[Federal Register Volume 70, Number 250 (Friday, December 30, 2005)]
[Rules and Regulations]
[Pages 77742-77745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24672]



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Part VIII





Department of Housing and Urban Development





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24 CFR Parts 5, 880, 883, et al.



Eligibility of Students for Assisted Housing Under Section 8 of the 
U.S. Housing Act of 1937; Final Rule

  Federal Register / Vol. 70, No. 250 / Friday, December 30, 2005 / 
Rules and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 880, 883, 884, 886, 891, and 982

[Docket No. FR-5036-F-01]
RIN 2501-AD19


Eligibility of Students for Assisted Housing Under Section 8 of 
the U.S. Housing Act of 1937

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This rule implements a new law, enacted as part of HUD's 
Fiscal Year (FY) 2006 appropriations, that restricts individuals 
enrolled in an institution of higher education and who meet certain 
other requirements from receiving assistance under section 8 of the 
U.S. Housing Act of 1937. The new law directed HUD to issue a final 
rule within 30 days of enactment of the new law. This rule fulfills the 
statutory requirement.

DATES: Effective Date: January 30, 2006.

FOR FURTHER INFORMATION CONTACT: For Section 8 voucher issues, Alfred 
C. Jurison, Director, Housing Voucher Management and Operations 
Division, Office of Public and Indian Housing, Room 4210, telephone 
(202) 708-0477; for the Office of Housing's project-based Section 8, 
Gail Williamson, Director, Housing Assistance Policy Division, Room 
6180, telephone (202) 708-3000. For all of the individuals, the address 
is Department of Housing and Urban Development, 451 Seventh Street, 
SW., Washington, DC 20410-8000. None of the aforementioned telephone 
numbers are toll-free numbers. Persons with hearing or speech 
impairments may access this number through TTY by calling the toll-free 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    Fiscal Year (FY) 2006 appropriations for HUD were recently enacted 
in Public Law 109-115 (119 Stat. 2936), which was approved on November 
30, 2005 (the Act). HUD's appropriations are found in Title III of this 
law. Section 327 of the administrative provisions of Title III place 
restrictions on housing assistance that can be provided to students of 
higher education under Section 8 of the U.S. Housing Act of 1937 (42 
U.S.C. 1437f). Specifically, Section 327 of Public Law 109-115 (Section 
327) provides as follows:
    ``Sec. 327. (a) No assistance shall be provided under Section 8 of 
the United States Housing Act of 1937 (42 U.S.C. 1437f) to any 
individual who--
    (1) Is enrolled as a student at an institution of higher education 
(as defined under section 102 of the Higher Education Act of 1965 (20 
U.S.C. 1002));
    (2) Is under 24 years of age;
    (3) Is not a veteran;
    (4) Is unmarried;
    (5) Does not have a dependent child; and
    (6) Is not otherwise individually eligible, or has parents who, 
individually or jointly, are not eligible, to receive assistance under 
section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).
    (b) For purposes of determining the eligibility of a person to 
receive assistance under section 8 of the United States Housing Act of 
1937 (42 U.S.C. 1437f), any financial assistance (in excess of amounts 
received for tuition) that an individual receives under the Higher 
Education Act of 1965 (20 U.S.C. 1001 et seq.), from private sources, 
or an institution of higher education (as defined under the Higher 
Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to 
that individual, except for a person over the age of 23 with dependent 
children.''
    The new law is intended to address recent incidents of college 
students obtaining federal housing assistance without their educational 
financial assistance counting as income for purposes of income 
eligibility for federal housing assistance. The law also describes how 
educational financial assistance is to be treated in the calculation of 
income for purposes of determining eligibility.
    Section 327 of the Act directs HUD to issue a final rule to carry 
out this section no later than 30 days from the date of enactment of 
the law. Since HUD finds the restrictions of the law to be clear, this 
final rule codifies the restrictions largely as set forth in the 
statute.
    HUD strongly encourages public housing agencies, owners, and 
management agents administering Section 8 programs to, as soon as it is 
practicable, recertify existing Section 8 participants that have family 
members that may meet the requirements of Section 327 of the Act. 
Prompt recertification, in addition to careful applicant screening, 
will ensure compliance with the restrictions of the new law.

