## Facts

- The U.S. Department of Agriculture’s Food and Nutrition Service (FNS) issued a final rule amending Food Stamp Program regulations in 7 C.F.R. parts 272, 273, 274, and 277.
- The rule implemented statutory changes made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and later amendments affecting eligibility, certification, and administration.
- FNS published a proposed rule on February 29, 2000, received public comments through May 1, 2000, and issued the final rule on November 21, 2000, with modifications.
- The rule addressed (i) noncitizen eligibility categories and the treatment of “sponsored aliens,” (ii) application processing and certification procedures, and (iii) resource and income-counting rules.
- For sponsored noncitizens, the rule clarified when sponsor deeming applies and required an “indigence” determination tied to whether the household’s income exceeds 130% of the poverty guideline.
- The rule expanded “inaccessible resources” treatment to certain vehicles and revised how vehicles are assessed under resource tests, including an equity-value limit for inaccessibility determinations.
- The rule revised income and deductions, including counting certain transitional housing payments and many state/local energy assistance payments as income, excluding earnings of students under age 18, and requiring benefit proration after breaks in certification.
- The rule increased state options and standardization tools (e.g., standard deductions, simplified self-employment expense treatment) and established ground rules for a Simplified Food Stamp Program option linked to TANF.

## Issues

1. How should FNS implement PRWORA and subsequent amendments governing noncitizen eligibility and the benefits of sponsored noncitizens, including sponsor deeming and indigence exceptions?
2. What certification, interview scheduling, notice, and fair-hearing rules should govern application processing to improve administration while maintaining recipient protections?
3. How should vehicles and other property be treated under the Food Stamp Act’s “inaccessible resources” concept and under vehicle/resource valuation methods?
4. Which payments and earnings should be counted as income or excluded, and what standardized methods should be permitted for deductions and expenses?

## Decision

- FNS adopted a final rule, with modifications from the proposed rule, amending Food Stamp Program regulations in 7 C.F.R. parts 272, 273, 274, and 277.
- The rule finalized regulatory categories and procedures for noncitizen eligibility and sponsored-alien benefit determinations, including limits on sponsor deeming when indigence criteria are met.
- The rule revised application processing and certification requirements, including protections against premature adverse action and rules requiring clear notice and time to respond before termination.
- The rule added certain vehicles to assets that may qualify as “inaccessible resources,” set an equity-value threshold affecting inaccessibility treatment, and simplified vehicle-counting approaches by removing a proposed dual-test method for additional vehicles.
- The rule adjusted income-counting and exclusion rules and authorized broader use of standardized amounts for deductions and self-employment expenses, while setting rules for benefit proration after certification breaks.

## Legal Principles

- Agencies administering federal benefits programs may implement statutory eligibility restrictions and administrative directives through notice-and-comment rulemaking that amends program regulations.
- Noncitizen eligibility rules must reflect congressional eligibility categories and related benefit restrictions, while specifying operational standards for state agencies to apply consistently.
- Sponsor deeming rules for sponsored noncitizens may be limited by a regulatory indigence determination; when indigence criteria are met, only actual support received may be counted rather than deemed sponsor income.
- Application processing rules may require procedural protections, including advance notice of needed information, an opportunity to respond, and limits on denying or terminating benefits without required timeframes and process.
- Resource rules may treat certain assets as excluded when they meet standards for inaccessibility (e.g., inability to sell for significant return), and vehicle rules may be structured to simplify administration while preserving statutory limits.
- Income-counting and deduction rules may standardize calculations (e.g., standard deductions and expenses) and define inclusions/exclusions to coordinate with other assistance payments and reduce administrative error.

## Conclusion

The USDA FNS final rule implemented PRWORA-era Food Stamp Program amendments by codifying noncitizen and sponsored-alien eligibility standards, strengthening application and recipient-protection procedures, simplifying vehicle and resource treatment through expanded “inaccessible resources” rules, and revising income and deduction methodologies to standardize administration while enforcing statutory limits.


Food Stamp Program: Noncitizen Eligibility, and Certification Provisions of Pub. L. No. 104-193, as Amended by Pub. L. Nos. 104-208, 105-33 & 105-185, 65 Fed. Reg. 70,134 (Nov. 21, 2000)