COMMENT DUE DATE:
July 1, 2008
DATE:
June 18, 2008
Laura Brown FSSD (405) 521-4396
Dena Thayer PMU Manager (405) 521-4326
Pat McCracken PMU Specialist (405) 522-1017
RE:
APA WF 08-07
The proposed policy is Emergency . This proposal will go to the Commission meeting on
CHAPTER 50. FOOD STAMP PROGRAM
Subchapter 7. Financial Eligibility Criteria
Part 1. Resources
OAC 340:50-7-2 through 340:50-7-3 [AMENDED]
SUMMARY:The proposed revision to exempt tax deferred retirement accounts and education accounts from consideration as a resource is completed to comply with Section 4104 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-234) that goes into effect October 1, 2008 and to provide staff with clear and concise rules to facilitate the accurate delivery of benefits and services to persons who are in need which includes updating terminology.
340:50-7-2 is amended to: (1) remove language that Individual Retirement Accounts (IRAs) and some Keogh Plans are countable resources and (2) add language that tax deferred retirement plans and education accounts are exempt as a resource.
340:50-7-3 is amended to remove language that IRAs and KEOGH plans are countable resources.
EMERGENCY APPROVAL:Emergency rulemaking approval is requested as OKDHS finds compelling public interest to amend resources rules regarding education and retirement accounts to be in compliance with recent federal legislation that is effective October 1, 2008.
LEGAL AUTHORITY:Commission for Human Services, Article XXV, Sections 2, 3, and 4 of the Oklahoma Constitution; and Section 4104 of the Food, Conservation, and Energy Act of 2008 (Public Law 110-234).
To:Dena Thayer, Programs Administrator
Policy Management Unit
From:Mary Stalnaker, Division Director
Family Support Services Division
Date:June 10, 2008
Re:CHAPTER 50 FOOD STAMP PROGRAM
Subchapter 7 Financial Eligibility Criteria
Part 1. ResourcesOAC 340:50-7-2 [AMENDED]
OAC 340:50-7-3 [AMENDED]
(Reference APA WF 08-07)
Contact: Laura Brown, 405-521-4396
A.Brief description of the purpose of the proposed rule:
Purpose.The proposed revisions to Subchapter 7 of Chapter 50 amend the rules to exempt tax deferred retirement accounts and education accounts as a resource.
Strategic Plan impact.The proposed rules achieve OKDHS goals by continuously improving systems and processes to achieve OKDHS efficiency.
Substantive changes.
340:50-7-2 is amended to: (1) remove language that Individual Retirement Accounts (IRAs) and some Keogh Plans are countable resources; (2) add language that tax deferred retirement accounts and education accounts are exempt as a resource; (3) remove redundant language; and (4) update language to current terminology.
340:50-7-3 is amended to remove language that IRAs and KEOGH plans are countable resources.
Reasons.The proposed revisionto exempt tax deferred retirement accounts and education accounts from consideration as a resource is completed to comply with Section 4104 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-234) that goes into effect October 1, 2008 and to provide staff with clear and concise rules to facilitate the accurate delivery of benefits and services to persons who are in need which includes updating terminology.
Repercussions. The proposed rules will make policy easier to understand for both human services center (HSC) staff and the public. If the proposed revisions are not implemented, OKDHS will not be in compliance with Section 4104 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-234).
Legal authority. Commission for Human Services, Article XXV, Sections 2, 3, and 4 of the Oklahoma Constitution; Section 4104 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-234).
Emergency approval.Emergency rulemaking approval is requested as OKDHS finds compelling public interest to amend resources rules regarding education and retirement accounts to be in compliance with recent federal legislation that is effective October 1, 2008.
B.A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities: The classes of persons most likely to be affected by the proposed rules are Food Stamp households and OKDHS staff. The affected classes of persons will bear no costs associated with implementation of the rules.
C.A description of the classes of persons who will benefit from the proposed rule: The classes of persons who will benefit are Food Stamp households and OKDHS staff.
D.A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each: The revised rules do not have an economic impact on the affected entities. There are no fee changes associated with the revised rules.
E.The probable costs and benefits to the Agency and to any other agency of the implementation and enforcement of the proposed rule, the source of revenue to be used for implementation and enforcement of the proposed rule and any anticipated effect on state revenues, including a projected net loss or gain in such revenues if it can be projected by the Agency: The probable cost to OKDHS includes the cost of printing and distributing the rules, which is estimated to be less than $20. The revised rules will result in enhanced delivery of services to Food Stamp households.
