTION TO FHA PROGRAMS

    9. The authority citation for part 200 continues to read as 
follows:


    Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).

    10. Section 200.1303 is revised to read as follows;


Sec. 200.1303  Annual income exclusions for the Rent Supplement 
Program.

    (a) The exclusions to annual income described in 24 CFR 5.609(c) 
apply to those rent supplement contracts governed by the regulations at 
24 CFR part 215 in effect immediately before May 1, 1996 (contained in 
the April 1, 1995 edition of 24 CFR, parts 200 to 219), in lieu of the 
annual income exclusions described in 24 CFR 215.21(c) (contained in 
the April 1, 1995 edition of 24 CFR, parts 200 to 219).
    (b) The mandatory deductions described in 24 CFR 5.611(a) also 
apply to the rent supplement contracts described in paragraph (a) of 
this section in lieu of the deductions provided in the definition of 
``adjusted income'' in 24 CFR 215.1 (as contained in the April 1, 1995 
edition of 24 CFR, parts 200 to 219).
    (c) The definition of ``persons with disabilities'' in paragraph 
(c) of this section replaces the terms ``disabled person'' and 
``handicapped person'' used in the regulations in 24 CFR part 215, 
subpart A (as contained in the April 1, 1995 edition of 24 CFR, parts 
200 to 219). Person with disabilities, as used in this part, has the 
same meaning as provided in 24 CFR 891.305.

PART 236--MORTGAGE INSURANCE AND INTEREST REDUCTION PAYMENT FOR 
RENTAL PROJECTS

    11. The authority citation for part 236 continues to read as 
follows:


    Authority: 12 U.S.C. 1701-1715z-1; 42 U.S.C. 3535(d).

Subpart D--Rental Assistance Payments

    12. Section 236.710 is revised to read as follows;


Sec. 236.710  Qualified tenant.

    (a) The benefits of rental assistance payments are available only 
to an individual or a family who is renting a dwelling unit in a 
project that is subject to a contract entered into under the 
requirements of this subpart or who is occupying such a dwelling unit 
as a cooperative member. To qualify for the benefits of rental 
assistance payments, the individual or family must satisfy the 
definition of Qualified Tenant found in Sec. 236.2 of subpart A 
(contained in the April 1, 1995 edition of 24 CFR, parts 220 to 499; 
see the Savings clause at Sec. 236.1(c)).
    (b) To receive rental assistance under this subpart, the income of 
the individual or family must be determined to be too low to permit the 
individual or family to pay the approved Gross Rent with 30 percent of 
the individual's or family's Adjusted Monthly Income, as defined in 
Sec. 236.2 of subpart A (contained in the April 1, 1995 edition of 24 
CFR, parts 220 to 499). Determination of the Adjusted Monthly Income 
must include the deductions required for adjusted income in 24 CFR 
5.611(a) in lieu of the deductions provided in the definition of 
``adjusted income'' in 24 CFR 236.2 (contained in the April 1, 1995 
edition of 24 CFR, parts 220 to 499; see the Savings clause at 
Sec. 236.1(c)).
    (c) For requirements concerning the disclosure and certification of 
Social Security Numbers, see 24 CFR part 5, subpart B. For requirements 
regarding the signing and submitting of consent forms for the obtaining 
of wage and claim information from State Wage Information Collection 
Agencies, see 24 CFR part 5, subpart B. For restrictions on financial 
assistance to noncitizens with ineligible immigration status, see 24 
CFR part 5, subpart E.
    (d) The definition of ``persons with disabilities'' in paragraph 
(d) of this section replaces the terms ``disabled person'' and 
``handicapped person'' used in the regulations in 24 CFR part 236, 
subpart A (contained in the April 1, 1995 edition of 24 CFR, parts 220 
to 499; see the Savings clause at Sec. 236.1(c)). Person with 
disabilities, as used in this part, has the same meaning as provided in 
24 CFR 891.305;.

PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

    13. The authority citation for part 574 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 12901-12912.

    14. Paragraphs (d)(1) and (d)(3) of Sec. 574.310 are revised to 
read as follows:


Sec. 574.310  General standards for eligible housing activities.

* * * * *
    (d) Resident rent payment. * * *
    (1) 30 percent of the family's monthly adjusted income (adjustment 
factors include the age of the individual, medical expenses, size of 
family and child care expenses and are described in detail in 24 CFR 
5.609). The calculation of the family's monthly adjusted income must 
include the expense deductions provided in 24 CFR 5.611(a), and for 
eligible persons, the calculation of monthly adjusted income also must 
include the disallowance of earned income as provided in 24 CFR 5.617, 
if applicable;
* * * * *
    (3) If the family is receiving payments for welfare assistance from 
a public agency and a part of the payments, adjusted in accordance with 
the family's actual housing costs, is specifically designated by the 
agency to meet the family's housing costs, the portion of the payment 
that is designated for housing costs.
* * * * *

PART 582--SHELTER PLUS CARE

    15. The authority citation for part 582 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 11403-11407b.

    16. Section 582.310 is revised to read as follows:

[[Page 50848]]

Sec. 582.310  Resident rent.

