        IN THE SUPREME COURT OF
               CALIFORNIA

                   KERRIE REILLY,
                 Plaintiff and Appellant,
                             v.
              MARIN HOUSING AUTHORITY,
               Defendant and Respondent.

                           S249593

            First Appellate District, Division Two
                          A149918

                Marin County Superior Court
                       CIV 1503896


                       August 31, 2020

Justice Chin authored the opinion of the Court, in which
Justices Liu, Cuéllar, and Groban concurred.


Chief Justice Cantil-Sakauye filed a dissenting opinion, in
which Justices Corrigan and Kruger concurred.
         REILLY v. MARIN HOUSING AUTHORITY
                            S249593


                Opinion of the Court by Chin, J.


      The federal Housing Choice Voucher program is a key
program in section 8 of the United States Housing Act of 1937.
(42 U.S.C. § 1437 et seq., as amended by § 201(a) of the Housing
and Community Development Act of 1974.) Commonly referred
to as “Section 8,” the program provides low-income families a
monthly subsidy to pay for a portion of their rent. The amount
of the subsidy depends, in part, on the income Section 8 families
receive. The program, which is funded and regulated by the
United States Department of Housing and Urban Development
(HUD), is administered locally by public housing authorities
(PHAs). In this case, we address whether a Section 8
beneficiary’s compensation for providing in-home care for a
severely disabled adult daughter should be excluded from
income in calculating the rental subsidy. For reasons that
follow, we conclude that it should be excluded and reverse the
Court of Appeal’s judgment.
         FACTUAL AND PROCEDURAL BACKGROUND
      In 1998, plaintiff Kerrie Reilly and her two daughters
moved into a three-bedroom apartment in Novato and began
receiving Section 8 housing assistance payments to subsidize
their monthly rent. Reilly has an adult daughter, K.R., who is
severely disabled and requires constant supervision. Reilly
receives compensation to provide in-home supportive care for




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             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


K.R. through the state and federally funded In-Home
Supportive Services (IHSS) program.
      In 2004, Reilly’s other daughter, R.R., moved out of their
subsidized apartment, but Reilly did not inform the Marin
Housing Authority (MHA), which is responsible for
administering Reilly’s Section 8 voucher. Five years later, when
Reilly told MHA that R.R. no longer lived with her, MHA
advised her that her failure to report her daughter’s leaving
constituted a violation of the program rules. Reilly could only
stay in the government-subsidized apartment if she paid
approximately $16,000 in damages to MHA.
       Reilly agreed to pay MHA in monthly installments,
initially starting at $486 and eventually lowered to $150 per
month at Reilly’s request. In 2010, after Reilly missed an
installment payment, MHA warned her that future missed
payments would result in termination of her housing assistance.
Reilly missed multiple payments in 2012, 2014, and 2015.
      In 2015, Reilly requested that MHA recalculate her rent
and exclude her IHSS compensation from “income” under the
relevant federal regulation. (See 24 C.F.R. § 5.609(c)(16)
(2020).) MHA did not respond to this request, but instead served
Reilly a notice of termination of her Section 8 voucher. After a
hearing on MHA’s decision to terminate Reilly’s housing
voucher, the hearing officer upheld the agency’s decision, noting
that Reilly’s failure to pay amounts under the settlement
agreement constituted grounds for terminating her housing
assistance. The hearing officer did not address whether the
IHSS compensation counted as income, however.
    On October 26, 2015, Reilly filed a petition for writ of
mandate seeking an order requiring MHA to terminate her


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                   Opinion of the Court by Chin, J.


repayment plan and reinstitute her Section 8 voucher; she also
sought an administrative writ ordering MHA to terminate the
repayment plan and exclude Reilly’s IHSS payments in
calculating her income going forward. The trial court rejected
Reilly’s assertion that IHSS payments were excepted from the
meaning of “annual income” (24 C.F.R. § 5.609(c)(16) (2020)). It
sustained MHA’s demurrer without leave to amend, and the CA
affirmed the judgment. (Reilly v. Marin Housing Authority
(2018) 23 Cal.App.5th 425.) Both lower courts ordered “a stay
in the enforcement of the administrative order terminating
Reilly’s Section 8 benefits.” MHA later agreed to an extension
of this stay pending review in this court.
     We granted review, limited to the issue whether IHSS
payments should be excluded from “annual income” for purposes
of calculating a Section 8 beneficiary’s home assistance
payment.
                           DISCUSSION
     A. Overview of Section 8 voucher program
      In 1974, Congress added the Section 8 housing program to
the United States Housing Act of 1937 “[f]or the purpose of
aiding low-income families in obtaining a decent place to live.”
(42 U.S.C. § 1437f(a); see generally Friedman et al., Cal.
Practice Guide: Landlord-Tenant (The Rutter Group 2019)
¶ 12.) The program gives eligible families either “tenant-based”
or “project-based” rent subsidies administered locally through
PHAs. (See Park Village Apartment Tenants Ass’n v. Mortimer
Howard Trust (9th Cir. 2011) 636 F.3d 1150, 1152–1153
[overview of Section 8 housing assistance].) “ ‘[T]enant-based
assistance’ ” is a rent subsidy that is tied to a specific family
even if the family moves to other suitable housing. (42 U.S.C.


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                   Opinion of the Court by Chin, J.


§ 1437f(f)(7).) “ ‘[P]roject-based assistance,’ ” on the other hand,
is tied to a specific housing development or unit. (42 U.S.C.
§ 1437f(f)(6).) We focus on tenant-based assistance, which is at
issue in this case.
       Under the tenant-based assistance program, at least 75%
of all admitted families must be “[e]xtremely low[] income,” i.e.,
their income may not exceed 30% of the median income
calculated by HUD for the relevant area (24 C.F.R. § 5.603(b)
(2020)); and all remaining admitted families must be “[l]ow
income,” i.e., their income may not exceed 50% of the median
income. (Ibid.; id., § 982.201(b)(1), (2)(i) (2020) [eligibility and
targeting].)
      After a Section 8 family selects an eligible rental unit
approved by the applicable PHA, the PHA enters into a contract
with the rental property owner. That owner “functions as a
landlord in the private rental market. The owner signs a lease
with the Section 8 tenant (which includes a HUD Lease/Tenancy
Addendum) and also signs a Housing Assistance Payments
(HAP) contract with the Housing Authority.” (Apartment Assn.
of Los Angeles County, Inc. v. City of Los Angeles (2006) 136
Cal.App.4th 119, 123.) The PHA gives the subsidy payments
directly to the property owner. (24 C.F.R. § 982.311(a) (2020).)
      As we explain below (see post, at p. 8), the amount of the
housing subsidy depends in large part on the “annual income”
the Section 8 family receives or expects to receive. (See 24
C.F.R. § 5.609(a) (2020); id. § 982.201(a), (b) (2020).) The issue
is whether the IHSS payments Reilly receives to provide
services to keep her developmentally disabled daughter at home
are excluded from income under 24 Code of Federal Regulations
part 5.609(c)(16) (2020).


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                   Opinion of the Court by Chin, J.


      B. IHSS
      IHSS is a state social welfare program implemented under
The Burton-Moscone-Bagley Citizens’ Income Security Act for
Aged, Blind and Disabled Californians, enacted in 1973. (Welf.
& Inst. Code,1 § 12000 et seq., added by Stats. 1973, ch. 1216,
§ 37, p. 2904; see County of Sacramento v. State of California
(1982) 134 Cal.App.3d 428, 430–431.) The purpose of the
legislation is to give the aged, blind and disabled the “assistance
and services which will encourage them to make greater efforts
to achieve self-care and self-maintenance, whenever feasible,
and to enlarge their opportunities for independence.” (§ 12002.)
IHSS is specifically “designed to avoid institutionalization of
incapacitated persons.”        (Basden v. Wagner (2010) 181
Cal.App.4th 929, 931.)           Providers perform nonmedical
supportive services for IHSS recipients, such as domestic
services, personal care services, protective supervision, and
accompaniment to health-related appointments. (§ 12300; see
Miller v. Woods (1983) 148 Cal.App.3d 862, 867, disapproved on
other grounds by Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th
955, 986, fn. 15.)
      “IHSS is actually provided under three programs: the
original IHSS program (the residual program) (§ 12300 et seq.);
the Medi-Cal personal care services program (PCSP) (§
14132.95); and the IHSS Plus waiver program (§ 14132.951).[2]


1
      All further statutory references are to Welfare and
Institutions Code unless otherwise noted.
2
      Section 14132.951, subdivision (a) provides: “It is the
intent of the Legislature that the State Department of Health
Services seek approval of a Medicaid waiver under the federal



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             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


The latter two programs tap into federal funds, and IHSS
recipients will receive services under the residual program only
if they do not qualify under the other two programs. (§§ 12300,
subd. (g); 14132.95, subd. (b); 14132.951, subd. (d).)” (Basden v.
Wagner, supra, 181 Cal.App.4th at p. 933, fn. 4; see 2 Dayton et
al., Advising the Elderly Client (2019) § 22:40 (Advising the
Elderly Client); Calderon v. Anderson (1996) 45 Cal.App.4th
607, 609–610.)
      The State Department of Social Services (Department)
administers the IHSS program in compliance with state and
federal law. The Department promulgates regulations to
implement the relevant statutes, which are set out in its Manual
of Policies and Procedures: Social Services Standards (July
2019) (MPP). (MPP, §§ 30-700 to 30-785; see Norasingh v.
Lightbourne (2014) 229 Cal.App.4th 740, 744–745.) County
welfare departments administer the IHSS program with the
Department’s supervision, and determine an applicant’s
individual needs to authorize necessary services. (Norasingh v.
Lightbourne, at pp. 744–745; see MPP, § 30-761 [needs
assessment standards].)
       A county welfare department may either obtain and pay
directly a provider of the supportive services, or pay the
recipient who hires one. (Basden v. Wagner, supra, 181
Cal.App.4th at p. 940 [when state pays provider or recipient
directly, it assumes certain “ ‘employer’ duties”]; MPP, § 30-


Social Security Act in order that the services available under
Article 7 (commencing with Section 12300) of Chapter 3, known
as the In-Home Supportive Services program, may be provided
as a Medi-Cal benefit under this chapter to the extent federal
financial participation is available. The waiver shall be known
as the ‘IHSS Plus waiver.’ ”


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             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


763.44.) Or, as in this case, it may compensate the parent who
provides in-home care to her disabled child. (See § 12300, subd.
(e); MPP, § 30-763.45 et seq.; see also Fam. Code, § 3910, subd.
(a) [parent’s responsibility extends to a “child of whatever age
who is incapacitated from earning a living and without
sufficient means”].) It bears noting that “[t]he vast majority of
home care is provided by family and friends.” (Advising the
Elderly Client, supra, § 22:17.)
       Reilly’s daughter suffers from a severe developmental
disorder and obtained authorization for protective supervision,
i.e., 24-hours-a-day supervision that allows her to remain at
home safely. (§ 12301.21; MPP, § 30-757.173.) Protective
supervision involves “observing recipient behavior and
intervening as appropriate in order to safeguard the recipient
against injury, hazard, or accident.” (MPP, § 30-757.17; see
Marshall v. McMahon (1993) 17 Cal.App.4th 1841, 1847
[“ ‘Protective supervision’ appears to be similar to care given
small children, that is, anticipating everyday hazards and
intervening to avert harm”].) Such supervision is available for
“nonself-directing, confused, mentally impaired, or mentally ill
persons only.” (MPP, § 30.757.171; see Marshall v. McMahon,
at p. 1847; Calderon v. Anderson, supra, 45 Cal.App.4th at
p. 616.) There is no dispute that Reilly’s adult daughter was
entitled to IHSS services, or that Reilly was authorized to
receive IHSS compensation for providing those services to her.
     C. HUD regulation on “Annual Income” and its
        exclusions
     The applicable federal regulation defines “annual income”
broadly, as “all amounts, monetary or not.” (24 C.F.R. § 5.609(a)
(2020).) For example, income includes “compensation for
personal services” (id., § 5.609(b)(1) (2020)) and “[p]ayments in

