Court Opinion

ID: 195348
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:38:09+00
Date Added: 2024-06-11T09:50:01.329518
License: Public Domain

UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 93-1453

                     DEBRA ESTEY, ET AL.,

                   Plaintiffs, Appellants,

                              v.

              COMMISSIONER, MAINE DEPARTMENT OF
                   HUMAN SERVICES, ET AL.,

                    Defendants, Appellees.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF MAINE

         [Hon. Morton A. Brody, U.S. District Judge]
                                                   

                                         

                            Before

                   Torruella, Circuit Judge,
                                           
                Bownes, Senior Circuit Judge,
                                            
                   and Cyr, Circuit Judge.
                                         

                                         

Patrick  Francis Ende, with  whom Pine Tree Legal Assistance, Inc.
                                                                  
was on brief for appellants.
Peter  D. Coffman,  with  whom  Jay  P. McCloskey,  United  States
                                                 
Attorney,  Frank W.  Hunger, Assistant  Attorney General,  Michael Jay
                                                                  
Singer and Deborah Ruth Kant, Department of Justice, were on brief for
                        
appellee.

                                         

                        April 20, 1994
                                         

          BOWNES,  Senior Circuit  Judge.   Plaintiffs appeal
          BOWNES,  Senior Circuit  Judge.
                                        

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

                    

1The class includes
          [a]ll the persons  in the State  of Maine who  will
          receive  or  who  have  received  FmHA  and/or  HUD
          utility  [reimbursements]  anytime  since March  1,
          1990 and whose  food stamp benefits were or will be

                             -2-

          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.     2011-2032,

although section 2014(d)(11)(A) of the Act expressly excludes

"energy assistance" payments from food stamp income.

                     A.  Food Stamp Act 
                     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.  
                                                           

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.   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.   2014(d)-(e).  The exclusion
                               

                    

          wrongfully terminated, reduced,  or denied  because
          of the  defendant's policy  of refusing to  exclude
          FmHA  and/or  HUD  utility   [reimbursements]  from
          "income"  when  determining food  stamp eligibility
          and benefits.
Estey, 814 F. Supp. at 154.  
     

                             -3-

at  issue  exempts from  food stamp  income "any  payments or

allowances   made  for  the   purpose  of   providing  energy

assistance  under any  Federal law."   Id.    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.    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.   
                                               

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

                             -4-

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.    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.   
                                               

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.    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

                             -5-

$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

                    

2Courts  have  split  over  whether USDA  may  count  utility
reimbursements as income.  See, e.g., West v. Bowen, 879 F.2d
                                                   
1122  (3d Cir.  1989) (striking  down USDA's  policy); accord
                                                             
South  Dakota Dep't of Soc.  Servs. v. Madigan,  824 F. Supp.
                                              
1469, 1477 (D.S.D. 1993),  appeal docketed, Nos. 93-2849, 93-
                                          
2869  (8th Cir.  July  21 &  23,  1993); Carpenter  v.  North
                                                             
Carolina Dep't of Human  Res., 419 S.E.2d 582 (N.C.  Ct. App.
                             
1992).    Contra  Gore  v. Espy,  Nos.  2:91-0139,  2:91-0826
                               
(S.D.W.V.  March 31,  1993); Scott  v. Grunow,  No. 1:90-0188
                                             
(M.D. Tenn.  May 22,  1992); Susan  v.  Scales, No.  S-91-65M
                                              
(N.D. Ind.  May 19, 1992);  Garcia v. Madigan,  No. H-91-1992
                                             
(S.D.  Tex. Nov. 29, 1991);  Larry v. Yamauchi,  753 F. Supp.
                                              
784  (E.D.  Ark.  1990);  Mitchell v.  Block,  No.  82-3297-3
                                            
(D.S.C. June 22, 1983);  Orr v. Arizona Dep't of  Econ. Sec.,
                                                            
761 P.2d 1085 (Ariz. Ct. App.  1988).  Cf. Maryland Dep't  of
                                                             

                             -6-

                    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
                                        

(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  (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.
                                                  

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

                    

Human  Res. v. USDA, 976 F.2d 1462 (4th Cir. 1992) (upholding
                   
USDA's  interpretation  of  exclusion  for  energy assistance
provided under state or local laws). 

                             -7-

language.  American Tobacco Co. v. Patterson, 456 U.S. 63, 68
                                            

(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 (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

                             -8-

one energy company for  the services provided.   Otherwise, a

utility reimbursement is not an energy subsidy at all because

it assiststhe tenantonly inpaying nonenergyutility 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  benefits provided  by the

Home   Energy   Assistance  Act,   and   the  Energy   Crisis

Intervention  and  Energy  Crisis  Assistance  Programs,  are

"energy assistance."  See  H.R. Rep. No. 788, 96th  Cong., 2d
                         

Sess. 122-23 (1980), reprinted in 1980 U.S.C.C.A.N. 843, 955-
                                 

56.    Because  these  programs historically  provided  food,

medicine, and rental assistance,  as well as direct subsidies

for  fuel bills,  plaintiffs  contend that  Congress did  not

intend "energy  assistance"  to  include  payments  only  for

energy utilities.  

          Plaintiffs  fail  to  acknowledge   the  difference

between  their   utility  reimbursements  and   the  benefits

provided under  the programs  discussed in the  House Report.

According  to the report,  these programs provided assistance

to offset the impact of high energy costs.  See id.; see also
                                                             

45 C.F.R.    1061.51-6(a), 1061.70-8.  At issue in this case,

                             -9-

however, are utility reimbursements that are designed in part

to  offset nonenergy utility costs.  The analogy suggested by

plaintiffs  is thus  not  apt; it  does  not clarify  whether

payments designed  to account  for  a mixture  of energy  and

nonenergy  expenses  are  "energy assistance."    Neither the

energy  assistance   exclusion's  plain  language,   nor  its

legislative  history evince  an  intent  to exclude  payments

provided primarily for the purpose of energy assistance.  For
                  

this reason,  we decline  plaintiffs' invitation to  read the

word "primarily" or its equivalent into the statute.

          The  Secretary argues that  a utility reimbursement

can never be a subsidy for the purchase of energy because the
         

allowance  may  be  based exclusively  on  nonenergy  utility

costs.   In all likelihood,  however, part of  every tenant's

utility reimbursement is  based on an energy-related  utility

allowance.     In   fact,  some   tenants   receive   utility

reimbursements only  for energy utilities.   Named  plaintiff

Felix St.  Peter's utility  reimbursement, for example,  is a

two  party check made jointly payable to him and Maine Public

Service  Company.     See  24  C.F.R.       813.108,  913.108
                         

(providing  that  HUD  utility  reimbursements  may  be  made

payable  to utility  providers).   The  energy and  nonenergy

components  of  a utility  allowance  are  itemized when  the

allowance  is approved by FmHA and  HUD; this information may

be used to determine what fraction of a utility reimbursement

                             -10-

is energy-related.   FmHA  regulations require a  landlord to

list each  utility  allowance separately  when  seeking  FmHA

approval for  the allowance, and to  provide this information

to the tenant.  7 C.F.R. pt. 1944, subpt. E,  exh. A-6.III to

-A.6.V.   The  local public  housing agency  operating a  HUD

public housing project must maintain similar lists of utility

allowances, and this information  is available to the tenant.

24 C.F.R.    965.473, 965.474.  Although  HUD regulations for

section  8 privately-owned housing  do not explicitly require

that itemized  information on utility  allowances be retained

for  the  tenant,  this  is the  implication  of  regulations

requiring that HUD or the local public housing agency approve

proposed allowances and that  allowances be reviewed annually

for  adjustments.    See,  e.g.,  id.      813.102,  882.116,
                                     

882.214.  We  assume that  HUD and the  local public  housing

agency would  retain records of utility  allowances and would

make  this information  available  to the  tenant whose  rent

depends on that allowance. 

