JAMES H. BURNLEY, IV, SECRETARY OF TRANSPORTATION, APPELLANT V. MID-AMERICA PIPELINE COMPANY No. 87-2098 In the Supreme Court of the United States October Term, 1987 On Appeal from the United States District Court for the Northern District of Oklahoma Jurisdictional Statement TABLE OF CONTENTS Question Presented Jurisdiction Constitutional and Statutory provisions involved Statement The question is substantial Conclusion OPINIONS BELOW The findings and recommendations of the Magistrate (App., infra, 1a-13a) are unreported. The district court's order adopting the Magistrate's recommendations (App., infra, 14a) is also unreported. JURISDICTION The judgment of the district court (App., infra, 15a-16a) was entered on February 9, 1988. A notice of appeal was filed on March 9, 1988 (App., infra, 17a-18a). On April 29, 1988, Justice White entered an order extending the time within which to docket this appeal to and including June 23, 1988. The jurisdiction of this Court is invoked under 28 U.S.C. 1252. /1/ CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED Article I, Section 1, of the Constitution provides, in pertinent part: "All legislative Powers herein granted shall be vested in a Congress of the United State * * *." Article I, Section 8, provides, in pertinent part: "the Congress shall have Power To lay and collect Taxes, (and) * * * (t)o regulate Commerce * * * -- And * * * To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers * * *." Section 7005 of the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 140-141 (to be codified at 49 U.S.C. App. 1682a) provides: PIPELINE SAFETY USER FEES. (a) ESTABLISHMENT. -- (1) SCHEDULE. -- The Secretary of Transportation (hereafter in this section referred to as the "Secretary") shall establish a schedule of fees based on the usage, in reasonable relationship to volume-miles, miles, revenues, or an appropriate combination thereof, of natural gas and hazardous liquid pipelines. In establishing such schedule, the Secretary shall take into consideration the allocation of departmental resources. (2) COLLECTION. -- The Secretary shall establish procedures for the collection of such fees. The Secretary may use the services of any Federal, State, or local agency or instrumentality to collect such fees, and may reimburse such agency or instrumentality a reasonable amount for such services. (3) LIABILITY. -- Fees established under this section shall be assessed to the persons operating -- (A) all pipeline facilities subject to the Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. App. 2001 et seq.); and (B) all pipeline transmission facilities and all liquefied natural gas facilities subject to the jurisdiction of the Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. App. 1671 et seq.). (b) TIME OF ASSESSMENT. -- The Secretary shall assess and collect fees described in subsection (a) with respect to each fiscal year before the end of such fiscal year. (c) USE OF FUNDS. -- Funds received under subsection (a) shall be used, to the extent provided for in advance in appropriation Acts, only -- (1) in the case of natural gas pipeline safety fees, for activitieses authorized under the Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. App. 1671 et seq.); and (2) in the case of hazardous liquid pipeline safety fees, for activities authorized under the Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. App. 2001 et seq.). (d) FEE SCHEDULE. -- Fees established by the Secretary under subsection (a) shall be assessed against all natural gas and hazardous liquids transported by pipelines subject to the Natural Gas Pipeline Safety Act of 1968 and the Hazardous Liquid Pipeline Safety Act of 1979 after September 30, 1985, and shall be sufficient to meet the costs of activities described in subsection (c), beginning on October 1, 1985, but at no time shall the aggregate of fees received for any fiscal year under this section exceed 105 percent of the aggregate of appropriations made for such fiscal year for activities to be funded by such fees QUESTION PRESENTED The Department of Transportation administers pipeline safety programs created by the Natural Gas Pipeline Safety Act of 1968, 49 U.S.C. App. (& Supp. III) 1671 et seq., and the Hazardous Liquid Pipeline Safety Act of 1979, 49 U.S.C. App. (& Supp. III) 2001 et seq. Section 7005 of the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 140-141 (to be codified at 49 the costs of administering those two pipeline safety programs by assessing and collecting fees from pipeline operators. The question presented is whether Section 7005 represents an unconstitutional delegation of the legislative power of taxation. STATEMENT 1. In 1986, Congress enacted