Case Title: Stanton v. Smith

Citation: 429 N.E.2d 224

Docket Number: 975S238

State: indiana

Court: Indiana Supreme Court

Date: 1981-12-22T00:00:00Z

Document:
429 N.E.2d 224 (1981)
Wayne A. STANTON, Administrator of the Indiana State Department of Public Welfare, Robert Watson, Chairperson and James Burnett, Robert Curless, Marion Hilger and Arvella Stanton, Members of the State Board of Public Welfare and Elizabeth Samkowski, Director of the Marion County Department of Public Welfare, Appellants,
v.
Clara SMITH, Individually and On Behalf of Her Minor Children and On Behalf of All Other Persons Similarly Situated, Appellees.
No. 975S238.

Supreme Court of Indiana.
December 22, 1981.
Theodore L. Sendak, Atty. Gen., Robert F. Colker, Asst. Atty. Gen., Joseph J. Reiswerg, Deputy Atty. Gen., Indianapolis, for appellants.
Harold R. Berk, Legal Services Organization of Indianapolis, Inc., Louis Rosenberg, Indiana Center on Law and Poverty, Indianapolis, for appellees.
PIVARNIK, Justice.
This action was brought in the trial court by Clara Smith against Wayne A. Stanton, as Administrator of the Indiana State Department of Public Welfare, and members of the State Board. Clara Smith was a *225 recipient of aid to families with dependent children (AFDC) for herself and four minor children as administered by the State Department of Public Welfare and the Marion County Department of Public Welfare. AFDC is a federal-state grant in aid program to provide financial assistance to eligible families with dependent minor children.
Public Law 339 of the Acts of the Indiana General Assembly of 1973 as enacted on April 26, 1973, provided in part as follows:
Pursuant to the directive of the General Assembly, the State Welfare Board adopted regulation 2-106, effective July 1, 1974, effectuating a 25% rateable reduction. The implementation of the rateable reduction caused some AFDC recipients to be stricken from the welfare rolls and reduced benefits to some other recipients. Plaintiff Clara Smith's benefits were reduced in amount because of the rateable reduction and she brought this action in behalf of herself and her minor children as well as seeking to have the action declared a class action for all of those similarly situated. The trial court found the action was properly maintainable as a class action and further found that notice to members of the class was not applicable and not required.
The trial court further found in favor of the plaintiff and against the defendants on the grounds that P.L. 339 failed to establish guidelines to guide the Welfare Board in the selection of the amount of rateable reduction. The Court found that by ordering reductions "not to exceed thirty-five per cent" the Legislature delegated power to make rateable reductions of financial standards used to determine minimum essential needs for recipients of benefits under Title IV of the Federal Social Security Act. This constituted an unconstitutional delegation of legislative power to the State Department of Public Welfare and that therefore the act was ineffective and void. The court later amended its judgment to find that welfare regulation 2-106, which applied the 25% rateable reduction pursuant to P.L. 339, was void and ordered defendants to pay the plaintiffs and further ordered defendants to pay all members of the class in plaintiff's situation such amounts of money as would have been paid to them but for the application of regulation 2-106. The trial court then granted defendant's motion for stay of execution of the judgment pending this appeal.
The question before us then is whether the legislature improperly delegated its authority to the Indiana Welfare Board by allowing the Board to set the actual figure of rateable reduction which it did set at 25%. An analysis of the federal and state statutes involved and the practices and procedures of the Indiana Welfare Board since its institution shows that there is no more authority given to it under P.L. 339 than it has always had. The same standards that were used to determine eligibility and amounts of benefits were still to be used by the Indiana Department of Welfare but it was to apply a 25% rateable reduction to those standards and amounts. This would be done by analyzing the needs in the area covered by AFDC and the amount of funds available. The State Welfare Board was the proper and most practical unit to make these determinations pursuant to the authority that it had always had and subject to the guidelines and maximums directed by the Legislature. The trial court accordingly erred when it found that P.L. 339 and regulation 2-106 unconstitutionally delegated legislative authority to the State Welfare Board and were void.
The Welfare Department was created by the Indiana General Assembly in 1936 for the following purposes:
In appropriating funds for the AFDC program the United States Congress stated in 42 U.S.C. § 601 (1974):
The Welfare Department has taken on many duties since its inception as it applies to this area of its responsibility. The agency was authorized to comply with the requirements of the Social Security Act and do all things necessary to secure federal funds by Ind. Code § 12-1-2-12 and § 12-1-2-13 (Burns 1971). It is apparent that the United States Congress intended the AFDC program to provide as much financial assistance to needy dependent children as was practicable considering the financial condition of each State. The Federal regulations require the specification of statewide assistance in the following manner:
45 C.F.R. § 233.20 (1974)
In 1936 the Indiana General Assembly accepted the Federal funds for the creation of an AFDC program and provided that the amount of assistance which should be granted should be sufficient in light of other income to provide such child with a reasonable subsistence compatible with decency and health. Thus, the authority, duties and responsibilities of the State Welfare Board were provided in Ind. Code § 12-1-2-2(d) as follows:
And Ind. Code 12-1-7-3, as written in 1974:
(Amended 1975, P.L. 123, § 1; 1976, P.L. 48, § 2; 1977, P.L. 141, § 1; 1979, P.L. 124, § 1.)
