[Federal Register Volume 67, Number 138 (Thursday, July 18, 2002)]
[Rules and Regulations]
[Pages 47430-47432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18051]



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Part II





Department of Housing and Urban Development





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24 CFR Part 5



Temporary Assistance for Needy Families (TANF) Program; Conforming 
Changes to Annual Income Requirements for HUD's Public Housing and 
Section 8 Assistance Program; Final Rule

  Federal Register / Vol. 67, No. 138 / Thursday, July 18, 2002 / Rules 
and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

[Docket No. FR-4635-F-02]
RIN 2501-AC77


Temporary Assistance for Needy Families (TANF) Program; 
Conforming Changes to Annual Income Requirements for HUD's Public 
Housing and Section 8 Assistance Programs

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This final rule updates and clarifies HUD's annual income 
requirements for its public housing and Section 8 assistance programs. 
Specifically, the final rule clarifies that annual income includes 
payments under the Temporary Assistance for Needy Families (TANF) 
program, but only to the extent such payments qualify as ``assistance'' 
under the TANF program regulations issued by the Department of Health 
and Human Services (HHS) and are not otherwise excluded under HUD's 
regulation. This final rule follows publication of an April 20, 2001, 
proposed rule and takes into consideration public comments received on 
the proposed rule. After careful consideration of the comments, HUD has 
decided to adopt the proposed rule without change.

DATES: Effective Date: August 19, 2002.

FOR FURTHER INFORMATION CONTACT: Patricia Arnaudo, Senior Programs 
Manager, Department of Housing and Urban Development, Office of Public 
and Indian Housing, 451 Seventh Street, SW, Room 4222, Washington, DC 
20410; telephone (202) 708-0744 (this is not a toll-free telephone 
number). Persons with hearing or speech impairments may access this 
number via TTY by calling the toll-free Federal Information Relay 
Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:   

I. Background

    On April 20, 2001 (66 FR 20368), HUD published a proposed rule to 
update and clarify HUD's annual income requirements for its public 
housing and Section 8 assistance programs. The changes are intended to 
ensure greater conformity between HUD's annual income requirements and 
the TANF program regulations, and to make the annual income 
requirements easier to understand for both program participants and 
public housing agencies.

A. HUD's Annual Income Requirements

    HUD's regulations at 24 CFR part 5, subpart F, establish 
requirements governing the determination of annual income of families 
who apply for, or receive assistance under, the Section 8 and public 
housing programs. The HUD regulations define ``annual income'' to mean 
all amounts, monetary or not, which:
    (1) Go to, or on behalf of, the family head or spouse (even if 
temporarily absent) or to any other family member;
    (2) Are anticipated to be received from a source outside the family 
during the upcoming 12 month period; and
    (3) Are not excluded under Sec. 5.609(c).
    Section 5.609(b)(6) establishes the requirements determining the 
amount of income when the welfare assistance payment includes an amount 
specifically designated for shelter and utilities that is subject to 
adjustment by the welfare assistance agency in accordance with the 
actual costs of these items. The term ``welfare assistance'' is defined 
at Sec. 5.603. Specifically, this term is defined to mean ``[w]elfare 
or other payments to families or individuals, based on need, that are 
made under programs funded, separately or jointly, by Federal, State, 
or local governments.''

B. ``Assistance'' Under the Temporary Assistance for Needy Families 
(TANF) Program

    HUD's definition of ``welfare assistance'' at Sec. 5.603 includes 
assistance provided under the Temporary Assistance for Needy Families 
(TANF) program. The TANF block grant program replaced the existing 
welfare program known as Aid to Families with Dependent Children 
(AFDC), which provided cash assistance to needy families on an 
entitlement basis. It also replaced the related programs known as the 
Job Opportunities and Basic Skills Training program (JOBS) and 
Emergency Assistance (EA).

II. HUD's Proposed Rule

    On April 20, 2001, HUD published a proposed rule that would make 
two changes designed to clarify the relationship between HUD's annual 
income requirements for its Section 8 and public housing programs, and 
the TANF program definition of ``assistance.'' First, the rule would 
clarify that the term ``welfare assistance,'' for purposes of 
calculating annual income, includes TANF payments, but only to the 
extent such payments meet the definition of ``assistance'' under 45 CFR 
260.31 and are not otherwise excluded under Sec. 5.609(c).
    Second, the rule would clarify the definition of ``welfare 
assistance'' at Sec. 5.603. Specifically, the April 20, 2001, rule 
proposed to clarify that welfare assistance includes TANF 
``assistance,'' as that term is defined by the HHS regulation at 45 CFR 
260.31.
    HUD proposed these clarifications to make the annual income 
requirements easier to understand for program participants and public 
housing agencies. The amendments were also designed to ensure greater 
conformity between the annual income requirements and the TANF program 
regulations.