II. This Final Rule

    This final rule amends 24 CFR part 5, subpart F, which addresses 
income eligibility in assisted housing, among other matters, to 
incorporate the provisions of the new law. Specifically, this rule 
makes the following amendments to 24 CFR part 5, subpart F.
    Section 5.609(b) of subpart F, which lists forms of compensation 
that are calculated as income, is amended to include as income, for 
programs under section 8 of the U.S. Housing Act of 1937 (section 8), 
the educational financial assistance described in Section 327(b) of the 
Act, except for persons over the age of 23 with dependent children. 
Section 327(b) provides for such exemption for persons over the age of 
23 with dependent children. HUD has interpreted the term ``financial 
assistance'' as used in Section 327(b) to not include loan proceeds for 
the purpose of determining income.
    Section 5.609(c)(6) of subpart F lists forms of compensation that 
are excluded from the calculation of annual income. Prior to the change 
being made by this final rule, Sec.  5.609(c) provided for the full 
amount of student financial assistance paid directly to the student or 
the educational institution to be excluded from annual income. Section 
5.609(c)(6) is amended to provide, by cross-reference to Sec.  
5.609(b), that the exclusion does not pertain, with regard to Section 8 
programs, to the financial assistance described in Section 327(b) of 
the Act.
    A new regulatory section, Sec.  5.612, is added to 24 CFR part 5, 
subpart F, to codify the criteria set forth in Section 327(a) of the 
Act by which an individual enrolled in an institution of higher 
education is ineligible for assistance. Subsection (a)(6) of Section 
327 concludes the list of criteria by providing that an individual who 
is enrolled in an institution of higher education is ineligible for 
assistance if the individual is not otherwise individually eligible, or 
has parents who, individually or jointly, are ineligible to receive 
assistance under Section 8. Since Section 327 is focused on income 
eligibility of a higher education student, the Department interprets 
the section's reference to the eligibility of the parents to also refer 
to income eligibility.
    In addition to the amendments made to 24 CFR part 5, subpart F, 
this final rule also makes conforming amendments to 24 CFR 880.603(b), 
24 CFR 883.302, 24 CFR 884.102, 24 CFR 886.102, 24 CFR 886.132, 24 CFR 
886.321(b), 24 CFR 891.610(c), 24 CFR 982.201, and 24 CFR 982.552.

III. Justification for Final Rule

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with its own

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regulations on rulemaking in 24 CFR part 10. Part 10, however, provides 
for exceptions to the general rule if the agency finds good cause to 
omit advanced notice and public participation. The good cause 
requirement is satisfied when prior public procedure is ``impractical, 
unnecessary, or contrary to the public interest'' (see 24 CFR 10.1). In 
this rulemaking, however, HUD is issuing a final rule to comply with a 
statutory directive to issue final regulations within 30 days of 
enactment of Public Law 109-115.

IV. Findings and Certifications

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule would impose no additional economic or other burdens on small 
entities. The entities affected by this rule are agencies administering 
tenant-based and project-assisted housing and properties that are 
already required to screen applicants applying for assistance. This 
rule provides clear directions on how educational financial assistance 
is to be calculated in an income determination prior to receiving 
assistance under section 8 of the U.S. Housing Act of 1937.

Environmental Impact

    In accordance with 24 CFR 50.19(c)(1) of the Department's 
regulations, this 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, manufactured 
housing, or occupancy. Therefore, this final rule is categorically 
excluded from the requirements of the National Environmental Policy Act 
(42 U.S.C. 4321 et seq.).

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (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 does not impose 
any federal mandates on any state, local, or tribal government or the 
private sector within the meaning of UMRA.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits, to the 
extent practicable and permitted by law, an agency from publishing any 
rule that has federalism implications and 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 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 the Executive 
Order.

