437.25—Program income.
(a) General.
Grantees are encouraged to earn income to defray program costs. Program income includes income from fees for services performed, from the use or rental of real or personal property acquired with grant funds, from the sale of commodities or items fabricated under a grant agreement, and from payments of principal and interest on loans made with grant funds. Except as otherwise provided in SSA regulations, program income does not include interest on grant funds, rebates, credits, discounts, refunds, etc. and interest earned on any of them.
(b) Definition of program income.
Program income means gross income received by the grantee or subgrantee directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period. “During the grant period” is the time between the effective date of the award and the ending date of the award reflected in the final financial report.
(c) Cost of generating program income.
If authorized by SSA regulations or the grant agreement, costs incident to the generation of program income may be deducted from gross income to determine program income.
(d) Governmental revenues.
Taxes, special assessments, levies, fines, and other such revenues raised by a grantee or subgrantee are not program income unless the revenues are specifically identified in the grant agreement or SSA regulations as program income.
(e) Royalties.
Income from royalties and license fees for copyrighted material, patents, and inventions developed by a grantee or subgrantee is program income only if the revenues are specifically identified in the grant agreement or SSA regulations as program income. (See § 437.34.)
(f) Property.
Proceeds from the sale of real property or equipment will be handled in accordance with the requirements of § 437.31 and § 437.32.
(g) Use of program income.
Program income will be deducted from outlays that may be both Federal and non-Federal as described in paragraphs (g)(1) through (3) of this section, unless SSA regulations or the grant agreement specify another alternative (or a combination of the alternatives). In specifying alternatives, SSA may distinguish between income earned by the grantee and income earned by subgrantees and between the sources, kinds, or amounts of income. When SSA authorizes the alternatives in paragraphs (g)(2) and (3) of this section, program income in excess of any limits stipulated will also be deducted from outlays.
(1) Deduction.
Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless SSA authorizes otherwise. Program income that the grantee did not anticipate at the time of the award must be used to reduce SSA and grantee contributions rather than to increase the funds committed to the project.
(2) Addition.
When authorized, program income may be added to the funds committed to the grant agreement by SSA and the grantee. The program income must be used for the purposes and under the conditions of the grant agreement.
(3) Cost sharing or matching.
When authorized, program income may be used to meet the cost sharing or matching requirement of the grant agreement. The amount of the Federal grant award remains the same.
(h) Income after the award period.
There are no Federal requirements governing the disposition of program income earned after the end of the award period (i.e., until the ending date of the final financial report, see paragraph (a) of this section), unless the terms of the agreement or SSA regulations provide otherwise.