F.A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule: The proposed rules do not have an economic impact on any political subdivision, nor will the cooperation of any political subdivisions be required in implementation or enforcement of the rules.
G.A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act: There are no anticipated adverse effects on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act.
H.An explanation of the measures the Agency has taken to minimize compliance costs and a determination whether there are less costly or non-regulatory methods or less intrusive methods for achieving the purpose of the proposed rule: There are no less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rule.
I.A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk: Implementation of the proposed rules will have a positive impact on the health, safety, and well-being ofFood Stamp households by allowing these households to save for future college expenses and retirement without jeopardizing their benefits.
J.A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented:If the proposed rules are not implemented, OKDHS will not be in compliance with Section 4104 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-234) and these households will have less incentive to save for college and retirement.
K.The date the rule impact statement was prepared and, if modified, the date modified: Prepared June 10, 2008.
SUBCHAPTER 7. FINANCIAL ELIGIBILITY CRITERIA
PART 1. RESOURCES
340:50-7-2. Excluded resources
Revised 6-1-06 10-1-08
In households applying for or receiving food benefits, resources listed in this Section are excluded for household members, for disqualified members whose resources are counted, or for ineligible aliens who would otherwise be a household member.When an exclusion applies because of use by or for a household member, the exclusion also applies when the resource is used by or for a disqualified person whose resources are counted or for an ineligible alien who would otherwise be a household member.
(1) Home and surrounding property.The home and surrounding property which is not separated from the home by intervening property owned by others is exempt.Public right-of-way, such as roads which run through the surrounding property and separate it from the home, does not affect exemption of the property.
(A) The home and surrounding property remain exempt when temporarily unoccupied by reasons of employment, training for future employment, illness, vacation, or uninhabitability caused by casualty or natural disaster so long as the household intends to return.
(B) Households that currently do not own a home, but own or are purchasing a lot on which they intend to build or are building a permanent home receive an exclusion for the value of the lot and, if it is partially completed, for the home.
(2) Household personal goods, life insurance, and pension plans.Household goods, personal belongings, including one burial lot per household member, the cash value of life insurance policies, and prepaid burial plans are exempt.The cash value of tax deferred pension plans or funds is excluded, except for Individual Retirement Accounts (IRA) and Keogh Plans.¢ 1A Keogh Plan may be excluded if it involves a contractual arrangement with individuals outside the household.¢2
(3) Vehicles.
(A) Exclude one licensed vehicle per adult household member, including an ineligible alien or disqualified household member whose resources are considered available to the household, regardless of the use of the vehicle.
(B) Exclude any other licensed vehicle a household member under age 18, including an ineligible alien or disqualified household member under age 18 whose resources are considered available to the household, drives to and from employment, or to and from training or education which is preparatory to employment, or to seek employment.This exclusion applies during temporary periods of unemployment to a vehicle which a household member under age 18 customarily drives to and from employment.
(C) Also exclude Exclude any other licensed vehicle if:
(i) used for income-producing purposes such as, but not limited to, a taxi, truck, or fishing boat, or a vehicle used for deliveries, to call on clients or customers, or required by the terms of employment.Licensed vehicles that have previously been used by a self-employed household member engaged in farming but are no longer used in farming because the household member has terminated his or her self-employment from farming must continue to be excluded as a resource for one year from the date the household member terminated his or her self-employment farming;
(ii) annually producing income consistent with its fair market value, even if used only on a seasonal basis;
(iii) necessary for long distance travel, other than daily commuting, that is essential to the employment of a household member, ineligible alien, or disqualified person whose resources are considered available to the household, such as the vehicle of a traveling sales person or of a migrant farm worker following the work stream;
(iv) used as the household's home;
(v) necessary to transport a physically disabled household member, physically disabled ineligible alien, or physically disabled disqualified person whose resources are considered available to the household, regardless of the purpose of such transportation.The vehicle need not have special equipment or be used primarily by or for the transportation of the physically disabled household member.Only one vehicle per physically disabled household member may be excluded;
(vi) necessary to carry fuel for heating or water for home use when the transported fuel or water is anticipated to be the primary source of fuel or water for the household during the certification period. Households must receive this resource exclusion without having to meet any additional tests concerning the nature, capabilities, or other uses of the vehicle.Households must not be required to furnish documentation unless the exclusion of the vehicle is questionable;
(vii) the value of the vehicle is inaccessible because its sale would produce an estimated return of not more than $1,500;
(viii) jointly owned by a food benefit household member and someone who does not live with the food benefit household.To be excluded, the vehicle must not be used by, nor in the possession, of anyone who lives in or with the household.The food benefit household member must also be unable to sell the vehicle because the signature of the co-owner is needed and that person will not sign; or
(ix) legally prohibited from being sold by the food benefit household.The determination of whether a food benefit household can legally sell a vehicle is governed by the law of Oklahoma.
