Department of Health and Human Services
IN THE MATTER OF THE
DISAPPROVAL OF OHIO'S TITLE IV-D PLAN AMENDMENT,
Docket No. 89-200
Decision No. 1219
TRANSMITTAL NO.
88-27
RECOMMENDED FINDINGS AND PROPOSED DECISION
The Ohio Department of Social Services (Ohio, State) petitioned
for
reconsideration of a decision by the Acting Director, Office of
Child
Support Enforcement (OCSE), Family Support Administration. The
Acting
Director disapproved Ohio's proposed amendment (submitted as
Transmittal
No. 88-27) to the Ohio State Plan for Child Support Enforcement
under
Title IV-D of the Social Security Act. The purpose of the
amendment was
to incorporate terms of the Ohio Revised Code which provided
that all
obligees of support orders would be considered to have filed a
signed
application for Title IV-D services.
Pursuant to 45 C.F.R. 301.14 and 45 C.F.R. 213.21, the Acting
Director
designated me as Presiding Officer for the purpose of providing
the
State with a hearing and related procedures, and rendering a
proposed
decision. The issues were identified in a Federal Register
Notice
published on Thursday, October 19, 1989 (54 Fed. Reg. 42993).
Both
parties agreed that no hearing was necessary in this case, and the
State
specifically waived a hearing in writing.
Pursuant to 45 C.F.R. 213.32 and based on the following findings of
fact
and on my conclusions regarding the legal issues raised, I propose
that
the plan amendment be disapproved.
Below, I first provide a summary of the basis for my proposed decision.
I
then provide background information. Finally, I discuss each of
the
issues raised, explain my legal conclusions related to those issues,
and
my specific findings with respect to whether OCSE acted
inconsistently
in disapproving Ohio's proposed state plan amendment, which is
the only
disputed fact. 1/ Other findings are incorporated in my
proposed
decision.
I. SUMMARY OF THE PROPOSED DECISION
The plan amendment at issue incorporated section 2301.35(J) of the
Ohio
Revised Code, which states, in relevant part:
All obligees of support orders administered by the child
support
enforcement agency shall be considered to have filed a
signed
application for Title IV-D services.
The effect of this change would be to eliminate the requirement for
an
application for IV-D services. According to Ohio, this provision of
the
Ohio Revised Code, which was timely and properly promulgated,
complies
with the statutory and regulatory application requirements for
receipt
of IV-D services. However, I concur with OCSE that Ohio's
proposed plan
amendment is contrary to the plain language of Title IV-D and
its
implementing regulations, as well as a long-standing OCSE guideline
that
applications for Title IV-D services be made in writing.
Therefore, I propose that the OCSE Acting Director's original decision
be
upheld. Specifically, I find as follows:
o Federal requirements at 42 U.S.C. 654(6) and 45 C.F.R.
302.33
require an application. OCSE reasonably interpreted this
to
mean an individual written application.
o OCSE policy in OCSE-AT-76-9 (June 9, 1976) provides,
in
relevant part:
In order to comply with the statutory requirements of filing
an
application, the application must be in writing, and may not
be
an oral application. The application must be signed by
the
individual applying for child support services.
o The plan amendment does not conform with the
application
requirement, since the obligees covered by the
proposed
amendment will not have filed a signed application for
IV-D
services.
o The plan amendment gives no opportunity for a person who
had
a support order but who did not want to apply for IV-D
services
to refuse the services.
II. BACKGROUND
Congress established the Child Support and Establishment of
Paternity
Program as Title IV-D of the Social Security Act (Act) by Pub.
L.
63-457, effective July 1, 1975. Federal funds were made available
to
the states for "enforcing the support obligations owed by absent
parents
to their children, locating absent parents, establishing paternity,
and
obtaining child support". 42 U.S.C. 651. 2/
The statute provides for states to furnish child support services to
two
classes of persons. The first class includes all individuals
receiving
Aid to Families with Dependent Children (AFDC) under Title IV-A of
the
Act. As a condition of eligibility for AFDC payments, these
individuals
must assign any support rights of the child to the state and
must
cooperate with the state in enforcing those rights. 42
U.S.C.
602(a)(26).
The second class, the one involved in this proceeding, consists
of
individuals not eligible for AFDC. These persons need not assign
the
support rights of the child but may be charged an application fee
for
the services. The statute provides that "the child support
collection
or paternity determination services" established under a state
IV-D plan
shall be made available "to any individual not otherwise eligible
for
such service upon application filed by such individual with the
State."
42 U.S.C. 654(6)(A). As the State pointed out, despite many
changes in
the IV-D program, Congress has not amended the part of the
statute
pertaining to the filing of an application for services by a
non-AFDC
applicant. State brief (br.) at 5. The words "upon
application filed
by such individual" are directly at issue in this
proceeding.
The language in the regulation which provides for IV-D services
to
non-AFDC applicants has required an application since the
original
regulation tracking the statute in 1975. See 45 C.F.R.
302.33(a), 40
Fed. Reg. 27153, 27161 (June 25, 1975).