          Such information may be  used to determine how much

of  a utility reimbursement is  in fact a  subsidy for energy

costs.  See South  Dakota Dep't of Soc. Servs.,  824 F. Supp.
                                              

at 1477  ("computing the energy and  non-energy components of

[utility   reimbursements]  would  be   a  simple  matter  of

arithmetic, not a great administrative burden").  If 60% of a

utility allowance  is attributable to energy  costs, then 60%

                             -11-

of  the  utility reimbursement  is  a  payment assisting  the

purchase of  energy.   According  to  a construction  of  the

statute consistent with  its plain language, only  40% of the

reimbursement may  be counted as income under  the Food Stamp

Act.

                             -12-

     B.  Structure of the Act:  Deductions and Exclusions

          Turning to an analysis of the structure of the Act,

we consider  whether reading the  energy assistance exclusion

in  context renders counter-intuitive or ambiguous Congress's

intent on the meaning of "energy assistance."  

          The Secretary argues that the structure of the Food

Stamp  Act  indicates  that utility  reimbursements  are  not

"energy  assistance."  Income  eligibility determinations for

food stamps resemble income tax calculations,  see Department
                                                             

of Health  & Welfare v.  Block, 784 F.2d  895, 900 (9th  Cir.
                              

1986);  that is, net  food stamp income  equals gross income,

minus any  payments that are  excluded by statute,  minus the

standard deduction and any other deductions applicable to the

household.   The  Food Stamp  Act's "standard  deduction" and

"excess shelter cost  deduction" account  for utility  costs.

See  7  U.S.C.     2014(e).    According  to  the  Secretary,
   

excluding utility reimbursements as "energy assistance" would

subtract utility costs twice:  once as an exclusion and again

as a deduction.

          The  argument that  a payment  may not  be excluded

because  it  offsets a  cost  already  accounted for  by  the

standard  deduction  is  not  persuasive.    All  households,

regardless of  size,  receive the  standard deduction,  which

only in the most general sense reflects energy utility costs,

just as it reflects many other costs.  The standard deduction

                             -13-

is a fixed  sum that  is adjusted annually  according to  the

Consumer Price  Index  "for items  other  than food  and  the

homeowners'  costs and  maintenance  and repair  component of

shelter costs."  7 U.S.C.   2014(e).  

          The deduction for excess shelter costs specifically

accounts for  energy utilities, but  it does not  capture the

entire cost  of  energy  utilities.   The  statute  allows  a

household  to  deduct shelter  expenses,  including  rent and

utilities,  only  "to  the  extent that  the  monthly  amount

expended by [the] household  for shelter" exceeds 50%  of the

household's income  after  all  other  deductions  have  been

taken.    Id.   Deductible  expenses  include rent,  property
             

taxes,   property  insurance,   and  mortgage   payments  and

interest,  as well  as  fuel,  electricity, water,  sewerage,

trash  collection, and  telephone  service.   See 7  C.F.R.  
                                                 

273.9(d)(5)(ii).   The cap  on the  deduction is adjusted  to

reflect changes in the Consumer Price Index  for the shelter,

fuel,  and utilities components of housing costs.  7 U.S.C.  

2014(e).  

          According to the Secretary, Congress could not have

intended  to   exclude  the   energy  component   of  utility

reimbursements,  given  the existence  of the  excess shelter

cost  deduction.    But  the  Secretary  does  not  offer  an

alternative construction of the Act that absolutely precludes

deducting  energy  utility costs  whenever  energy assistance

                             -14-

payments  are  excluded  from income.    Even  if the  energy

assistance exclusion  were  intended to  cover only  payments

offsetting  rising  energy  costs,  as  USDA  contends,   any

payments  designed to  offset  rising energy  costs would  be

excluded,  while  the  energy   costs  themselves  would   be

deductible.    Implicit in  any  construction  of the  energy

assistance  exclusion  is   that  Congress  intended   energy

assistance to  be  excluded and  energy utility  costs to  be

deducted,  to the extent that all shelter costs exceed 50% of

monthly income.  This is borne out in the legislative history

of the energy assistance exclusion:  "If a household receives

an  energy allowance or grant, that allowance or grant is not

to be included in income  at all, but the energy  costs which

it  covers  may  continue  to be  treated  as  a  potentially

deductible shelter  expense when billed  or due."   H.R. Rep.

No. 788, supra, at 123, 1980 U.S.C.C.A.N. at 956.
              

          As  a practical matter,  there is unlikely  to be a

substantial overlap  between households excluding  the energy

component  of  utility  reimbursements  and  those  deducting

excess   shelter   costs.      Tenants    receiving   utility

reimbursements pay no rent and incur no homeowners' expenses.

They are  entitled to the excess shelter  cost deduction only

to the extent that  their utility costs alone exceed  half of
                                             

their monthly  income, including the  nonenergy component  of

                             -15-

their utility  reimbursements.3  In other  words, the poorest

food stamp recipients living  in public housing would exclude

the energy  component of their  utility reimbursements,  then

deduct the fraction of their utility bills exceeding half  of

their  income.   This  result is  consistent  with the  Act's

purpose to  alleviate hunger  and malnutrition  by augmenting

the  food  purchasing   power  of  participating   low-income

households.   See 7 U.S.C.    2011.  We do not  find that the
                 

structure of  the Food  Stamp Act  requires  that the  energy

assistance  provision  be  construed  contrary  to  its plain

language.  Our reading of the provision in context reinforces

our   determination  that   the   plain  language   manifests

Congress's intent.  

                   C.  Legislative History

                    

3For  administrative convenience  in  calculating the  excess
shelter expense  deduction,  a "standard  utility  allowance"
(SUA) may be  used in  lieu of a  household's actual  utility
costs.  7 C.F.R.   273.9(d)(6).  Households receiving "energy
assistance"  may use  the  SUA only  if  they incur  "out-of-
pocket" heating or  cooling expenses.   7  U.S.C.    2014(e).
The Third  Circuit, having previously found impermissible the
USDA policy of counting utility reimbursements as income, see
                                                             
West, 879  F.2d at  1132, subsequently  upheld a USDA  policy
    
preventing  recipients of  utility reimbursements  from using
the  SUA unless  their  actual utility  costs exceeded  their
public housing utility allowances,  see West v. Sullivan, 973
                                                        
F.2d  179 (3d  Cir.  1992), cert.  denied,  113 S.  Ct.  2934
                                         
(1993).  Plaintiffs argue that they  may use the SUA, even if
their utility reimbursements  are energy assistance,  because
they must  pay 30% of household income  for utilities.  We do
not  address this argument because it is not an issue in this
case.  

                             -16-

          We  next  consider the  legislative history  of the

energy   assistance  exclusion,  to   determine  whether  the

legislative intent we find clearly expressed in the statutory

language  is clouded  or  contradicted by  any statements  of

members  of Congress.4   When  the exclusion  was enacted  in

1980,  the House  Committee  on Agriculture  issued a  report

noting that certain energy grants and allowances, designed to

offset the rising cost of energy, had been excluded from food

stamp   income  calculations  in   prior  years   by  express

provisions in other statutes.   H.R. Rep. No. 788,  supra, at
                                                         

122,  1980 U.S.C.C.A.N. at 955.  The report cites examples of

energy assistance  programs that were designed  to offset the

rise in  energy costs in the  late 1970s and in  1980, id. at
                                                          

121-22,  1980  U.S.C.C.A.N. at  954-55,  and  notes that  the

exclusions  for  assistance  provided  under  these  programs

ensured that  food stamp recipients would  be held "harmless"

for their benefits.  Id. at 122, 1980 U.S.C.C.A.N. at 955.  
                        

          Preferring that amendments to the Food Stamp Act be

made  under  its  aegis,  the committee  drafted  the  energy

assistance  exclusion, which "incorporate[s]  the essence" of

these prior exclusions.   Id.  The committee stated  that the
                             

                    

4We reject the parties' invitation to delve into the language
and  legislative  history   of  the  Housing  and   Community
Development Reauthorization Act of 1992, Pub. L. No. 102-550,
   927,  106  Stat.  3672,  3885-86  (1992).    That  statute
addresses  neither  how   utility  reimbursements  should  be
treated   under  the   Food   Stamp  Act,   nor  the   proper
interpretation of the energy assistance exclusion.  