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             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


lieu of earnings, such as unemployment and disability
compensation, worker’s compensation, and severance pay” (id.,
§ 5.609(b)(5) (2020)). However, income does not include such
amounts as “specifically excluded” under the regulation. (Id.,
§ 5.609(a)(3) (2020).) There are 16 such exclusions. (Id.,
§ 5.609(c)(1)–(17) (2020).)
      “An extensive set of statutory provisions and regulations
governs the calculations of the subsidy that must be paid on
behalf of each tenant.” (Nozzi v. Housing Authority of City of
Los Angeles (9th Cir. 2015) 806 F.3d 1178, 1184.) In general,
Section 8 tenants must contribute 30% of their monthly adjusted
income or 10% of their gross monthly income, whichever is
greater, towards each month’s rent. (42 U.S.C. § 1437f(o)(2)(A).)
The housing assistance payment covers the balance of the rent,
up to a statutorily capped amount. (Nozzi v. Housing Authority
of City of Los Angeles, at pp. 1184–1185.)
      We do not examine the underlying method used to
calculate the rental subsidy, however, but focus on whether
Reilly’s IHSS compensation for care of her disabled daughter is
“specifically excluded” (24 C.F.R. § 5.609(a)(3) (2020)) from
income as “[a]mounts paid by a State agency to a family with a
member who has a developmental disability and is living at
home to offset the cost of services and equipment needed to keep
the developmentally disabled family member at home” (id.,
§ 5.609(c)(16) (2020), italics added). The parties do not dispute
that if Reilly’s daughter received IHSS care from a third party
rather than a family member, such amounts paid would qualify
under the exclusion. MHA argues that for the exclusion to
apply, however, a family must incur costs for hiring someone
because only then would the “[a]mounts paid” by the state to a
family truly “offset” those “cost[s].” (24 C.F.R. § 5.609(c)(16)

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             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


(2020); see In re Ali (Minn. 2020) 938 N.W.2d 835, 840 (Ali)
[“Cost means an actual monetary expense . . . incurred by the
family to keep the disabled family member living at home”].)
Because the state pays Reilly to provide care for her own
daughter and not to hire a third party provider, MHA maintains
there is no actual “cost” to Reilly for such services, and
consequently, there is nothing to “offset.”
         1. Meaning of “Offset” & “Cost”
      MHA’s interpretation is based in part on the dictionary
definition of “offset,” which generally means to counterbalance
or compensate for something. (See Steinmeyer v. Warner Cons.
Corp. (1974) 42 Cal.App.3d 515, 518.) Echoing the Court of
Appeal, MHA asserts that payments by the state must offset
costs the family itself incurs to keep a developmentally disabled
member at home; “[o]therwise the payment does not
counterbalance or compensate for the costs of services.” As
MHA puts it, “the payment must go to the same entity that
incurs the cost of those services.” MHA further insists that
“cost” is a monetary term that does not encompass emotional
costs Reilly bears in caring for her daughter, nor any lost
opportunity costs when Reilly forgoes outside employment to be
her daughter’s IHSS provider.
      We disagree with MHA’s interpretation. Unlike the word
“reimburse,” which means to “pay back or compensate (another
party) for money spent or losses incurred” (American Heritage
Dict. (5th ed. 2020) p. 1214, italics added), “offset” is not
similarly restrictive. (See Briggs v. Eden Council for Hope &
Opportunity (1999) 19 Cal.4th 1106, 1117 [“Where different
words or phrases are used in the same connection in different
parts of a statute, it is presumed the Legislature intended a



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                    Opinion of the Court by Chin, J.


different meaning”].) For example, the term “reimbursement”
is used in two other exclusions. (24 C.F.R. § 5.609(c)(4), (8)(iii)
(2020).) Consistent with the meaning of “reimburse,” those
exclusions refer to compensation of specific, discrete amounts,
e.g., “the cost of medical expenses” (id., § 5.609(c)(4) (2020)) and
“out-of-pocket expenses” to participate in a publicly assisted
program (id., § 5.609(c)(8)(iii)).
      While the term “reimburse” suggests there may be full
recompense for any out-of-pocket expenses a family incurs
under those exclusions, “offset” as used here does not necessarily
reflect that same meaning. (See Briggs v. Eden Council for Hope
& Opportunity, supra, 19 Cal.4th at p. 1117.) Here, what is
“offset” is the “cost of services and equipment needed to keep the
developmentally disabled family member at home.” (24 C.F.R.
§ 5.609(c)(16) (2020).) “[C]ost,” in turn, is defined to include both
“an amount paid or required in payment for a purchase; a price”
and “the expenditure of something, such as time or labor,
necessary for the attainment of a goal.” (American Heritage
Dict., supra, at p. 454.) Whether a family uses homecare
payments to support itself so that it may care for a
developmentally disabled member at home, or instead uses the
funds to pay a third party to provide care for some of the time,
these payments do no more than “offset” the “cost” of services
and equipment needed to avoid institutionalization, costs that
are not otherwise specified or limited. (24 C.F.R. § 5.609(c)(16)
(2020).)
      Further, contrary to MHA’s suggestion, “cost” in this
exclusion (24 C.F.R. § 5.609(c)(16) (2020)) does not have the
same meaning as “cost” used in other provisions of the
regulation. For instance, “actual cost of shelter and utilities” (24
C.F.R. § 5.609(b)(6)(ii) (2020)) and “cost of medical expenses for

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                   Opinion of the Court by Chin, J.


any family member” (id., § 5.609(c)(4) (2020)) both refer to
discrete, monetary amounts. “[T]he presumption that ‘identical
words used in different parts of the same act are intended to
have the same meaning . . . readily yields whenever there is such
variation in the connection in which the words are used as
reasonably to warrant the conclusion that they were employed
in different parts of the act with different intent.’ ” (Roberts v.
Sea-Land Services, Inc. (2012) 566 U.S. 93, 108.)
         2. Rulemaking history of 24 Code of Federal
            Regulations par 5.609(c)(16) (2020)
      This interpretation of the terms “offset” and “cost” is also
consistent with the rulemaking history of 24 Code of Federal
Regulations part 5.609(c)(16) (2020). (See 60 Fed.Reg. 17388–
17395 (Apr. 5, 1995) [“Combined Income and Rent”; interim rule
as precursor to 24 C.F.R. § 5.609(c)(16) (2020)]; 61 Fed.Reg.
54492–54504 (Oct. 18, 1996) [final rule]). Though the Court of
Appeal found this history to be unhelpful and not illuminating,
we do not share that view. (See Thomas Jefferson Univ. v.
Shalala (1994) 512 U.S. 504, 512 [relevance of agency’s “ ‘intent
at the time of the regulation’s promulgation’ ”].)
      In 1995, HUD published an interim rule proposing eight
new income exclusions — among them the homecare payments
exclusion — to the definition of annual income under Section 8
and other assisted housing programs. (See 60 Fed.Reg. 17388–
17395 (Apr. 5, 1995); 24 C.F.R. § 5.609(c) (2020).) It determined
that the new exclusions “are essential for achieving its goals of
ensuring economic opportunity, empowering the poor and
expanding affordable housing opportunities. Moreover, HUD
believes that the costs of additional exclusions will be offset by
long-term future savings because the exclusions will increase



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                   Opinion of the Court by Chin, J.


the number of economically self-sufficient families residing in
assisted housing.” (60 Fed.Reg. 17388, italics added.)
      Regarding the “homecare payments” exclusion in
particular, HUD explained that the “exclusion exempts amounts
paid by a State agency to families that have developmentally
disabled children or adult family members living at home.
States that provide families with homecare payments do so to
offset the cost of services and equipment needed to keep a
developmentally disabled family member at home, rather than
placing the family member in an institution. Since families that
strive to avoid institutionalization should be encouraged, and
not punished, the Department is adding this additional
exclusion to income. The Department wishes to point out that
today’s interim rule does not define ‘developmentally disabled’
since whether a family member qualifies as developmentally
disabled, and is therefore eligible for homecare assistance, is
determined by each individual State.” (60 Fed.Reg. 17388,
17389 (Apr. 5, 1995), italics added.)
      In finalizing the rule and responding to public comment
that “ ‘developmentally disabled children’ ” and “ ‘adult family
members’ ” should be expressly defined, HUD rejected the
suggestion as unnecessary: “There is no need for HUD to define
these terms, as they are defined by the State program providing
the payments. If the family is receiving such a payment from the
State because a family meets the criteria of the definition, the
[public housing authority] should consider the family eligible for
the exclusion.” (61 Fed.Reg. 54492, 54497 (Oct. 18, 1996), italics
added.)
      We find several points from this rulemaking history to be
significant. As to the meaning of “offset,” HUD recognized that


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                   Opinion of the Court by Chin, J.


states that make payments for in-home services “do so to offset
the cost” to the family keeping the developmentally disabled
member at home “rather than placing the family member in an
institution.”   (60 Fed.Reg. 17388, 17389 (Apr. 5, 1995).)
Significantly, HUD here did not use “cost” and “offset” in terms
of a specific monetary expense or amount a Section 8 family
incurs, but in a broad sense with respect to describing the
overall objective of the exclusion. HUD regarded homecare
payments as reducing or offsetting costs to families caring for
developmentally disabled individuals, costs that would be borne
by state and federal governments if the family member were
institutionalized. (See Perkins & Boyle, Addressing Long Waits
for Home and Community-Based Care Through Medicaid and
the ADA (2001) 45 St. Louis U. L.J. 117, 119 [“Most states have
reduced costly institutional care by shifting some public funding
to home and community settings”].)
       This background clearly informs the interpretation of 24
Code of Federal Regulations part 5.609(c)(16) (2020). The
language of the regulation (“amounts paid by a State agency . . .
to offset the costs of services and equipment needed to keep the
developmentally disabled family member at home” [italics
added]) closely tracks this rulemaking language (“States that
provide families with homecare payments do so to offset the costs
of services and equipment needed to keep a developmentally
disabled family member at home, rather than placing the family
member in an institution”) (60 Fed.Reg. 17388, 17389, italics
added), and the italicized phrases at issue here are identical.
      The only express limitation HUD has placed on this
exclusion is that the in-home care payments must be for services
and equipment needed to keep the “developmentally disabled”
family member at home. (See post, at pp. 15–16.) Even then,

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HUD found “no need” to define what “developmentally disabled”
meant, and instead left this up to the states to decide. (61
Fed.Reg. 54492, 54497 (Oct. 18, 1996; see 60 Fed.Reg. 17389
(Apr. 5, 1995) [“whether a family member qualifies as
developmentally disabled, and is therefore eligible for homecare
assistance, is determined by each individual State”].) From
HUD’s perspective, “If the family is receiving such a payment
from the State because a family member meets the criteria of
the definition, the [public housing authority] should consider the
family eligible for the exclusion.” (61 Fed.Reg. 54492, 54497,
italics added.)
      Notwithstanding the general rule that exclusions from
income should be construed narrowly (see Commissioner v.
Schleier (1995) 515 U.S. 323, 328), we find no indication that
HUD intended a narrow construction of the homecare payments
exclusion. We perceive no reasoned basis — including any basis
informed by the regulation’s language — why HUD would single
out a parent provider’s compensation as unworthy for income
exclusion. Rather, we find HUD’s stated goals of encouraging
families to avoid the institutionalization of developmentally
disabled individuals through the addition of this exclusion (60
Fed.Reg. 17388, 17389 (April 5, 1995)), and more globally of
“ensuring economic opportunity, empowering the poor and
expanding affordable housing opportunities” (60 Fed.Reg.
17388), would be furthered by permitting all homecare
payments for services to keep developmentally disabled family
members at home — whether the provider is a family member
or third party — to be excluded from the meaning of “annual
income.” (24 C.F.R. § 5.609(c)(16) (2020).) By allowing these
families to realize the full benefit of the homecare payments
without facing a corresponding increase in rent, the exclusion


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                   Opinion of the Court by Chin, J.


would operate as intended by not penalizing families who take
on the onus of caring for a developmentally disabled family
member at home.
      To that end, it is helpful to remember that “[t]he United
States Housing Act is a program of ‘cooperative federalism.’ ”
(James v. New York City Housing Authority (S.D.N.Y. 1985) 622
F.Supp. 1356, 1359; see 42 U.S.C. § 1437; see also Hodel v.
Virginia Surface Mining & Recl. Assn. (1981) 452 U.S. 264,
289.) “HUD’s delegation of eligibility requirements to local
public housing authorities is intended to effectuate the
underlying policy of the United States Housing Act by
promoting efficient management of the programs . . . .” (James
v. New York City Housing Authority, at pp. 1361–1362.) With
respect to the exclusion for homecare payments specifically (24
C.F.R. § 5.609(c)(16)) (2020)), HUD expressly left it to the states
to define “developmentally disabled,” which in part determines
a family’s eligibility for the income exclusion. (See ante, at p.
12.)
       Along these lines, HUD did not limit the income exclusion
based on whether a state allows a family to use a family member
or a third party to provide the necessary care; the exclusion
covers “[a]mounts paid by a State agency to a family” with a
developmentally disabled member (24 C.F.R. § 5.609(c)(16)
(2020)). Indeed, acknowledging such a distinction would do
little to advance the complementary purposes of the federal and
state statutes. Congress established Section 8 with “the
purpose of aiding low-income families in obtaining a decent
place to live.” (42 U.S.C § 1437f(a).) And our Legislature
created IHSS with the goal of providing “supportive services . . .
to aged, blind, or disabled persons . . . who are unable to perform
the services themselves and who cannot safely remain in their

