Florida Power & Light Co. v. U.S.

Decision Date13 May 1988
Docket Number86-1567 and 86-1571,Nos. 86-1512,s. 86-1512
Citation846 F.2d 765
Parties, 56 USLW 2687 FLORIDA POWER & LIGHT COMPANY, et al., Petitioners, v. UNITED STATES of America and Nuclear Regulatory Commission, Respondents. WISCONSIN ELECTRIC POWER COMPANY, et al., Petitioners, v. UNITED STATES of America and Nuclear Regulatory Commission, Respondents. ARKANSAS POWER & LIGHT COMPANY, et al., Petitioners, v. UNITED STATES of America and Nuclear Regulatory Commission, Respondents.
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petition for Review of an Order of the Nuclear Regulatory commission.

Harold F. Reis, with whom Thomas A. Schmutz, Washington, D.C., was on the brief for petitioners Florida Power & Light Co., et al. Michael F. Healy and Ernest C. Baynard, Washington, D.C., also entered an appearance, for Florida Power & Light Co.

Jay E. Silberg, Washington, D.C., was on the brief, for petitioners Wisconsin Elec. Power Co., et al.

Joseph B. Knotts, Jr. and Scott M. DuBoff, Washington, D.C., were on the brief, for petitioners Arkansas Power & Light Co., et al.

Irwin B. Rothschild, III, Deputy Asst. Gen. Counsel, Nuclear Regulatory Com'n with whom William C. Parler, Gen. Counsel, William H. Briggs, Sol., E. Leo Slaggie, Deputy Sol., Nuclear Regulatory Com'n, Peter R. Steenland, Jr., Jacques B. Gelin and Kathleen P. Dewey, Attys., Dept. of Justice, Washington, D.C., were on the brief, for respondents. Dirk D. Snel, Atty. Dept. of Justice, Washington, D.C., also entered an appearance, for respondents.

Michael A. Bauser, Washington, D.C., was on the brief, for amicus curiae The Committee on Nuclear Technology, et al., urging remand.

Before RUTH BADER GINSBURG, STARR and NIES *, Circuit Judges.

Opinion for the court filed by Circuit Judge NIES.

Dissenting opinion filed by Circuit Judge STARR.

NIES, Circuit Judge:

In three consolidated cases, thirty-one nuclear power reactor licensees (petitioners) seek to invalidate a final rule entered on September 16, 1986, by the Nuclear Regulatory Commission ("NRC" or "Commission"), which imposes a uniform "Annual Fee" on those licensees for the fiscal year 1987. "Annual Fee for Power Reactor Operating Licenses and Conforming Amendment," 51 Fed.Reg. 33,224 (Sept. 18 1986), corrected at 52 Fed.Reg. 34,082 (Sept. 25, 1986), codified at 10 C.F.R. pt. 171 (1987). The Annual Fee was imposed under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Pub. L. No. 99-272, 100 Stat. 82 (1986), which became effective on April 7, 1986.

Petitioners argue, first, that the NRC violated the standards contained in COBRA for imposition of a fee. Second, they maintain that if COBRA were interpreted to authorize NRC's annual flat fee, then the measure would constitute an unconstitutional delegation of Congress' power to tax. In addition, petitioners assert procedural errors in promulgation of the rule which, they allege, deprived them of a meaningful opportunity to comment on the NRC rule and preclude meaningful appellate review. After reviewing petitioners' numerous variations on the above arguments, 1 we conclude that no sufficiently persuasive ground has been advanced to warrant judicial invalidation of the subject rule and that the rule lawfully implements COBRA.


Before enactment of COBRA, the Commission, like other agencies, has charged user fees for special benefits rendered to identifiable entities under the Independent Offices Appropriation Act of 1952 ("IOAA"), 31 U.S.C. Sec. 9701 (1982) (see 10 C.F.R. pt. 170 (1987)). As established by judicial interpretation, the amount of a fee charged under IOAA is limited to the cost to the agency of a specific benefit rendered to a particular entity. See, e.g., National Cable Television Ass'n, Inc. v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974); Federal Power Comm'n v. New England Power Co., 415 U.S. 345, 94 S.Ct. 1151, 39 L.Ed.2d 383 (1974). Under IOAA, the Commission has imposed fees for services, for example, for review of a license application or for an inspection, but it has never charged for providing general regulatory services ("generic services"), such as research and rulemaking. The Commission's IOAA fee schedule was judicially approved in Mississippi Power & Light Co. v. NRC, 601 F.2d 223 (5th Cir.1979), cert. denied, 444 U.S. 1102, 100 S.Ct. 1066, 62 L.Ed.2d 787 (1980). IOAA is generally applicable to all government agencies.