List of Subjects

24 CFR Part 5

    Administrative practice and procedure; Aged; Claims; Crime; 
Government contracts; Grant programs--housing and community 
development; Individuals with disabilities; Intergovernmental 
relations; Loan programs-housing and community development; Low and 
moderate income housing; Mortgage insurance; Penalties; Pets; Public 
housing; Rent subsidies; Reporting and recordkeeping requirements; 
Social security; Unemployment compensation; Wages.

24 CFR Part 880

    Grant programs--housing and community development; Rent subsidies; 
Reporting and recordkeeping requirements.

24 CFR Part 883

    Grant programs--housing and community development; Rent subsidies; 
Reporting and recordkeeping requirements.

24 CFR Part 884

    Grant programs--housing and community development; Rent subsidies; 
Reporting and recordkeeping requirements; Rural areas.

24 CFR Part 886

    Grant programs--housing and community development; Lead poisoning; 
Rent subsidies; Reporting and recordkeeping requirements.

24 CFR Part 891

    Aged, 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; Grant programs--
Indians; Indians; Public housing; Rent subsidies; Reporting and 
recordkeeping requirements.


0
For the reasons stated in the preamble, HUD amends 24 CFR part 5 as 
follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
1. The authority citation for 24 CFR part 5 is revised to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, 3535(d), 
and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.


0
2. In Sec.  5.609, add a new paragraph (b)(9) and revise paragraph 
(c)(6) to read as follows:


Sec.  5.609  Annual income.

* * * * *
    (b) * * *
    (9) For section 8 programs only and as provided in 24 CFR 5.612, 
any financial assistance, in excess of amounts received for tuition, 
that an individual receives under the Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.), from private sources, or from an institution of 
higher education (as defined under the Higher Education Act of 1965 (20 
U.S.C. 1002)), shall be considered income to that individual, except 
that financial assistance described in this paragraph is not considered 
annual income for persons over the age of 23 with dependent children. 
For purposes of this paragraph, ``financial assistance'' does not 
include loan proceeds for the purpose of determining income.
* * * * *
    (c) * * *
    (6) Subject to paragraph (b)(9) of this section, the full amount of 
student financial assistance paid directly to the student or to the 
educational institution;
* * * * *

0
3. Add Sec.  5.612 to read as follows:


Sec.  5.612  Restrictions on assistance to students enrolled in an 
institution of higher education.

    No assistance shall be provided under section 8 of the 1937 Act to 
any individual who:
    (a) Is enrolled as a student at an institution of higher education, 
as defined under section 102 of the Higher Education Act of 1965 (20 
U.S.C. 1002);
    (b) Is under 24 years of age;
    (c) Is not a veteran of the United States military;

[[Page 77744]]

    (d) Is unmarried;
    (e) Does not have a dependent child; and
    (f) Is not otherwise individually eligible, or has parents who, 
individually or jointly, are not eligible on the basis of income to 
receive assistance under section 8 of the 1937 Act.

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

0
4. The authority citation for 24 CFR part 880 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 3535(d), 12701, 
13611-13619, and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

0
5. In Sec.  880.603(b), the introductory paragraph is revised to read 
as follows:


Sec.  880.603  Selection and admission of assisted tenants.

* * * * *
    (b) Determination of eligibility and selection of tenants. The 
owner is responsible for obtaining and verifying information related to 
income eligibility in accordance with 24 CFR part 5, subpart F, and 
evidence related to citizenship and eligible immigration status in 
accordance with 24 CFR part 5, subpart E, to determine whether the 
applicant is eligible for assistance in accordance with the 
requirements of 24 CFR part 5, and to select families for admission to 
the program, which includes giving selection preferences in accordance 
with 24 CFR part 5, subpart D.
* * * * *

PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

0
6. The authority citation for 24 CFR part 883 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 13611-13619, 
and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

0
7. In Sec.  883.302, the definitions of Family and Low-Income Family 
are removed and the definition of Annual Income is revised to read as 
follows:


Sec.  883.302  Definitions.