(BD) The exclusions in (i) through (iii) of this subsection continue to apply when the vehicle(s) is not in use because of temporary unemployment such as when a taxi driver is ill and cannot work or the vehicle is broken down and cannot be used.
(4) Real or personal property directly related to the maintenance of excluded vehicles.Property, real or personal, to the extent it is directly related to the maintenance or use of a vehicle described in paragraph (3) of this subsection is excluded.Only that portion of real property determined necessary for maintenance or use is excluded.¢ 32
(5) Income producing property.Income producing property which annually produces income consistent with the fair market value is excluded even if used on a seasonal basis.¢ 43
(6) Property essential to employment.Property, such as farm land or work related equipment including tools of a tradesman or the machinery of a farmer, which is essential to the employment or self-employment of a household member is excluded.Property of a household member engaged in farming continues to be excluded for one year from the date the household member terminates his or her self-employment from farming.
(7) Installment contracts.Installment contracts for the sale of land or buildings are excluded if the contract or agreement is producing income consistent with its fair market value.The exclusion applies to the value of the property sold under the installment contract or held as security in exchange for a purchase price consistent with the fair market value of that property.
(8) Inaccessible resources.Resources whose cash value is not accessible to the household are exempt, such as but not limited to, irrevocable trust funds, security deposits on rental property or utilities, property in probate, and real property which the household is making a good faith effort to sell at a reasonable price and which has not been sold.If questionable, the worker establishes that the property is for sale and that the household will accept a reasonable offer.
(A) A resource is considered inaccessible if its sale or other disposition is unlikely to produce funds amounting to one half or more of the applicable resource limit for the household.
(B) The value of the inaccessible resource is the amount of the expected return to the household after subtracting estimated cost of sale or disposition, and consideration of the ownership interest to the household.(C) A single resource may not be subdivided solely to obtain an exclusion as inaccessible.
(D) This inaccessible provision does not apply to vehicles or financial instruments such as stocks, bonds, or negotiable financial instruments.¢ 54
(E) Any funds in a trust, or transferred to a trust, and the income produced by that trust, to the extent it is not available to the household, is considered inaccessible to the household if:
(A)(i) the trust arrangement is not likely to cease during the certification period and no household member has the power to revoke the trust arrangement or change the name of the beneficiary during the certification period;
(B)(ii) the trustee administering the funds is either:
(I) a court,; or
(II) an institution, corporation, or organization which is not under the direction or ownership of any household member,; or
(III) an individual a person appointed by the court who has court imposed limitations placed on his or her use of the trust funds;
(C)(iii) trust investments made on behalf of the trust do not directly involve or assist any business or corporation under the control, direction, or influence of a household member; and
(D)(iv) the funds held in irrevocable trust are either established from:
(I) the household's own funds, if the trustee uses the funds solely to make investments on behalf of the trust or to pay the educational or medical expenses of any person named by the household creating the trust,; or established from
(II) non-household funds by a non-household member.
(9) Education assistance.All education grants, work study, scholarships, and student loans are exempt if receipt is contingent upon the student regularly attending school.
(10) Resources excluded by law.Resources currently excluded by law are:
(A) payments received:
(i) under the Alaska Native Claims Settlement Act[Public Law (P.L.) 92-203, § 21(a)];
(ii) under the Sac and Fox Indian Claims Agreement[P.L. 94-189];
(iii) from the disposition of funds to the Grand River Band of Ottawa Indians [P.L. 94-540];
(iv) by members of the Confederated Tribes of the Mescalero Reservation[P.L. 95-433]; or
(v) under the Maine Indian Claims Settlement Act of 1980 to members of the Passamaquoddy and the Penobscot Nation[P.L. 96-420];
(B) payments received by certain Indian tribal members under P.L. 94-114, Section 6 regarding submarginal land held in trust by the United States;
(C) Indian per capita payments distributed from judgment awards and trust funds made pursuant to P.L. 98-64.Exclude any interest or investment income accrued on such funds while held in trust or any purchases made with judgment funds, trust funds, interest or investment income accrued on such funds.Exclude any per capita payments, headrights of Osage tribe, income from mineral leases, or other tribal business ventures, as long as the payments meet the distribution requirements as stated in this subparagraph.