We agree with defendants that the Indiana General Assembly by enacting these statutes delegated to the State Department of Public Welfare the authority to establish minimum standards of assistance for the program within the guidelines and maximum standards set out therein. We further feel the defendants have accurately stated that it is apparent from considering both state and federal statutes that the purpose of the AFDC program was to provide the highest assistance to most needy dependent children in light of state financial conditions. The State Welfare Department has always been required to meet these standards in the AFDC program and the enactments under consideration here do not change these requirements. The United States Supreme Court in Rosado v. Wyman, (1970) 397 U.S. 397, 90 S. Ct. 1207, 25 L. Ed. 2d 442, found that the Federal Congress in enactment of 42 U.S.C. § 602(a)(23) providing for aid to families with dependent children, that provisions of the Social Security Act gave authority to administer this program to the federal HEW. Rosado provided: "There are two basic factors that enter into the determination of what AFDC benefits will be paid: First, it is necessary to establish `a standard of need,' a yardstick for measuring who is eligible for public assistance. Second, it must be decided how much assistance will be given, that is, what `levels of benefits' will be paid. On both scores, Congress has always left to the States a great deal of discretion." Id. at 408, 90 S. Ct.  at 1215. Rosado further provided that if the Department of Housing and Welfare found that a state was not properly using the federal monies allocated to it for a program such as AFDC that Department would be justified in withdrawing the federal funds granted to that state for that program. The HEW did provide for rateable reduction in state programs in 1969, when it enacted a new federal regulation which read as follows:
45 C.F.R. § 233.20(a)(2)(ii)
45 C.F.R. § 233.20(a)(3)(viii).
This regulation required the states to incorporate cost of living raises into their minimum standards of assistance. Because this would raise the amount of assistance payable, HEW provided that if the state could not meet this higher standard, it could institute an across the board rateable reduction. This means the state could reduce by a percentage its total need calculation to provide minimum standards of assistance payable in light of the appropriation by the state legislature for the AFDC program. As the defendants point out, the State of Indiana was still under the obligation codified in both state and federal law to provide minimum standards of assistance which would provide reasonable subsistence to the most needy children. The selection of a percentage rateable reduction could be governed only by this standard. Under 42 U.S.C. § 601 and 602, the state was required to submit a state plan for AFDC assistance to HEW. As a matter of fact, the state submits quarterly reports to HEW, fully detailing the amounts of assistance payable in the AFDC program. Following the enactment of P.L. 339, the Indiana State Welfare Board caused hearings to be held on the selection of a percentage rateable reduction. Following this hearing, the 25% rateable reduction was set by the Board as above indicated. The Attorney General of the State of Indiana and the Commission of the Governor were privy to the hearings regarding the determination of the percentage of rateable reduction; after its setting, the Attorney General, the Governor of Indiana, and the HEW approved the percentage selected. Plaintiffs properly point out that approval by any and all of these offices does not necessarily make the action legal or constitutional. It does, however, indicate that the action taken was subject to sufficient input and control to prevent arbitrary action. Within P.L. 339 can be found legislative intent that the welfare department continue to act under a reasonable subsistence standard from the original delegation of power to the present. P.L. 339 could not change the basic policy standards set by the Legislature but indicated that the intent and policy of the Legislature was that there be a rateable reduction of the end amounts and set the maximum of that reduction at 35%. The Legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. Blue v. Beach, (1900) 155 Ind. 121, 56 N.E. 89. An administrative body can be delegated the responsibility, methods, or details necessary to implement the law enacted by the Legislature. This Court has held that the Legislature may delegate authority to an administrative agency if the legislature lays down in the same statute a reasonable standard to guide that discretion. Kryder v. State, (1938) 214 Ind. 419, 15 N.E.2d 386. We have further held that the standard set in the statute to guide the administrative board can be found within the four corners of the statute itself or can be found within other statutes that apply to the conduct and authority of the administrative unit. Benton County Council v. State, (1946) 224 Ind. 114, 65 N.E.2d 116. It was stated in Benton:
Id. at 121, 65 N.E.2d  at 119.
In Ennis v. State Highway Commission, (1952) 231 Ind. 311, 108 N.E.2d 687, this Court approved the authority given by the legislature to the Indiana Toll Road Commission to locate toll roads. This authority came under the same attack of delegation of legislative power with no standard that we face in the present statute. It was found therein that the legislative delegation was proper since the governor had to approve the location fixed by the Indiana Toll Road Commission and another administrative agency had to approve the decision and that there were guidelines in another statute to guide the approval of the second agency. See also Wampler v. Trustees of Indiana University, (1961) 241 Ind. 449, 172 N.E.2d 67. The case of Taxpayers Lobby of Indiana, Inc., v. Orr, (1974) 262 Ind. 92, 311 N.E.2d 814 concerned the sales tax that provided for an exemption for sales of food for human consumption. No definition was given to the term food but the statute listed some items as exempt and some as not. Again, this provision was attacked as an improper delegation of legislative authority to the tax department to make the determinations of which foods would be exempt and which would not. This Court sustained the food exemption because we found that there were workable standards in the provision.
Defendants put into evidence in this cause facts and figures showing the workability of the AFDC plan with the rateable reduction. The legislature gave proper and sufficient guidelines to the Welfare Department in its operations from its institution in 1936 up to and including P.L. 339. P.L. 339 did not unconstitutionally delegate legislative power and authority to the Indiana Welfare Department. The trial court was in error in finding Public Law 339 unconstitutional and void and Indiana Board of Public Welfare regulation 2-106 ineffective and void. It therefore erred in further ordering the plaintiff and all members of the class be paid the same amounts they would have received but for the passage of P.L. 339 and the enforcing of welfare regulation 2-106.
This cause is remanded to the trial court with orders to amend this judgment consistent with this opinion.
GIVAN, C.J., and DeBRULER, HUNTER and PRENTICE, JJ., concur.