the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Pub. L. No. 99-272, 100 Stat. 82. Section 7005 of COBRA, 100 Stat. 140-141, directs the Secretary of Transportation (Secretary) to adopt a system of fees to cover the costs of federal pipeline safety programs administered by the Department of Transportation under the Natural Gas Pipeline Safety Act of 1968, 49 U.S.C. App. (& Supp. III) 1671 et seq., and the Hazardous Liquid Pipleline Safety Act of 1979, 49 U.S.C. App. (& Supp. III) 2001 et seq. /2/ Section 7005(a)(3), 100 Stat. 140, states that the fees "shall be assessed to the persons operating" pipeline facilities subject to the two safety Acts. The fees must be assessed prior to the end of each fiscal year (Section 7005(b), 100 Stat. 140), and must be sufficient to pay the costs of the two safety programs as "provided for in advance in appropriation Acts" (Section 7005(c), 100 Stat. 141). Section 7005(a)(1) of COBRA, 100 Stat. 140, directs the Secretary to "establish a schedule of fees based on the usage, in reasonable relationship to volume-miles, miles, revenues, or an appropriate combination thereof, of natural gas and hazardous liquid pipelines." 2. On July 15, 1986, the Secretary published fee schedules adopted pursuant to Section 7005. See 51 Fed. Reg. 25782-25783 (1986). The Secretary selected "pipeline mileage" as the measure of each firm's fee, reasoning that that criterion is closely related to the covered regulatory costs (e.g., the cost of inspections of pipelines). The Secretary further observed that the major pipeline trade associations had reached a consenus that "pipeline mileage provides the most reasonable basis for determining fees to be paid by operators of gas transmission lines and hazardous liquid pipeline facilities." Id. at 25782, 46975, 46977. For fiscal year 1986, the Secretary established fees of $23.99 per mile of gas pipeline and $6.41 per mile of hazardous liquid pipeline (id. at 25783). /3/ 3. Appellee Mid-America Pipeline Company owns and operates pipelines that transport hazardous liquids. As such, appellee is subject to the Hazardous Liquid Pipeline Safety Act (Complaint para. 3). On July 28, 1986, the Department of Transportation (DOT), acting pursuant to its published schedule of fees, assessed appellee $53,023.52 to cover its share of the costs of administering the safety act (id. para. 10). Appellee thereupon filed this suit, asserting that Section 7005 of COBRA is an unconstitutional delegation of the taxing power. The district court referred the parties' cross-motions for summary judgment to Magistrate John Leo Wagner for a recommended decision. On August 5, 1987, the Magistrate issued findings and recommendations (App., infra, 1a-13a). The Magistrate stated that there were no genuine issues of material fact, and that two legal issues were presented: "(1) (W)hether the 'user fees' contemplated by Section 7005 are fees or taxes, and (2) if Section 7005 imposes a tax, whether Congress may delegate the taxing power in this manner" (id. at 1a-2a (footnote omitted)). The Magistrate concluded "that the 'fees' assessed under Section 7005 are taxes" (id. at 5a). The Magistrate then discussed, but neither accepted nor rejected, appellee's contention that Congress is subject to special restrictions with respect to delegation of the taxing power relative to its other powers (ibid.). Instead, the Magistrate (id. at 6a-11a) purported to analyze Section 7005 in light of this Court's decisions in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394 (1928), and American Power & Light Co. v. SEC, 329 U.S. 90 (1946). The Magistrate found that Section 7005 leaves "the Secretary * * * free to appropriate the cost of regulation in almost any way (he) sees fit" (App., infra, 9a). By not specifying the fees schedules itself, the Magistrate declared, Congress has permitted the Secretary to charge a company "almost any figure from 0-100% of the entire (pipeline safety) appropriation" (id. at 10a). /4/ The Magistrate accordingly concluded that Section 7005 is unconstitutional: "This statute asks more from the Secretary than aid in implementing a tax established by the legislature; it asks the Secretary of Transportation to use (his) discretion and set the rate of fees which is in fact a tax, and then go one step further and collect such taxes" (ibid.). The Secretary filed exceptions to the Magistrate's report. On December 30, 1987, however, the district court entered a brief order (App., infra, 14a) adopting the Magistrate's recommendations. On February 9, 1988, the district court entered a judgment (id. at 15a-16a) declaring Section 7005 unconstitutional and enjoining the Secretary from enforcing that section against appelle. THE QUESTION IS SUBSTANTIAL