* * * * *
    Annual Income. As defined in part 5 of this title.
* * * * *

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

0
8. The authority citation for 24 CFR part 884 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 13611-13619, 
and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

0
9. In Sec.  884.102, the definition of Income is revised to read as 
follows:


Sec.  884.102  Definitions.

* * * * *
    Income. Income from all sources of each member of the household as 
determined in accordance with criteria established by HUD and as 
defined in 24 CFR part 5, subpart F.
* * * * *

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL 
ALLOCATIONS

0
10. The authority citation for 24 CFR part 886 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 13611-13619, 
and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

0
11. In Sec.  886.102, the definition of Income is revised to read as 
follows:


Sec.  886.102  Definitions.

* * * * *
    Income. Income from all sources of each member of the household as 
determined in accordance with criteria established by HUD and as 
defined in part 5 of this title.
* * * * *
0
12. Revise Sec.  886.132 to read as follows:


Sec.  886.132  Tenant selection.

    Subpart F of 24 CFR part 5 governs selection of tenants and 
occupancy requirements applicable under this subpart A of part 880.

0
13. Section 886.321(b)(1) is revised to read as follows:


Sec.  886.321  Marketing.

* * * * *
    (b)(1) HUD will determine the eligibility of assistance of families 
in occupancy before sales closing. After the sale, the owner shall be 
responsible for taking applications, selecting families, and all 
related determinations, in accordance with part 5 of this title. (See 
especially, 24 CFR part 5, subpart F).
* * * * *

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

0
14. The authority citation for 24 CFR part 891 continues to read as 
follows:

    Authority: 12 U.S.C. 1701q, 42 U.S.C. 1437f, 3535(d), 8013, and 
Sec. 327, Pub. L. 109-115, 119 Stat. 2936.

0
15. Section 886.610(c) is revised to read as follows:


Sec.  891.610  Selection and admission of tenants.

* * * * *
    (c) Determination of eligibility and selection of tenants. The 
Borrower is responsible for determining whether applicants are eligible 
for admission and for the selection of families. To be eligible for 
admission, an applicant must be an elderly or handicapped family as 
defined in Sec.  891.505; meet any project occupancy requirements 
approved by HUD; meet the disclosure and verification requirements for 
Social Security Numbers and sign and submit consent forms for obtaining 
of wage and claim information from State Wage Information Collection 
Agencies, as provided by 24 CFR part 5, subpart B; and, if applying for 
an assisted unit, be eligible for admission under 24 CFR part 5, 
subparts E and F.
* * * * *

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

0
16. The authority citation for 24 CFR part 982 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 3535(d), 12701, 
13611-13619, and Sec. 327, Pub. L. 109-115, 119 Stat. 2936.


0
17. Section 982.201(a) is revised to read as follows:


Sec.  982.201  Eligibility and targeting.

    (a) When applicant is eligible: general. The PHA may only admit an 
eligible family to the program. To be eligible, the applicant must be a 
``family;'' must be income-eligible in accordance with paragraph (b) of 
this section and 24 CFR part 5, subpart F; must be a citizen or a 
noncitizen who has eligible immigration status as determined in 
accordance with 24 CFR part 5, subpart E.
* * * * *

0
18. Section 982.552 is amended to add a new paragraph (b)(5) to read as 
follows:


Sec.  982.552  PHA Denial or termination of assistance for family.

* * * * *
    (b) * * *

[[Page 77745]]

    (5) The PHA must deny or terminate assistance if any family member 
fails to meet the eligibility requirements concerning individuals 
enrolled at an institution of higher education as specified in 24 CFR 
5.612.
* * * * *

    Dated: December 27, 2005.
Roy A. Bernardi,
Deputy Secretary.
[FR Doc. 05-24672 Filed 12-27-05; 3:28 pm]
BILLING CODE 4210-32-P