Mississippi Power & Light Co. v. U.S. Nuclear Regulatory Com'n, CHEM-NUCLEAR

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtJAMES C. HILL
Citation601 F.2d 223
Parties, 51 A.L.R.Fed. 571, 9 Envtl. L. Rep. 20,655 MISSISSIPPI POWER & LIGHT CO., Offshore Power Systems, and Florida Power & Light Co., Petitioners, v. UNITED STATES NUCLEAR REGULATORY COMMISSION and United States of America, Respondents. NUCLEAR ENGINEERING CO., INC., Petitioner, v. UNITED STATES NUCLEAR REGULATORY COMMISSION and United States of America, Respondents.SYSTEMS, INC., a Washington corporation, Petitioner, v. UNITED STATES NUCLEAR REGULATORY COMMISSION and United States of America, Respondents.
Decision Date24 August 1979
Docket Number78-1871 and 78-2200,Nos. 78-1565,CHEM-NUCLEAR

Page 223

601 F.2d 223
13 ERC 1569, 51 A.L.R.Fed. 571, 9
Envtl. L. Rep. 20,655
MISSISSIPPI POWER & LIGHT CO., Offshore Power Systems, and
Florida Power & Light Co., Petitioners,
v.
UNITED STATES NUCLEAR REGULATORY COMMISSION and United
States of America, Respondents.
NUCLEAR ENGINEERING CO., INC., Petitioner,
v.
UNITED STATES NUCLEAR REGULATORY COMMISSION and United
States of America, Respondents.
CHEM-NUCLEAR SYSTEMS, INC., a Washington corporation, Petitioner,
v.
UNITED STATES NUCLEAR REGULATORY COMMISSION and United
States of America, Respondents.
Nos. 78-1565, 78-1871 and 78-2200.
United States Court of Appeals,
Fifth Circuit.
Aug. 24, 1979.

Page 225

Conner, Moore & Corber, Troy B. Conner, Jr., Harold D. Rhynedance, Jr., Washington, D. C., for petitioners in 78-1565 and 78-1871.

Wise, Carter, Child, Caraway, Sherwood W. Wise, Jackson, Miss., for petitioners in 78-1565.

Troy B. Conner, Jr., Washington, D. C., for Ark. Power & Light Co., et al.

Mark J. Wetterhahn, Keith H. Ellis, Washington, D. C., for petitioners in 78-1565 and 78-1871 and for Ark. Power & Light Co., et al.

Stephen F. Eilperin, Irwin B. Rothschild, III, E. Leo Slaggie, U.S. Nuclear Regulatory Comm., Washington, D. C., for respondents in 78-1565 and 78-2200.

Neil T. Proto, Dept. of Justice, Washington, D. C., for respondents in 78-1565 and 78-1871.

Larry G. Gutterridge, Dept. of Justice, Washington, D. C., for respondents in 78-1565.

R. Lee Armbruster, Louisville, Ky., for petitioner in 78-1871.

Jones, Grey & Bayley, John L. West, Rudy A. Englund, Seattle, Wash., for petitioner in 78-2200.

Petitions for Review of an Order of the Nuclear Regulatory Commission.

Before GEWIN, HILL and FAY Circuit Judges.

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

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provision 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 rulemaking. 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

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analyzed the functions performed and services rendered by each NRC office to determine which activities, if any, provided special benefits to applicants, licensees or permittees. 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

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Court summarily rejected the Commission's position that general benefits redounding to regulated industries justify the imposition of fees against whole industries. Indeed, the IOAA was interpreted to allow only specific charges for specific services rendered to identifiable recipients. The Court quoted approvingly from a Bureau of the Budget Circular, 6 holding that "no charge should be made for services rendered, 'when the identification of the ultimate beneficiary is obscure and the service can be primarily considered as benefitting broadly the general public.' " 415 U.S. at 350, 94 S.Ct. at 1154.

The petitioners' contention is that the work of the NRC benefits the general public solely and that the conferral of a license or permit does not bestow upon them any special benefit whatsoever; therefore, they argue, the NRC is without authority to assess Any fee. In this connection we are reminded that "public safety is the first, last, and a permanent consideration in any decision on the issuance of a construction permit or a license to operate a nuclear facility." Power Reactor Development Co. v. International Union of Electrical, Radio & Machine Workers, 367 U.S. 396, 402, 81 S.Ct. 1529, 1532, 6 L.Ed.2d 924 (1961).

We reject such an argument because it ignores the realities of the operation of the...

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65 practice notes
  • Byproduct material; medical use: Fee schedules revision; 100% fee recovery (1998 FY),
    • United States
    • Federal Register June 10, 1998
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    ...24, 1979, by the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied, 444 U.S. 1102 (1980). The Court held (1) The NRC had the authority to recover the full cost of providing service......
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    • Federal Register May 30, 2006
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    ...24, 1979, by the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied, 444 U.S. 1102 (1980). This court held (1) The NRC had the authority to recover the full cost of providing servic......
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    ...it also provides some benefit to the public. See, e.g., Mississippi Power & Light Co. v. United States Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied 444 U.S. 1102 (1980). BLM found that any small benefit to the public provided by the processing of fixed-fee d......
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    ...24, 1979, by the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied, 444 U.S. 1102 (1980). This court held (1) The NRC had the authority to recover the full cost of providing servic......
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    ...to the NRC's license fee regulations. New England Power Co. v. NRC, 683 F.2d 12 (1st Cir.1982); Mississippi Power & Light Co. v. NRC, 601 F.2d 223 (5th Cir.1979). While neither opinion discussed initial review jurisdiction, both courts were of course under the same obligation we are to sati......
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    ...F.2d 874, 887 (4th Cir.1983), cert. denied, 465 U.S. 1080, 104 S.Ct. 1444, 79 L.Ed.2d 764 (1984); Mississippi Power & Light Co. v. NRC, 601 F.2d 223, 229 (5th Cir.1979), cert. denied, 444 U.S. 1102, 100 S.Ct. 1066, 62 L.Ed.2d 787 Moreover, these cases construing National Cable have addresse......
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    ...pay for highway construction was a "general" type of public expenditure); Mississippi Power & Light Co. v. U.S. Nuclear Regulatory Comm'n, 601 F.2d 223, 228, 231-32 (5th Cir.1979), cert. denied, 444 U.S. 1102, 100 S.Ct. 1066, 62 L.Ed.2d 787 (1980) (charge was a "fee," not a "tax," because i......
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