
USCA1 Opinion

	




                            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.                                          I.                                      BACKGROUND                                      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                       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.                                         II.                                      DISCUSSION                                      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.  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                 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                               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                                    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.                      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          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          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                    "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                    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
