Mississippi Power & Light Co. v. United States Nuclear Regulatory Commission

601 F.2d 223
CourtCourt of Appeals for the Fifth Circuit
DecidedAugust 24, 1979
DocketNos. 78-1565, 78-1871 and 78-2200
StatusPublished
Cited by5 cases

This text of 601 F.2d 223 (Mississippi Power & Light Co. v. United States Nuclear Regulatory Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mississippi Power & Light Co. v. United States Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979).

Opinion

JAMES C. HILL, Circuit Judge.

Appellants seek review of a licensing fee schedule adopted by the Nuclear Regulatory Commission (NRC) on February 9, 1978. In reviewing the fee schedule we must decide whether the charges assessed by the agency may properly be classified as “fees,” or branded as unconstitutional “taxes.” After careful examination of the assessments levied by the agency, we conclude that the fee schedule should be upheld.

I.

On August 10, 1973, the Atomic Energy Commission (AEC), the predecessor of the NRC, adopted a fee schedule designed to recover the costs for processing applications, permits and licenses as well as the costs arising from health and safety inspections and statutorily mandated environmental and antitrust reviews.

On March 4, 1974, the Supreme Court decided two cases in which fees charged by the Federal Communications Commission (FCC) and the Federal Power Commission (FPC) were successfully challenged. National Cable Television Association, Inc. v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974); Federal Power Commission v. New England Power Co., 415 U.S. 345, 94 S.Ct. 1151, 39 L.Ed.2d 383 (1974). In these two decisions, the Court for the first time construed Title V of the Independent Offices Appropriation Act (IOAA), 31 U.S.C.A. § 483a,1 the statutory [226]*226provision permitting federal agencies to charge fees. The court construed the Act to allow fees only for special benefits rendered to identifiable recipients; these fees were to be measured by the “value to the recipient” of the agency service.

In response to these two decisions, a petition for rulemaking was filed on May 2, 1974, by the petitioners herein and others, requesting the Commission to amend its 1973 fee schedule to comply with the Supreme Court decisions. The petitioners suggested that the Commission could not recover more than five percent of its licensing costs because at least 95 percent of the regulatory costs of the Commission’s licensing activities benefited the public rather than the applicant.

On November 11, 1974, the AEC published for comment proposed revisions to the fee schedule that differed from the petitioner’s recommended schedule. While the Commission was considering the comments on the proposed schedule, the Court of Appeals for the District of Columbia handed down four opinions on December 16, 1976, invalidating portions of the license fee schedule promulgated by the Federal Communications Commission.2

Using these decisions to provide additional guidance, the Commission on May 2, 1977, issued a new proposed notice of rule-making. After receiving public comments, the Commission revised the rule to incorporate these comments and published a final rule on February 21, 1978.

Using the two Supreme Court decisions and the four opinions issued by the District of Columbia Circuit as a framework for analysis, the NRC devised a set of guidelines from which to structure the fee schedule.3 Based on these guidelines, the NRC [227]*227analyzed the functions performed and services rendered by each NRC office to determine which activities, if any, provided special benefits to applicants, licensees or per-mittees. After determining which of these services constituted special benefits, the NRC calculated the cost of providing this service, a cost which included professional manpower costs, overhead support and contractual services costs.4 Under the fee schedule adopted by the Commission, approximately eighty percent of the Commission’s budgeted regulatory costs in Fiscal Year 1977 were excluded from consideration for recovery. These excluded costs include agency activities which, in the Commission’s view, either do not provide special benefits to identifiable recipients, or represent agency programs providing an independent public benefit, such as rulemaking proceedings. Under this revised schedule, the NRC estimated that it would recover approximately $30 million of its Fiscal Year 1978 budget and approximately $20 million of its Fiscal Year 1979 budget.

II.

The petitioners’ first argument is a blunderbuss shot aimed at the entire fee schedule itself. Reduced to its simplest form, the petitioners’ argument is that the NRC is without authority to assess any fee against an applicant, since all of the Commission’s activities are “in the public interest”; therefore, any charge assessed must necessarily be a “tax” and not a “fee.” This proposition is grounded upon the petitioners’ interpretation of National Cable Television Association, Inc. v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974) (National Cable) and Federal Power Commission v. New England Power Co., 415 U.S. 345, 94 S.Ct. 1151, 39 L.Ed.2d 383 1974) (New England Power). Because these two decisions constitute the starting point for any analysis in this area, we review them briefly.

In National Cable, the Court dealt with a challenge to the fee schedule established by the Federal Communications Commission. The FCC had sought to recoup its entire cost of regulating cable television systems by imposing a fee on regulatees, calculated on the basis of the number of subscribers to a particular cable system. In striking down the FCC’s fee schedule, the Court narrowly construed Title V of the Independent Offices Appropriation Act (IOAA), 31 U.S.C.A. § 483a.5 Title V of the IOAA permits federal agencies to charge persons for work or services provided to them. Broadly construed, the IOAA could have been interpreted to permit federal agencies to recoup their entire cost of regulating, a result which would offend the constitutional mandate that only Congress has the “Power to levy and collect Taxes.” To avoid such constitutional problems, Justice Douglas construed the IOAA to permit federal agencies to charge fees but not to levy taxes. The Court then carefully proceeded to characterize a “fee.” First, a fee “is incident to a voluntary act, e.g., a request that a public agency permit an applicant to practice law or medicine or construct a house or run a broadcast station.” 415 U.S. at 340, 94 S.Ct. at 1149. Second, a fee represents a charge for services which bestow a benefit on an applicant not shared by other members of society. Thus, an agency may not charge for protective services rendered to the general public. The statutory phrase “value to the recipient” was found by the Court to be the measure of the authorized fee.

In New England Power the Court dealt with a simple challenge to the fee schedule of the FPC in which the Commission attempted to recoup the entire cost of administering the Natural Gas and Federal Power Acts by assessing fees based on the amount of electricity or natural gas sold by a regulated utility company in interstate commerce. In striking down the FPC’s fee schedule the Court again emphasized that a “fee” usually presupposes an application by a person or company for, a service; thus the [228]

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601 F.2d 223, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mississippi-power-light-co-v-united-states-nuclear-regulatory-ca5-1979.