Estey v. Commissioner, Maine Dept. of Human Services

• Citation: 21 F.3d 1198
• Decision Date: 07 October 1993
• Docket Number: No. 93-1453,93-1453
• Parties: Debra ESTEY, et al., Plaintiffs, Appellants, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, et al., Defendants, Appellees. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1198

21 F.3d 1198

Debra ESTEY, et al., Plaintiffs, Appellants, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, et al.,

Defendants, Appellees.

No. 93-1453.

United States Court of Appeals, First Circuit.

Heard Oct. 7, 1993.

Decided April 20, 1994.

Patrick Francis Ende, with whom Pine Tree Legal Assistance, Inc., Augusta, ME, was on brief, for plaintiffs, appellants.

Peter D. Coffman, Washington, DC, with whom Jay P. McCloskey, U.S. Atty., Portland, ME, Frank W. Hunger, Asst. Atty. Gen., Michael Jay Singer and Deborah Ruth Kant, Dept. of Justice, Washington, DC, were on brief, for defendants, appellees.

Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, and CYR, Circuit Judge.

BOWNES, Senior Circuit Judge.

Plaintiffs appeal from a judgment on stipulated facts upholding a policy of the United States Department of Agriculture (USDA) that reduces their food stamp benefits. The district court upheld the USDA policy of counting as income for food stamp purposes the utility reimbursements plaintiffs receive from the Department of Housing and Urban Development (HUD) and from the Farmers Home Administration (FmHA). Estey v. Commissioner, Maine Dep't of Human Servs., 814 F.Supp. 152 (D.Me.1993). Because we conclude that the energy-related components of HUD and FmHA utility reimbursements are excluded by statute from income under the Food Stamp Act, we reverse.

I. BACKGROUND

The defendant-appellees are the Secretary of USDA (Secretary) and the Commissioner of the Maine Department of Human Services, the state agency charged with applying USDA's uniform guidelines in administering the food stamp program in Maine. Plaintiffs are a class of tenants receiving food stamps, paying for household utilities, and living in HUD public housing, in privately-owned "Section 8" HUD-assisted apartments, and in privately-owned FmHA-assisted housing. ¹

Plaintiffs, as tenants in HUD and FmHA housing, receive monthly payments, called "utility reimbursements," because all of their utilities are not included in their rent, and because their monthly income is very low relative to average utility costs in their communities. The issue on appeal is whether USDA may count utility reimbursements as income under the Food Stamp Act, 7 U.S.C. Secs. 2011-2032, although section 2014(d)(11)(A) of the Act expressly excludes "energy assistance" payments from food stamp income.

A. Food Stamp Act

The Food Stamp Act establishes a federally-funded, state-administered program to alleviate malnutrition and hunger in low income households by providing needy persons with coupons to purchase food from retail stores. See id. Sec. 2011; Massachusetts v. Lyng, 893 F.2d 424, 425 (1st Cir.1990); West v. Bowen, 879 F.2d 1122, 1124 (3d Cir.1989). USDA establishes uniform standards for food stamp eligibility. See 7 U.S.C. Sec. 2014(b). Eligibility depends on income. "Income" is defined as money payable to a household, from whatever source, subject to the exclusions and deductions in the Act. See id. Sec. 2014(d)-(e). The exclusion at issue exempts from food stamp income "any payments

                or allowances made for the purpose of providing energy assistance under any Federal law."   Id. Sec. 2014(d)(11)(A).  Plaintiffs, as recipients of FmHA and HUD utility reimbursements, are allotted fewer food stamps because USDA interprets the Act to include utility reimbursements as income
                

B. HUD and FmHA Utility Reimbursements

To frame an analysis of whether utility reimbursements are "energy assistance" under the Food Stamp Act, we outline the regulations on utility reimbursements under the FmHA rental assistance program and the HUD section 8 and public housing programs. In relevant respects, these regulations are identical. Tenants in HUD and FmHA housing pay no more than 30% of household income for rent plus an allowance for any utilities not supplied by the landlord. See 42 U.S.C. Sec. 1437a(a)(1); 7 C.F.R. pt. 1930, subpt. C, exhs. B.IV.A.2.c, E.II.E. Water, sewerage, trash collection, electricity, cooking fuel, heat, and hot water are utilities for which allowances may be established. See 24 C.F.R. Secs. 813.102, 965.472, 965.476; 7 C.F.R. pt. 1944, subpt. E, exhs. A-5, A-6. The FmHA utility allowance reflects the utility costs incurred by the majority of households in similar units in a housing complex. See 7 C.F.R. pt. 1944, subpt. E, exh. A-6.I, -6.II. HUD utility allowances represent a "reasonable consumption" of utilities "by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary and healthful living environment." 24 C.F.R. Secs. 813.102, 965.476(a).