                             -17-

provision  would  exclude  "all  energy  assistance  provided

households  through the use of Federal, State, or local funds

flowing from .  . . laws that focus on  the problem of energy

assistance."   Id.  at 123,  1980 U.S.C.C.A.N.  at 956.   The
                  

committee further  stated that  the provision would  "exclude

from income  any direct payments  made to  households by  the

Federal Government" under  "crisis intervention" or  "regular

energy  assistance"  programs.    Id.    This aspect  of  the
                                     

committee report  does  not define  "energy assistance,"  but

does indicate that section 2014(d)(11), by incorporating  the

essence  of  similar,  program-specific  provisions  in other

statutes, was  intended to  exclude "any" payments  providing

energy assistance under "any" federal law.

          The committee report further states:

          Where    energy    assistance    provided
                                                   
          households  through the  use  .  .  .  of
                                                   
          Federal,  State,  or local  funds flowing
                                                   
          from  Federal, State,  or local  laws not
                                                   
          specifically    dealing    with    energy
                                                   
          assistance is concerned,  such as Aid  to
                                                   
          Families   with  Dependent   Children  or
                                                   
          General  Assistance,  the Committee  also
                                                   
          intends   to   guarantee    excludability
                                                   
          provided  that  [USDA] is  satisfied that
                                                   
          the  increase in benefits  awarded by the
                                                   
          State  or local  government (either  on a
                                                   
          matching    basis   with    the   Federal
                                                   
          Government or on its own) is, in fact, an
                                                   
          energy  assistance-related  increase  and
                                                   
          not  simply  a  general welfare  increase
                                                   
          that would have occurred even were energy
                                                   
          costs not a  factor and that,  therefore,
                             
          should be viewed as income for food stamp
          program  purposes.    Only  where  energy
                                                   
          costs   are  a   but-for  cause   of  the
                                                   
          increased payment should  the payment  be
                                                   

                             -18-

          excluded from income  and, then, only  to
                                                   
          the   extent   that   the   increase   is
                                                   
          attributable to high heating costs rather
                                                   
          than  general  inflationary   conditions.
                                                   
          The  Committee   obviously  expects  that
          State  legislatures  and  local  councils
          will  . .  . not  take advantage  of this
          exclusion by labeling every . . . regular
          welfare  allotment  adjustment an  energy
          assistance  increase  in  order  to  take
          advantage of this exclusion . . . . 

Id. (emphasis added).
   

          The   Secretary   argues   that   the   highlighted

statements support a narrow definition of "energy assistance"

for the purpose of  section 2014(d)(11)(A).  Our  scrutiny of

the context, however, leads us to conclude that these remarks

were prompted by the concern that state and local governments

might  pass  off  increases  in  existing,  nonenergy-related

welfare  program  payments  as   "energy  assistance."    See
                                                             

Maryland Dep't of Human  Res., 976 F.2d at 1470-71.   Because
                             

the federal  government pays  the entire  cost of food  stamp

benefits,  7 U.S.C.   2013(a), such a ploy would increase the

allotments  of  food  stamps to  a  state's  residents  at no

substantial  cost  to the  state.   To  thwart  such efforts,

Congress  subsequently  amended  the  exclusion   for  energy

assistance  payments provided  under state  and local  laws.5

                    

5Section 2014(d)(11)(B) excludes from food stamp income,
          any payments  or allowances made  for the
          purpose of providing energy  assistance .
          .  .  under  any  State  or   local  laws
          designated   by   the   State  or   local
          legislative    body   authorizing    such
          payments   or    allowances   as   energy

                             -19-

See Maryland Dep't of Human Res., 976 F.2d at  1471.  Utility
                                

reimbursements,  in  contrast,  are  provided  under  federal

regulations that specify that the payments account for energy

and nonenergy utility costs.  Although we do not dispute that

the  committee  intended  that  "energy  assistance"  include

benefits   offsetting  the   rising  cost   of  energy,   the

legislative  history of  the provision  reveals no  intent to

circumscribe the plain language of  the provision so that  it

would apply only to such benefits.  

          Furthermore,   we   note   that   the   Secretary's

interpretation  of the  energy assistance exclusion  causes a

result  at odds with the legislative history.  The 1980 House

Report  indicates that  typical  energy  assistance  programs

"hold low-income  households harmless  by permitting  them to

buy the same  amount of  energy they would  have utilized  in

past years without having  to diminish their already marginal

                    

          assistance,   and   determined   by   the
          Secretary to be calculated as if provided
          by the State or local government involved
          on  a seasonal  basis  for  an  aggregate
          period not  to exceed  six months in  any
          year even if such payments  or allowances
          (including tax credits) are  not provided
          on a  seasonal basis because  it would be
          administratively       infeasible      or
          impracticable to do so.

Unlike  the  exclusion  for federal  energy  assistance, this
statute  expressly   provides   the  Secretary   a  role   in
determining  whether payments  designated by  state or  local
governments  as  "energy  assistance"  should  be  counted as
income.

                             -20-

incomes."    H.R.   Rep.  No.  788,   supra,  at  122,   1980
                                           

U.S.C.C.A.N.  at  955.   An  exclusion  for such  assistance,

according  to the  House  Report, guarantees  that low-income

households are held harmless for the assistance they receive.

Id.    Utility  reimbursements  with  energy  components  are
   

designed  in part to ensure that tenants, on average, will be

able to purchase energy  utilities without spending more than

30%  of household  income.   The allowances  underlying these

reimbursements are  adjusted annually to  reflect substantial

energy  cost increases.  See, e.g., 7 C.F.R. pt. 1930, subpt.
                                  

C,  exh.  E.IX.C; 24  C.F.R.     882.214,  965.478.   In this

manner,  utility  reimbursements  ensure that  a  household's

expenditures for  energy remain  constant as a  percentage of

household  income, from  year to  year.   USDA's practice  of

counting the energy  component of  utility reimbursements  as

income does  not hold  tenants "harmless" for  the assistance

they receive.    

          The Secretary argues  that Congress ratified USDA's

interpretation  of the  statute  when it  amended the  energy

assistance  exclusion  in  1988.    Prior  to  1988,  section

2014(d)(11)(A)   exempted  from   income  "any   payments  or

allowances made  under any  Federal  law for  the purpose  of

providing energy assistance."  See West v. Bowen, 879 F.2d at
                                                

1130.   Congress  reworded the  statute in  1988 so  that the

provision  currently excludes "any payments or allowances for

                             -21-

the purpose of providing  energy assistance under any Federal

law."    A  Senate   committee  report  indicates  that  this

"technical amendment" clarified

          that  USDA and local agencies do not need
          to conduct an inquiry into the purpose of
          a   federal   statute  before   excluding
          federal  "payments  for  the  purpose  of
          energy  assistance."    The  law  as  now
          written could  be  read to  require  this
          analysis.

          The  crucial  question should  be whether
          the  purpose of  the  payment  is  energy
          assistance, not whether the statute, as a
          whole, is primarily for energy assistance
          or includes other human services as well.
          This  change is  not  intended to  change
                                                   
          current policy.
                         

S.  Rep. No. 397, 100th  Cong., 2d Sess.  28-29, reprinted in
                                                             

1988 U.S.C.C.A.N. 2239, 2266-67 (emphasis added).

          The Secretary urges us to read the last sentence in

the  quoted   text  as  endorsing  the   agency's  policy  of
                                                 

restricting the  definition  of energy  assistance solely  to

payments offsetting dramatic increases in the cost of energy.