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                   Opinion of the Court by Chin, J.


homes or abodes of their own choosing unless these services are
provided.” (§ 12300, subd. (a).) Like the purpose of the federal
exclusion (see ante, at pp. 12–13), the IHSS program’s purpose
is to enable “ ‘disabled poor persons to avoid institutionalization
by remaining in their homes with proper supportive services.’ ”
(Basden v. Wagner, supra, 181 Cal.App.4th at p. 939.)
Nevertheless, MHA would have us read in the words “from third
parties” after the phrase “cost of services” (24 C.F.R. §
5.609(c)(16) (2020)) thereby making it correspondingly harder
for certain families to provide necessary in-home care. Given
this cooperative federalism regime, we ought to be reticent to
interpret the HUD regulation in a way that would foreclose or
hinder the objectives of the state IHSS program.
      The dissent overstates the import of the authority it cites
(see dis. opn., post, at pp. 1–2, 16–19). (See Anthony v. Poteet
Housing Authority (5th Cir. 2009) 306 Fed. Appx. 98, 101
(Anthony) [“One must incur costs before they can be offset”]; Ali,
supra, 931 N.W.2d 835.) In Anthony, an unpublished Fifth
Circuit decision that first addressed the issue, plaintiff Brenda
Anthony provided in-home care for her severely disabled son in
their Section 8 subsidized apartment. Unlike California, the
State of Texas does not pay families directly for in-home care;
such care is provided by third party intermediaries, who in turn
employ in-home attendants and pay them wages partially
funded by the state. Through her employment as a personal
care attendant with two private for-profit companies, Anthony
provided care not only for her son but also for other clients under
the terms of her employment.
      In determining Anthony’s annual income for purposes of
calculating her subsidized rent, the PHA refused to exclude
Anthony’s wages under 24 Code of Federal Regulations part

                                 16
              REILLY v. MARIN HOUSING AUTHORITY
                    Opinion of the Court by Chin, J.


5.609(c)(16) (2020)). The Fifth Circuit agreed with the PHA’s
decision: “[T]he fact that Anthony’s employment income
coincides with state funds that are set aside for her son’s care
does not make that income a form of reimbursement.” (Anthony,
supra, 306 Fed. Appx. at pp. 101–102.) The court further
rejected Anthony’s claim that the services she provided her son
were at a cost and were not free: “[F]or Anthony, they are free.
She has no out-of-pocket expenses — ‘costs’ — that must be
reimbursed or ‘offset’ by the state.” (Id. at p. 102.)
       We are not persuaded by Anthony’s reasoning on several
grounds. Fundamentally, Texas’s program is distinct from the
IHSS scheme in that “all state-funded in-home attendant-care
services in Texas are provided by private intermediaries, and
Texas does not provide any amounts directly to families to offset
costs incurred to keep a disabled family member at home.”
(Anthony, supra, 306 Fed. Appx. at p. 101.) Next, although
Anthony’s private employers paid her to provide in-home care to
her son “with money partially provided by the state” (id. at p.
101), it is unclear what portion of her wages truly constituted
“pass-through” state funds. Her employers paid Anthony not
just to care for her disabled son, but also to care for other clients.
(Id. at p. 100.) Thus, Anthony’s compensation as an in-home
attendant was arguably indistinguishable from wages a parent
earns from outside employment, and therefore properly not
excluded from income under 24 Code of Federal Regulations
part 5.609(c)(16) (2020)). Finally, we do not agree with the Fifth
Circuit’s narrow interpretation of the exclusion as limited to out-
of-pocket expenses that a state directly reimburses. (See
Anthony, supra, 306 Fed. Appx. at pp. 101–102; see ante, at pp.
9–11.)



                                  17
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


      Nor are we persuaded by the Minnesota Supreme Court’s
recent decision in Ali, supra, 938 N.W.2d 835, which relied in
part on both Anthony and the Court of Appeal opinion below to
reach a similar conclusion. (See Reilly v. Marin Housing
Authority, supra, 23 Cal.App.5th 425.) Under Minnesota’s
Consumer Directed Community Support option for home and
community-based services, a family receives a budget for
specific services and equipment needed to keep a
developmentally disabled member at home. (Ali, supra, 938
N.W.2d at p. 837.) The plaintiff, whose autistic son was eligible
for the program, “chose to allocate a portion of the budget to
herself as a paid parent to provide to her son some of the
necessary services.” (Ibid.) Following Anthony and Reilly, the
Ali court adopted a narrow view of “cost” to mean out-of-pocket
expenses, and concluded that the mother incurred no actual
monetary expenses to “offset.” (Id. at p. 840.)
       As with the Texas program, the Minnesota program —
which allowed the mother to “allocate her budget as she saw fit
to keep her son living at home” — is structured differently from
the IHSS program in a way that makes Ali distinguishable.
(Ali, supra, 938 N.W.2d at p. 837.) Moreover, as with Anthony,
we disagree with the Ali court’s narrow interpretation of “cost”
and “offset.”
     D. MHA’s policy arguments
      Notwithstanding this reading of the HUD regulation,
MHA asserts that including a parent’s IHSS compensation as
income is necessary to achieve a measure of parity between
families in similar circumstances. An expansive reading of the
exclusion (24 C.F.R. § 5.609(c)(16) (2020)), MHA argues, would
unfairly advantage families who provide in-home care to a



                                 18
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


developmentally disabled member because their compensation
is not counted as income for purposes of calculating their rent
subsidy, whereas no comparable income exclusion is available
for a family with a medically disabled member or for a family
who hires a third party provider.
      In advancing this argument, MHA asserts the state pays
Reilly “wages” under the IHSS program. Describing an
employment relationship between Reilly and the State of
California, MHA relies in part on the Court of Appeal’s
reasoning that “IHSS payments substitute in the family’s
budget for the money the parent would have earned outside the
home.” Such wages, MHA continues, should be considered part
of her annual income just like the outside income of a parent
who instead hires an in-home provider. We address these points
in turn.
         1. Disparity based on individuals’ different
            disabilities
      First, we reject MHA’s and the dissent’s assertion that
excluding Reilly’s IHSS payments from annual income under 24
Code of Federal Regulations part 5.609(c)(16) (2020) would
create an unfair disparity by extending the exclusion to families
with a developmentally disabled member but not to families
with a medically disabled member. To the extent there is any
disparity, it is inherent in the federal regulation itself, which
specifically limits the exclusion to payments made to families
caring for a “developmentally disabled family member.” (24
C.F.R. § 5.609(c)(16) (2020).) Put another way, even assuming
MHA’s position is correct that the exclusion is limited to
payments made to third party providers, it would still treat
developmental disabilities more favorably than physical
disabilities because whatever its scope, the exclusion by its

                                 19
              REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


terms applies only to “[a]mounts paid by a State agency to a
family with a member who has a developmental disability.”
(Ibid., italics added.)
       The regulation, moreover, does not require that an
individual meet a particular definition of “developmentally
disabled” for the income exclusion to apply. As previously
discussed (see ante, at p. 15), HUD has not defined
“developmental disability” in the regulation, but instead left it
up to states to determine its meaning. Specifically, if a state
program authorizes a family to receive in-home care for a family
member, in HUD’s view that family member “meets the criteria
of the definition” of developmentally disabled, and the PHA
“should consider the family eligible for the exclusion.” (61
Fed.Reg. 54492, 54497 (Oct. 18, 1996), italics added.) This
expansive view in favor of applying the exclusion is consistent
with HUD’s expressed concern that families of developmentally
disabled members in particular would receive unfair treatment
if this income exclusion were not made available to them. HUD
added the relevant exclusion for families with a developmentally
disabled member “[s]ince families that strive to avoid
institutionalization should be encouraged, and not punished.”
(60 Fed.Reg. 17388, 17389 (Apr. 5, 1995), italics added.)
       The dissent, however, asserts that precluding Reilly from
utilizing this income exclusion would not amount to punishment
because no other group, besides foster parents, enjoys the
benefit of the income exclusion. (See dis. opn., post, at p. 34, fn.
18.) This critically misapprehends the nature of the penalty
involved. The punishment here is not merely withholding a
benefit to a family that is not otherwise given to similarly
situated families; in other words, the dilemma a family faces is
not choosing between enjoying or forgoing a “preferential

                                 20
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


benefit,” as the dissent seems to suggest. (Dis. opn., post, at
p. 23.) Rather, if a family cannot utilize the income exclusion to
exclude compensation for a parent’s in-home care, this may
cause the family to lose its Section 8 housing altogether because
it is unable to pay an increased portion of rent. Without such
housing, a family may face having to institutionalize a
developmentally disabled member, a result the exclusion seeks
to prevent in the first place.
      Further, despite no expressed preference for family
providers per se, “[r]ecipients needing 24-hour protective
supervision — and other services — are more likely to receive
better continuous care from relatives living with them whose
care is more than contractual.” (Miller v. Woods, supra, 148
Cal.App.3d at p. 870.) This continuity of care is particularly
salient here because of the nature of need-based tasks under the
IHSS program. Because an IHSS recipient may only receive
specific services based on an assessed need — i.e., where
“[p]erformance of the service by the recipient would constitute
such a threat to his/her health/safety that he/she would be
unable to remain in his/her own home” (MPP, § 30.761.14) —
not all time that a provider spends with a recipient would be
compensable. (See § 12300, subd. (a); MPP, § 30.761.12.) Many
tasks are discrete and not clustered together throughout the day
(such as feeding, dressing, bowel and bladder care), and a
provider may not be compensated for time spent waiting in
between those tasks. It would no doubt prove challenging to find
many providers — other than family members — willing to work
that intermittently during the day.
      Family members may also make particularly good
providers because IHSS services “involve a most intimate and
personal aspect of an individual’s life” and family providers

                                 21
              REILLY v. MARIN HOUSING AUTHORITY
                    Opinion of the Court by Chin, J.


often “insure the least intrusion upon the recipient’s privacy.”
(Miller v. Woods, supra, 148 Cal.App.3d at p. 878; see § 12304.1
[“preference shall be given to any qualified individual provider
who is chosen by any recipient”].) Also recognizing that family-
provided care is often the best type of care for individuals with
disabilities, Congress has included it as one of the “goals of the
Nation” to provide families of children with disabilities the
services necessary to “enable families of children with
disabilities to nurture and enjoy their children at home”; and
“support family caregivers of adults with disabilities.” (42
U.S.C. § 15091(a)(6)(B), (D) [congressional findings of Families
of Children with Disabilities Support Act of 2000]; id.,
§ 15091(a)(1) [“It is in the best interest of our Nation to preserve,
strengthen, and maintain the family”].) Congress further
emphasized the important cost savings when family members
are themselves providers for their disabled children: “Families
of children with disabilities provide support, care, and training
to their children that can save States millions of dollars.
Without the efforts of family caregivers, many persons with
disabilities would receive care through State-supported out-of-
home placements.” (Id., § 15091(a)(2); see 60 Fed.Reg. 17388,
17389 (Apr. 5, 1995).) These expressed goals fully align with
HUD’s objective to have developmentally disabled individuals
avoid institutionalization and instead live with their families at
home.3


3
      Contrary to the dissent’s suggestion, nothing in our
opinion should be construed as implying that third party
caregivers as a whole will provide “substandard” care compared
to family members. (Dis. opn., post, at p. 31.) We merely
confirm what Congress has expressly recognized about the
benefits of having family caregivers.


                                  22
              REILLY v. MARIN HOUSING AUTHORITY
                    Opinion of the Court by Chin, J.


       This leads us to the inescapable conclusion that parents
who keep their disabled child at home instead of in an
institution — while also providing care as their child’s IHSS
provider — are different from other caregivers. That difference,
however, cuts in favor of allowing a parent’s IHSS compensation
under the exclusion. Unlike third party caregivers whose job it
is to take care of someone on an hourly basis, for these parent
providers, caring for their child “is not a day job; it is their life.”
(In re Hite (Bankr. W.D.Va. 2016) 557 B.R. 451, 458 [holding
parents’ in-home care payments excluded from monthly income
and consequently not deemed disposable income subject to
creditors].) If in-home care payments are not excluded from her
income, the benefits Reilly receives — the in-home care for her
disabled daughter K.R. and the Section 8 housing assistance —
would be at cross-purposes. A family should not be forced to
make an impossible choice between these two critical benefits.
We perceive no plausible reason why Reilly should not realize
the full benefit of what each program has to offer her family.4
          2. IHSS payments as wages
      Next, we reject MHA’s underlying assumption that a
parent provider’s compensation under the IHSS program seeks
to replicate the wages and hours of a parent who is employed
outside the home. A parent’s employment is relevant only to the
extent it relates to the parent’s suitability or availability to
provide IHSS services to a child. (MPP, § 30-763.451; Dept. All-
County Letter No. 19-02 (January 9, 2019) (All-County Letter


4
      This conclusion focuses on Reilly’s general entitlement to
benefits under the Section 8 voucher and IHSS programs, and
does not consider any other basis for terminating these benefits
such as the failure to comply with any program requirements.


