Opinion ID: 421215
Heading Depth: 3
Heading Rank: 1

Heading: Costs of environmental impact statements

Text: 127 Interior's practice of charging applicants for the costs of environmental impact statements triggered by right-of-way applications is a major issue of this appeal. The utilities argue that they should not be charged for the total costs of EIS preparation. 13 They also argue that it is not reasonable under the Act to charge applicants for portions of an EIS that address impacts occurring on private lands apart from the right-of-way sought. 14 128 We note initially that this circuit has previously considered and rejected the argument that Interior may not require applicants for rights-of-way to reimburse any part of the cost of an EIS prepared in connection with processing their applications. In Alumet v. Andrus, 607 F.2d 911 (10th Cir.1979), we held that FLPMA requires all reasonable costs incurred by the Secretary in processing applications to be chargeable against the applicant, and that those reasonable costs include costs of an EIS. Id. at 916. We expressly rejected the contention that an EIS inures solely to the benefit of the general public, and therefore, no part is assessable to the applicant. Id. We also considered and rejected the trial court's alternative holding that the provision in section 304(b) directing Interior to consider  'that portion of the costs incurred for the benefit of the general public rather than for the exclusive benefit of the applicant' ... completely negated the former provision in the same statute that reasonable costs included the cost of an environmental impact statement. Id. (emphasis in original). We held that the latter provision may well modify the earlier provision ... but [it] does not, in effect, excise the former provision from the statute. Id. (emphasis in original). 15 129 Our construction of section 304(b) in the present case is in full accord with our holding in Alumet. The reasonableness factors do indeed modify the provision that  'reasonable costs' include ... the costs of ... environmental impact statements. FLPMA § 304(b). The Secretary must consider the reasonableness factors when assessing reasonable costs of preparing an EIS triggered by an application. 130 The utilities argue that it is not reasonable under FLPMA to charge applicants for costs of studies examining the impacts of the applicants' projects that are caused by facilities or activities not located within the right-of-way sought. Their argument hinges on the assertion that such studies primarily benefit the public, because they [go] so far beyond what [the applicant] seeks from the BLM, namely, the right-of-way. Brief for Public Service at 50. The utilities also assert that charging for those often-massive studies contributes to the disproportion between costs of processing and the monetary value of the easement sought. 131 The trial court in PSC II treated this issue under the rubric of NEPA, stating that an EIS which conforms to the requirements of NEPA cannot be unreasonable for the purposes of FLPMA, slip op. at 28, notwithstanding the fact that a considerable portion of the statement may speak to the environmental impact of a right-of-way on non-federal lands, id. at 29. The court cautioned that the scope of an EIS ... should generally be a factor in the agency's consideration of the costs incurred for the benefit of the public at large. Id. (emphasis added). The district court in Nevada Power Co. apparently reached a similar result, rejecting the notion that total costs of an EIS are made reasonable per se by their inclusion in the first provision of section 304(b). See 515 F.Supp. at 317-22. The court held that 132 the standard for any inclusion of costs [including those of an EIS] ... is reasonableness .... 133 ... Congress recognized that no hard and fast rule concerning EIS's should be crystallized with reference to every EIS, but the problem should be left for decision in view of the circumstances of each particular case with due consideration of the standards incorporated by Congress to guide and limit that discretion. 134 Id. at 322. 135 Interior argues strenuously that FLPMA permits recovery of the full cost of an EIS necessitated by an application, even when the EIS considers impacts beyond the right-of-way itself. The parties' battle is joined in a field of caselaw extrinsic to that of FLPMA itself; thus, although our holding is dictated by our examination of FLPMA's legislative history, we shall briefly examine the cases upon which the parties rely. This examination will also guide our later consideration of the validity of the pre-FLPMA cost-reimbursement regulations. 136 In the companion cases of National Cable Television Ass'n v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974), and Federal Power Commission v. New England Power Co., 415 U.S. 345, 94 S.Ct. 1151, 39 L.Ed.2d 383 (1974), the Supreme Court addressed the claim that fees assessed under the IOAA to industry members were taxes levied by administrative agencies and therefore unconstitutional. The Court held that the IOAA granted agencies only the power to assess fees and not taxes, thereby avoiding the constitutional issue. 