The  problem with  the  Secretary's argument  is that  USDA's

policy of applying the  exclusion only to payments offsetting

dramatic increases in the cost of energy did not exist at the

time the  Senate Report was  drafted.  Although  USDA treated

utility  reimbursements  as income  before  1988,  the agency

based  this  practice on  the  faulty  interpretation of  the

energy  assistance  exclusion  that  the  1988  amendment was

designed to correct.   The two  cases construing the  statute

                             -22-

prior to 1988, West v. Bowen, No. 84-3883 (E.D.  Pa. Dec. 17,
                            

1987),  rev'd, 879 F.2d 1122  (3d Cir. 1989)  and Mitchell v.
                                                          

Block,  No. 82-3297-3, slip op. at 10 (D.S.C. June 22, 1983),
     

held, consistent  with USDA's  interpretation  at that  time,

that  utility  reimbursements  are  not  "energy  assistance"

because they were authorized  by federal housing laws, rather
                                                

than energy assistance laws.6  
                      

          Viewed    in    this    light,   the    plaintiffs'

interpretation of the 1988 amendment and the Senate Report is

more persuasive:   the amendment was  not intended to  change

congressional   policy,  but  in  effect  it  repudiated  the
             

agency's litigation  position by clarifying that any payments
                                                    

for energy assistance be  excluded, regardless of the purpose

of the  law authorizing  the payments.   Further  support for

this  interpretation  is  that  the committee  described  the

rewording of  the statute  as a  "technical amendment."   The

statement in  the legislative history that  the amendment "is

not intended to change  current policy" reaffirms that it  is

not a substantive revision of the statutory language.

          The   Secretary's  final  argument   based  on  the

legislative history is that Congress expressed tacit approval

of  USDA's  interpretation by  leaving  it in  place  when it

                    

6The district court in Mitchell cited the legislative history
                               
of the energy assistance exclusion as an alternate  basis for
upholding the practice of counting utility reimbursements  as
income.  See Mitchell, No. 82-3297-3, slip op. at 13-28.  
                     

                             -23-

amended  the   statute  in   1988.    Inaction   may  signify

acquiescence  to an  agency interpretation.   See,  e.g., Bob
                                                             

Jones Univ. v. United States, 461 U.S. 574, 600-01 (1983).  A
                            

logical  prerequisite to  inferring approval  or ratification

from silence  is that  the agency's interpretation  antedates

any relevant amendments.  That is not so here.  Although USDA

has  invariably deemed  utility reimbursements  to be  income

under  the Food Stamp  Act, the  agency's rationale  for this

practice  has changed over time.  Prior to the 1988 amendment

of  the  Act,  the agency  asserted  in  litigation that  the

exclusion applied  only to  payments made under  federal laws

specifically enacted to provide  energy assistance.  The 1988

amendment condemned  this interpretation, see West  v. Bowen,
                                                            

879 F.2d at 1322, and the agency abandoned it in favor of the

position it  espouses in this case,  that "energy assistance"

refers only  to  payments offsetting  rapidly  rising  energy

costs.   The interpretation of the statute at issue on appeal

thus does not predate the 1988 amendment.  

          We  have considered  USDA's unvarying  treatment of
                                                          

utility reimbursements as an  "interpretation" of the statute

capable  of ratification by silence, but we do not find great

significance in Congress's inaction.  "Congressional inaction

frequently    betokens    unawareness,   preoccupation,    or

paralysis."   Zuber  v.  Allen,  396 U.S.  168,  185-86  n.21
                              

(1969).   Legislative  silence is  most significant  when the

                             -24-

"area is one  of traditional  year-by-year supervision,  like

tax,  where watchdog committees  are considering and revising

the statutory scheme."  Id.   In the baker's dozen years that
                           

have  passed  since  the  Food Stamp  Act  energy  assistance

exclusion was enacted,  the Act has been  amended many times,

but  the exclusion itself has  been amended only  twice.  The

1981 amendment  affected only  the provision  excluding state

and  local  energy  assistance  payments.    The  legislative

history of  the 1988 amendment reflects  a senate committee's

appreciation  that USDA  misread  the statute,  but does  not

indicate the  committee's awareness  of  USDA's treatment  of

utility reimbursements.  See  S. Rep. No. 397, supra,  at 28,
                                                    

1988  U.S.C.C.A.N.  at 2266  (stating  that  "USDA and  local

agencies do not need  to conduct an inquiry into  the purpose

of a federal  statute before  excluding" energy  assistance).

Therefore, even if what the senate committee recognized about

the   agency's  prior   misreading   of  the   statute   were

attributable  to the  entire Congress,  this would  not prove

congressional   cognizance  of   the  treatment   of  utility

reimbursements. 

          There are still fewer facts outside the legislative

history supporting an  inference of congressional  awareness.

USDA  has  not embodied  its  interpretation  of the  federal

energy assistance  exclusion in a regulation.   Moreover, our

research  uncovered  nothing   suggesting  that  the   agency

                             -25-

embodied its position on utility reimbursements in any agency

publication prior  to 1990, when it  issued policy statements

on  the  matter.   And  the  only courts  considering  USDA's

treatment  of  utility reimbursements  prior  to 1988  issued

unpublished opinions.  E.g., West, No. 84-3883; Mitchell, No.
                                                        

82-3297-3.   Furthermore,  the  policy  of including  utility

reimbursements in  food stamp  income affects only  very poor

FmHA and HUD tenants, persons unlikely to  have the resources

to  publicize  their  plight.    We  cannot  infer  from  the

legislative history  and from these  facts that congressional

silence  signals ratification of the agency's policy.  Nor do

we find in the legislative history any statements belying our

determination that Congress's intended meaning for the energy

assistance exclusion is manifested by its plain language.

                        D.  Deference

          The  Secretary argues  that  we must  defer to  the

agency's  judgment   on  the  applicability   of  the  energy

assistance exclusion  to utility reimbursements  because this

authority  has   been  expressly  delegated  to  the  agency.

According  to the  Secretary, Congress  explicitly called  on

USDA to determine whether any payments provided under federal

"laws not specifically  dealing with energy assistance"  were

"energy-assistance related."   H.R.  Rep. No. 788,  supra, at
                                                         

123,  1980  U.S.C.C.A.N.  at  956.   An  agency's  reasonable

construction  of  a statute  is  entitled  to deference  when

                             -26-

Congress delegates to the  agency the power to  interpret the

statute.  See St. Luke's Hosp. v. Secretary of Health & Human
                                                             

Servs., 810 F.2d 325, 331 (1st Cir. 1987).
      

          We previously  quoted the  passage  from the  House

Report cited  by the Secretary  in support of  this argument,

see  H.R. Rep. No. 788,  supra, at 123,  1980 U.S.C.C.A.N. at
                              

956, and we  noted that the remarks reflected the committee's

concern  that  state  or  local governments  might  pass  off

increases in  general welfare as energy  assistance.  Utility

reimbursements,   in  contrast,  are  authorized  by  federal

regulations specifying that  the payments account  for energy

utility  costs.    The   legislative  history  cited  by  the

Secretary  does  not  empower   USDA  to  refine  the  energy

assistance  exclusion so that it does not apply to the energy

component of a utility reimbursement.    Finally,         the

Secretary  contends  that  USDA's  policy  should  be  upheld

because,  under Chevron,  courts  must defer  to an  agency's
                       

reasonable  interpretation  of   a  statute  it  administers.

Chevron prescribes that courts  employ a two-step analysis of
       

an  agency's interpretation of a statute it administers.  See
                                                             

Dion,  933 F.2d at 14-15.  Deference is appropriate only when
    

the legislative intent is unclear.  See St. Luke's Hosp., 810
                                                        

F.2d at 331.  In this case, the plain language of the statute

manifests Congress's  intent on the  question at issue:   any

payment designed to offset energy costs is excluded from food

                             -27-

stamp  income,  not just  payments offsetting  rapidly rising

energy costs.  We conclude that the energy component of a HUD

or FmHA utility reimbursement, as  a subsidy for the purchase

of  energy,   must  be   excluded  from  food   stamp  income

calculations.    Any  policy  of  USDA  to  the  contrary  is

impermissible.

          The decision of the district court is therefore

          Reversed.    
          Reversed.
                   

          Dissent follows.

