Slocum v. Dept. of Social Welfare

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                           Nos. 88-338 & 88-589


Constance Slocum, Richard Wilson,            Supreme Court
Glendeen Bragg, Stephen Yates and
Marjorie Kimber
                                             On Appeal From
     v.                                      Human Services Board

Department of Social Welfare                 November Term, 1989


Cindy Clark

     v.

Department of Social Welfare


Alan B. George, Pamela Kraynak, Isabel R. Childs and William F. Farrell,
  board members (88-338)

Alan B. George, Isabel R. Childs and Alayne Rabow, board members (88-589)

John J. McCullough III, Vermont Legal Aid, Inc., Montpelier, for plaintiffs-
  appellants

Jeffrey L. Amestoy, Attorney General, Montpelier, and Jane Elizabeth Gomez
  and Donelle Staley, Assistant Attorneys General, Waterbury, for defendant-
  appellee


PRESENT:  Allen, C.J., Peck and Gibson, JJ., and Barney, C.J. (Ret.) and
          Springer, D.J. (Ret.), Specially Assigned


     ALLEN, C.J.   Petitioners appeal from a decision of the Human Services
Board (Board) authorizing the Department of Social Welfare (DSW) to recover
from Supplemental Security Income (SSI) awards, General Assistance (GA)
benefits paid by DSW.  We reverse and remand.
     SSI is a federally funded and operated program with its own disability
and financial eligibility requirements.  In 1974, Congress amended the
Social Security Act to enable the Social Security Administration (SSA) to
pay retroactive awards of SSI benefits directly to the states in order to
reimburse the states for "interim assistance," known in Vermont as GA. (FN1) See
42 U.S.C. { 1383(g)(3); 20 C.F.R { 416.1902.
     GA is a program operated, regulated and funded solely by the State of
Vermont.  The program provides financial assistance to individuals unable to
support themselves by working and who do not qualify for other benefits.
     The facts were not in dispute, and thus the cases were consolidated on
appeal.  In each case, petitioner applied for SSI and received GA in the
interim while their applications were pending.  Upon the approval of their
SSI applications, the Social Security Administration transmitted the full
retroactive SSI award to DSW.  DSW, in turn, deducted the amount of GA paid
to the petitioners, and forwarded them the remainder.  In each case, DSW
reimbursed the State for benefits paid more than two years before the date
of the SSI award.
     This dispute concerns the proper interpretation of W.A.M. (Welfare
Assistance Manual) { 2600d.  At the time of the fair hearing, the regulation
provided:
            General Assistance shall be furnished with the
         understanding that when a recipient subsequently
         acquires benefits or resources in any amount from:  an
         inheritance; cash prize; sale of property; retroactive
         lump sum Social Security, Supplemental Security Income/
         Aid to Aged, Blind and Disabled [SSI/AABD], Veterans,
         or Railroad Retirement Benefits; or court awards or
         settlements; he shall be required to make reimbursement
         for that amount of aid furnished during the previous two
         years.

            The GA applicant who is also an SSI/AABD applicant
         must sign a Recovery of General Assistance Agreement
         . . . which authorizes SSA to send the initial check to
         this department so that the amount of General Assistance
         received can be deducted.  The deduction will be made
         regardless of the amount of the initial SSI/AABD check.
         Any remainder due the SSI/AABD recipient shall be
         forwarded to him within 10 days.  The deduction shall
         be made for General Assistance issued during the period
         from the first day of the month of the SSI/AABD
         eligibility to the date the remainder of the initial
         SSI/AABD remainder of the initial SSI/AABD check is
         mailed by the Department to the recipient.