    (a) Amount of rent. Each participant must pay rent in accordance 
with section 3(a)(1) of the U.S. Housing Act of 1937 (42 U.S.C. 
1437a(a)(1)), except that in determining the rent of a person occupying 
an intermediate care facility assisted under title XIX of the Social 
Security Act, the gross income of this person is the same as if the 
person were being assisted under title XVI of the Social Security Act.
    (b) Calculating income. (1) Income of participants must be 
calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a).
    (2) Recipients must examine a participant's income initially, and 
at least annually thereafter, to determine the amount of rent payable 
by the participant. Adjustments to a participant's rental payment must 
be made as necessary.
    (3) As a condition of participation in the program, each 
participant must agree to supply the information or documentation 
necessary to verify the participant's income. Participants must provide 
the recipient information at any time regarding changes in income or 
other circumstances that may result in changes to a participant's 
rental payment.

PART 583--SUPPORTIVE HOUSING PROGRAM

    17. The authority citation for part 583 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 11389.

    18. In Sec. 583.315, paragraph (a) is revised to read as follows:


Sec. 583.315  Resident rent.

    (a) Calculation of resident rent. Each resident of supportive 
housing may be required to pay as rent an amount determined by the 
recipient which may not exceed the highest of:
    (1) 30 percent of the family's monthly adjusted income (adjustment 
factors include the number of people in the family, age of family 
members, medical expenses and child care expenses). The calculation of 
the family's monthly adjusted income must include the expense 
deductions provided in 24 CFR 5.611(a), and for persons with 
disabilities, the calculation of the family's monthly adjusted income 
also must include the disallowance of earned income as provided in 24 
CFR 5.617, if applicable;
    (2) 10 percent of the family's monthly gross income; or
    (3) If the family is receiving payments for welfare assistance from 
a public agency and a part of the payments, adjusted in accordance with 
the family's actual housing costs, is specifically designated by the 
agency to meet the family's housing costs, the portion of the payment 
that is designated for housing costs.
* * * * *

PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH 
DISABILITIES

    19. The authority citation for part 891 continues to read as 
follows:

    Authority: 12 U.S.C. 1701q, 42 U.S.C. 1437f, 3535(d) and 8013.

    20. In Sec. 891.105, the definitions of Annual Income, Total Tenant 
Payment, and Utility Allowance are revised and a new definition of 
Adjusted Income is added to read as follows:


Sec. 891.105  Definitions.

* * * * *
    Adjusted income as defined in part 5, subpart F of subtitle A of 
this title.
    Annual income as defined in part 5, subpart F of subtitle A of this 
title. In the case of an individual residing in an intermediate care 
facility for the developmentally disabled that is assisted under title 
XIX of the Social Security Act and this part, the annual income of the 
individual shall exclude protected personal income as provided under 
that Act. For purposes of determining the total tenant payment, the 
income of such individuals shall be imputed to be the amount that the 
household would receive if assisted under title XVI of the Social 
Security Act.
* * * * *
    Total tenant payment means the monthly amount defined in, and 
determined in accordance with part 5, subpart F of subtitle A of this 
title.
    Utility allowance is defined in part 5, subpart F of this subtitle 
A of this title and is determined or approved by HUD.
    21. In part 891, revise the heading of subpart E to read as 
follows:

Subpart E--Loans for Housing for the Elderly and Persons with 
Disabilities

    22. In Sec. 891.520, the definitions of Gross Rent, Tenant Rent, 
Total Tenant Payment, Utility Allowance, and Utility Reimbursement are 
revised and a new definition of Adjusted Income is added to read as 
follows:


Sec. 891.520  Definitions applicable to 202/8 projects.

* * * * *
    Adjusted income as defined in part 5, subpart F of subtitle A of 
this title.
    Gross rent is defined in part 5, subpart F of subtitle A of this 
title.
* * * * *
    Tenant rent means the monthly amount defined in, and determined in 
accordance with part 5, subpart F of subtitle A of this title.
    Total tenant payment means the monthly amount defined in, and 
determined in accordance with part 5, subpart F of subtitle A of this 
title.
    Utility allowance is defined in part 5, subpart F of subtitle A of 
this title and is determined or approved by HUD.
    Utility reimbursement is defined in part 5, subpart F of subtitle A 
of this title.

PART 982--SECTION 8 TENANT BASED ASSISTANCE: HOUSING CHOICE VOUCHER 
PROGRAM

    23. The authority citation for part 982 continues to read as 
follows:

    Authority: 42 U.S.C. 1437f and 3535(d).

    24. In Sec. 982.201, paragraph (b)(3) is revised to read as 
follows:


Sec. 982.201  Eligibility and targeting.

* * * * *
    (b) * * *
    (3) The annual income (gross income) of an applicant family is used 
both for determination of income-eligibility under paragraph (b)(1) of 
this section and for targeting under paragraph (b)(2)(i) of this 
section. In determining annual income of an applicant family which 
includes persons with disabilities, the determination must include the 
disallowance of increase in annual income as provided in 24 CFR 5.617, 
if applicable.
* * * * *

    Dated: July 25, 2000.
Andrew Cuomo,
Secretary.
[FR Doc. 00-20802 Filed 8-18-00; 8:45 am]
BILLING CODE 4210-32-P