                             -28-

        CYR, Circuit  Judge (dissenting).   Although  the court
        CYR, Circuit  Judge (dissenting).
                           

proposes  a  plausible  alternative,  I  cannot  agree  that  the

Exclusion   11  interpretation  adopted   by  the  United  States

Department of Agriculture ("USDA") is "arbitrary, capricious,  or

manifestly  contrary to  the statute."   Chevron U.S.A.,  Inc. v.
                                                            

National Resource Defense Council, 467 U.S. 837, 844 (1984).  Not
                               

only  are statutory  interpretations by  an administering  agency

entitled to deferential review, id., but the rationale underlying
                                 

the Chevron doctrine is fully implicated  in this case.  I  would
         

therefore  accord Chevron deference  to USDA's  interpretation of
                       

the pivotal language "energy assistance [payments]," as excluding

ordinary utility reimbursements ("URs").

        First, the omnibus regulatory scheme  established under

the Food Stamp Act ("FSA") is "technical and complex" both in its

literal  statutory  manifestation   and  in  its   interdependent

implementation with several  elaborate federal  and state  public

assistance statutes administered by other agencies (e.g., HUD and
                                                      

FmHA).   See id.  at 865;  Maryland Dep't  of Human  Resources v.
                                                            

United  States Dep't  of Agric.,  976 F.2d  1462, 1470  (4th Cir.
                             

1992).    As a  consequence of  its  accustomed immersion  in the

intricacies of the FSA, and its intimate familiarity with related

statutory schemes,  the USDA, like other  administering agencies,

ordinarily is  presumed to  have the  confidence  of Congress  in

affording interstitial interpretations  of statutes entrusted  to

its  administration.  See Chevron,  467 U.S. at  865 ("Judges are
                               

                             -27-
                              27

not experts in the field . . . ."); Sierra Club v. Larson, 2 F.3d
                                                       

462, 468-69 (1st Cir.  1993); Aronson v. IRS,  973 F.2d 962,  965
                                          

(1st  Cir. 1992); Evans v.  Commissioner of Maine  Dep't of Human
                                                               

Servs., 933 F.2d 1, 7 (1st Cir. 1991).  Further, as a politically
    

accountable executive agency, generally speaking the USDA  should

be  left to "strike the [policy] balance" not struck by Congress,

and to reach "a  reasonable accommodation of manifestly competing
                                                               

interests."  Chevron, 467  U.S. at 865-66 (emphasis added).   The
                  

policy  choices plainly  implicated  by the  FSA's provisions  on
             

income inclusion and  exclusion, and Congress's repeated  failure

to  countermand USDA's longstanding  policy favoring inclusion of

URs, see Zemel v. Rusk, 381 U.S. 1, 12 (1965), present a textbook
                    

case  for  Chevron deference.    Lastly, ever  since  1980, after
                

considering  Exclusion  11  and  its legislative  history  "in  a

detailed  and reasoned  fashion," Chevron,  467 U.S. at  865, the
                                       

USDA consistently has concluded  that Congress did not  intend to

insulate food  stamp recipients  from energy cost  increases that

routinely accompany  inflationary rises in the  nature of "normal

household living expenses."  7 C.F.R.   273.9(c)(5) (1993).

        I readily acknowledge, of course, that Chevron does not
                                                      

dictate  judicial deference  to  agency  interpretations  in  all

circumstances.   See, e.g., Larson, 2 F.3d at 468 (under Chevron,
                                                              

"courts have the last word on statutory  interpretation [and] the

question  is one  of how  much weight  to be  accorded  to agency
                                   

views") (emphasis added).   In my  view, however, after  charting

the  course  for  its   two-tiered  Chevron  inquiry,  the  court
                                         

                             -28-
                              28

misplaces its  compass by withholding deference  on impermissible

grounds.

        The  overarching  aim of  the  Chevron  analysis is  to
                                              

determine "whether  Congress has  directly spoken to  the precise
                                                               

question at issue."   Chevron, 467 U.S. at 842  (emphasis added);
                           

see K  Mart Corp. v.  Cartier, Inc., 486 U.S.  281, 291-92 (1988)
                                 

("[A] reviewing court must  first determine if the  regulation is
                               

consistent with the language  of the statute . . . [or]  [i]f the
        

statute is silent or ambiguous with respect to the specific issue
                                                               

addressed by  the regulation . . . .") (emphasis added).   In the
                          

present case,  the court frames  the inquiry less  precisely than

Chevron requires.  See supra p. 7 (the issue is "whether  'energy
                          

assistance'   under  [Exclusion  11]  encompasses  only  payments

offsetting  rapidly rising  energy  costs").   Under the  Chevron
                                                               

framework, the "precise question," Chevron, 467 U.S. at 842, thus
                                        

the controlling one, is much more narrowly focused:  Has Congress

expressed  a "specific intention"  to include or  exclude HUD and

FmHA  URs  from the  ambit of  the  phrase "payment[s]  . . . for

energy assistance"?   Cf. id. at 845  (inquiring whether Congress
                           

evinced its "specific intention"  to apply EPA's proposed "bubble

concept"  to  the  statutory  term  "stationary  [air  pollution]

source").

Language, Structure, and Purposes of the FSA and Exclusion 11
                                                           

        If the undefined term "energy assistance [payment]" has

a  plain  and determinate  meaning under  the  FSA, as  the court

suggests,  see supra p. 8 ("a[ny] public subsidy for the purchase
                  

                             -29-
                              29

of energy"); but cf. Dion v. Commissioner of Maine Dep't of Human
                                                               

Resources, 933  F.2d 13,  15-16 (1st  Cir. 1991)  (rejecting USDA
       

interpretation of  "child," based on  FSA's variant uses  of same
                                                               

term), then the initial  prong under the Chevron inquiry  is met,
                                              

and  the  USDA  cannot  prevail  no  matter   how  plausible  its

interpretation.  See Public  Employees Retirement Syst. v. Betts,
                                                              

492 U.S.  158, 171 (1989).   However, the USDA  does not disagree

that the term "energy assistance [payment]," viewed in isolation,

is  susceptible to  more  expansive interpretation.   Rather,  it

contends that the statutory  and historical contexts of Exclusion

11 support the narrower construction given it by the agency.  See
                                                               

Skidgel v. Maine Dep't  of Human Servs.,  994 F.2d 930, 937  (1st
                                     

Cir.   1993)  ("plainness"   of  legislative  language   must  be

considered  in the context of  the entire statute  and its policy
                                                               

goals);  see also National R.R. Passenger Corp. v. Boston & Maine
                                                               

Corp., 112 S. Ct. 1394, 1401 (1992) (same).  Thus, at least three
   

related  impediments must  be  overcome before  the term  "energy

assistance  [payment]" can be  considered sufficiently "plain" to

warrant withholding Chevron deference in this case.
                         

        First, at  the same  time it explicitly  added "income"
                                                              

exclusions to  the FSA in  1977, Congress  clearly evidenced  its
        

intention that  the statute's "broad-gauged definition  of income
                                         

. . .  measure income as  broadly as possible  to be fair  to all
                                                       

[FSA]  recipients as  well as  to the  tax-paying public  and not
                                                      

simply  by reference  to  purchasing power  available for  food."

H.R.  Rep. No. 464, 95th Cong., 1st Sess. 27 (1977), reprinted in
                                                               

                             -30-
                              30

1977 U.S.C.C.A.N. 1978, 2004;  see 7 U.S.C.   2014(d) ("Household
                                

income  for purposes of the  [FSA] shall include  all income from
                                                               

whatever source excluding only . . . .") (emphasis added).  Given
                            

this historical  context, it would seem  appropriate to recognize

that  the  FSA's  broadly  gauged  "income"  inclusion  provision

strongly suggests that exclusions from "income" under the FSA are

to be  strictly limited,  lending considerable rational  force to

the  USDA's  limiting interpretation  of  the  Exclusion 11  term

"energy  assistance  [payments]."   Cf.,  e.g.,  Commissioner  v.
                                                           

Jacobson,  336  U.S.  28,  49  (1949)  (Internal  Revenue  Code's
      

deliberately  broad definition  of taxable  "income" necessitates

limiting interpretation relating to exemptions).