Congress has in recent years enacted several provisons designed to recover the costs of particular regulatory programs through a system of fees imposed on those entities regulated under the program. In addition to the statute at issue in this case, which concerns the pipeline safety programs administered by DOT, Congress has also directed the Nuclear Regulatory Commission (NRC) to recover part of the costs of nuclear powerplant licensing and inspection programs through a system of fees (see COBRA Section 7601(a), 100 Stat. 146-147) and has instructed the Federal Energy Regulatory Commission (FERC) to recover the costs of its regulatory programs through a system of fees (see Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509, Section 3401, 100 Stat. 1890-1891). The district court's decision in this case not only strikes down a statute that provides for the entire operating budget of DOT's two pipeline safety statutes (approximately $8.5 million per year), it also calls into question those other statutes and conflicts with a recent decision of the District of Columbia Circuit upholding NRC's new fee authority against a similar constitutional challenge. See Florida Power & Light Co. v. United States, No. 86-1512 (May 13, 1988). /5/ Moreover, the district court's judgment is demonstrably wrong. Section 7005 of COBRA is but one of many constitutional statutes that set forth "statutory standards" and call upon the Executive Branch "for the formulation of subsidiary administrative policy within the prescribed statutory framework." Yakus v. United States, 321 U.S. 414, 425 (1944). Thus, the Court should note probable jurisdiction. 1. a. As the Court observed in INS v. Chadha, 462 U.S. 919, 951 (1983), the Constitution divides the federal government "into three defined categories, Legislative, Executive, and Judicial, to assure, as nearly as possible, that each branch of government would confine itself to its assigned responsibility." The legislative power granted by Article I "is the authority to make laws." Springer v. Government of the Phillipine Islands, 277 U.S. 189, 202 (1928). The executive power created by Article II is the authority to "take Care that the Laws be faithfully executed" (Art. II, Section 3). And the judicial power conferred by Article III is the authority, in appropriate cases and controversies, "to say what the law is" (Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)) and whether the law has been violated. The Framers intended that these separate functions would serve as "the foundation of a structure of government that would protect liberty." Bowsher v. Synar, 478 U.S. 714, 722 (1986). The so-called "non-delegation doctrine" is rooted in this principle of separation of powers. If each Branch of the federal government is to perform its assigned function, Congress must enact legislation that "delineates the general policy, the public agency which is to apply it, and the boundaries of th(e) delegated authority" (American Power & Light Co. v. SEC, 329 U.S. at 105). When Congress legislates in this manner, the Executive Branch is able "to understand the() limits" of the law. United States v. Rock Royal Co-Operative, Inc., 307 U.S. 533, 574 (1939). And the Judicial Branch, when presented with a case challenging executive action, is able "to ascertain whether the will of Congress has been obeyed" (Yakus v. United States, 321 U.S. 426). Consequently, as the Court noted in Field v. Clark, 143 U.S. 649, 692 (1892), the principle "(t)hat Congress cannot delegate legislative power to the President" is "universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution." b. Nevertheless, with one notable exception some 50 years ago, this Court has consistenly rejected claims based on the non-delegation doctrine. During the first 150 years of its history, the Court uniformly held that challenged statutes did not unconstitutionally delegate legislative authority. See, e.g., The Brig Aurora, 11 U.S. (7 Cranch) 382 (1813); United States v. Grimaud, 220 U.S. 506 (1911); Field v. Clark, supra. In two decisions rendered in 1935, however, the Court struck down portions of the National Industrial Recovery Act of 1933 as unconstitutionally delegating the power to enact legislation. See A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935); Panama Refining Co. v. Ryan, 293 U.S. 388 (1935). The challenged provisions called for the creation of codes of fair competition for the entire economy, bypassed the normal administrative process, and "supplie(d) no standards for any trade, industry or activity" (A.L.A. Schechter Poultry, 295 U.S. at 541), creating what Justice Cardozo described as "a roving commission to inquire into evils and upon discovery