III. This Final Rule

    This final rule follows publication of the April 20, 2001, proposed 
rule, and takes into consideration the public comments received on the 
proposed rule. This final rule adopts the proposed rule and makes no 
changes.

IV. Discussion of Public Comments on the April 20, 2001, Proposed Rule

    The public comment period on the April 20, 2001, proposed rule 
closed on June 19, 2001. HUD received three comments, two from public 
housing agencies (PHAs) and one from a nonpartisan research 
organization.
    This section of the preamble presents a summary of the significant 
issues raised by the public commenters on the April 20, 2001, proposed 
rule and HUD's responses to these comments.
    One commenter wrote to express support for the proposed change to 
the definition of the term ``welfare assistance'' to include the TANF 
program definition of ``assistance'' under HHS regulation 45 CFR 
260.31. The commenter wrote that the proposed changes will reduce 
conflicting interpretations of ``welfare assistance'' given to families 
who receive both TANF and housing assistance.
    Comment: Modification to exclude TANF-funded food assistance for 
legal immigrants. One commenter, who expressed support for the proposed 
rule, recommended one modification to the proposed rule. The suggested 
modification was to exclude TANF-funded food assistance for legal 
immigrants that some states have chosen to provide after the 1996 
restrictions.
    HUD Response: HUD declines to adopt the suggestion to specifically 
exclude this type of assistance. The purpose of this rule is to clarify 
the relationship between HUD's annual income requirements for assisted 
housing purposes and the TANF

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program definition of assistance, not to add additional exclusions to 
the definition of annual income. The rule provides that annual income 
includes TANF payments, but only to the extent such payments meet the 
definition of ``assistance'' under regulations promulgated by HHS at 45 
CFR 260.31, and are not otherwise excluded under 24 CFR 5.609(c). 
Therefore, if a specific type of assistance does not meet the 
definition of assistance under the TANF regulation, then it would be 
excluded for HUD purposes.
    Comment: HUD should clarify the interaction of the revised 
definition of ``welfare assistance'' with existing rules. The commenter 
suggested that HUD clarify the interaction of the revised definition of 
``welfare assistance'' with existing rules on exclusions from income. 
In addition, the clarification should be included in the preamble to 
the final rule as well as in the implementing instructions.
    HUD Response: The preamble to the proposed rule clarified that 
``welfare assistance'' included TANF payments, but only to the extent 
such payments meet the definition of ``assistance'' under 45 CFR 260.31 
and are not otherwise excluded under 24 CFR 5609(c). This is also 
reflected in the revised regulation at 24 CFR 5.609(b)(6)(i)(B). HUD 
believes that this language is sufficient to address the interaction of 
the revised definition of ``welfare assistance'' with existing 
regulations. As a result, HUD has not adopted this suggestion.
    Comment: HUD should give specific examples (without limitation) of 
the types of common TANF payments that would be excluded from income by 
the new rule. The commenter used as an example that the proposed rule 
would exclude TANF funded one-time payments such as utility arrears, 
because such one-time or short-term payments are excluded from the TANF 
definition of assistance. The commenter would like to see other 
specific examples of payments that are excluded.
    HUD Response: HUD has not adopted this suggestion. HUD will not 
give specific examples within the regulation. The TANF program 
regulations are discussed in the preamble, and will only be referenced 
by citation in the HUD regulations. It is important that PHAs and local 
TANF agencies work closely if there are questions related to 
interpretation of HUD or TANF regulations. HUD will also consider 
developing additional guidance on this subject which would be available 
on the HUD website and in future issuances.
    Comment: The proposed rule also invited comments on the utility of 
HUD's previous guidance (PIH 2000-11) on the development of cooperative 
agreements between PHAs and welfare offices, and on whether other 
guidance and training is needed to further public housing and welfare 
coordination. One commenter thought it would be helpful to request that 
PHAs, on a voluntary basis, submit to HUD copies of cooperative 
agreements to share ideas with other PHAs. Further, the commenter 
suggested that there is a great need for further guidance and training 
for PHAs and welfare agencies on areas of beneficial coordination such 
as Family Self-Sufficiency (FSS), earnings disregards and other rent-
based work incentives, Section 3 requirements, etc.
    HUD Response: HUD appreciates the comments and will take them into 
consideration.
    Comment: The proposed clarification does not show the exclusions as 
defined under the new definition of ``Welfare Assistance.'' One 
commenter noted that the ``welfare assistance'' definition underwent a 
change in the year 2000, which excluded (for the purposes of the FSS 
program only) the following:
    (1) Amounts solely directed to meet housing expenses.
    (2) Amounts for health care.
    (3) Food stamps and emergency rental and utilities assistance.
    (4) SSI, SSDI, or Social Security.
    The commenter wrote that HUD's proposed clarification does not show 
any of the above line items as being excluded. The commenter stated, 
``welfare assistance, if once again included in the above items, may 
cause many families who are moving toward self sufficiency to be 
derailed.'' The commenter would like to see these items remain excluded 
from the definition of ``welfare assistance'' for the FSS program.
    HUD Response: The definition for ``welfare assistance'' for 
purposes of the FSS program only (24 CFR 984.103) was changed by the 
final rule (Changes to Admission and Occupancy Requirements in the 
Public Housing and Section 8 Housing Assistance Programs, published in 
the Federal Register on March 29, 2000 (65 FR 16692)), to refer only to 
cash maintenance payments for ongoing basic needs, funded under Federal 
or State welfare programs such as the TANF program. This definition, 
for purposes of the FSS program only, remains unchanged and is not 
affected by this final rule.