        Second, the  court  concedes  that  the  entire  phrase
                                                       

"energy  assistance   [payments]"      not  merely  its  discrete

component "energy  assistance"     is ambiguous in  one important
                                             

and  unmistakable  respect; viz.,  viewed  as  a unitary  federal
                                                      

assistance payment, the  average HUD  or FmHA UR     unlike,  for

example,  a payment made pursuant  to the Low  Income Home Energy

Assistance Act, see  supra pp. 9-10    obviously is  not purely a
                                                             

"payment[]  or  allowance[] made  for  the  purpose of  providing

energy   assistance,"  but   often  includes   various  nonenergy

components (e.g., water charges,  trash collection charges).  The
              

court proposes to avoid the  looming interpretive dilemma in  its

path by  requiring the  agency to  segregate  these nonenergy  UR

                             -31-
                              31

components from the energy component.  See supra pp. 10-11.7   As
                                              

the  district  court  aptly  noted, however,  the  entire  phrase

"payments  . . .  made  for  the purpose  of  energy  assistance"
       

suffers  from a latent ambiguity and raises a serious question as

to whether the 96th Congress ever considered the possibility that

Exclusion 11 might be interpreted to include discrete portions of
                                                            

"mixed" or multi-purpose utility payments like HUD and FmHA URs.
                              

        Finally, the conclusion that the USDA interpretation is

at odds with the  legislative policy underlying the FSA  does not

withstand scrutiny.  Recipients of HUD and FmHA URs can lay claim

to  no  special burden  under the  food  stamp scheme.   Congress
             

itself has recognized the principle of "fairness" which underlies

                    

7Given the  FSA's complex structure, and  the internal cross-
references  in  Exclusion  11  to  other  federal  and  state
statutes of comparable complexity,  it is difficult to accept
the  facile    conclusion  that  segregation  of  the  energy
component from the nonenergy components in  URs would pose no
significant  administrative  burden.    The  USDA  vigorously
insists otherwise, and the district  court prudently bypassed
the entire administrative implementation  issue.  See  Estey,
                                                            
814 F. Supp. at 158 n.2.  On the other hand, this court bases
its  "minimal  administrative  burden" thesis  solely  on  an
examination of the cold  appellate record, including the FSA,
HUD, and  FmHA implementing regulations, without  the benefit
of a developed record relating to the types of problems which
might portend serious administrative burdens.
   The USDA does  not set,  monitor, or control  HUD or  FmHA
utility  allowances,  nor  the  annual  adjustments to  those
                                                   
allowances.    Thus, even  though  segregation  may appear  a
"simple  matter of  arithmetic"  in the  abstract, it  cannot
simply be assumed that segregation would not entail elaborate
inter-agency  monitoring and policing    for example, between
the  USDA and  HUD  to  ensure  that  food  stamp  recipients
correctly declare the appropriate  components of their URs as
excludible income.  Absent some contrary evidence, therefore,
the  USDA's  assessment of  the  likely  burdens entailed  in
implementing such  an  administrative regime  warrants  prima
facie deference.

                             -32-
                              32

the  FSA's narrowly-drawn  income exclusions,  and the  competing

interests at stake in any  benefit allocation made by government.

See  H.R. Rep. No.  464, supra, at 27.   While acknowledging that
                            

families  with the lowest incomes  often feel the financial brunt

of this congressional policy choice, the USDA assiduously acts to

further that legislative policy  by treating as includible income
                                                               

many  other routine  and  need-based  assistance  payments  which
                                  

increase a family's real  purchasing power.  See, e.g.,  7 C.F.R.
                                                    

273.9(b)  (2)(i)   (supplemental  SSI  and  AFDC,   and  "other

assistance programs  based on need" are includible  in food stamp
                                

"unearned  income")  (emphasis   added);  id.     273.9(b)(2)(ii)
                                           

(veteran's   and   unemployment   compensation   payments);   id.
                                                               

273.9(b)(2)(iv)  (scholarships).    Thus,  notwithstanding  the

strong humanitarian preference for affording  maximum nutritional

benefits to needy families,  it is precisely this type  of policy

balancing, and allocation of  finite governmental resources, that

Chevron  normally  ordains  be  left to  politically  accountable
     

administering agencies rather than the  courts.  See Chevron, 467
                                                          

U.S. at 866  ("[F]ederal judges     who have  no constituency    

have  a duty to respect  legitimate policy choices  made by those

who do.").

        In sum, the "precise  question" for determination under

the  Chevron  analysis  is  whether the  FSA  evinces  Congress's
          

"specific  intention" to  bring HUD  and FmHA UR  payments within

Exclusion 11.  Although in my view the operative phrase "payments

. . . for energy  assistance" is ambiguous, the very  least these

                             -33-
                              33

three impediments to a "plain" language interpretation require is

careful attention to any relevant legislative history which might

throw light on its meaning.

                             -34-
                              34

Legislative History of FSA and Exclusion 11
                                         

        The focus of  the search is on  any historical evidence

of a  specific congressional intent  to classify  URs as  "energy

assistance"  payments or,  alternatively, evidence  that Congress

left this type  of definitional  task to agency  expertise.   See
                                                               

Chevron, 467  U.S. at 844 ("Sometimes  the legislative delegation
     

to an agency  on a  particular question is  implicit rather  than

explicit.").   The  relevant  legislative  history confirms  that

Exclusion 11 is  at least ambiguous on the matter  at issue.  See
                                                               

Dion, 933 F.2d at  16 (looking to legislative history  to confirm
  

nonambiguity of statutory language).

        I  readily  agree  with  the court  that  its  proposed

interpretation  of the various pre-enactment committee reports is

eminently  reasonable.   On the  other hand,  the USDA  points to

several  references  in  the committee  reports  suggesting  that

Congress,  in  the wake  of  the unprecedented  OPEC  oil crisis,
                                                              

contemplated  no  exclusion  from  "income" for  federal  "energy

assistance"    payments   to    FSA   recipients,    except   for
                                                         

"extraordinary" energy expenses not already addressed through the

"ordinary mechanisms" in the  FSA for accommodating normal infla-

tionary  cost-of-living increases.  S. Rep.  No. 394, 96th Cong.,

2d Sess. 111 (1980), reprinted in 1980 U.S.C.C.A.N. 410, 520.
                               

        The pivotal  Committee Report, H.R. Rep.  No. 788, 96th

Cong.,  2d Sess.  122-23 (1980),  reprinted in  1980 U.S.C.C.A.N.
                                            

843, 955-56 [hereinafter:  "House Report No. 788"], see supra pp.
                                                           

17-18, cites  to particular examples of  recently enacted federal
                                               

                             -35-
                              35

statutes  providing "payments  . . .  for the  purpose of  energy

assistance."  See, e.g., Home Energy Assistance Act, 94 Stat. 229
                     

(1976)  (formerly  codified  at  42 U.S.C.     8601-8612  (1976))

(repealed and reenacted as Low Income Home Energy Assistance Act,

Pub. L. No. 97-35,    2601-2610, 95 Stat. 893 (1981) (codified at

42 U.S.C.    8622-8629 (1982))) [hereinafter:  LIHEAA or LIHEAP];

see  also S.  Rep. No.  394, supra  at  111 (committee  report on
                                

LIHEAA).   House Report No. 788 noted that the federal "interven-

tion" payments authorized under  these "new" programs had enabled

low  income households  to "meet the  dramatic increases  in home
                                                      

heating costs," "to buy the same amount of energy they would have

utilized  in past years without having  to diminish their already

marginal  incomes,"  and  thereby  "represent[] more  of  a  wash

transaction than  any  real increase  in the  [FSA] recipient  or
                                  

benefited  household's purchasing  power."   H.R.  Rep. No.  788,
                                      

supra, at 122 (emphasis added).
   

