Opinion
No. C9-97-233.
Filed August 19, 1997.
Appeal from the District Court, Scott County, File No. C967287.
Paul W. Onkka, Jr., (for Appellant).
Peter B. Hofrenning, (for Respondent Minnesota Department of Human Services), Thomas J. Harbinson and Brent S. Schafer, (for Respondent Scott County Human Services)
Considered and decided by Peterson, Presiding Judge, Norton, Judge, and Amundson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Pamela Weinberg challenges the termination of her food stamp benefits and citation filed against her for overpayment of food stamp benefits in the amount of $1,507. The Department of Human Services and the state of Minnesota terminated Weinberg's food stamp benefits because her personal property, specifically her motor vehicles and bank accounts, exceeded the asset limit to qualify for the food stamp program. We reverse and remand.
FACTS
Appellant Pamela Weinberg received food stamp benefits through respondents Scott County Department of Human Services (agency) and the state of Minnesota. On February 16, 1996, Weinberg applied to the agency for medical assistance. During the processing of Weinberg's application, the agency discovered that a mistake had previously been made in calculating Weinberg's resources. Specifically, Weinberg's 1986 Mazda station wagon had not been included as a resource when the food stamp application was processed. The agency notified Weinberg of the error. After much discussion, the agency added the lowest appraised value of the Mazda ($500) to the trade-in value of Weinberg's second vehicle, a 1989 Chevrolet van (between $5,375 and $5,825). The agency also found that Weinberg's bank account resources had not been properly calculated in determining her eligibility. The agency requested that Weinberg supply copies of her bank statements. After taking into account the standard deduction for vehicles (which was $4,550 for April 1995 through September 1995 and $4,600 beginning in October 1995), Weinberg's personal property, specifically her motor vehicles and bank accounts, exceeded the asset limits to qualify for the food stamp program. Based upon the automobile and bank account figures (exact bank account figures were not available to this court), the agency determined that Weinberg had been overpaid $1,507 in food stamp benefits.
Weinberg appealed the determination to the Commissioner of Human Services (commissioner), arguing that her van should be excluded because it was used over 50 percent of the time in her daycare business. Weinberg also argued that the agency miscalculated her bank account resources. After the agency hearing, the commissioner issued an order affirming the agency's determination of overpayment.
Weinberg appealed the commissioner's decision to the district court. On November 26, 1996, a hearing was held and the agency introduced Weinberg's 1995 tax return for eligibility determination. The tax return, which was prepared by professional tax preparer Jim Speiker, represented that the Chevrolet van was used 32 percent of the time for business purposes. The agency argued that Weinberg's tax return was introduced into evidence as part of the court file or, in the alternative, pursuant to statute. On December 13, 1996, the district court issued an order affirming the commissioner's determination of an overpayment of $1,507 in food stamp benefits. This appeal followed.
DECISION
Because this court is reviewing the decision of a state agency, the scope of review is defined by Minn. Stat. § 14.69 (1996). This provision permits this court to reverse or modify an agency decision if the decision is:
(a) In violation of constitutional provisions; or
(b) In excess of the statutory authority or jurisdiction of the agency; or
(c) Made upon unlawful procedures; or
(d) Affected by other error of law; or
(e) Unsupported by substantial evidence in view of the entire record as submitted; or
(f) Arbitrary or capricious.
Minn. Stat. § 14.69 (1996).
I. Van Exclusion
The determination of whether someone qualifies to receive food stamp benefits depends on a combination of household size, income, and assets. In order to be eligible, the household resources, including liquid and nonliquid assets, must not exceed $2,000. 7 C.F.R. § 273.8 (b) (1996). Some assets, however, are excluded from the maximum $2,000 allowable resources. See 7 C.F.R. § 273.8 (e) (1996). The entire value of a vehicle shall be excluded if more than 50 percent of its use is for the production of income. 7 C.F.R. § 273.8 (h)(1)(i) (1996).
In a letter to the court, Weinberg argued that her van should be excluded because the van is used in her daycare business for the production of income. Without the use of the van, Weinberg would not be able to distinguish her daycare business from competing daycare businesses in her area. With her van, Weinberg is able to offer activities that make her a more attractive choice as a daycare provider: transportation for the children to swimming lessons, trips to the park to feed the ducks, library trips, playground trips, trips to various beaches, trips to the theater, transportation to the McDonalds play area, trips to the zoo, and transportation to additional activities that without the van would be impossible. Weinberg asserts that these activities enhance her daycare's quality and ensure the business's success. Weinberg stated an additional use for the van in that she uses it "to transport everyone in case of an emergency. (I [Weinberg] just needed this on March 4 when my son fell and needed 3 staples in the back of his head.)"
Based on the testimony received, Weinberg's vehicle is used for the production of income as intended by 7 C.F.R. § 273.8 (h)(1)(i) (1996). If the van were unavailable, the income flow might stop or at least be reduced.
The second criterion to qualify for the exclusion is that the vehicle must be used over 50 percent of the time in that income-producing capacity. Weinberg states that she used the van 75 percent of the time in her daycare business. But this statement is contradicted by Weinberg's 1995 tax return where Speiker, Weinberg's tax preparer, stated that the van was only used 32 percent of the time for her daycare business. Although the tax documents alone would place the van outside the parameters of exclusion, Weinberg did not have an adequate opportunity to respond to the tax return figures. See Minn. Stat. § 256.045, subd. 4(b) (1996) (recipient must have opportunity to respond to evidence presented by agency). There is confusion over the 1995 tax document preparation and source of the proper figures for the percentage of business use of the van. Speiker stated that he used estimated numbers from the previous year to determine the percentage of use for the 1995 tax return. In 1995, however, Weinberg received a second vehicle (the Mazda station wagon), thereby reducing her personal use of the van. It naturally follows that by having a separate, more economical, vehicle for her personal use, Weinberg would thereafter primarily use her van for her daycare business.
Neither the agency nor the district court accounted for the personal use of the additional vehicle. The agency's determination (that Weinberg's van was not primarily used for the production of business income) was unsupported by substantial evidence in view of the entire record. Weinberg's van clearly qualifies for the business exclusion.
II. Bank Accounts
There is confusion whether the agency correctly applied the principles set forth in 7 C.F.R. § 273.10 (1996) in determining what amount of Weinberg's bank account balances should apply towards the maximum allowable resources as established in 7 C.F.R. § 273.8 (b) (1996). By including the value of the van, Weinberg was over the maximum allowable resources to qualify for food stamp benefits, therefore making the bank account balances immaterial. This court, however, reverses the agency's decision to include the value of the van. Since the actual bank account balances and the amounts that should be applied toward Weinberg's resources are in question, this court is remanding the bank account balances issue to the district court for further findings.
Weinberg's bank statements establish that she retained income into the subsequent months of May 1995 through February 1996. The income, therefore, may lose the exclusion and may be required to be calculated as a resource for purposes of determining food stamp eligibility. Although this court will generally defer to an agency's statutory interpretation in a technical area in which the agency has expertise, see Conagra, Inc. v. Swanson , 356 N.W.2d 825, 827 (Minn.App. 1984), on remand, the district court should verify that the agency properly applied 7 C.F.R. § 273.10 (1996).