V. Findings and Certifications

Environmental Impact

    This final rule involves the discretionary establishment of income 
limits and exclusions with regard to eligibility for or calculation of 
HUD housing assistance or rental assistance, which does not constitute 
a development decision that affects the physical condition of specific 
project areas or building sites. Accordingly, under 24 CFR 50.19(c)(6), 
this rule is categorically excluded from environmental review under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this rule and in so doing 
certifies that this rule would not have a significant economic impact 
on a substantial number of small entities. There are no anti-
competitive discriminatory aspects of the rule with regard to small 
entities, and there are no unusual procedures that would need to be 
complied with by small entities.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of Section 6 of the Executive Order. This rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive Order.

Unfunded Mandates Reform Act

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

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers for these 
programs are 14.850 and 14.871.

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List of Subjects in 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.

    Accordingly, for the reasons described in the preamble, 24 CFR part 
5 is amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for 24 CFR part 5 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.

Subpart F--Section 8 and Public Housing; Family Income and Family 
Payment; Occupancy Requirements for Section 8 Project-Based 
Assistance

    2. The authority citation for subpart F continues to read as 
follows:

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


    3. In Sec. 5.603(b), revise the definition of ``Welfare 
assistance'' to read as follows:


Sec. 5.603  Definitions.

* * * * *
    (b) * * *
    Welfare assistance. Welfare or other payments to families or 
individuals, based on need, that are made under programs funded, 
separately or jointly, by Federal, State or local governments 
(including assistance provided under the Temporary Assistance for Needy 
Families (TANF) program, as that term is defined under the implementing 
regulations issued by the Department of Health and Human Services at 45 
CFR 260.31).
* * * * *

    4. Revise Sec. 5.609(b)(6) to read as follows:


Sec. 5.609  Annual income.

* * * * *
    (b) * * *
    (6) Welfare assistance payments.
    (i) Welfare assistance payments made under the Temporary Assistance 
for Needy Families (TANF) program are included in annual income only to 
the extent such payments:
    (A) Qualify as assistance under the TANF program definition at 45 
CFR 260.31; and
    (B) Are not otherwise excluded under paragraph (c) of this section.
    (ii) If the welfare assistance payment includes an amount 
specifically designated for shelter and utilities that is subject to 
adjustment by the welfare assistance agency in accordance with the 
actual cost of shelter and utilities, the amount of welfare assistance 
income to be included as income shall consist of:
    (A) The amount of the allowance or grant exclusive of the amount 
specifically designated for shelter or utilities; plus
    (B) The maximum amount that the welfare assistance agency could in 
fact allow the family for shelter and utilities. If the family's 
welfare assistance is ratably reduced from the standard of need by 
applying a percentage, the amount calculated under this paragraph shall 
be the amount resulting from one application of the percentage.
* * * * *

    Dated: July 8, 2002.
Mel Martinez,
Secretary.
[FR Doc. 02-18051 Filed 7-17-02; 8:45 am]
BILLING CODE 4210-33-P