In addition to the statute and regulation, OCSE issued a
program
instruction or action transmittal in June 1976, OCSE-AT-76-9,
addressed
to state agencies administering child support enforcement
plans. This
action transmittal referred to the provisions of the
statute and the
regulation pertaining to furnishing child support services to
non-AFDC
applicants, which required "an application filed by such
individual."
The instruction then provided a Definition of application which
stated
that in order to comply with the statutory requirements of filing
an
application, the application had to be in writing, and could not be
an
oral application. The application had to be signed by the
individual
who was applying for child support services.
Although OCSE-AT-76-9 was not promulgated under the notice and
comment
rulemaking procedures of the Administrative Procedures Act (APA),
5
U.S.C. section 550 et. seq., it is undisputed that the states were
all
given notice of it.
In 1988, as part of a reorganization of child support
enforcement
activities in Ohio, section 2301.35(J) was added to the Ohio
Revised
Code. The state plan amendment at issue was submitted to
incorporate
the Ohio Code provision. State br. at 8.
The State argued that there is nothing in the statute or
regulation
requiring a signed application, and that the action
transmittal
therefore improperly imposed a substantive requirement not in
the
statute or regulation without complying with the notice and
comment
rulemaking provisions of the APA.
OCSE contended that, without considering the action transmittal, the
state
plan amendment does not meet the requirements of the statute or
the
regulation, since it attempts to do away with the requirement for
an
application altogether. Even if the plan amendment met the
statutory
and regulatory requirement for an application, said OCSE, it did
not
comply with the action transmittal's requirement for an application
in
writing. The requirement for a signed application was a
reasonable
interpretation of the statute, and as an interpretative rule,
the
requirement did not have to be adopted under the rulemaking
provisions
of the APA, according to OCSE. The following section
of the decision
contains my findings and the supporting analysis.
III. DISCUSSION
A. Whether the proposed state plan amendment violates
the
application requirement of the Act and its
implementing
regulatory provision at 45 C.F.R. 302.33(a).
Although Ohio maintained that the issue here was whether its
proposed
state plan amendment conformed with the federal enabling legislation
and
the implementing regulations (State's br. p. 9), the State
primarily
focused its argument, as will be discussed below, on the position
that
OCSE-AT-76-9 improperly imposed a substantive requirement not in
the
statute or regulation. Ohio failed to address the question of
whether
the proposed state plan amendment complied with the statute
and
regulation without the action transmittal. I conclude that it did
not.
3/
The current regulatory provision at 45 C.F.R. 302.33(a) provides:
The State plan must provide that the support collection
or
paternity determination services established under the
plan
shall be made available to any individual not
receiving
assistance under the Aid to Families with Dependent
Children
(AFDC) program who files an application for the services
with
the IV-D agency.
I find that the proposed state plan amendment, to consider all obligees
of
support orders to have filed a signed application for Title IV-D
services, on
its face violates the plain language of the statute and
regulation. The
proposed state plan amendment fails to provide for any
type of application --
written or oral. On the contrary, the proposed
plan amendment
completely eliminates the application requirement. Both
the
Departmental Appeals Board and a federal court of appeals have
considered the
boundaries of the statutory application requirement and
determined that while
the statute does not specify the form of the
application, the statute does,
at a minimum, require a personalized
filing by the applicant. See New
Jersey Dept. of Human Services, DAB
No. 135 (1980), aff'd, 670 F. 2d 1262
(3rd Cir. 1981).
Moreover, the proposed state plan amendment provides no opportunity for
an
individual to refuse receipt of such Title IV-D services. In
New
Jersey, supra, the court would not allow the state to
claim
reimbursement for individuals who received child support
services
through the state system but did not, for a variety of reasons,
sign
Title IV-D applications. The court in New Jersey said:
There simply is nothing in the legislation or its history
to
indicate that Congress wished to provide federal monies
for
individuals who either could not be located by a state or
who,
once located, refused to complete an application for
IV-D
services.
670 F. 2d at 1280. I conclude that the reasoning in New Jersey,
supra,
is applicable to this situation. Ohio's proposal, at the very
least,
assumes that no one would refuse Title IV-D services. I find no
support
in the statute or regulation for this assumption.
B. Whether the requirement in OCSE-AT-76-9 that applications
be
in writing is a valid requirement.
While it is not necessary to rely on OCSE's action transmittal, I
also
conclude that Ohio failed to comply with OCSE's long-standing
and
legitimate policy that such applications for Title IV-D services be
made
in writing.
As noted above, Ohio argued that OCSE-AT-76-9 improperly imposed
a
substantive requirement not present in the statute or regulation.
Ohio
contended that the requirement of the action transmittal that
an
application for IV-D services be in writing is a substantive rule
that
did not meet the notice and comment rulemaking requirements of
section
553 of the APA.
OCSE argued that the action transmittal was an interpretive rule (the
APA
uses the word "interpretative") and therefore specifically excepted
from the
notice and comment requirements. 5 U.S.C. 553(b)(A).
The distinction between interpretative and legislative (or
substantive)
rules has been the subject of discussion in many cases over the
years.