     Petitioners argue that the last clause of the first paragraph controls,
and, therefore, { 2600d limits the reimbursement to GA payments made within
two years of the SSI award.  DSW claims that the Board properly deferred to
the agency's interpretation of its own regulation by ruling that the last
sentence of the second paragraph authorizes DSW to reimburse the State for
all GA payments issued to the recipient, not only for those benefits awarded
within the previous two years.
     When construing an administrative rule or regulation, we use the same
rules that we use in construing a statute.  See Blundon v. Town of Stamford,
1 Vt. L.W. 181, 82 (Apr. 27, 1990) (No. 89-108) (zoning ordinances).  In so
doing, the primary rule is to give language its plain, ordinary meaning.  In
re Hydro Energies Corp., 147 Vt. 570, 573, 522 A.2d 240, 242 (1987).  When
ambiguity renders the plain meaning rule unavailing, we turn to other aids
of statutory construction.  See Paquette v. Paquette, 146 Vt. 83, 86, 499 A.2d 23, 26 (1985).  We also look to the agency itself, because an adminis-
trative agency's interpretation of its own regulation is usually given great
weight.  See Bishop v. Town of Barre, 140 Vt. 564, 577, 442 A.2d 50, 56
(1982).
     An apparent conflict exists between the first and second paragraphs of
{ 2600d, and thereby creates an ambiguity that defies the application of the
plain meaning rule.  Examination of the legislative history discloses that {
2600d was promulgated to effectuate 33 V.S.A. { 3075, which authorizes the
State to recover GA payments whenever the recipient "owns or thereafter
acquires real or personal property or an interest therein or becomes
employed."  DSW responded with { 2600 in 1971.  The regulation set forth in
general terms the obligation of the GA recipient to reimburse the State out
of after-acquired property or income.  Therefore, neither the statute nor
the regulation in its original form placed time limitations on the recovery
of GA benefit payments.
     In 1974, DSW adopted a new regulation which specified the types of
income, resources, or benefits from which it could seek reimbursement, and
included Social Security Income in that delineation. (FN2)  With respect to the
rights and responsibilities of the recipient, { 2600 did not differentiate
among the sources listed.  The regulation also imposed for the first time a
two year limitation on the recovery of GA payments.  Therefore, from its
inception in 1974, the two-year time limitation applied to SSI awards.
     W.A.M. { 2600 underwent further change in 1976 in response to Congress'
amendment of the Social Security Act that enabled the states to deduct
directly from SSI awards the amount of GA disbursed.  See 42 U.S.C. {
1383(g).  At that time, DSW added the second paragraph to the regulation.
The first paragraph, however, was also revised to include AABD among the
list of benefits requiring reimbursement and to eliminate the $500 minimum
reimbursement requirement.
     After the initiation of petitioners' cases, DSW amended the regulation
again in 1987 to delete SSI/AABD awards from paragraph one, which contains
the two-year limitation.  Hence, these appeals concern only the recovery of
benefits under the regulation in effect before the 1987 amendment.
     DSW asserts that the intent of { 2600d was to enable it to recover from
SSI recipients the total amount of GA awarded as measured from the first day
of SSI eligibility to the date of the SSI award, regardless of whether that
period exceeded two years.  To resolve the regulation's apparent conflict,
DSW relies primarily on the "last enactment rule."  This canon of statutory
construction instructs that where two statutes on the same subject
irreconcilably conflict, the more recent legislative enactment will control.
See State v. Lynch, 137 Vt. 607, 610, 409 A.2d 1001, 1003 (1979).  DSW
argues that the second paragraph of { 2600d was promulgated after the first
paragraph, which contains the two-year limitation, and hence allows the
recovery of all GA benefits disbursed during the SSI eligibility period.
     The last-enactment rule, however, does not apply to this case. (FN3)  See
State v. Dejardins, 144 Vt. 473, 475, 479 A.2d 160, 161 (1984) (rules of
statutory construction are not talismans, but, merely interpretation aids
to be disregarded in the appropriate case).  Although the development of the
first paragraph predates the second by approximately two years, the 1976
bulletin which introduced the second paragraph actually set forth the full
regulation in its entirety, including the first paragraph.  In fact, the
1976 amendment made two substantive changes in the first paragraph:  the
amendment removed the $500 minimum requirement and added "Aid to the Aged,
Blind and Disabled" to the sources of income from which DSW could seek
reimbursement.  Therefore, rather than resort to the rule of last
enactment, we think it more appropriate in this case to apply the "rule of
reenacted provisions."  This principle holds that the "[p]rovisions of the
original act or section which are repeated in the body of the amendment . .
. are considered a continuation of the original law. . . . Thus, rights and
liabilities accrued under the provisions of the original act which are
reenacted are not affected by the amendment."  1A N. Singer, Sutherland
Statutory Construction { 22.33, at 287-88 (4th ed. 1985).
     The rule of reenacted provisions reflects the presumption that all
language in a statute or regulation is inserted for a purpose.  See State v.
Racine, 133 Vt. 111, 114, 329 A.2d 651, 654 (1974).  Accordingly, we
consider the regulation as a whole, and strive where possible to give effect
to every word, clause, and sentence.  State v. Tierney, 138 Vt. 163, 165,
412 A.2d 298, 299 (1980).  Viewed in light of the legislative history,
analysis of the regulation's language indicates that the two paragraphs can
and should be harmonized.  See St. Gelais v. Walton, 150 Vt. 245, 248, 552 A.2d 782, 784 (1988) (Supreme Court's duty is to harmonize wherever
possible apparently conflicting sections of the same legislative act).