(i) Any interest or income derived from the funds after distribution is considered as any other income.
(ii) The per capita exclusion applies per person rather than per family.
(iii) When these excluded funds are deposited in a bank or other financial institution, the deposits are excluded as long as the funds are kept in a separate account and not commingled in an account with non-excluded funds.
(iv) When the excluded funds are commingled in an account with non-excluded funds, the excluded funds retain their exemption for six months from the date of commingling.After six months from the date of commingling, all funds are counted as a resource.
(v) Purchases made with excluded funds are considered a resource;
(D) interests of individual Indians in trust or restricted lands;
(E) benefits received from Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)[P.L. 92-443, § 6];
(F) reimbursements from the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970[P.L. 91-646, § 216];
(G) Earned Income Tax Credit (EITC) payments received by a participating food benefit household member as part of a federal tax refund or as advance payments received as part of a paycheck, excluded for 12 months during continuous participation.This does not mean that households lose the exclusion if they temporarily leave the program for administrative reasons;
(H) refunds of the state EITC as a result of filing a state income tax return in the month received and the following month;
(I) payments received from the Youth Incentive Entitlement Pilot Projects, the Youth Community Conservation and Improvement Projects, and the Youth Employment and Training Programs under Title IV of the Comprehensive Employment and Training Act of 1978[P.L. 95-524];
(J) financial assistance provided by a program funded in whole or in part under Title IV of the Higher Education Act in accordance with P.L. 99-498;
(K) payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.);
(L) payments received under the Civil Liberties Act of 1988.These payments are made to individuals persons of Japanese ancestry who were detained in internment camps during World War II;
(M) payments made from the Radiation Exposure Compensation Trust Fund as compensation for injuries or deaths resulting from the exposure to radiation from nuclear testing and uranium mining;
(N) amounts held in an account for the fulfillment of a Plan for Achieving Self-Support (PASS) under Title XVI of the Social Security Act;
(O) the resources of any non-household member unless the individual person is disqualified from the program by an administrative or court fraud hearing, by failing to obtain or refusing to provide a Social Security number, or is an ineligible alien who would otherwise be a household member;
(P) payments or allowances made under any federal law for the purpose of energy assistance such as the Low Income Home Energy Assistance Program (LIHEAP);
(Q) earmarked resources, such as those governmental payments made by the Individual and Family Grant Program or the Small Business Administration which are designated for the restoration of homes damaged in a disaster and which are subject to a legal sanction if the funds are not used as intended.Resources such as those of self-employed persons, which have been prorated and counted as income, and Indian lands held jointly with the tribe or land that can be sold only with the approval of the Bureau of Indian Affairs are also exempt;
(R) the identified resources of all Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI) recipients when the household's total resources are calculated for food benefit eligibility purposes;
(S) excluded monies kept in a separate account, which are not commingled in an account with the non-excluded funds retain excluded status for an unlimited period of time.
(i) Monies of self-employed households that are excluded as a resource because they have been prorated over the period they are intended to cover and are commingled in an account with non-excluded funds retain their exclusion for the period of time over which they have been prorated as income.
(ii) All other excluded monies which are commingled in an account with other funds retain their exempt status for six months from the date they are commingled.When the household's total resources, including all funds in the commingled account, exceed the allowable limit after that time, all funds in the commingled account are considered as a resource;
(T) payments made to individuals persons because of their status as victims of Nazi persecution;
(U) any funds deposited in an Individual Development Account (IDA) operated under the Assets for Independence Act;
(V) monetary allowances as described in Section 1823(c) of Title 38 of the United States Code (U.S.C.) provided to certain individuals persons who are children of Vietnam War veterans; and
(W) Disaster Unemployment Assistance paid to individuals persons unemployed as the result of a major disaster.
(11) Department of Housing and Urban Development (HUD) Family Self‑sufficiency (FSS) Program escrow accounts.Families participating in the HUD FSS program may withdraw money from their escrow accounts prior to completion of the program.This money is excluded both as income and as a resource.
