Vehicle Questions and Answers
Question: A State would like to use TANF policy to exclude one
vehicle per household, regardless of value. Food Stamp Program policy
would then be used to totally exclude any other household vehicles used
to produce income, for transportation of a disabled member, to haul water
and fuel, as a home, or with an equity value of less than $1,500. The
fair market value over $4,650 would then be counted for one non-excluded
licensed vehicle per adult household member, regardless of use. The same
value would also be counted for any other licensed vehicle a household
member under the age of 18 uses to drive to work, school, training, or
to look for work.
Is this correct interpretation of current Food Stamp Program vehicle
Answer: Yes. Under the vehicle provision of P.L. 106-387 the
State can use TANF policy to exclude one vehicle in its entirety, since
this policy is more liberal than FSP procedures. This exclusion can be
applied to the vehicle with the highest value in the household. For any
other vehicles owned by the household, the State can apply FSP vehicle
rules if these would result in a lower attribution of food stamp resources
to households than would TANF rules.
Question: A State would like to use food stamp policy to exclude
household vehicles which are producing income, used as a home, transporting
physically disabled members, carrying fuel or water, or whose value is
inaccessible. The State would then exclude one remaining vehicle. If one
tagged vehicle per adult household member, or another vehicle which a
teenager drives to work, school, job training, or to look for work remains,
the State would use food stamp rules to exempt this vehicle from the equity
test, and TANF policy (which uses only an equity test) to exclude the
vehicle from the fair market test. Is this mixing of policies acceptable?
Answer: No. Section 847(a)(2) of the statute provides that a
State may elect to apply TANF vehicle standards in lieu of applying
FSP fair market standards. While we have expanded application of this
provision to include FSP equity standards, the statute clearly implies
that a State can use either the FSP, or the TANF vehicle
standard for a particular vehicle or class of vehicles, not both. The
State’s proposal concerning one non-excluded licensed vehicle per adult
household member, and vehicles driven by persons 18 or under, would apply
a portion of FSP standards to exclude vehicles for equity purposes and
a portion of TANF standards to exclude the same category of vehicles for
FMV purposes. This procedure, in effect, applies both programs’ procedures
to one category of vehicles to completely exclude that category from consideration
as a resource. Our reading of the statute indicates that States must choose
either the FSP or TANF vehicle policy, whichever results
in a lower attribution of resources to a household.
Question: Under the new inaccessible vehicle rule, would the
equity value still be determined if someone outside the household owes
the debt on the car? For example, a father purchases a vehicle for a daughter
and puts the car in the daughter's name. The father is paying the loan
payments for the car and is not a member of the daughter's household.
The daughter does not have to pay the father back. Would we apply the
equity value test for this vehicle to determine if it could be considered
Answer: Yes. If the daughter has possession of, and title to
the vehicle, the entire amount of whatever the daughter gets for selling
the vehicle would be considered equity for the $1,500 inaccessible resource
Question: CFR 273.8(e)(3)(i)(G) defines the value of a vehicle
as inaccessible if its sale would return not more than $1,500. If the
equity test determines that the sale of a vehicle would return more than
$1,500, is the entire value applied toward the $4,650 limit, or is just
the amount above $1,500 counted? For example, if the sale of a vehicle
would return $2,500, would the full $2,500 be applied to the $4,650 limit,
or would only $1,000 be applied to the limit?
Answer: The $1,500 limit is to determine only if the vehicle
should be excluded as a resource. If the vehicle's sales value is less
than this amount it will be excluded from the program’s fair market and
equity tests; if more than this amount, its total fair market value (not
just the sales value above $1,500) will be counted toward the $4,650 limit.
Question: Section 273.8(e)(3)(i)(G) says the value of a vehicle
will be excluded as inaccessible if the sale of the vehicle would produce
an estimated return of not more than $1,500. Some States have submitted
manual material saying the vehicle will be excluded as inaccessible if
the household's equity in the vehicle is less than $1,500.
Is the State’s interpretation correct?
Answer: Yes, if the State defines equity value as the current
(as opposed to the original or blue book) fair market value of a vehicle
minus encumbrances. The current fair market value of the vehicle would
be whatever price it can be sold for at the present time and in its present
condition. Any encumbrances would be subtracted from this amount, and
the remainder would be its equity value. In this context, the term "equity"
would essentially be an "estimated return" as specified in Section
273.8(e)(3)(i)(G) and, if less than $1,500, would allow that vehicle to
be excluded from the FSP’s fair market and equity tests. If a State defines
the fair market value of a vehicle as its blue book value, or uses another
definition which does not reflect the vehicle’s current value, the response
to this question would be "no". This is because the actual amount
for which a vehicle can be sold will often vary considerably from its
blue book value. Any household that claims a State agency’s determination
of the value of its vehicle(s) is not accurate has the opportunity to
acquire verification of the true value of the vehicle from a reliable
source. We believe use of the actual amount realized by a household from
the sale of a vehicle is preferable to use of its blue book value for
purposes of Section 273.8(e)(3)(i)(G). Households can establish actual
amounts realized from the sale of vehicles using documentation from buyers
on a case-by-case basis. Verifiable estimates of a vehicle’s sales value
may be provided by the household using such sources as mechanics, junk
dealers and so forth.
NOTE: This response is partially at variance with policy issued
via email in response to this same question. It is to be used in place
of that response.
Question: A household has a 15 year old employed teen working
at Burger King and their unemployed 16 year old sibling drives the 15
year old to work. Can we use the fair market value of this vehicle based
on 7 CFR 273.8(f)(2)(iii)?
Answer: Yes. The new regulatory language reads, "Any other
vehicle a household member under age 18...drives to commute to and from
employment, or to and from training or education which is preparatory
to employment, or to seek employment." While this language implies
that the teen drive him/herself to and from work, etc., it does not specify
this. Since the purpose of the regulation is to simplify resource determinations
for such households, it is within reason to apply the provision to households
with teens who drive other people to work, etc.. This would enhance the
originally intended simplification aspect of the regulation by exempting
these households from the equity test.
Question: Please define the term "vehicle" as used
for Food Stamp Program resource determination purposes.
Answer: This term has never been defined for Food Stamp Program
purposes, and we do not wish to impose a standard definition on States
now. Consequently, States may employ whatever vehicle definition they
use in their TANF program. This definition may be used for excluding or
including vehicles for FSP purposes as long as licensed vehicles are included
in the definition. These vehicles must continue to be included in financial
resources in accordance with Section 5(g)(2)(B)(iv) of the Food Stamp