In 1985, Congress enacted COBRA which contains provisions directing the NRC, inter alia, to recoup up to thirty-three percent of its budget through charges imposed on its licensees. More specifically, section 7601(a) of COBRA, to be codified at 42 U.S.C. Sec. 2213, required the Commission, within ninety days after enactment, to evaluate a system to assess and collect annual fees from the Commission's licensees which would "fund all or part of the activities conducted by the Commission," and to provide Congress with a report. Under section 7601(b)(1), the Commission was required, within forty-five days of its report, to impose annual charges on its licensees through rulemaking, subject to three limitations: (1) the aggregate annual fees plus other amounts collected (e.g., under IOAA) "may not exceed" thirty-three percent of the Commission's fiscal year costs, (2) the annual charges must be "reasonably related to the regulatory service provided by the Commission," and (3) the charges "shall fairly reflect the cost to the Commission of providing such service." 2 Acting within COBRA's tight deadlines, the Commission timely issued its final "Annual Fee" rule. That rule sets a uniform, annual fee for each power reactor operating licensee ("operating licensee") by calculating the Commission's costs budgeted for certain generic services which it concluded were reasonably related to regulating all licensees in that category. The total of those costs are compared with thirty-three percent of the Commission's budget less fees collected from all licensees under the IOAA. The smaller amount is adopted as the total amount to be recouped. The individual annual charge to each operating licensee is uniform, the total amount to be recouped simply being divided by the number of such licensees. If fees collected under IOAA and COBRA exceed the thirty-three percent ceiling, the rule provides for a refund. A particular licensee can request an exemption under certain circumstances. No COBRA fee is imposed on licensees other than operating licensees, although all licensees continue to pay IOAA fees. The NRC's methodology resulted in a fee of $950,000 per reactor for 1987. 51 Fed.Reg. at 33,231. 3

The thirty-one petitioners before us are licensees on whom the new fees have been imposed.


Petitioners challenge the Commission's interpretation of the statute, asserting that the standards of section 7601(b)(1) of COBRA do not authorize a uniform annual fee on operating licensees based on the cost of generic services. That challenge has several facets which we address in turn.


Petitioners first argue that, while section 7601(b)(1)(B) states only that the user fees charged "shall be reasonably related to the regulatory service provided by the Commission" without specifying the recipient of the "regulatory service" that Congress had in mind, the paragraph cannot reasonably be interpreted to authorize fees except for regulatory services to an identifiable recipient. Per petitioners, the language of COBRA must be interpreted the same as the courts have interpreted the IOAA and other fee statutes: any fee (in contrast to a tax) must relate to a specific benefit bestowed upon a specific beneficiary. See, e.g., National Cable, 415 U.S. at 340-41, 94 S.Ct. at 1148-49 (fee, unlike tax, is for benefit to applicant "not shared by other members of society"); New England Power, 415 U.S. at 351, 94 S.Ct. at 1155 (charges for regulatory activities of benefit to an entire industry are in the "domain of taxes"). Also, per petitioners, a corollary of this requirement is that fees may not be assessed for activities that do not specifically benefit the feepayer or that serve an independent public interest. See, e.g., Central & S. Motor Freight Tariff Ass'n v. United States, 777 F.2d 722, 729-31 (D.C.Cir.1985); National Ass'n of Broadcasters v. FCC, 554 F.2d 1118, 1128-29 (D.C.Cir.1976) (invalidating FCC fee schedule because independent public interests were represented in all fees).

In this case, petitioners contend, the equal division of the costs of generic services results not only in one licensee carrying the burden of others who require more general services, but also in the licensees paying for the cost of services which have an independent public benefit. In the absence of an explicit legislative expression of intent to change generally understood limitations on fee collection, petitioners urge that the statute should be interpreted to preclude the NRC from entering into a "constitutionally unchartered area." Further, petitioners point out that the language of COBRA is sufficiently similar to the provisions of IOAA, except for the explicit direction in IOAA that the fee be based, inter alia, on "the value of the service to the recipient," that the COBRA fee authorization should be given the same interpretation.

Having considered petitioners' reasons for urging the application of the IOAA standard, including the constitutional implications in rejection of that standard, we are unpersuaded that Congress intended that COBRA incorporate the same limitations as IOAA. As petitioners acknowledge, noticeably absent from COBRA is the IOAA limitation that the fee reflect "the value of the [agency's] service to the recipient." Further, as the Floor Managers of COBRA made clear, the language was not intended to reiterate IOAA standards:

The charges assessed pursuant to this authority shall be reasonably related to the regulatory...

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