Opinion ID: 575215
Heading Depth: 2
Heading Rank: 4

Heading: HEAP Funds to Those Most in Need

Text: 42 The fact that Congress aimed in the words of the Act to ensure that the states retained flexibility to target benefits to the most needy households, coupled with the legislative history just discussed, is persuasive proof that the 110 percent floor was not meant to be absolute. An absolute floor plainly would deprive the states of the flexibility to target funds to those most in need. Measuring need by which households have the the lowest income and the highest energy costs in relation to income, 42 U.S.C. § 8624(b)(5), requires the formulation of policy and the making of rules and thus is a determination that falls within the purview of the states' interpretive authority. See Chevron, 467 U.S. at 843, 104 S.Ct. at 2782. 43 A state may rationally conclude that tenants occupying government subsidized housing with heat included in the rent are less in need of HEAP funds than, for example, tenants who do not live in such housing. This follows because a tenant living in government subsidized housing with heat part of her rent at least has some of her energy costs already subsidized, and that subsidy is relatively stable in proportion to income because the tenant's rent is not affected by fluctuations in energy costs. See 42 U.S.C. § 1437a(a); 24 C.F.R. §§ 813.107(a), 813.102, 913.102, 913.107; 9 NYCRR § 1627-2.6(c)(5)(i); 18 NYCRR § 352.3(a), (d). In contrast, a tenant not living in government subsidized housing has no cap on the amount of rent payable in proportion to income, and no part of her heating expense has been subsidized. Plaintiffs argue that though heat is included in their government-subsidized rent they nevertheless incur substantial heating costs. The state replies that the rent subsidy makes those costs negligible. Whether plaintiffs incur substantial or negligible heating expenses is a relative question and, in any event, beyond the compass of our inquiry. What is more important--insofar as it reflects on whether the state has rationally exercised the authority delegated to it--is that plaintiffs' heating costs represent a fixed percentage of their income, and are already substantially subsidized. Unlike tenants living in non-government-subsidized-housing, plaintiffs' rent cannot go up in response to a rise in their landlord's heating costs because of the way in which the public assistance and government housing subsidies are structured. 44 This is not to say that tenants must be vulnerable to a rise in heating costs to be eligible for HEAP assistance. Congress eliminated the requirement--extant in an earlier version of the statute--that recipients of HEAP funds be found vulnerable to changes in heating costs. Compare Home Energy Assistance Act, 42 U.S.C. §§ 8601-8612, Pub.L. 96-223, 94 Stat. 288-299, repealed, Pub.L. 97-35, 95 Stat. 902 with Low-Income Home Energy Assistance Act of 1981, 42 U.S.C. §§ 8621 et seq. We merely use plaintiffs' invulnerability to fluctuations in the price of heat as evidence--when coupled with the fact that most, if not all, of their heating costs are actually subsidized--demonstrating the rationality of distinguishing between plaintiffs and other needy tenants who do not reside in government subsidized housing. Specifically, if the income of a household not living in government subsidized housing decreases, its rent and heat costs remain the same, so the percentage of its income paid for heat necessarily increases, even when heat is included in the rent. 45 The picture is different for a household in government subsidized housing whose income decreases. In such case its rent--and thereby its heating costs if included in rent--also decreases, so that the percentage of income the household pays for heat remains the same. See 42 U.S.C. § 1437a(a); 24 C.F.R. §§ 960.209, 813.107(a), 813.102, 913.107; 9 NYCRR § 1627-2.6(c)(5)(i); 18 NYCRR § 352.3(a), (d). The state may therefore rationally determine that tenants of government subsidized housing whose heat is included in their rent do not have the lowest income and the highest energy costs in relation to income in comparison with households not occupying such housing. This determination falls within the state's interpretive authority under the Low-Income Energy Act. And since it is not arbitrary, capricious, or manifestly contrary to the statute, we defer to it. See Chevron, 467 U.S. at 844, 104 S.Ct. at 2782; Rural Alaska, 847 F.2d at 539. 46 This rather long digression returns us to the question of whether an absolute 110 percent floor would prevent states from following the direction in the first part of clause (b)(5)--to give aid to those most in need. The foregoing discussion shows it plainly has that potential. Analysis of the legislative history of the 1984 amendments and the policies expressed in the Act leads to the conclusion that the 110 percent floor was aimed at restricting the state's ability to designate a particular income level for purposes of eligibility under clause (2)(B), not its ability to enact other eligibility standards that might indirectly exclude households whose incomes fall under the 110 percent floor. 47 We briefly address one more argument regarding this floor. Plaintiffs reason that because clause (b)(5) prevents the states from discriminating between households that receive public assistance and those that do not, the floor in subclause (2)(B) must also apply to those households identified in subclause (2)(A). This argument is unpersuasive. First, Congress' enactment of the 110 percent floor in subclause (2)(B) demonstrates that when it wanted to put in a floor it knew how to do so, and the absence of a similar provision in subclause (2)(A) means that no income floor applies to households eligible for HEAP funds by virture of receiving other assistance. See Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 300, 78 L.Ed.2d 17 (1983). Second, the specific language of the floor itself limits its application to this subclause. To read the floor as applying to all otherwise eligible households would read that limitation out of the statute, something we may not do. See Trichilo v. Secretary of Health & Human Services, 823 F.2d 702, 706, aff'd on reh'g, 832 F.2d 743 (2d Cir.1987). 