Opinion ID: 3010252
Heading Depth: 2
Heading Rank: 1

Heading: Proceedings Before the HHS Appeals Board.

Text: The Secretary of HHS created the HHS Appeals Board in the early 1970's by a regulation promulgated under 45 C.F.R. Part 16. The regulation gave the Board the responsibility of resolving disputes such as the one now before us. Congress thereafter gave the Board additional authority including the ability to resolve quality control disputes under the AFDC program of Title IV-A. 6 See 42 U.S.C. § 608(j). The Appeals Board is comprised of a Chairperson and four full-time Board members. The Secretary appoints each of the members of the Board. The Appeals Board rejected the Commonwealth's challenge to its authority, and also rejected the Commonwealth's argument that the JCP fee is not IV-D program income under 42 U.S.C. §655(a)(1), and 45 C.F.R. § 304.50. The Board reasoned that 45 C.F.R. § 304.50 merely restates Title IV-D's requirement that fees collected from services provided under a state's Child Support Enforcement plan are income that must be excluded from any claim for federal funding. The Board concluded that the JCP fees in dispute were charged as initial filing fees in conjunction with IV-D child support cases and thus directly generated by IV-D services. (App. 20a) The Board also noted that the Commonwealth treats other court filing fees received in connection with IV-D services as program income. (App. 181a182a). Accordingly, the Board upheld the disallowances. The Board relied in part upon its own precedent to reject the Commonwealth's claim that 45 C.F.R. § 74.41(c)(1) applies to this case. At the time of the Board's decision, that regulation stated: [r]evenues raised by a government recipient under its governing powers, such as taxes, special assessments, levies, and fines are not considered program income. 45 C.F.R. §74.41(c)(1) (1993). The parties stipulated that the JCP fees at issue constituted special assessments, but the Board ruled that the more restrictive income exclusion provision of the statute takes precedence over the general language of the regulation. See 42 7 U.S.C. § 655(a)(1). The Board concluded that the proper focus is on the receipt of income from grant-related activities, not on how the funds are expended. App. at 23a. Nor did the Board believe that 45 C.F.R. § 304.21(b)(1) supported the Commonwealth's position. That regulation provides that federal funding is not available for court filing fees unless the court participating in the cooperative agreement with the state IV-D agency ordinarily pays such fees itself. The Board found that the Commonwealth failed to present any evidence that either the Department of Public Welfare or the Domestic Relations Sections pay court filing fees; rather, the Board concluded that the fees are paid by the litigants. After its original ruling, the Board upheld an additional disallowance of $24,861 in federal funding to the Commonwealth on the same grounds.