                                  23
              REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


19-02).) As section 12300, subdivision (e) explains, the predicate
for a paid parent provider is that “no other suitable provider is
available.” (§ 12300, subd. (e); see MPP, § 30-763.451.) In
providing the necessary in-home care to a disabled child, a
parent forgoes any outside employment — not to displace
otherwise competent professional caregivers — but to prevent a
third party caregiver’s “inappropriate placement or inadequate
care” for their child. (§ 12300, subd. (e).)
       For instance, in its 2019 All-County Letter 19-02, the
Department clarified the paid parent provider requirements:
“The paid parent IHSS provider requirements, set forth in MPP
Section 30-763.451, do not require or imply that a parent must
have marketable job skills or a work history to be their child’s
paid IHSS provider, as long as it is the recipient child’s needs
which prevent the parent from maintaining or obtaining full-
time employment.” (All-County Letter 19-02, supra, at p. 4,
italics added.) Likewise, parents who retire or are laid off may
also serve as their child’s provider only if their retirement or
layoff is due to the child’s need for IHSS services. (Id. at p. 6.)
In short, “if a parent is not employed full-time for a reason other
than the recipient child’s IHSS needs . . . that parent would not
qualify as a paid parent IHSS provider.” (Id. at p. 4.)
      Second, even assuming Reilly’s IHSS compensation
represents her wages, this does not mean that providing in-
home care to her child is “an employment for all purposes.”
(Basden v. Wagner, supra, 181 Cal.App.4th at p. 940.) In Basden
v. Wagner, the Court of Appeal recognized certain duties — such
as the state being responsible for the provider’s unemployment
compensation, workers’ compensation, federal and state income
tax and the like — that would suggest providing IHSS full-time
could be considered an employment. The court, however,

                                 24
              REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


pointed out that “the Legislature defined IHSS providers as
employees for limited circumstances, but undisputedly not for
all circumstances. More significantly, nothing in the statutes
even remotely suggests the Legislature defined the provision of
in-home, full-time, IHSS funded care by a parent to a child as
full-time employment . . . .” (Ibid., italics omitted.) The question
here is whether a parent’s compensation for providing in-home
care is “specifically excluded” from the definition of annual
income for purposes of the HUD regulation. (24 C.F.R.
§ 5.609(a)(3), (c)(16) (2020).) As explained above, we conclude
that IHSS compensation to a parent provider is excluded from
income. (See ante, at pp. 14–15.)
      Nevertheless, the dissent maintains that “[u]nlike funds
that reimburse a family’s expenditures, funds provided by the
state to compensate for the family’s caregiving activities are
available to meet the family’s daily needs. That is their
purpose.” (Dis. opn., post, at p. 25, italics added.) This
characterization gravely misconstrues the nature and scope of
IHSS services.
      Under the IHSS program, the main focus is on assessing
the disabled individual’s “service needs and authorizing service
hours to meet those needs.” (§ 12301.2, subd. (a)(1).) A
caregiver will be compensated only for those authorized service
hours and nothing more. As previously explained (see ante, at
p. 21), because many tasks are discrete and completed
throughout the day, a provider might not be compensated for
time spent waiting in between those tasks. Contrary to the
dissent’s suggestion, excluding a parent’s IHSS compensation
from income would not artificially reduce a family’s income and
thereby increase any resulting rent subsidy. At best, a parent’s
IHSS compensation will offset a portion of the costs of keeping

                                 25
              REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


a developmentally disabled family member at home, and would
not go far in meeting the family’s daily needs.
       The dissent’s related assertion — i.e., family providers
“are effectively selling their labor to the state, and the resulting
income is indistinguishable, in its impact on the family’s
standard of living, from money earned working outside the
home” (dis. opn., post, at p. 25) — is likewise long on conclusion
but short on facts. (See ibid. [“to receive funds from IHSS a
parent must accept their disabled child’s care as, in effect, their
job”].) In the case of Reilly’s daughter, K.R., for example, she
required protective supervision that is “only available” if “a need
exists for twenty-four-hours-a-day of supervision in order for the
recipient to remain at home safely.” (MPP, § 30-757.173(a).) A
person needing 24-hour supervision would require a provider’s
services for 720 hours in a 30-day month. However, an IHSS
provider is limited to a statutory cap of 283 hours of
compensation.       (§§ 12303.4, 14132.95, subd. (g).)          The
discrepancy between a parent provider’s actual hours of service
and compensation belies any assertion that IHSS payments, at
least with respect to protective supervision, are intended to
represent wages the parent would have earned outside the
home, where compensation would be based on every hour
worked.
      Finally, we find it significant that the IRS also treats in-
home care payments — whether the provider is related or
unrelated to the disabled individual — as excludable from a
provider’s income under Internal Revenue Code section 131. (26
U.S.C. § 131; see Rev. Proc. 2014-7, 2014-4 I.R.B. 445.) In 2014,
the IRS explained that Medicaid waiver payments to states,
which are used to fund IHSS payments through the state Medi-
Cal program (see ante, at pp. 5–6 & fn. 2), should be excluded

                                 26
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


from a provider’s gross income. (Rev. Proc. 2014-7, 2014-4 I.R.B.
445.) It equated these payments to foster care payments, which
are considered “difficulty of care” payments excludable from a
provider’s income under Internal Revenue Code section 131.
(26 U.S.C. § 131(a) [“Gross income shall not include amounts
received by a foster care provider . . . as qualified foster care
payments”].) “The programs share the objective of enabling
individuals who otherwise would be institutionalized to live in a
family home setting rather than in an institution, and both
difficulty of care payments and Medicaid waiver payments
compensate for the additional care required.” (Rev. Proc. 2014-
7, 2014-4 I.R.B. 445 [these foster parents “ ‘are saving the
taxpayers’ money by preventing institutionalization of these
children’ ”].) As relevant here, the IRS makes no distinction
between care provided by a parent or by a third party — the
exclusion for Medicaid waiver payments “will apply whether the
care provider is related or unrelated to the eligible individual.”
(Ibid., italics added.)
      Seeking to downplay any impact an IRS interpretation has
on a HUD regulation, MHA notes that HUD has indicated that
the “tax rules are different from the HUD program rules.”
(HUD, HUD Handbook 4350.3: Occupancy Requirements of
Subsidized Multifamily Housing Programs (Nov. 2013) ¶ 5-1.)
Be that as it may, we do not conclude that the IRS’s
interpretation is dispositive or compels the outcome in this case.
We do, however, acknowledge that it provides persuasive
insight, one that is consistent with the rulemaking record of the
HUD regulation (24 C.F.R. § 5.609(c)(16) (2020)). (See ante, at
pp. 11–13)
    For example, though payments to foster parents and in-
home care payments are both considered “difficulty of care”

                                 27
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


payments excludable from a provider’s taxable income, these
payments would receive unequal treatment under MHA’s
interpretation of the regulation. Under 24 Code of Federal
Regulations part 5.609(c)(2) (2020), “[p]ayments received for the
care of foster children or foster adults (usually persons with
disabilities, unrelated to the tenant family, who are unable to
live alone)” are excluded from income for purposes of Section 8
housing. If a family takes into their home an unrelated disabled
adult who is unable to live alone, and receives payment from the
State for providing care to that adult, such payments are
excluded from the family’s income. However, if that same family
receives payment for providing the same care but to a
developmentally disabled family member, those payments
would not be excluded from income.              To ascribe this
interpretation to HUD, which would impose a financial penalty
on a family simply because the care is given to a disabled family
member rather than a disabled stranger, would not only be
inconsistent with the IRS’s treatment of both payments, there is
no evidence in the regulation’s rulemaking record that HUD
intended different treatment.
     E. HUD’s position
      At our request, HUD filed an amicus brief in this matter.
We first note that at oral argument HUD’s counsel indicated
that the agency did not request we give deference to its
interpretation of the regulation because it believed the plain
language controlled. (See Kisor v. Wilkie (2019) 588 U.S. ___
[139 S. Ct. 2400, 2415] [“If uncertainty does not exist, there is
no plausible reason for deference. The regulation then just
means what it means — and the court must give it effect”].)
Urging us to affirm the Court of Appeal’s judgment, HUD opines
that the IHSS payments Reilly receives must be treated as

                                 28
             REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


income under the regulation because that “compensation
substitutes for income Reilly would otherwise earn for working
outside the home.” HUD essentially echoes the reasoning of the
Court of Appeal below.
       Though deference is generally accorded an agency’s
interpretation of its own regulation in the face of ambiguity (see
Auer v. Robbins (1997) 519 U.S. 452; Skidmore v. Swift & Co.
(1944) 323 U.S. 134, 140), we conclude that such deference is not
compelled here. (See United States v. Mead Corp. (2001) 533
U.S. 218, 228 [“[t]he fair measure of deference to an agency
administering its own statute has been understood to vary with
circumstances”].)      Courts should defer to an agency’s
interpretation unless an “ ‘alternative reading is compelled by
the regulation’s plain language or by other indications of the
[agency’s] intent at the time of the regulation’s promulgation.’ ”
(Thomas Jefferson Univ. v. Shalala, supra, 512 U.S. at p. 512,
italics added.)
      As explained above (see ante, at pp. 12–13), we conclude
that HUD’s clearly expressed intent at the time it added the
exclusion for homecare payments (24 C.F.R. § 5.609(c)(16)
(2020)) was to encourage families to provide in-home care to, and
avoid institutionalization of, developmentally disabled family
members. This contemporaneous intent is fully realized only
when in-home payments for services needed to keep the
developmentally disabled member at home — are excluded from
income for purposes of the Section 8 program, i.e., whether those
payments are ultimately made to a family member or to a third
party provider.       This interpretation is consistent with
exclusion’s language, which places no restrictions on who the
provider of services can be. (24 C.F.R. § 5.609(c)(16) (2020).)



                                 29
              REILLY v. MARIN HOUSING AUTHORITY
                   Opinion of the Court by Chin, J.


       Contrary to MHA’s suggestion, we do not perceive any
intent by HUD to treat families with a developmentally disabled
member and families with a medically disabled member the
same, or to consider a parent’s outside income the same as a
parent’s IHSS compensation. We will not pursue parity for
parity’s sake, especially if such pursuit runs counter to the
language and purpose of the exclusion. Including a parent’s in-
home care payments as income to determine a family’s Section
8 eligibility will have the perverse effect of making it harder for
a family to maintain a home in which to care for the child.
      In the end, we refuse to adopt a crabbed interpretation
that does little to advance the tandem goals of offering
affordable housing to low income families and of supporting
families who themselves provide in-home care for
developmentally disabled members. We cannot endorse a
construction that yields a result antithetical to our nation’s “goal
of providing families of children with disabilities with the
support they need to raise their children at home.” (42 U.S.C.
§ 15091(c).) We conclude a parent’s IHSS compensation to
provide care to keep a developmentally disabled child at home
is excluded from income under 24 Code of Federal Regulations
part 5.609(c)(16) (2020).




                                 30
             REILLY v. MARIN HOUSING AUTHORITY
                  Opinion of the Court by Chin, J.


                         CONCLUSION
          We reverse the Court of Appeal’s judgment and
remand the matter for further proceedings consistent with this
opinion.
                                                     CHIN, J.
We Concur:

LIU, J.
CUÉLLAR, J.
GROBAN, J.




                                31
        REILLY v. MARIN HOUSING AUTHORITY

                           S249593


    Dissenting Opinion by Chief Justice Cantil-Sakauye

      The federal Housing Choice Voucher program, 42
U.S.C. section 1437f (hereafter Section 8), provides housing
assistance to low-income families, with the amount of the
assistance determined by the family’s annual income. Under
24 Code of Federal Regulations part 5.609(c) (2020),1 certain
funds are excluded from the calculation of annual income.
Among the funds excluded from that calculation are state
payments to a family providing at-home care to a
developmentally disabled family member if those payments
“offset the cost of services and equipment needed to keep the
developmentally     disabled   family    member       at   home.”
(§ 5.609(c)(16).)    The   majority     adopts   an    expansive
interpretation of part 5.609(c)(16), holding that, in addition
to excluding the state’s reimbursement of out-of-pocket
expenses, the regulation also covers the compensation paid to
parents who are hired by the state to provide full-time care
to their developmentally disabled children.       Every other
appellate court to consider part 5.609(c)(16) — the United


1
       Hereafter part 5.609(c) — and, when referred to in a
citation parenthetical, § 5.609(c). (See California Style
Manual (2000) § 2:44.)