The distinction has even been described as "enshrouded in
considerable
smog." See General Motors Corp. v. Ruckelshaus, 742 F.2d
1561, 1565
(D.C. Cir. 1984), cert. denied, 471 U.S. 1074 (1985).
However, the distinction generally accepted has been the one given in
the
leading case of Gibson Wine Co. v. Snyder, 194 F.2d 329, 331 (D.C.
Cir.
1952). Substantive rules are those which create law,
whereas
interpretative rules are statements as to what an administrative
officer
"thinks the statute or regulation means." Or, as
stated succinctly in
United States v. Picciotto, 875 F.2d 345, 347 (D.C. Cir.
1989), "in
general, substantive rules create law, whereas interpretive
rules
clarify existing law." In Picciotto the court also said that "it
had
previously found agency rules explaining ambiguous terms in statutes
and
regulations to be interpretive." Id.
Indeed, the principal case cited by the State for its position refers
to
the same principle, that "[a]n interpretative rule simply states
what
the administrative agency thinks the statute means . . . ." State
of
Ohio Dept. of Human Services v. U.S. Dept. of Health & Human
Services,
862 F. 2d 1228 (6th Cir. 1988), citing General Motors, supra, at
l565.
So here, I find that the action transmittal simply stated what
OCSE
thought the statute meant when it used the term "application"
without
any further explanation. OCSE gave its interpretation
that
"application" meant a "written" application, rather than an oral
one.
Although Ohio recognized the distinction between an interpretative and
a
legislative rule, Ohio attempted to rely on the theory of
"substantial
impact" even if OCSE-AT-76-9 was an interpretative rule.
This
principle, which does not appear in the APA, is that even
an
interpretative rule requires notice and comment rulemaking if it
will
have a "substantial impact" on a large number of persons or
entities.
While the State asserted this approach, the substantial impact
principle
is outdated. A recent Sixth Circuit case points this out:
At an earlier time, substantial impact was treated by a
number
of courts as an important factor in deciding whether a rule
was
legislative or interpretative. More recent cases have held
that
the level of impact on interested parties is not a factor
in
correctly classifying a rule or regulation. . . .
Friedrich v. Secretary of Health & Human Services, 894 F. 2d 829,
836
(6th Cir. 1990). See also Cabais v. Egger, 690 F.2d 234 (D.C.
Cir.
1982).
I find that the rule here is interpretative, stating the interpretation
of
OCSE of what the word "application" in the statute means. I also
find
that it is OCSE's long-standing policy. Indeed, it is a very
small
distance from the statutory use of "application" to the
OCSE
interpretation of individual written applications.
The State admitted that it received OCSE-AT-76-9 and that it had
not
received any instruction from OCSE rescinding that part of
the
transmittal which specifies that an application must be in
writing.
State's submission dated January 17, 1990, answering
"Respondent's
Requests for Admissions."
I therefore find that Ohio had notice of OCSE's long-standing
policy,
interpreting the requirement for an application in the statute
as
requiring a written application. I further find that
this
interpretation is clearly a reasonable one and is therefore binding
on
the State. I find that Ohio's proposed plan amendment, Transmittal
No.
88-27, is contrary to this policy.
C. Whether OCSE has acted consistently.
Finally, the State argued that even if the action transmittal was
an
interpretative rule, and therefore did not need to meet the
APA
requirements for notice and comment rulemaking, deference should not
be
given to OCSE's interpretation, since it had not been
applied
consistently. This argument relies primarily on a letter, dated
October
28, 1978, from the Deputy Director of OCSE to the Director of the
Oregon
Department of Human Resources. Ohio Ex. C.
In this letter there is reference to not requiring a literal reading
of
the applicable provisions of the action transmittal to require a
formal
application for IV-D services. However, the letter does not
retract the
requirement for something in writing from the applicant.
The letter
refers specifically to the "requirement for a written request for
IV-D
services." It states that this requirement is met by the
unique
procedure in Oregon, where the individual files a signed petition
with
the court seeking an order for support. Rather than rescinding
the
policy for a written application, the letter reaffirms it by
pointing
out that the Oregon procedure does "satisfy the technical
requirement of
a written request for IV-D services."
I find that OCSE has not acted inconsistently in applying its
requirement
for a written request for IV-D services signed by non-AFDC
applicants.
I therefore need not decide whether deference could or
should be denied the
OCSE policy on that ground.
IV. CERTIFICATION
The entire record, including the foregoing recommended findings
and
proposed decision, is CERTIFIED to the Director of the Office of
Child
Support Enforcement, as directed in 45 C.F.R. 213.32(b)(1).
Alexander G. Teitz
Presiding
Officer
January 24, 1991.1. Both parties declined the opportunity to
submit
proposed findings of fact and conclusions of law.
2. Amendments to the Act later added support obligations owed
by
absent parents to the spouse or former spouse with whom such
children
were living, as well as to the children themselves; these changes
are
not involved here.
3. Since I find that the proposed plan amendment is contrary to
the
plain language of the statute, I do not consider the State's
argument
that the plan amendment is within the spirit of
the