Beginning in 1974, the first paragraph established that a recipient who
received income or benefits from the listed sources -- including SSI  --
would have to repay GA received during the previous two years.  The
promulgation of the 1976 amendment, contrary to DSW's assertion, does not
indicate that the agency intended to treat SSI differently from any of the
other delineated sources of income.  The 1976 amendment added the second
paragraph and altered the first paragraph to include AABD within the list of
sources, which already contained SSI.  The addition of AABD manifests an
intent to continue to apply the two-year recovery limitation to SSI, and to
treat AABD the same way.
     This conclusion is supported by the DSW transmittal bulletin that
accompanied the 1976 amendment.  In reference to the first paragraph, the
bulletin stated that "[t]his proposed regulation specifies that a recipient
must repay assistance received during the previous two years if benefits or
resources in any amount are subsequently acquired from certain named
sources."  With respect to paragraph two, the bulletin merely remarked that
those applying for both GA and SSI/AABD applicants had to sign a Recovery of
General Assistance Agreement.  Neither the language of the regulation nor
the transmittal bulletin warrants the inference that, with the 1976
amendment, DSW intended to remove SSI awards from the two-year limitation of
paragraph one.
     DSW would have this Court disregard the listing of SSI among those
resources and benefits subject to the two-year limitation.  We think,
however, that the retention of SSI on the list was not the result of
oversight.  The 1976 amendment was not intended to increase the SSI
recipient's liability for GA payments; rather, { 2600d continued to treat
all the listed sources the same.  The second paragraph served to establish a
means of collecting the GA reimbursement and a method of calculating the
amount due -- subject, however, to the two-year limitation.  We decline to
treat the first paragraph's reference to SSI as mere surplusage.  See
Weissenstein v. Burlington Board of School Commissioners, 149 Vt. 288, 292,
543 A.2d 691, 693 (1988) (where statutory provisions conflict, interpreta-
tions that harmonize and give effect to both are favored).
     DSW points out that, since the promulgation of the 1976 amendment, it
has never applied the two-year limit to its recovery of GA benefits from SSI
awards.  Given this consistent application, the agency contends that this
Court should defer to its interpretation of { 2600d.  The examination of
DSW's interpretation of { 2600d has proven to be something less than
illuminating.  Though DSW authored the regulation in issue, its explanation
of { 2600d is markedly incomplete.  The crux of the dispute turns on the
applicability of the two-year limitation, yet DSW concedes in its brief that
the "intent behind the two-year limitation is unknown."  Despite the great
weight usually accorded to an agency's interpretation of its own regula-
tions, this Court will disregard that interpretation where it is plainly
erroneous or inconsistent with the regulation.  Cronin v. Department of
Social Welfare, 145 Vt. 187, 188, 485 A.2d 1253, 1254 (1984).  For the
reasons previously discussed, we hold that DSW's interpretation of { 2600d
is inconsistent with the regulation.  See In re Peel Gallery, 149 Vt. 348,
351, 543 A.2d 695, 697 (1988) ("administrative agency must abide by its
regulations as written until it rescinds or amends them").  The two-year
time limitation applies to the recovery of GA benefits from SSI awards.
     Lastly, we reject the agency's assertions that this result is
irrational, unjust and unconstitutional.  DSW identifies as the source of
the alleged constitutional defect the potential for some persons to receive
a double benefit by retaining GA benefits paid more than two years before
the SSI award, while those who fall within the "arbitrary" two-year
limitation must reimburse DSW completely for GA benefits, and hence receive
only SSI.  Rather than treating SSI recipients differently, the resolution
of this case applies the two-year limitation to SSI awards in the same
manner as it does to all the other sources listed in the first paragraph of
{ 2600d.  Thus, if the possibility of a double benefit for SSI recipients
flaws this decision, then the entire regulatory scheme of { 2600d suffers a
similar infirmity -- a position that DSW has not taken.  DSW amended { 2600d
in 1987 to delete the first paragraph's reference to SSI.  Therefore, with
respect to the other listed sources, the two-year limitation remains, and
with it, the possibility of double benefits.  Simply put, a regulatory
scheme does not lack rationality when it restricts how far back an agency
can reach to recover benefits paid to the needy and long-since spent.
     Reversed.

                                        FOR THE COURT:



                                        Chief Justice

 

FN1.  DSW entered into an "interim assistance agreement" with the
Secretary of Health, Education and Welfare (now Health and Human Services)
to authorize DSW to receive directly reimbursements for GA paid to SSI
applicants who had given written authorization for such payments.

FN2.  The 1974 promulgation of { 2600 provided:

	General Assistance shall be furnished with the under-
	standing that when a recipient subsequently acquires
	benefits or resources in the amount of $500.00 or more
	from an inheritance; cash prize; sale of property;
	retroactive lump sum Social Security, Supplemental
	Security Income, Veterans or Railroad Retirement pay-
	ment; or in or out of court awards or settlements; he
	shall be required to make reimbursements for the amount
	of aid furnished during the previous two years.

FN3.   We also reject DSW's claim that the second paragraph constitutes the
more specific provision, and as such, should control over the more general
first paragraph.  We agree with the Human Services Board that both
paragraphs specify SSI by name as being covered by their provisions, and
therefore "neither paragraph here easily lends itself to a 'general' label."