                                1
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



States Court of Appeals for the Fifth Circuit, the Minnesota
Supreme Court, and our Court of Appeal — has adopted a
narrower construction, limiting the exclusion to those state
payments that reimburse a family’s expenditures.               In
contrast, these courts have held that compensation to parents
for their labor in caring for a developmentally disabled child,
which constitutes genuine income to the family, is outside the
scope of the exclusion.

      The conclusion reached by these other appellate courts
is the most straightforward reading of the relevant
regulatory language, which is restricted to payments made
“to offset the cost of services and equipment.” (§ 5.609(c)(16).)
And this interpretation fully serves my understanding of the
purpose underlying the regulation, which is to ensure that
families caring for a developmentally disabled family
member are not disadvantaged in their receipt of Section 8
housing assistance by their acceptance of state help in
keeping the family member at home.              Significantly, the
narrower interpretation is the one urged on us by the United
States Department of Housing and Urban Development
(HUD), the federal agency that drafted the regulation.
      The majority’s more expansive construction of the
regulation relies on a strained reading that disregards the
actual language, and it will have unfortunate and selective
public policy consequences. First, the majority’s ruling will
introduce unintended and unwarranted inequities into the

                                  2
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



administration of Section 8.            Second, the majority’s
misreading will siphon scarce housing assistance from
California’s other low-income families, inevitably reducing
the number of families who will benefit from the Section 8
program.    In light of the misguided, if well-intentioned,
nature of the majority’s analysis, I respectfully dissent.
                       I. BACKGROUND

      A. Plaintiff’s Circumstances
      Plaintiff Kerrie Reilly and her adult daughter, K.R.,
live together in a three-bedroom apartment in Marin County.
Due to a severe developmental disability, K.R. requires
around-the-clock    supervision.         Under         the   In-Home
Supportive Services program (IHSS; Welf. & Inst. Code,
§ 12300 et seq.), the state pays plaintiff to provide full-time
home care and supervision to her daughter. Without such
care, K.R. would likely be placed in an institution. At the
time of the trial court proceedings, the family’s annual
income exceeded $52,000, comprised of K.R.’s social security
benefits of $11,000 and more than $41,000 in IHSS
compensation to plaintiff.
      Plaintiff is a long-time participant in Section 8.          In
2004, plaintiff’s second daughter, R.R., moved from the
family’s apartment to attend college. For the next five years,
plaintiff falsely represented in annual, sworn certifications to
the Marin Housing Authority (Authority), the agency
responsible for administering her Section 8 benefits, that

                                  3
                REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



R.R. continued to live with her.2 After the Authority learned
the    truth,   plaintiff   admitted      that    she    made    the
misrepresentations because she was concerned that she and
K.R. would be required to move from their three-bedroom
apartment if she disclosed R.R.’s move.             Plaintiff’s false
representations also caused her to be granted, the Authority
concluded, a larger Section 8 housing voucher than she would
have    received   had      the   Authority      known    the   true
circumstances. When the Authority confronted plaintiff, she
agreed to repay more than $16,000 in excess subsidies under
a payment schedule.         Unfortunately, plaintiff was often
unable to make the scheduled payments. The Authority’s
patience ran out in 2015, when it terminated her
participation in the Section 8 program.
       As the Authority informed the trial court in explaining
its decision to terminate plaintiff, its implementation of
Section 8 is severely constrained by limited funding. In 2015,
more than 5,000 families in Marin County eligible for
Section 8 housing assistance were on a waiting list because
the Authority was unable to help them. At the time, the
Authority was authorized to grant vouchers to only 2,153
families; in practice, it provided rent vouchers only to 1,957


2
     The majority’s statement that plaintiff “did not inform”
the Authority of R.R.’s departure (maj. opn., ante, at p. 2) is
a charitable but misleading characterization of plaintiff’s
repeated and knowing falsehoods.


                                   4
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



families due to insufficient funding. The Authority decided
to terminate plaintiff because, it explained, although it “has
been grappling with the possibility of terminating hundreds
of compliant families from the Section 8 Program, [plaintiff]
has made it a practice to violate rules of the Section 8
Program and her contractual obligations.”               Contrary to
majority’s claim (maj. opn., ante, at p. 2), the termination did
not require plaintiff’s eviction from her apartment, although
she would become responsible for paying the entire rent.
      In this mandate action challenging her termination,
plaintiff argued that the Authority had improperly included
her IHSS payments when calculating her annual income
under Section 8, causing the Authority to understate the
housing subsidy due her.           The trial court disagreed,
sustaining the Authority’s demurrer without leave to amend
upon concluding that the IHSS payments were properly
included in plaintiff’s income calculation.            The Court of
Appeal affirmed in a published decision. (Reilly v. Marin
Housing Authority (2018) 23 Cal.App.5th 425, 439 (Reilly).)
The Supreme Court now reverses the Court of Appeal.

      B. Governing Law

         1. Section 8
      The Section 8 voucher program “is funded by HUD and
administered by state and local public housing authorities
. . . in accordance with regulations promulgated by HUD.



                                  5
              REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



When a rent payment exceeds a specified percentage of a
family’s monthly income, the federal program pays the
balance.”    (Inclusive Communities Project, Inc. v. Lincoln
Property Co. (5th Cir. 2019) 920 F.3d 890, 900.) As HUD
characterizes the program in an amicus curiae brief,
“Section 8   is   not   an   entitlement program; Congress
appropriates only a fixed sum for vouchers . . . each year, and
not every otherwise qualified family receives a voucher.”3
Each administering agency is assigned a maximum number
of annual vouchers and has a fixed budget.4 Yet Congress
has underfunded the program in recent years, requiring




3
      If the Authority’s experience is any guide, HUD’s
concession that “not every otherwise qualified family receives
a voucher” is a gross understatement. More than 7,000
families in Marin County are eligible for assistance under
Section 8, but fewer than 2,000 are actually provided
vouchers.
4
      See Congressional Research Service, An Overview of
the Section 8 Housing Programs: Housing Choice Vouchers
and Project-Based Rental Assistance, No. RL32284 (Feb. 7,
2014).     A copy of the report can be found at
<https://www.everycrsreport.com/reports/RL32284.html#:~:t
ext=The%20voucher%20program%20is%20funded,an%20an
nual%20budget%20from%20HUD.> (as of Aug. 28, 2020). All
Internet citations in this opinion are archived by year, docket
number, and case name at <http://www.courts.ca.gov/
38324.htm>.



                                   6
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



these agencies to operate at only 85 percent of their assigned
budgets.5
      Each subsidized family is required to contribute to its
rent payment an amount equal to “thirty percent of the
tenant family’s monthly ‘adjusted income’ or ten percent of
its monthly gross income, whichever is greater.” (Hayes v.
Harvey (3d Cir. 2018) 903 F.3d 32, 36, citing 42 U.S.C.
§ 1437f(o).) “Adjusted income” for this purpose is a family’s
“annual income,” minus certain expenses and allowances.
(24 C.F.R. § 5.611 (2020); DeCambre v. Brookline Housing
Authority (1st Cir. 2016) 826 F.3d 1, 9 (DeCambre).) The
calculation of annual income therefore determines the
proportion of its monthly rent that a family participating in
Section 8 must pay.
      For purposes of Section 8, “annual income” constitutes
“all amounts, monetary or not” that “[g]o to, or on behalf of,
the family head or spouse . . . or to any other family member.”
(24 C.F.R. § 5.609(a)(1), (3) (2020); DeCambre, supra, 826
F.3d at p. 9.) Among other things, this includes “[t]he full
amount, before any payroll deductions, of wages and
salaries, . . . and other compensation for personal services.”
(24 C.F.R. § 5.609(b)(1) (2020).) Subpart (c) of part 5.609 lists


5
      Eligibility Team, How the Housing Choice (Section 8)
Voucher      Program      is   Funded    (Jan.   22,    2016)
<https://eligibility.com/section-8/how-the-housing-choice-
section-8-voucher-program-is-funded#> (as of Aug. 28, 2020).


                                  7
               REILLY v. MARIN HOUSING AUTHORITY
                     Cantil-Sakauye, C. J., dissenting



16 exclusions from annual income.               In addition to the
exclusion on which plaintiff relies, part 5.609(c)(16), which
excludes certain payments to a family providing at-home care
to a developmentally disabled family member, these include
payments received “for the care of foster children”
(§ 5.609(c)(2)), payments “for, or in reimbursement of, the
cost” of medical expenses (§ 5.609(c)(4)), students’ financial
aid     (§ 5.609(c)(6)),   certain       nonrecurring     payments
(§ 5.609(c)(3), (9)), and student earnings and adoption
assistance payments “in excess of $480” (§ 5.609(c)(11), (12)).

           2. IHSS
        The purpose of the IHSS program is “to avoid
institutionalization of incapacitated persons.           It provides
supportive services to aged, blind, or disabled persons who
cannot perform the services themselves and who cannot
safely remain in their homes unless the services are provided
to them. The program compensates persons who provide the
services to a qualifying incapacitated person.” (Basden v.
Wagner (2010) 181 Cal.App.4th 929, 931 (Basden).) IHSS is
administered by the state’s counties (Skidgel v. California
Unemployment Ins. Appeals Bd. (2018) 24 Cal.App.5th 574,
578–579), which either hire a caregiver for the recipient or
pay the recipient directly to cover the costs of a caregiver.
(Basden, at p. 934; Welf. & Inst. Code, §§ 12302, 12304, subd.
(a).)   Counties are required to give preference to a care
provider selected by the recipient, and some IHSS care

                                     8
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



recipients are entitled to select and hire their own provider.
(Welf. & Inst. Code, §§ 12303.4, subd. (b); 12304, subd. (a),
12304.1; Skidgel, supra, 24 Cal.App.5th at p. 579.)
      The state may hire parents to care for their children
under IHSS, but only “when the [parent] leaves full-time
employment or is prevented from obtaining full-time
employment because no other suitable provider is available.”
(Welf. & Inst. Code, § 12300, subd. (e); see generally, Basden,
supra, 181 Cal.App.4th at pp. 939–940.) Of the 535,000 IHSS
care providers in California, about 70 percent are a relative
or spouse of the recipient, and about one-quarter of those are
a parent. Slightly less than half of IHSS providers — 250,000
persons — are, like plaintiff, relatives of the person for whom
they provide care and live in the same home.6
      Plaintiff’s claim that her IHSS payments should be
excluded from the calculation of her Section 8 annual income
is premised on part 5.609(c)(16), which excludes “[a]mounts
paid by a State agency to a family with a member who has a
developmental disability and is living at home to offset the
cost of services and equipment needed to keep the

6
      The State Department of Social Services reports a wide
range of monthly data regarding participation in the IHSS
program. The information cited in this paragraph is from a
table of data for June 2020, maintained at IHSS Program
Data <https://www.cdss.ca.gov/inforesources/ihss/program-
data> (as of Aug. 28, 2020). The cited data is available under
a tab labeled “Provider Details,” which does not appear to be
accessible through a separate URL.


