Opportunity Cars Policy Update

January 2008

Special Report: The CAR Act

The News

In September 2007, Representative Gwen Moore (D – Milwaukee) introduced the Creating Access to Rides (CAR) Act (HR 3599). This proposal would expand opportunities for low-wage workers to purchase a reliable and affordable vehicle to improve employment outcomes.

Background

During the years that Congress debated reauthorization of the historic welfare reform law passed in 1996, the Senate Finance Committee developed and voted on three different bills. In each case, the bill that passed out of committee included a provision promoting car ownership for low-wage workers. One bill passed under Democratic leadership, with support of Democrats and Republicans on the committee, as well as the Senate’s only Independent member at that time, Senator Jeffords (VT). A second bill passed with the vote splitting along party lines when Republicans held leadership in the Senate. In 2005, a third proposal passed with bi-partisan support, after the full committee voted to include the car ownership provision. This consistent bi-partisan support is a promising sign for future action on such a provision. 

In 2005, Representative Moore introduced similar legislation as a stand-alone bill in the House of Representatives.

In early 2006, the reauthorization passed Congress as a small component of a larger bill. That bill did not include a number of Senate Finance Committee recommendations, including the car ownership provision. Because all bills die at the end of each Congress, Gwen Moore introduced HR 3599 in 2007.

What HR 3599 includes

This bill would: 

• Authorize new funding for grants to states, localities, and nonprofits operating car programs; and
• Expand allowable use of matched savings accounts utilizing certain federal funds to include car purchase.

In a letter to congressional colleagues, Rep. Moore described the impact of the legislation:

     “The CAR Act would establish a 5-year, $50 million grant program through which states, localities, and nonprofits could apply for funding to strengthen existing low-income car ownership programs or create new ones.

The CAR Act would also facilitate car ownership through the use of Individual Development Accounts (IDAs).  IDAs are special savings accounts for very low-income individuals through which, as an incentive to save, a person's contributions to the account are matched by public and private funding. States can use funds authorized by a little-known law called the Assets for Independence Act (AFIA) to match participant contributions to IDAs. However, when IDA contributions are matched using AFIA funds, withdrawals may be used for only three qualified expenses: homeownership, post-secondary education, and starting a business. This bill would expand permissible IDA uses under AFIA matching rules to include the purchase of a car.

In addition to AFIA dollars, states can use their Temporary Assistance for Needy Families (TANF) funds to match IDA contributions. While the purchase of a car is not included in the underlying TANF statute as a qualifying IDA expense, the Department of Health and Human Services has clarified that states can elect to permit withdrawals for car purchases when the participant's IDA is matched with federal TANF dollars. However, some states have found that, as a result of choosing this option, the IDA can be considered an asset when determining the participant's eligibility for other programs such as food stamps. The CAR Act would remove this barrier and allow states to use TANF dollars to match IDA savings for a car without the account's assets being counted against the participant's eligibility for other important programs.”

Action Steps

Readers interested in sharing reactions to or information about the bill with their Member of Congress may call the Capitol switchboard at 202-224-3121.

Readers with existing contacts on congressional staff may prefer to write or send electronic messages to these staffers. However, in general it is best to call staff since email can get lost in the mix of hundreds of other messages, and “snail-mail” takes a long time to arrive in congressional offices due to security precautions.

Staffers can be referred to the “Dear Colleague” [hotlink] letter from Congresswoman Moore, which explains the bill and encourages co-sponsorship by other members. Readers can also contact Gwen Moore’s lead staff, Judy Burmaster, at [add email address]. Judy will be interested in updates about your contacts with other members about the bill.

Often, legislation like the CAR Act is folded into a related bill with other provisions. However, this typically occurs when the number of cosponsors suggests broad support for the original proposal.

Read more about the CAR Act, including the status and co-sponsors on these websites:

Resource Documents

• H.R. Bill 3599 - "The CAR Act" ~ 8 pages - 47 KB

• Provide Greater Job Opportunities For Low-Income Families Through Car Ownership (Dear Colleague Letter) ~ 2 pages - 22 KB

• Track the Latest Major Action of This Bill (THOMAS Library of Congress)

• Information about Lobbying