        Although   these   references   may   not   compel  the
                                                          

interpretation  adopted  by  the  USDA,  they  surely  support  a
                                                            

permissible inference that this was the specific type of  federal
                                                   

"energy  assistance" payment  targeted by  Exclusion 11.   Having

promptly  adopted this  statutory gloss,  both in  its regulatory

definition, see  7 C.F.R.    273.9(c) (5) (FSA  "income" includes
             

all reimbursements  for "normal household living  expenses" which

"do not represent a  gain or benefit to  the household"), and  in

practice,  the  USDA maintains  that  FSA  income exclusions  for

reimbursements  of  routine energy  costs  would  go well  beyond
                         

                             -36-
                              36

merely holding FSA recipients  "harmless," for the obvious reason

that the FSA,  HUD, and FmHA programs  already contain mechanisms

for taking into account any general inflationary energy increases

(e.g., FSA's "standard" and "excess shelter" deductions).
   

        Similarly,  House  Report  No.  788  demonstrates  that

Congress did  not hesitate to delegate  significant discretion to

the  USDA to  determine  which state-paid  benefits are  properly
                                  

classified "energy assistance [payments]" under Exclusion 11, see
                                                               

H.R. Rep. No.  788, supra, at  123 ("provided that [the  USDA] is
                       

satisfied that the  increase in [state  or local] benefits  . . .

is, in fact, an energy assistance-related increase and not simply

a general  welfare increase") (emphasis  added).   Significantly,

one   criterion  Congress  established  for  guiding  the  USDA's

classification of these benefits  is that state benefit increases

could only  be considered "energy assistance  [payments]" "to the
                                                               

extent that the  increase is attributable  to high heating  costs
                                                

rather  than  general inflationary  conditions."    Id. (emphasis
                                                     
added).

        "Hold Harmless" Payments
                                

        The court  offers two rejoinders to  the USDA's reading

of the legislative  history.   With respect, I  believe both  are

flawed.   First, moving  beyond its questionable  conclusion that

nothing  in  House  Report  No. 788  confirms  the  USDA's inter-
                                           

pretation  of  "energy assistance  [payments]," the  court states

that the USDA's policy  choice is "at odds" with  the legislative
                            

history.   See  supra p.  19.   The court's  statement presumably
                   

                             -37-
                              37

stems  from two premises: (1) USDA's practice of including URs as

food stamp "income" fails to  hold food stamp families "harmless"

by ensuring  that "a  household's expenditures for  energy remain

constant as a percentage of household income, from year to year,"

and  (2)   hypothetical  UR  payments   might  sometimes  contain

reimbursements for  superinflationary energy cost  increases, for

which URs  would hold tenants "harmless."  In order to assess the

soundness of  these  two  premises,  it  is  necessary  first  to

determine  what Congress meant when it said that the "new" energy

programs were designed to  hold recipient families "harmless" for
                                                          

"energy assistance" payments, LIHEAP being  a known type of "new"
                                                      

energy assistance payment.

        Congress enacted LIHEAA  intending that "new"  programs

of its  type would supplement preexisting governmental assistance
                           

programs which had not previously provided benefit adjustments to
                    

low income households to account for  energy cost increases which

outpaced  general cost-of-living increases.  See S. Rep. No. 394,
                                              

supra, at  111 (expressing concern that  "the ordinary mechanisms
                                                               

for adjusting  income assistance programs to the  rising costs of

living  may be  inadequate  to meet  the extraordinary  increases
                                                    

which have taken place in energy costs") (emphasis added).  Thus,

when  enacting  LIHEAA,   Congress  ostensibly  determined   that

preexisting  statutory  mechanisms  for  making  adjustments  for

"substantial  [energy   rate]  increases,"  like   those  already

incorporated in the FSA, HUD and FmHA programs, were ill-designed

to offset  recent and  unprecedented "spike" increases  in energy

                             -38-
                              38

costs, and opted to  reimburse food stamp recipients in  full for
                                                           

all otherwise unreimbursed expenditures for these past and future

"spike" increases.  Cf. 42 U.S.C.   8624(f) (LIHEAP  payments not
                     

includible  as "income" in  calculating food stamp entitlements).

Thus, in  two  senses, food  stamp  recipients realized  no  real
                                                               

"gain"  from LIHEAA:  (1)  LIHEAP payments  merely offset  super-

inflationary  energy cost  increases, and  food  stamp recipients

were  simply restored to their pre-OPEC financial position, so as

to  afford  them the  same  amount of  energy  as before  the oil
                                           

crisis,  without loss of real spending power, and (2) since these
                                               

superinflationary energy cost increases  were not being offset by

any other  statutory cost-of-living assistance  provision, LIHEAP

payments would effect  no double compensation, or "gain," to food
                              

stamp  families.  In  these respects, therefore,  LIHEAA worked a

complete "wash."
      

        On the other hand,  consider the following hypothetical

calculations  of representative  housing assistance  payments and

URs:  
                                      1990      1991
                                                    

             approved rent            $300      $300
           + utility allowance        $ 60      $ 72
                                                    
           = approved shelter cost    $360      $372
           - 30% family income        $ 45      $ 45
               of $150
                                                    
             housing assistance       $315      $327
               payment
           - approved rent            $300      $300
                                                    
             utility reimbursement    $ 15      $ 27

                             -39-
                              39

The  utility allowance,  which  may  or  may not  reflect  actual
                                                               

utility costs, is an average  figure calculated by the "landlord"

for  all units in  a covered facility, and  is designed to afford

tenants  an "adequate" allowance  for household  utilities, while

deterring  inefficient energy usage.   As  the court  points out,

"substantial" annual  increases in energy rates  (e.g., more than
                                                    

10%) might require the "landlord" to make corresponding increases

in the pre-set utility allowance.   See 7 C.F.R. pt. 1930, subpt.
                                     

C, exh. E.IX.C; 24 C.F.R.    882.214, 965.478.  So, in  our hypo-

theticals, if utility rates increased to $72 over one year, a 20%

increase, the tenant's UR would increase from $15 to $27.  If the

general or across-the-board inflation rate for the same year were

only 15%, then one-quarter of the $12 increase in the  UR paid to

the tenant, or $3, could  be considered an additional  reimburse-
               

ment for  utility cost increases beyond  the general inflationary

rate,  and some lesser portion  of that segregable  payment of $3

would be  for superinflationary  energy (as opposed  to nonenergy
                                     

utility) price  increases.  Accordingly, our  hypothetical $27 UR

would include three components:  basic energy cost ($15), general

inflationary increase ($9), and superinflationary increase ($3).

        When  the  identical   "hold  harmless"  analysis  just

applied  to  LIHEAP  is  applied  to  the  housing  URs  Congress

established prior to  its enactment  of LIHEAA, the  flaw in  the

thesis  advanced by  the  court becomes  clear.8   Unlike  LIHEAP

                    

8The court  concludes that  "USDA's practice of  counting the
energy component  of [URs]  as income does  not hold  tenants
'harmless'  for the assistance they  receive."  See supra pp.
                                                         

                             -40-
                              40

payments, URs simply  are not  payments made pursuant  to a  "new
                           

program" as  specifically referred  to in  House Report  No. 788.

[See  supra  p.  9.]    For  example,  HUD's  section  8  housing
         

legislation was enacted in  1974, see P.L. No. 93-383,    201(a),
                                   

88 Stat. 653  (1974) (codified at 42 U.S.C.    1437), well before

Congress  can   reasonably  be  thought  to   have  foreseen  the

superinflationary energy  price increases experienced in the late

1970s.   When  URs  were first  established, therefore,  Congress
                            

could not  have contemplated, let  alone intended, that  the UR's

"basic cost" component ($15) or its "general inflation" component

($9) would hold recipient families  "harmless" in the two special
                                                       

senses  in which LIHEAA later benefited its recipients.  Prior to

their initial entitlement to  URs, low income families presumably

paid the full $60 utility  cost from income; whereas  immediately

after  the establishment of URs, it cost the same family only $45

to purchase  the same amount of  energy it had purchased  for $60
                          

the  previous  year.    Congress  established  the  "basic  cost"

component in utility allowances and  URs to reduce the percentage
                                                

of household  income that must be expended  for energy regardless
                                                               

of  past inflationary  trends.   Thus  coupled  with an  adequate

internal  mechanism  for  making future  adjustments  for general

inflationary  increases, the  UR worked  a real  $15  increase in
                                                            

overall purchasing power, not merely a "wash."