137 In National Cable, the Court described a fee as incident to a voluntary act, e.g., a request that a public agency permit an applicant to practice law ... or run a broadcast station. [An] agency ... normally may exact a fee for a grant which, presumably, bestows a benefit on the applicant, not shared by other members of society. 415 U.S. at 340-41, 94 S.Ct. at 1148-49. The Court said that assessing industry members for the costs of oversight over the entire industry would require the members to pay not only for benefits they received but for the protective services rendered the public by the Commission in its regulatory role, and suggested that such an assessment might be an unconstitutional tax. See id. at 341-42, 94 S.Ct. at 1149. 138 In New England Power Co., the Court stated that charges  'should be made to each identifiable recipient for a measurable unit or amount of Government service or property from which he derives a special benefit,'  and 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 349-50, 94 S.Ct. at 1154 (quoting with approval a Bureau of the Budget interpretation) (emphasis in original). The Court said that such a construction keeps [the Act] within the boundaries of the 'fee' system and away from the domain of 'taxes.'  Id. at 351, 94 S.Ct. at 1155. Consequently, the Court struck down the cost-charge systems in both cases because they explicitly assessed an industry member with the agencies' costs of regulating the entire industry, rather than with that portion of the agencies' costs incurred in agency actions relating specifically to the industry member. In so doing, it noted that [c]ertainly some of the costs [of regulating an industry] inured to the benefit of the public. National Cable, 415 U.S. at 343, 94 S.Ct. at 1150. 139 The utilities argue that National Cable and New England Power Co. support their EIS argument, reasoning that an EIS primarily benefits the public and thus cannot be charged to an applicant. Interior disagrees, citing Mississippi Power & Light Co. v. United States Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir.1979), cert. denied, 444 U.S. 1102, 100 S.Ct. 1066, 62 L.Ed.2d 787 (1980). In Mississippi Power, the Fifth Circuit examined both National Cable and New England Power Co., and then held that the NRC could recover the full cost of providing a service to an identifiable beneficiary, regardless of the incidental public benefits flowing from the provision of that service. Id. at 230 (emphasis in original). Accordingly, the court held that the Commission could recover from a license applicant the full costs of conducting environmental reviews required under NEPA because they are a prerequisite to the issuance of a license.... The Commission must conduct these reviews before it can issue a license to an applicant; it is a necessary part of the cost of providing a special benefit to the licensee. In other words, it is 'incident to a voluntary act.'  Id. at 231 (quoting National Cable, 415 U.S. at 340, 94 S.Ct. at 1148) (footnote omitted). It mattered not that there was an obvious public benefit flowing from the preparation of these environmental reviews. Id. 140 The charges for environmental impact statements at issue in this case represent the costs of studies required by law to be performed when an application triggers NEPA. See National Environmental Policy Act of 1969, § 102(2)(C), 42 U.S.C. § 4332(2)(C) (1976). They are therefore unlike the charges struck down in National Cable and New England Power Co. These studies are a necessary prerequisite to the receipt by the applicant of a special benefit, the grant of a right-of-way. Therefore, Interior is not restrained by the doctrine laid out in National Cable and New England Power Co. from charging the full cost of such an EIS to the applicant. Mississippi Power, 601 F.2d at 231. However, FLPMA requires the Secretary to consider that portion of the cost incurred for the benefit of the general public interest rather than for the exclusive benefit of the applicant in determining reasonable costs. FLPMA § 304(b). Although the preparation of an EIS may be triggered by an application, beyond a doubt it confers benefits on the general public as well. Hence, because of FLPMA's affirmative command, Interior must consider the benefit to the public interest when it determines reasonable costs of processing. 141 It is admittedly difficult to draw a bright line between an EIS's general public benefit and the benefit to the applicant. Certainly it does not depend on a distinction made between costs of studies of the effects within the right-of-way granted and NEPA-required studies of its effects on lands outside of the grant, since presumably an application could not be granted if the EIS were less than sufficient by NEPA's standards. Nonetheless, Congress' inclusion of the reasonableness factors requires that Interior consider the problem, however metaphysical it may be. 16 Interior may charge an applicant for the reasonable costs of EIS preparation. 142