48 Third, the legislative history summarized above indicates that the 110 percent floor was inserted because it was needed to provide a floor for those persons not on public assistance; the non-discrimination clause was put in, not to protect public assistance households from discrimination in favor of others, but to protect non-public assistance households from discrimination in favor of public assistance households. See S.Rep. No. 484, 98th Cong., 2d Sess. 18-19 (1984), reprinted in 1984 U.S.Code, Cong. & Admin.News 4847, 4860-61. Finally, we believe that if Congress had meant an income floor to be applied to those households whose eligibility is not based on income, it would have said so directly rather than indirectly via a non-discrimination clause. In sum, we therefore hold that 18 NYCRR § 393.4(c)(3)(i) does not violate clauses (b)(2), (b)(5), or (b)(8) of the Act. III Clause (f)(1) 49 We next address whether the regulation violates 42 U.S.C. § 8624(f)(1) by allowing the state to consider rent subsidies in determining a household's eligibility, i.e., need for HEAP benefits. In addition to the sections discussed above, the Low-Income Energy Act provides that 50 [n]otwithstanding any other provision of law unless enacted in express limitation of this paragraph, the amount of any home energy assistance payments or allowances provided directly to, or indirectly for the benefit of, an eligible household under this subchapter shall not be considered income or resources of such household (or any member thereof) for any purpose under any Federal or State law, including any law relating to taxation, food stamps, public assistance, or welfare programs. 51 Id. The district court, relying on the Eighth Circuit's opinion in Clifford, held that the state's regulation also indirectly violated this clause because it considered public assistance income in determining HEAP eligibility. While acknowledging that the clause only prevents the opposite calculation--considering HEAP assistance as income for purposes of other public assistance programs, it believed that the Eighth Circuit was correct in ruling that there was no logical reason why it should be permissible for a state to achieve a net effect contrary to Congress' intent merely by subtracting from one side of an equation instead of the other. 733 F.2d at 538. The question we must answer then, is whether clause (f)(1) prevents states from taking into consideration other public assistance when calculating a household's need for HEAP assistance. 52 Although, we also consider the purposes Congress sought to serve by promulgating this clause, our starting point must be the plain language of the statute. The language of f(1) cannot be read as contemplating either that other public assistance may or may not be taken into account in calculating the need for HEAP assistance. Rather, it restricts consideration of benefits provided under this subchapter for purposes of other assistance laws. The legislative history of the predecessor statute to the Act reveals Congress' concern was with the use of HEAP funds to offset other public assistance, not the use of other public assistance in calculating the amount of HEAP funds to be given. See Joint Committee Statement, H.R.Conf.Rep. No. 817, 96th Cong., 2d Sess. 154 (1980), reprinted in 1980 U.S.Code, Cong. & Admin.News 642, 705-06 (The conference agreement requires that fuel assistance payments or allowances provided under this title will not be considered income or resources of an eligible household for any purpose under a Federal or State law); Dept. of Health & Welfare, State of Idaho v. Block, 784 F.2d 895, 900-01 (9th Cir.1986). To the contrary, in the one instance in which a proposed amendment would have provided that payments made by charitable organizations for energy bills were not to count as income for any federal benefit program, including the Low-Income Energy Act, the amendment was rejected. See S.Rep. No. 484, 98th Cong., 2d Sess. 18 (1984), reprinted in 1984 U.S.Code, Cong. & Admin.News 4847, 4859. 53 The parties dispute whether taking other assistance into account in calculating the need for HEAP payments would further the purposes of the statute. The state claims reading such reciprocity into clause (f)(1) would violate the statutory purpose of providing funds to those households who need them most, because the result would be that public assistance households whose heating costs are already fully or substantially subsidized would receive HEAP benefits, while non-public assistance households with similar incomes who receive no other assistance for heat would receive less HEAP assistance because limited funds would have to be stretched to cover more households. 54 The state contends that this result would be directly contrary to the mandate of clause (b)(5). It points out additionally that if a public assistance household receives subsidies for its heating costs, the HEAP funds will be a windfall used by the household to meet other costs, thereby violating the Act's requirement that HEAP funds be used only to meet energy costs. The reality of this possibility is confirmed by the fact that the very opinion upon which the district court and the plaintiffs rely, Clifford, held that [t]he general prohibition against using other forms of public assistance to reduce an applicant's entitlement to [the Act's] benefits ... does not prevent the state from assuring that [the Act's] funds are used only to pay a family's heating costs, which heating costs in subsidized homes have already been reduced by the amount of the heating subsidy. 733 F.2d at 540. Yet Clifford failed to explain how it is possible to calculate a household's true need for energy assistance without taking into account the portion that has already been paid. 55 Plaintiffs insist the Act's specific targeting of public assistance recipients for HEAP assistance--though Congress knew that most of these programs already provide some energy assistance--evinces Congress' intent that other aid not be taken into account when calculating the need for HEAP funds. See Clifford, 733 F.2d at 538. We also presume Congress was aware of such other aid, see Cannon v. University of Chicago, 441 U.S. 677, 696-97, 99 S.Ct. 1946, 1957-58, 60 L.Ed.2d 560 (1979), but it may well have intended HEAP to cover only those energy needs not already met by other forms of public assistance. See DeAllaume v. Perales, 701 F.Supp. 49, 52 (S.D.N.Y.1988) (HEAP was meant to supplement, not replace, any public assistance already delivered by state laws). 56 Clause (f)(1) persuasively demonstrates Congress knew how to mandate that certain types of payments not be taken into account when making other calculations. Nothing in the legislative history suggests it desired clause (f)(1) to be read as not counting HEAP funds in calculating income for purposes of other public assistance, but also the use of other public assistance in calculating the need for HEAP funds. No such reciprocal mandate is in the statute. We are compelled therefore to read the language of clause (f)(1) literally and conclude that the New York regulation at issue does not violate this clause.