                    

20-21.  Regardless whether this is the right answer, however,
the  court has not posed the right question.  The appropriate
inquiry  is whether these HUD and  FmHA housing programs were
                                               
intended to hold families harmless in the same way LIHEAA was
meant to do.

                             -41-
                              41

        At  most,  therefore,  the court  has  demonstrated  in

theory that the USDA might be required at some time in the future

to exclude a relatively small portion of some URs from food stamp

"income";  viz.,  the $3  (or less)  of  the hypothetical  $27 UR
             

attributable  to any  "superinflationary  component."   But  this

theory inevitablyimports seriousconceptual impediments ofits own.

        First, in  defense of this theory  the court disregards
                                                               

the  unitary nature  of UR  payments, opining  that the  USDA can
          

easily segregate URs into  their energy and nonenergy components,

thereby  smoothing  the path  for  its conclusion  that  the UR's

energy  component  alone  qualifies  for  "exclusion"   from  FSA

"income."  See supra pp. 10-11;  but cf. supra pp. 31-32.  Having
                                            

thus disregarded  the unitary  nature of  UR payments, the  court

cannot  then  credibly  suggest  that the  USDA  would  be acting

arbitrarily by segregating and  excluding from FSA income a  UR's
                                                       

hypothetical superinflationary  component ($3) while at  the same

time  including   the  UR's  "basic  cost"   ($15)  and  "general

inflation"  ($9) components  in  FSA income.    Second, and  more

importantly,  no  part  of any  UR  will  include  such a  super-

inflationary component during periods of subinflationary, stable,

or  declining energy prices.   Indeed, the USDA  concedes that it

may be appropriate to exclude from FSA income a UR which actually
                                                               

represents   a   reimbursement   for   superinflationary   energy

increases.  Given general  economic trends in the late  1980s and

early 1990s,  however, appellants advisedly have  not argued that

their  own   URs  covered  any   superinflationary  energy  price

                             -42-
                              42

increases, nor do they suggest that USDA has attempted to include

any  such superinflationary  component  in any  other food  stamp

recipient's "income."  Rather, the USDA continues to  include HUD

and FmHA  URs in food  stamp "income" on  the theory that  unless

proven to  contain some superinflationary  component, current HUD

and FmHA URs presumably reimburse only "routine" energy costs and

subinflationary  increases in  energy  costs.   The current  USDA
             

regulations flexibly  track this presumption by  reference to the

includibility of all reimbursements  for "normal household living

expenses."    As a consequence, I  find no support for the thesis

that the USDA's policy  choice is "at odds" with  the legislative

history.

        State "Energy Assistance" Payments
                                          

        As its  second rejoinder, the court  takes the position

that the language  quoted from House Report No. 788, see supra at
                                                            

pp.  17-18, considered  in  context, can  lead to  one reasonable

conclusion only    that  Congress was particularly concerned that

"state  and  local  governments   might  pass  off  increases  in

existing, nonenergy-related  welfare program payments  as 'energy

assistance'" so as to  shift local welfare burdens  to federally-

funded  programs (e.g., the  FSA program).   Once again, however,
                    

this thesis does not withstand close scrutiny, let alone begin to

dispel the  plausibility of the alternative view  advanced by the

USDA.

        If  this sort  of  burden shifting  had  indeed been  a

matter  of significant legislative concern,  it would have been a

                             -43-
                              43

simple matter for  Congress to authorize  a FSA income  exclusion

for  all  bona fide  energy cost  assistance  paid to  food stamp
                 

recipients  by the States.   All  Congress need  have done  is to

require States  to satisfy  the Secretary  that any increases  in

state-paid benefits  were for food stamp  recipients' energy cost

increases,  rather  than  their  nonenergy cost  increases.    In

addition to its threshold  requirement that energy cost increases

be   the  "but-for   cause"  of   any   increase  in   a  state's

reimbursements,  however, Congress  imposed a  second, subsidiary

condition:      even   a   state's   bona   fide   energy-related
                                              

reimbursements should be  exempt under Exclusion 11  "only to the
                                                               

extent  that  the  [benefit]  increase is  attributable  to  high
                                                               

heating costs rather than  general inflationary conditions."  The
                                                        

court has not explained  how Congress could have meant  to thwart

improper diversions of State welfare program costs by prohibiting

FSA income  exclusions for bona fide  subinflationary energy cost
                                  

reimbursements by  a  State, if  federal  payments for  the  same

purposes  were readily  excludible from  food stamp  income.   In

sharp   contrast, the reading given  House Report No. 788  by the

USDA  dovetails neatly  with the  stated goals  of "new"  federal

programs,  such   as  LIHEAA,  which  Congress   referred  to  as

prototypes  of  federal   "intervention"  payments  for   "energy

assistance."

        In   conclusion,   the    USDA's   interpretation    is

corroborated  both  by a  reasonable  reading  of Exclusion  11's

ambiguous  language and  its legislative  history.   There  is no

                             -44-
                              44

statutory  or  historical  evidence whatever  that  Congress  has

evinced a "specific intention" to include HUD and FmHA URs within

the Exclusion 11 language:  "payment[s] . . . for  energy assist-

ance."   Congress has never once  alluded to HUD and  FmHA URs as

"energy  assistance [payments],"  even  though URs  preceded  the

enactment of Exclusion 11 by some six years.  See, e.g., P.L. No.
                                                     

93-383,    201(a), 88 Stat. 653 (1974).  Chevron deference is not
                                              

dependent on  a determination  "that the agency  construction was

the  only [permissible] one . . . , or even the reading the court
       

would  have reached  if the  question initially  had arisen  in a

judicial setting."  Chevron, 467 U.S. at 843 n.11.
                         

        Notwithstanding its able effort to dispel the  permeant

ambiguity  in  the relevant  legislative  history, and  interpret

Exclusion 11 apart from its unique historical  context, the court

has  disclosed no  suggestion  that Congress  ever intimated  its

disapproval of  the USDA's  longstanding policy  against treating

routine utility reimbursements as "energy assistance [payments]."

Although  I recognize  that "[c]ongressional  inaction frequently
                                                    

betokens  unawareness, preoccupation,  or paralysis,"  Zuber, 396
                                                          

U.S. at 185-86 n.21,  Congress has amended Exclusion 11  not once

but twice since the USDA adopted its present policy on URs.  See,
                                                              

e.g., Lorillard  v.  Pons,  434 U.S.  575,  580  (1978)  (noting:
                       

"Congress is  presumed  to be  aware of  an administrative  . . .

interpretation of a statute and to adopt that interpretation when
                                                          

it  re-enacts  a  statute  without  change")   (emphasis  added).

Nevertheless,  implicit in the  approach adopted by  the court is

                             -45-
                              45

the  impermissible  presumption  that   on  both  occasions  when

Exclusion  11  was  amended,  Congress was  unfamiliar  with  the

administering agency's policy position on the very provision upon

which  the agency's policy depends.   See Pub.  L. No. 100-435,  
                                       

343,  102  Stat. 1647,  1663-64 (1988);  S.  Rep. No.  397, 100th

Cong.,  2d Sess.  28-29  (1988), reprinted  in 1988  U.S.C.C.A.N.
                                            

2239, 2266-67 (designating FSA  amendment as a "technical correc-

tion" which "is not intended to change current policy") (emphasis
                                                   

added).   Not only is there no  statutory or historical basis for

this presumption  but it  undermines Chevron itself,  which would
                                          

otherwise require  deference  to the  reasoned interpretation  of

Exclusion  11 adopted  by  the USDA  as  the FSA's  administering

agency.

        For the foregoing reasons, I respectfully dissent.

                             -46-
                              46