                                  9
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



developmentally disabled family member at home.”                  The
Authority and HUD interpret the phrase “[a]mounts paid . . .
to offset the cost of services and equipment” to cover only
payments by the state to compensate for a family’s actual
expenditures on services or equipment.                 (§ 5.609(c)(16.)
Because plaintiff’s IHSS compensation was not used to pay
for the costs of services or equipment purchased by the family
to care for K.R., the Authority explains, it did not exclude
plaintiff’s IHSS payments when calculating her annual
income. Plaintiff contends, however, and the majority holds,
that the phrase “[a]mounts paid . . . to offset the cost of
services and equipment” (ibid.) should be construed to cover
any payment made to a family by the state in connection with
the in-home care of a developmentally disabled family
member, regardless of whether the payment offset an
expenditure by the family or compensated a family member
hired by the state to care for the disabled person.
                       II. DISCUSSION

      A. The Language of Part 5.609(c)(16) Precludes
         the Majority’s Interpretation
      We review questions of statutory interpretation de
novo. (Christensen v. Lightbourne (2019) 7 Cal.5th 761, 771.)
Under “our familiar principles of statutory construction,”
“ ‘[w]e start with the statute’s words, which are the most
reliable indicator of legislative intent.’       [Citation.]     ‘ “We
interpret relevant terms in light of their ordinary meaning,


                                  10
             REILLY v. MARIN HOUSING AUTHORITY
                  Cantil-Sakauye, C. J., dissenting



while also taking account of any related provisions and the
overall structure of the statutory scheme to determine what
interpretation best advances the Legislature’s underlying
purpose.” ’ [Citations.] ‘If we find the statutory language
ambiguous or subject to more than one interpretation, we
may look to extrinsic aids, including legislative history or
purpose to inform our views.’ ” (In re A.N. (2020) 9 Cal.5th
343, 351–352 (A.N.).)    We take the same approach when
interpreting administrative regulations. (Centinela Freeman
Emergency Medical Associates v. Health Net of California,
Inc. (2016) 1 Cal.5th 994, 1011.)       Based on the ordinary
meaning of its language, we should conclude that the
part 5.609(c)(16) exclusion is limited to state payments that
compensate a family’s actual expenditures for services and
equipment to keep a developmentally disabled family
member in their home.
     As noted above, part 5.609(c)(16), excludes from a
Section 8 family’s annual income “[a]mounts paid by a State
agency to a family . . . to offset the cost of services and
equipment needed to keep the developmentally disabled
family member at home.” According to Merriam-Webster,
the verb “offset” means “to serve as a counterbalance for :
COMPENSATE.” (Merriam-Webster Dict. Online (2020)
<https://www.merriam-webster.com/dictionary/offset> [as of
Aug. 28, 2020]; see, e.g., Steinmeyer v. Warner Cons. Corp.
(1974) 42 Cal.App.3d 515, 518 [“An ‘offset’ may be defined as


                                 11
             REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



a claim that serves to counterbalance or to compensate for
another claim”].)      Part 5.609(c)(16) therefore excludes
payments by the state to a family that are made to
“counterbalance” the cost of services and equipment needed
to keep the developmentally disabled family member at
home.    Necessarily, this language anticipates that an
equivalent cost has been or will be paid by the family for
those services or equipment, since there would be nothing to
counterbalance in the absence of such an expenditure.
     If HUD, the agency that drafted part 5.609(c)(16), had
intended the regulation to bear the broader meaning imposed
by the majority, it could have used a more inclusive phrase,
such as amounts paid by the state “for services and
equipment,” instead of requiring the excluded payments to
“offset the cost” of services and equipment.            This is the
approach taken by HUD in drafting the only part 5.609(c)
exclusion that undoubtedly bears the breadth bestowed on
subpart (c)(16) by the majority. Part 5.609(c)(2) excludes
“[p]ayments received for the care of foster children or foster
adults (usually persons with disabilities, unrelated to the
tenant family, who are unable to live alone),” leaving no
uncertainty about its meaning.7 (Italics added.) By imposing


7
     The parenthetical presumably explains the reason for
the breadth of the exclusion: To provide a benefit to low-
income families that care for unrelated persons who are in



                                   12
             REILLY v. MARIN HOUSING AUTHORITY
                  Cantil-Sakauye, C. J., dissenting



a similar breadth on part 5.609(c)(16), the majority’s reading
renders pointless the use of the term “offset” because its
reading is not restricted to the exclusion of payments that
“offset the cost” of services and equipment.          It is an
elementary principle of statutory interpretation that “ ‘[a]n
interpretation that renders statutory language a nullity is
obviously to be avoided.’ ” (Tuolumne Jobs & Small Business
Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1039.) The
majority’s expansive approach also defies the general
interpretive principle that exceptions to a statute are to be
construed narrowly. (Mathews v. Becerra (2019) 8 Cal.5th
756, 771; Simpson Strong-Tie Co. v. Gore (2010) 49 Cal.4th
12, 22.)
      HUD has confirmed this understanding in an amicus
curiae brief, arguing that it intended the regulation to reach
only state payments that reimburse a family’s expenditures.
As HUD reasons, this narrower reading “accords with the


distressed circumstances.       The majority contends that
interpreting subpart (c)(2) differently from subpart (c)(16)
“would be unreasonable” because both families are providing
“the same care.” (Maj. opn., ante, at p. 28.) The different
approaches, however, are readily explained. HUD could
reasonably have concluded that the familial connection
required by part 5.609(c)(16) makes it unnecessary to bestow
this type of benefit on families covered by that exclusion. In
any event, the distinctly different language in the two
exclusions suggests that they should be interpreted
differently.



                                 13
              REILLY v. MARIN HOUSING AUTHORITY
                  Cantil-Sakauye, C. J., dissenting



basic policy objectives of the regulation. [Citation.] As HUD
has explained, in promulgating [part] 5.609(c)(16), the
exclusion exists because ‘families that strive to avoid
institutionalization should be encouraged, and not punished.’
[Citation.]   The regulation pursues this goal in part by
ensuring that families that choose different means of keeping
the developmentally disabled family member at home are
treated evenhandedly.”8
      Plaintiff argues that the term “cost” could cover more
than a monetary expenditure. In ordinary parlance, “cost,”
admittedly, can refer not simply to the price paid for
something, but more broadly to “the outlay or expenditure
(as of effort or sacrifice) made to achieve an object” or the
“loss or penalty incurred especially in gaining something.”
(Merriam-Webster            Dict.           Online    (2020)
<https://www.merriam-webster.com/dictionary/cost> [as of
Aug. 28, 2020].) In this connection, plaintiff invokes the
economic concept of an “opportunity cost,” that is, the
opportunities foregone when a person makes a particular


8
      Leaving aside debate about the precise degree of
deference to be accorded HUD’s interpretation under
Yamaha Corp. of America v. State Bd. of Equalization (1998)
19 Cal.4th 1, 7–8, the administrative agency’s interpretation
undoubtedly deserves serious consideration. Although the
majority does address HUD’s views, its explanation for
rejecting them amounts to little more than a disagreement
with HUD over which interpretation best serves HUD’s
goals. (Maj. opn., ante, at pp. 28–30.)


                                 14
              REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



economic choice. Here, the argument goes, “cost” refers to the
employment opportunities that plaintiff has foregone in order
to provide care under IHSS. The payments therefore “offset”
the cost to plaintiff of not having other employment. This is
hardly the “ordinary meaning” of the language HUD chose to
use. (A.N., supra, 9 Cal.5th at p. 351.) We typically refer to
a payment for services as “compensation” or, more simply,
“payment” for the work performed.             We do not refer to
compensation for providing a service as “offsetting the cost”
of the service provider’s own effort, much less the service
provider’s decision to take this job, rather than a different
hypothetical job.
      The majority takes a different tack in justifying its
interpretation, suggesting that because much of the IHSS
compensation paid to plaintiff will ultimately be spent on
costs associated with supporting K.R. in the family home,
that compensation is paid to “offset the cost of services and
equipment needed to keep [K.R.] at home.” (§ 5.609(c)(16);
see Maj. opn., ante, at p. 10 [“Whether a family uses homecare
payments to support itself so that it may care for a
developmentally disabled member at home, or instead uses
the funds to pay a third party to provide care for some of the
time, these payments do no more than ‘offset’ the ‘cost’ of
services     and       equipment          needed           to         avoid
institutionalization”].)      This      rationale       fails   for    two
independent reasons. First, while it finds a role for the term


                                   15
               REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



“offset,” it disregards other aspects of the regulatory
language. Part 5.609(c)(16) excludes only state payments
that offset expenditures for “services and equipment.” As
rationalized above, the majority’s reading necessarily
stretches the exclusion to cover any cost related to K.R.’s
presence in the home, including food, clothing, and rent.
These are not normally viewed as “services and equipment.”9
By restricting the exclusion to the costs of “services and
equipment,” HUD signaled its intent to exclude only costs
related to the family member’s disability, rather than the
ordinary, if necessary, expenses of daily life. Second, the
regulation excludes “[a]mounts paid by a state agency . . . to
offset the costs of services and equipment.” (§ 5.609(c)(16).)
As discussed above, the IHSS compensation is paid by the
state to compensate plaintiff for her labor in caring for her
daughter. While it may be used by plaintiff to cover the costs
of supporting her daughter, it is not paid by the state to offset
those costs.
      The restrictive view of part 5.609(c)(16) has been
adopted by all other appellate courts that have considered the
issue. The plaintiff in Anthony v. Poteet Housing Authority



9
      Indeed, because the majority reads the regulation to
exclude the entirety of plaintiff’s IHSS compensation on this
basis, it construes “the costs of services and equipment” to cover
the cost of anything plaintiff chooses to spend her compensation
on.


                                  16
                REILLY v. MARIN HOUSING AUTHORITY
                     Cantil-Sakauye, C. J., dissenting



(5th Cir. 2009) 306 Fed. Appx. 98, the first decision to address
this issue, lived with her developmentally disabled adult
child.     Under a state-funded program in Texas, she was
employed by a private entity to care for the child and, like
plaintiff, contended that the income she earned in this role
should be excluded from her Section 8 income under
part 5.609(c)(16). The court was willing to accept that her
payments, despite being provided by a private employer,
constituted payments by the state. It rejected her argument
that the payments should be excluded from the calculation of
her Section 8 income under part 5.609(c)(16), however, upon
concluding that the exclusion applies only to reimbursements
for costs paid for care by third-party providers. As the court
explained, “One must incur costs before they can be offset.”
(Anthony, at p. 101.)
         The Court of Appeal below reached a similar conclusion
after a more extensive analysis. It declined to equate “offset”
with “reimburse,” but the distinction it found between the
two terms was quite narrow and is inconsequential in these
circumstances.      As the court explained, part 5.609(c)(16)
“appears to reach money paid to a family so that the family
can go out and hire services or purchase equipment necessary
for the developmentally disabled family member.             Such
payments ‘offset the cost of services and equipment’ that
would otherwise fall on the family.              But they are not
reimbursement for out-of-pocket expenses if the family


                                    17
               REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



receives payment before, rather than after, incurring the
expense.”10 (Reilly, supra, 23 Cal.App.4th at p. 434.) The
appellate court below also rejected plaintiff’s argument that
the IHSS payments should be excluded because “the services
she provides are necessary for her daughter to live at home,
and the IHSS payments offset the costs of those services.”
(Id. at p. 432.)      The court rightly accepted plaintiff’s
contention that her services were necessary to keep K.R. at
home, but it found the language of the regulation inconsistent
with plaintiff’s argument that it excludes any payment for
necessary services. As the court explained, part 5.609(c)(16)
refers to payments “ ‘to a family . . . to offset the cost of
services . . . .’ ” (Reilly, at p. 434.) “If a payment is to ‘offset
the cost of services,’ the payment must go to the same entity
that incurs the cost of those services. Otherwise the payment
does not counterbalance or compensate for the cost of
services. . . . This means that the costs these payments offset
must be costs that the family itself incurs.” (Ibid.)
         Most recently, the Minnesota Supreme Court reached
the same conclusion in In re Ali (Minn. 2020) 938 N.W.2d 835
(Ali).    In that case the plaintiff lived at home with her
developmentally disabled son.           Under a Minnesota state


10
      The majority contends that “ ‘offset’ as used here does
not necessarily reflect th[e] same meaning” as “reimburse”
(maj. opn., ante, at p. 10), but it does not clearly articulate
what the difference might be.


                                   18
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



program, she was provided with a budget for the services and
equipment needed to keep him in the home, some of which
she allocated to herself as compensation for her services as a
caregiver.   (Id. at p. 837.)    In concluding that the sums
allocated to plaintiff were not excluded from her Section 8
income under part 5.609(c)(16), the court held that the word
“cost” should be interpreted as “price.” (Ali, at p. 839.) It
rejected the argument that the word should be given a
broader definition for three independent reasons.       First,
referring to the entirety of the phrase “to offset the cost of
services and equipment,” the court reasoned that “[t]he ‘and’
between the words services and equipment suggests that the
same measurement is used for each. Typically, the cost of
equipment is calculated in monetary terms — such as the cost
to buy or lease.” (Ibid.) Second, like the appellate court
below, Ali cited the use of the word “cost” elsewhere in part
5.609, where it clearly refers to “a monetary expense.” (Ali,
at p. 839.) Finally, the court noted that “when the regulators
wanted to exclude amounts paid to family members for their
own services, they knew how to do so — and did so
unambiguously.”     (Ibid.)     Ali cited in support two other
subparts of part 5.609(c), in both of which the regulatory
language, unlike part 5.609(c)(16), unambiguously excludes




                                  19
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



state payments made to the Section 8 family.11         (Ali, at
p. 839.)