To prevent tenants who pay for their own utilities from generally incurring excessive utility costs, HUD and FmHA regulations permit rent (capped at 30% of income) to be offset by an allowance for utilities. See 24 C.F.R. Secs. 813.102, 913.102; 7 C.F.R. pt. 1930, subpt. C, exh. E.IX.A.1. This set off results in a payment called a "utility reimbursement" whenever monthly income is very low and utility costs are relatively high. A utility reimbursement is equal to the sum of all allowances for any utilities not supplied by the landlord minus 30% of monthly income. See 24 C.F.R. Secs. 813.102, 913.102; 7 C.F.R. pt. 1930, subpt. C, exh. E.IX.A.2.

For example, if a tenant's monthly income is $100, $30 (30%) is the total amount the tenant must pay for housing costs, including any utility allowance. If the utility allowance is $5, the tenant will not receive a utility reimbursement, but will owe the landlord only $25 because the allowance is credited against the total amount due. A tenant with the same monthly income, but with a utility allowance of $50, will pay the landlord no rent and will receive a utility reimbursement of $20 (the utility allowance minus 30% of $100). Every tenant entitled to a utility reimbursement receives a bill from at least one utility company. The reimbursement ensures that FmHA and HUD tenants, living in very poor households, will not generally pay more than 30% of household income for energy, water, sewerage, and trash collection costs.

II. DISCUSSION

Plaintiffs argue that utility reimbursements are "energy assistance," and that section 2014(d)(11)(A) of the Food Stamp Act exempts such assistance from income calculations. USDA contends that this provision, excluding from food stamp income "any payments for the purpose of providing energy assistance," is inapplicable because "energy assistance" is limited to payments made to offset rapidly rising energy costs, whereas utility reimbursements cover routine utility costs. ²

A. Standard of Review

A court reviewing an agency's interpretation of a statute it administers must first determine whether Congress has spoken to the "precise question at issue." Chevron U.S.A. v. Natural Res. Defense Council, 467 U.S. 837, 842, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). The precise question in this case is whether "energy assistance" under section 2014(d)(11)(A) encompasses only payments offsetting rapidly rising energy costs. Cf. id. at 840, 845, 104 S.Ct. at 2780, 2783 (noting that precise question at issue is whether EPA's plantwide definition of "stationary source" applies to a statute requiring permits for new or modified stationary sources of air pollution). If Congress's intent on this question is clear, "that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43, 104 S.Ct. at 2781. Our review of the district court's construction of the statute is de novo. See Lyng, 893 F.2d at 428.

In determining congressional intent, we employ the traditional tools of statutory construction, including a consideration of the language, structure, purpose, and history of the statute. See Dion v. Commissioner, Maine Dep't of Human Servs., 933 F.2d 13, 15 (1st Cir.1991). Our inquiry begins with an examination of the relevant statutory language. American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982). To be excluded from income under section 2014(d)(11)(A), a payment must be "for the purpose of energy assistance." The Act provides no definition for "energy assistance," but its meaning is generally understood. A payment that provides "assistance" commonly refers to a public subsidy; for example: housing assistance, rental assistance, and medical assistance payments. We assume " 'that the legislative purpose is expressed by the ordinary meaning of the words used.' " American Tobacco Co., 456 U.S. at 68, 102 S.Ct. at 1537 (citation omitted). In the absence of a manifestation of legislative intent to the contrary, we conclude that "energy assistance" means what it says: a public subsidy for the purchase of energy.

Under this plain reading of the provision, the plaintiffs have no colorable claim unless their utility reimbursements are subsidies for energy. FmHA and HUD utility allowances account for nonenergy utilities such as water, sewerage, and trash collection, as well as energy utilities including heat, electricity, natural gas, and hot water. A tenant directly liable for certain utilities receives a utility reimbursement only if the sum of the allowances for these utilities exceeds 30% of household income. Therefore, a utility reimbursement does not subsidize energy purchases unless the tenant pays at least one energy company for the services provided. Otherwise, a utility reimbursement is not an energy subsidy at all because it assists the tenant only in paying nonenergy utility providers.

In response to the Secretary's argument that utility reimbursements can never be energy assistance because they might offset nonenergy utility costs, plaintiffs contend that utility reimbursements are always energy assistance because they are intended "primarily" for the payment of energy bills. A committee report discussing the energy assistance exclusion states that...