(12) Education accounts.Funds in education accounts established under Sections 529 and 530 of the Internal Revenue Code and Section 4000 of Title 56 of the Oklahoma State Statutes are excluded.¢ 5
INSTRUCTIONS TO STAFF 340:50-7-2
Revised 6-1-06 10-1-08
1.The list of countable retirement savings and pensions plans include:
(1) Individual Retirement Accounts (IRAs);
(2) Keogh plans that involve no contractual obligation with anyone who is not a household member; and
(3) Simplified Employer Pension (SEP) plans.
21.The list of excluded retirement savings and pension plans are:
(1) 457 plans, which are plans for state and local governments and other tax-exempt organizations;
(2) 401(k) plans, which are generally a cash or deferred arrangement and generally limited to profit-making firms;
(3) Federal Employee Thrift Savings plan;
(4) Section 403(b) plans, which are tax-sheltered annuities provided for employees of tax exempt organizations and state and local educational organizations;
(5) Section 501(c)(18) plans, which are retirement plans for union members consisting of employee contributions to certain trusts that must have been established before June 1959; and
(6) Keogh plans that involve a contractual obligation with someone who is not a household member. ;
(7) Individual Retirement Accounts (IRAs); and
(8) Simplified Employer Pension (SEP) plans.
32.For example, a household that owns a produce truck to earn its livelihood may be prohibited from parking the truck in a residential area.The household may own a 100-acre field and use a quarter-acre of the field to park or service the truck.Only the value of the quarter-acre is excluded under this provision, not the entire 100-acre field.
43.Examples of income producing property are rental homes and mineral rights.When it is necessary to determine if property is producing income consistent with its fair market value, the worker contacts a local realtor, tax assessor, the Small Business Administration, Farmer's Home Administration, or other knowledgeable sources to determine the prevailing rate of return from similar property in the area.
54.Refer to paragraph (3)(A)(i) through (ix) of this Section for information about unavailable vehicles.
5.This exclusion includes:
(1) an Oklahoma College Savings Plan account;
(2) a Coverdell Education Savings account also known as a Section 530 account; and
(3) a Qualified Tuition Program account also known as a Section 529 account.
340:50-7-3. Non-exempt resources
Issued 5-13-92 Revised 10-1-08
(a) Non-exempt resources are those resources which, after deducting any encumbrances, must be considered in the determination of eligibility to receive food stamps benefits.The worker must include sufficient detail in the case record to permit verification in the event that it becomes necessary because of inconsistent information or for a quality control review.
(b) Non-exempt resources include, but are not limited to:
(1) Liquid liquid resources.Liquid resources (must be verified). and include:
(A) Cash cash on hand.;
(B) Checking checking or savings accounts.;¢ 1
(C) Savings savings certificates.; or
(D) Stocks stocks or bonds.; or
(E) IRA's or Keogh plans that do not involve the household member in a contractual relationship with individuals who are not household members.The value counted is the cash value of the account less any penalty assessed if the entire amount was withdrawn.
(2) Non-liquid non-liquid resources (verify.Non-liquid resources are verified if questionable).and include:¢ 2
(A) The value of these non-exempt resources, except for licensed vehicles, shall be the equity value.The equity value is the fair market value less encumbrances.
(i)(A) Licensed licensed and unlicensed vehicles.;¢ 1 3
(ii)(B) Boats. boats;
(iii)(C) Land. land;
(iv)(D) Recreational recreational property.;
(v)(E) Mobile mobile homes other than home property.;
(vi)(F) Vacation vacation home. property; or
(vii)(G) Other other property not specifically excluded.
(c) The value of non-exempt resources, except for licensed vehicles, is the equity value.The equity value is the fair market value less encumbrances.
(B)(d) Exclude the entire value of non-liquid assets used as collateral for a business loan if the household is prohibited by the loan agreement from selling the asset.
INSTRUCTIONS TO STAFF 340:50-7-3
Revised 12-1-06 10-1-08
1.See OAC 340:50-7-2(12) for excluded education accounts.
2.The worker must include sufficient detail in Family Assistance/Client Services (FACS) Case Notes to permit verification in the event that it becomes necessary because of inconsistent information or for a quality control review.
13.See OAC 340:50-7-4(c) for more information about non-excluded vehicles.