      B.     Extrinsic Aids to Interpretation Weigh
           Against the Majority’s Approach
      I do not agree with the majority that the interpretation
it has imposed on the language of part 5.609(c)(16) is
sufficiently reasonable to create a statutory ambiguity, but
there is no need to debate the issue. The available extrinsic
aids to interpretation also weigh against the majority’s
reading. Its interpretation assigns an unfounded purpose to
the part 5.609(c)(16) exclusion that will seriously distort the
intended operation of the annual income calculation for
families receiving caregiving income under IHSS. In turn,
this distortion will not only introduce unintended inequities
among Section 8 families, but it is also likely to materially
reduce the funds available to support housing subsidies for
other low-income families in California. These unfortunate
consequences weigh strongly against the majority’s ruling.

           1. The rulemaking history does not support the
              majority’s reading
      The majority finds support for its interpretation in
commentary on part 5.609(c)(16) published by HUD around

11
      In addition to addressing part 5.609(c)(2), discussed
above, which excludes payments to foster families, Ali cited
part 5.609(c)(12), which excludes from annual income
“[a]doption assistance payments in excess of $480 per
adopted child.” (Ali, supra, 938 N.W.2d at p. 839.)


                                  20
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



the time of its adoption.      (Maj. opn., ante, at pp. 11–16.)
Reviewing the same materials, the Court of Appeal found
them “unhelpful in resolving the interpretive issue before
us,” and I agree. (Reilly, supra, 23 Cal.App.5th at p. 436.) As
quoted by the majority (maj. opn., ante, at p. 12), the
commentary never expressly addresses the issue before us —
the distinction between state payments made to reimburse a
family’s expenditures for services and those made to
compensate the family’s own provision of services — and does
little more than parrot the language of the regulation. The
commentary does use the term “homecare payments,” but it
characterizes those payments in the language of the
exclusion itself. That is, “homecare payments,” as the term
is used by HUD, are payments made “to offset the cost of
services and equipment needed to keep a developmentally
disabled family member at home, rather than placing the
family member in an institution.” (60 Fed.Reg. 17388, 17389
(Apr. 5, 1995).) HUD’s use of the term is therefore of no help
in resolving the question before us.
     The majority’s contrary conclusion is based on circular
reasoning. Beginning with its assumption that “homecare
payments” means any payment made by the state in
connection with the care in the home of a developmentally
disabled person, the majority concludes that by joining that
term with the regulatory language HUD signaled its
agreement with the majority’s broad interpretation.        The


                                  21
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



conclusion that “homecare payments” refers to any payment
by the state, however, rather than only those intended to
offset family expenditures, is unsupported by anything in the
commentary. In fact, the commentary clearly uses “homecare
payments” merely as a synonym for the type of payments that
are excluded by part 5.609(c)(16). Its use therefore confirms
the majority’s interpretation only if one assumes that the
regulation should be interpreted in the manner adopted by
the majority. In reality, the HUD commentary simply does
not address the question before us.
      The policy argument advanced by the majority in
connection with HUD’s commentary is, in essence, that
because payments made by the state to compensate a family
for caregiving services may be critical in keeping a
developmentally disabled family member in the home, they
must be included within the part 5.609(c)(16) exclusion. The
flaw in this logic, as the Court of Appeal noted in rejecting
the same argument below (Reilly, supra, 23 Cal.App.4th at
p. 434), is that it ignores the language of the regulation.
Merely because these payments are important in keeping a
developmentally disabled family member in the home does
not alone mean that they “offset the costs of service and
equipment” necessary to that task. As explained above, to
reach the majority’s conclusion it is necessary to read the
phrase “offset the costs” as synonymous with “for,” a different
and broader term. Because it is the regulation’s language


                                  22
             REILLY v. MARIN HOUSING AUTHORITY
                  Cantil-Sakauye, C. J., dissenting



that must guide our interpretation, we are required to
respect HUD’s word choice.

         2. The majority’s interpretation misunderstands the
            limited function of the part 5.609(c)(16)
            exclusion
     The impetus underlying the majority’s interpretation of
part 5.609(c)(16) seems to be to maximize the Section 8
subsidy for persons in plaintiff’s situation, given the
difficulties of their circumstances. In other words, if some
subsidy is good, more is better. Because the purpose of the
exclusion is to help burdened, low income families, it is
difficult to argue with the sentiment. Yet our interpretation
must be guided not by our own view of proper public policy,
but by the views of Congress and HUD, the agency tasked
with administering the Section 8 program. In implementing
the congressional plan, HUD is required to balance a wide
variety of pertinent policy and equity considerations, not the
least of which is the allocation of very limited public
resources among many needy families. Its policy choice is
reflected in the language of part 5.609(c)(16), which limits
the exclusion to out-of-pocket expenses. As discussed below,
HUD’s choice is consistent with the foundational concerns of
Section 8. The majority’s more expansive view upsets the
balance struck by Section 8, will create unintended inequities
in its implementation, and will ultimately lead to a




                                 23
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



diminution in the housing assistance available to other low-
income Californians.
     The purpose of the part 5.609(c)(16) exclusion is to
ensure that the acceptance of state financial help by families
who keep a developmentally disabled family member at home
does not place the families at a disadvantage in receiving
Section 8 housing assistance; they are to be “ ‘encouraged,
and not punished.’ ” (Maj. opn., ante, at p. 12 [quoting HUD
explanation].) To accomplish this, part 5.609(c)(16) excludes
from the families’ annual income funds provided by the state
that the family spends on services and equipment to support
at-home care of the disabled family member. By excluding
this type of payment, the regulation ensures that the
acceptance   of   state   aid    by    families    maintaining   a
developmentally disabled family member does not inflate
their annual income and result in a diminished Section 8
subsidy.   Instead, the family receives the same housing
subsidy as other Section 8 families having a similar
disposable income.
     There is no indication in the language of the regulation
itself or the limited regulatory history that, in adopting
part 5.609(c)(16), HUD intended to go further and provide
affirmative advantages to families with a developmentally
disabled member at home. HUD did not say such families
should be preferentially benefitted, and not punished. Yet
such a preferential benefit is the consequence of the


                                  24
              REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



majority’s interpretation of part 5.609(c)(16), since it affords
families who are paid to provide at-home care of a
developmentally disabled family member substantially
greater Section 8 housing subsidies than to other low-income
families with the same family income.
      Section 8 housing subsidies are determined by a
participating family’s income — that is, the funds available
to the family to pay for rent and other daily needs.12 The
part 5.609(c)(16)   exclusion      is   necessary       because   the
regulations defining “annual income” for purposes of Section
8 are very broad, including “all amounts, monetary or not”
that “[g]o to, or on behalf of, the family head or spouse . . . or
to any other family member.” (24 C.F.R. § 5.609(a)(1) (2020).)
Given this comprehensive definition, any payments made by
the state to a family for the care of a developmentally
disabled family member are included in annual income under
part 5.609(a), even if the payments are not available to the
family to pay for rent and other daily needs because they
merely offset family expenditures for at-home care. Properly
understood, part 5.609(c)(16) prevents a family’s annual
income from being inflated by payments covering such out-of-

12
      Literally, it is not the subsidy that is determined by a
family’s income. Rather, annual income determines the
amount the family is required to contribute to its rent
payment. The subsidy is then the difference between this
contribution and the family’s actual rent. For purposes of
this analysis, the difference is immaterial.


                                   25
             REILLY v. MARIN HOUSING AUTHORITY
                  Cantil-Sakauye, C. J., dissenting



pocket expenses, recognizing that those payments should not
be treated as income because they do not increase the
resources available to the family for daily expenses. In the
absence of the exclusion, the acceptance of such aid would
reduce the family’s Section 8 subsidy without improving its
standard of living — in the words of HUD, such families
would be “punished.”
     This highlights the fundamental difference, for
purposes of Section 8, between IHSS funds that are given to
reimburse expenditures by a family and funds that
compensate a family for the care of the disabled family
member.      Unlike    funds    that    reimburse     a      family’s
expenditures, funds provided by the state to compensate for
the family’s caregiving activities are available to meet the
family’s daily needs. That is their purpose. In accepting
compensation    for    their   caregiving      activities,     IHSS
participants are effectively selling their labor to the state,
and the resulting income is indistinguishable, in its impact
on the family’s standard of living, from money earned
working outside the home.         For that reason, HUD has
determined that this compensation is properly characterized
as income under Section 8.
     This is particularly true of parents who are hired to
provide caregiving responsibilities under IHSS. As noted
above, the state precludes a parent’s acceptance of full-time
work outside the home if the parent is receiving IHSS


                                 26
                REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



compensation; such funding is available to parents only if
“the [parent] leaves full-time employment or is prevented
from obtaining full-time employment because no other
suitable provider is available.” (Welf. & Inst. Code, § 12300,
subd. (e).) In other words, to receive funds from IHSS a
parent must accept their disabled child’s care as, in effect,
their job. Plaintiff is an example. So far as the appellate
record reveals, caring for her daughter is her full-time
activity, and IHSS compensation is her only income.
      The      majority   argues     that     the       acceptance   of
compensation from IHSS is not “ ‘an employment for all
purposes.’ ”    (Maj. opn., ante, at p. 24.)        The issue here,
however, is not whether IHSS “employs” caregivers for all
purposes. As defined by part 5.609, “annual income” includes
any “compensation for personal services,” not just income
from formal employment. (24 C.F.R. § 5.609(b)(1) (2020).)
The issue is therefore whether the compensation received
from IHSS by persons like plaintiff should be treated the
same as income received by Section 8 participants from other
types of compensable labor.        By limiting the exclusion of
part 5.609(c)(16) to offsetting payments, HUD has declared
that it should. The majority may disagree with HUD’s policy




                                   27
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



choice, but it is HUD’s choice, not that of the majority, that
must govern our interpretation.13
      Excluding IHSS compensation from a Section 8 family’s
annual income, as the majority requires, artificially reduces
the family’s income and, consequently, increases the family’s
housing subsidy above the level justified by its actual income.
The effect can be substantial. Take, as an example, plaintiff.
As noted above, a Section 8 family is ordinarily required to
contribute 30 percent of its annual income toward rent. The
remainder of its rent is paid by the program. Plaintiff’s
family income in the latest year for which we have
information was more than $52,000, consisting primarily of
plaintiff’s $41,000 income from IHSS; the remainder was
$11,000 in disability payments to K.R. If plaintiff’s IHSS
compensation is included in her annual income for purposes
of Section 8, the family would be expected to contribute
$1,300 toward its monthly rent. Here, the majority would
exclude plaintiff’s $41,000 in IHSS compensation from the



13
      The majority also finds support in the exclusion of in-
home care payments from “income” under the Internal
Revenue Code. (Maj. opn., ante, at pp. 26–27.) Because
Section 8 and the Internal Revenue Code are quite different
statutes with very different aims, there is no reason why the
exclusion of IHSS payments from federal taxable income
should weigh in favor of their exclusion from “annual income”
under Section 8.



                                  28
             REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



family’s annual income. Plaintiff’s family will therefore be
treated as though it had an annual income of $11,000,
although it was living on an actual income of $52,000 per
year. As a result, the family’s expected rent contribution will
be reduced to $275.14 The remaining $1,005 of the family’s
monthly rent payment, an annual gap of more than $12,000,
must be made up from the Authority’s Section 8 funds. It is
noteworthy that the majority nowhere acknowledges, let
alone attempts to explain or justify, that its interpretation
will treat a family with an annual income exceeding $52,000,
more than three times the federal poverty level for a family
of two, as though it were living far below the poverty line.15
Yet that is the clear and unavoidable import of its decision.
     Low-income families caring for a developmentally
disabled family member at home face daily challenges



14
       This assumes the resulting subsidy does not exceed the
maximum permitted. Section 8 housing subsidies are capped
by a “payment standard,” which is determined by local rental
conditions. (See Nozzi v. Housing Authority (9th Cir. 2015)
806 F.3d 1178, 1184–1185; 24 C.F.R. § 982.503(b) (2020); 42
U.S.C. § 1437f(o)(2).) The appellate record does not contain
sufficient information from which we may determine whether
plaintiff’s subsidy, as re-jiggered by the majority, would be
capped.
15
      The 2020 federal poverty level for a family of two is an
annual income of $17,240. (See U.S. Dept. Health & Human
Services,       Poverty        Guidelines         (Jan. 2020)
<https://aspe.hhs.gov/poverty-guidelines> [as of Aug. 28,
2020].)


                                  29
               REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



unknown to the rest of us. Few would begrudge such families
a generous housing subsidy, above and beyond that provided
to other low-income families with a similar income — if there
was evidence that Congress or HUD intended to provide
them    such   assistance.       But    as    noted    above,   the
part 5.609(c)(16) exclusion was intended to ensure that
families receiving aid from IHSS are simply treated the same
as, not better than, other families — to ensure that they were
not punished, rather than to preferentially benefit them.

          3. The majority’s interpretation will introduce
             unintended      inequities     into    Section 8
             implementation and reduce the availability of
             Section 8 housing assistance in California
       As discussed above, the majority’s reading of the
part 5.609(c)(16) exclusion is contrary to its language and
achieves the result, unintended by HUD, of granting IHSS
participants like plaintiff substantially greater Section 8
subsidies than are justified by their actual income. That
alone, of course, would be sufficient to reject the reading. But
we should be particularly wary of imposing a rule HUD did
not write, given the serious public policy consequences that
will follow.
       As explained below, these consequences are of two
types. First, the interpretation adopted by the majority will
create inequities among families participating in the IHSS
and Section 8 programs. Families that are paid through
IHSS to care at home for a developmentally disabled person

                                  30
              REILLY v. MARIN HOUSING AUTHORITY
                    Cantil-Sakauye, C. J., dissenting



will receive a far larger housing subsidy than families of
similar income that (1) IHSS funds to hire a third party to
care for a developmentally disabled family member in their
home or (2) receive IHSS funds to care for a medically
disabled family member.
      Second,    and    just   as    important,       the   majority’s
interpretation will reduce, by an unknown but potentially
sizable amount, the number of families that can obtain
Section 8 housing assistance in California. The majority’s
decision will not increase by a single dollar the Section 8
funds reaching California.       Yet it will require the state’s
counties to steer a significantly larger portion of their Section
8 housing funds to families that receive IHSS compensation
for caring for a disabled member in the home.                    These
increased subsidies can come from only one place: The funds
available to other low-income families who are, or would have
been, receiving housing assistance under Section 8.               The
majority’s expansive interpretation will come at the cost of
assistance to other families in need.
      First the inequities. IHSS provides families with the
funds necessary to maintain a developmentally disabled
family member in their home. The Authority or the family
can use these funds to hire a third-party caregiver or,
alternatively, a member of the family for the same role. Both
approaches      serve   the    purposes       of    IHSS    and    the
part 5.609(c)(16)       exclusion        by        (1) keeping     the


                                    31
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



developmentally    disabled     family     member      out   of   an
institution and (2) ensuring that the family is not
disadvantaged in the receipt of Section 8 funds by doing so.
So far as appears, neither HUD nor IHSS favors one option
over the other; certainly there is no language in either
Section 8 or IHSS reflecting a preference, as the majority
acknowledges.     (Maj. opn., ante, at p. 21 [“despite no
expressed preference for family providers per se”].)              Yet
under the majority’s reading a family that provides its own
compensated care will receive a far larger Section 8 housing
voucher than the family that uses IHSS funds to hire a
nonfamily member to provide the same care, even if both
families have identical incomes. This occurs because, under
the majority’s interpretation, some or all of the income of the
first family, consisting of compensation received from IHSS,
is excluded from the annual income, while the income of the
second family, earned outside the home, is fully included.
Assuming both families end up with similar disposable
income, the first family will receive a far larger subsidy under
Section 8 due to the exclusion of a significant portion of its
disposable income.     (See Reilly, supra, 23 Cal.App.5th at
pp. 437–438.)   There is no indication in the language of
part 5.609(c)(16) or the regulatory history to suggest that
HUD intended this result; in its amicus curiae brief, HUD
expressly disavows such an intent.



                                  32
               REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



        The majority seeks to explain away this disparity by
claiming that persons needing 24-hour care “ ‘are more likely
to receive better continuous care from relatives living with
them whose care is more than contractual.’ ” (Maj. opn., ante,
at pp. 21, quoting Miller v. Woods (1983) 148 Cal.App.3d 862,
870.)    Neither Miller nor our appellate record contains
evidence to support the proposition that third-party
caregivers provide substandard care, compared to family
members.16 But more to the point, the majority cites no
evidence that HUD believed this to be true or that it crafted
part 5.609(c)(16) based on any assumptions about the relative
competence of family members versus third-party caregivers.
        Much of the majority’s policy justification for its
interpretation is a recognition of the importance and
difficulty of the work done by persons who care for a
developmentally disabled family member at home. And I
agree, there is no doubt that this work is difficult and
important. If preferentially benefitting families who care for
developmentally disabled members themselves, rather than


16
      The majority notes that IHSS does not pay for 24-hour
care. (Maj. opn., ante, at p. 26.) Although true, that is of no
policy consequence here. Families that hire a third-party to
provide care for a developmentally disabled family member
in their home must provide the same type of uncompensated
off-hours care for the dependent as families that receive IHSS
compensation.



                                  33
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



retain a third-party caregiver, were actually a motive
underlying part 5.609(c)(16), however, one would expect
some express indication that HUD intended to favor family
care over care by third-party providers. As noted above, there
is no such indication. In fact, the regulation is entirely silent,
and therefore presumably neutral, on that issue.17
      The majority’s interpretation will create a similar
inequity between families that receive IHSS compensation to
care for a developmentally disabled family member and
families that receive IHSS funds to care for a medically
disabled family member. (See Reilly, supra, 23 Cal.App.5th
at p. 438.)   Like families maintaining a developmentally
disabled member in the home, families that maintain a
medically disabled family member in the home can receive
IHSS reimbursement for expenditures necessary to keep that
person at home as well as compensation for caregiving by a
family member. The Section 8 exclusion covering families
with a medically disabled member, however, allows the

17
      The majority also claims that if IHSS compensation is
not excludable under part 5.609(c)(16), the two programs,
IHSS and Section 8, will be at “cross-purposes,” presumably
because accepting IHSS compensation will reduce a family’s
Section 8 subsidy. (Maj. opn., ante, at p. 23.) Accepting IHSS
compensation, however, is no more at cross-purposes with
Section 8 than is employment generally, since all income
reduces a family’s Section 8 subsidy to the same degree. In
any event, there are no cross-purposes. The supplement to a
family’s income from accepting IHSS compensation far
exceeds any corresponding decline in its Section 8 subsidy.


                                  34
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



exclusion from annual income only of “[a]mounts . . . that are
specifically for, or in reimbursement of, the cost of medical
expenses . . . .” (§ 5.609(c)(4).) Although families caring for a
medically disabled family member face challenges similar to
those of families caring for a developmentally disabled family
member, the enhanced Section 8 subsidy made available by
the   majority’s   interpretation      of    part 5.609(c)(16)   is
unavailable to families with a medically disabled member.
Such families will also receive a materially reduced Section 8
subsidy compared to families that benefit from the majority’s
interpretation of part 5.609(c)(16).
      The majority responds that this disparity “is inherent
in the federal regulation itself” because part 5.609(c)(4)
permits recovery only of payments to third-party providers.
(Maj. opn., ante, at p. 19.) The argument misses the point.
Part 5.609(c)(16) has a materially wider scope than
part 5.609(c)(4) only because the majority has interpreted it
that way. If “offset the cost of services and equipment” is
interpreted to cover only the reimbursement of out-of-pocket
expenditures, the two exclusions have a similar scope. It is
not “the federal regulation itself,” but the majority’s
interpretation of it, that creates an inequity. The majority
otherwise fails to explain what possible public policy supports
giving families with a developmentally disabled member far




                                  35
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



more advantageous treatment under Section 8 than families
with a medically disabled family member.18
      The second unfortunate policy consequence of the
majority’s interpretation of part 5.609(c)(16) is its inevitable
diminution of the funds available to other low-income
participants in the Section 8 program. In an ideal world, the
majority’s award of greater Section 8 housing subsidies to
low-income families receiving state compensation to care for
disabled family members at home would be financed by
additional congressional appropriations for the Section 8
program.    In our real world, it does not work that way.
Already, Section 8 housing subsidies are available only to a
relatively small subset of all eligible families. The Authority,
for example, is authorized to serve less than one-third of the
families that qualify for its help. Yet even that does not fully
capture the inadequacy of the program. Presumably because

18
      The majority’s claim that HUD believes that families
with a developmentally disabled member would “receive
unfair treatment” if they were not allowed to exclude income
(maj. opn., ante, at p. 20) is based entirely on HUD’s comment
that such families should be “ ‘encouraged, and not
punished’ ” (ibid., italics omitted). Because no other class of
Section 8 participants, besides foster parents, is able to
exclude such income, restricting the exclusion to
reimbursement of expenditures hardly constitutes
punishment. The majority argues that such families will be
punished if their income is not excluded because they might
not qualify for Section 8 subsidy. (Ibid.) Again, the same is
true of all other families who have too much income to qualify
for Section 8; it is not a punishment.


                                  36
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



of congressional underfunding, the Authority actually
provides vouchers to only 1,957 families, rather than the
2,153 it is authorized to help.
      The majority’s generosity toward plaintiff and similar
IHSS participants does not come without cost, and that cost
will likely be borne by other low-income families in
California. The funding available to the Authority will not
be increased by $12,000 per year merely because the majority
has decreed that plaintiff must receive an additional annual
subsidy of $12,000. Instead, given the fixed and inadequate
budgets available under Section 8, it is likely that every
additional dollar of subsidy provided to families with a
developmentally disabled member at home will come directly
from the funds available to subsidize the housing of other
low-income families that are, or could have been, served by
the Authority. By skewing the allocation of Section 8 housing
subsidies to families receiving IHSS compensation, contrary
to HUD’s express intent, the majority’s misinterpretation of
the regulation will likely lead to a reduction in the housing
subsidies available to other low-income families in California,
and these will likely be reduced in an amount equal to the




                                  37
              REILLY v. MARIN HOUSING AUTHORITY
                   Cantil-Sakauye, C. J., dissenting



enhanced subsidies given by the majority to IHSS
participants.19
      If the language of part 5.609(c)(16) required this result,
we would be duty-bound to implement it. In fact, the result
is eminently avoidable.      To bring it about, the majority
stretches the language of the regulation and fails to account
for the serious public policy implications weighing against its
decision. Further, the dubious end result is to require the
Authority to treat a family with an income of more than
$50,000 as though it were living on $11,000. In the process,
the majority will divert the Authority’s all-too-scarce low-
income housing assistance away from other needy families.
Every other court to consider the issue has avoided this
result, and this court should as well.
                                        CANTIL-SAKAUYE, C. J.
We Concur:
CORRIGAN, J.
KRUGER, J.


19
      We lack the evidence necessary to estimate the financial
impact of the majority’s interpretation, but the limited
information available suggests that it could be substantial.
According to the state data cited above (see ante, fn. 6), there are
currently 250,000 “live-in relative providers” caring for a
disabled family member under IHSS. If just a tiny proportion
of those live-in relatives care for a developmentally disabled
person, participate in the Section 8 program, and receive IHSS
compensation similar to that of plaintiff, the majority’s ruling
will divert millions of dollars in Section 8 housing subsidies from
other low income families state-wide.


                                  38
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Reilly v. Marin Housing Authority
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XX 23 Cal.App.5th 425
Rehearing Granted

__________________________________________________________________________________

Opinion No. S249593
Date Filed: August 31, 2020
__________________________________________________________________________________

Court: Superior
County: Marin
Judge: Paul M. Haakenson

__________________________________________________________________________________

Counsel:

Law Offices of Frank S. Moore, Frank S. Moore; Autumn M. Elliott, Ben Conway and Deborah Gettleman
for Plaintiff and Appellant.

Morgan, Lewis & Bockius, Thomas M. Peterson and Jordan Mundell for Association of Regional Center
Agencies, Autism Society of Los Angeles, CASHPCR, Disability Voices United, Fairview Families and
Friends, Inc., Housing Choices, Jewish Los Angeles Special Needs Trust (JLA Trust), National Disability
Rights Network, Professor Alison Morantz and Public Counsel as Amici Curiae on behalf of Plaintiff and
Appellant.

Munger, Tolles & Olson and Michael E. Soloff for National Housing Law Project and Western Center on
Law and Poverty as Amici Curiae on behalf of Plaintiff and Appellant.

Ilya Filmus; WFBM, Randall J. Lee, Anne C. Gritzer; Wilson Elser Moskowitz Edelman & Dicker and
Robert Cooper for Defendant and Respondent.

Paul Compton, Miniard Culpepper, David M. Reizes, Alexandra N. Iorio, Joseph H. Hunt, Alisa B. Klein,
Melissa N. Patterson and Brad Hinshelwood for United States as Amicus Curiae on behalf of Defendant
and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Autumn M. Elliott
Disability Rights California
350 S. Bixel Street, Ste. 290
Los Angeles, CA 90017
(213) 213-8000

Robert Cooper
Wilson Elser Moskowitz Edelman & Dicker LLP
555 S. Flower Street, Suite 2900
Los Angeles, CA 90071
(213) 443-5100

Brad Hinshelwood
U.S. Department of Justice
950 Pennsylvania Avenue NW
Washington, DC 20530
(202) 514-7823