correct them" (id. at 551 (concurring opinion)). As such, the challenged provisions represented what was described as "delegation running riot" (id. at 553 (Cardozo, J., concurring)). In the 53 years since Schechter Poulty was decided, the Court has uniformly upheld statutes challenged on nondelegation grounds. See, e.g., United States v. Mazurie, 419 U.S. 544 (1975); United States v. Sharpnack, 335 U.S. 286 (1958); District of Columbia v. John R. Thompson Co., 346 346 U.S. 100 (1953); Lichter v. United States, 334 U.S. 742 (1948); Yakus v. United States, supra; National Broadcasting Co. v. United States, 319 U.S. 190 (1943); Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940); Currin v. Wallace, 306 U.S. 1 (1939). Section 7005 of COBRA squarely falls within this tradition. It sets forth Congress's policy determination, and calls upon the Executive to implement that policy by making "subordinate rules within prescribed limits" (Panama Refining Co. v. Ryan, 293 U.S. at 421). 2. a. Appellee contended in the district court (App., infra, 5a)) that Section 7005 is unconstitutional because it directs the Secretary of Transportation to establish a "tax," and the taxing power, according to appellee, is subject to stricter limitations on delegation than are the other powers of Congress. Although we disagree that Section 7005 creates a "tax" as that word is used in Article I of the Constitution (see pages 13-14, infra,), any dispute over what label should be attached to the monies collected pursuant to the Act is irrelevant. There is simply no basis in the text of the Constitution or this Court's decisions for the proposition that Congress may not confer discretion on the Executive in carrying out Congress's tax policies that have been duly enacted into law. Article I, Section 8, of the Constitution sets forth the many powers of Congress. One of those powers is the "Power To lay and collect Taxes." The taxing power, however, is not distinguished from any of the other enumerated powers (e.g., the power to borrow money or to regulate commerce) in terms of the extent to which Congress may call upon the Executive to exercise discretion in carrying out its policies. Thus, there is no textual basis for concluding that Congress may give the Executive authority to make subsidiary rules governing such matters as maximum prices (see Sunshine Anthracite Coal Co. v. Adkins, supra) or unfair competition (see FTC v. R.F. Keppel & Bro., 291 U.S. 304 (1934)), but not taxes. The Court recognized this point in Lichter v. United States, when it stated that "(a) constitutional power implies a power of delegation of authority under it sufficient to effect its purposes" (334 U.S. 778-779). Accord Florida Power & Light Co. v. United States, supra (rejecting claim that Congress's power to set rules relating to a tax is nondelegable); Synar v. United States, 626 F.Supp. 1374, 1385 (D.D.C.) (Scalia, Johnson, Gasch, JJ.) (rejecting contention that there are "core functions" that Congress may not delegate to the Executive), aff'd on other grounds, 478 U.S. 714 (1986). Indeed, the Court's decision in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394 (1928), forecloses appellee's contention that Congress's power to tax is treated differently from other powers when deciding whether a statute represents an unconstitutional delegation. In J.W. Hampton, the Court considered a challenge to a statute giving the Executive broad authority to set tariffs (a type of tax) on imported goods. The Court rejected the argument that Congress may not "use executive officers in the application and enforcement of a policy declared in law by Congress * * * where Congress has exercised the power to levy taxes and fix customs duties" (id. at 409). The Court stated (ibid.): The same principle that permits Congress to exercise its rate making power in interstate commerce, by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise. Contrary to appellee's suggestion below, J.W. Hampton was not overruled by the Court in National Cable Television Ass'n v. United States, 415 U.S. 336 (1974). In that case, the Court considered the power of federal agencies to assess fees under the Independent Offices Appropriation Act, 1952, 31 U.S.C. 9701. In construing that statute, the Court distinguished between "taxes" and "fees," and noted that it "would be a sharp break with our traditions to conclude that Congress had bestowed on a federal agency the taxing power" (415 U.S. at 341). The Court then discussed the separation-of-powers principle of Schechter Poultry and J.W. Hampton: "Whether the present Act meets the requirement of Schechter and Hampton is a question we do not reach. But the hurdles revealed in those decisions lead us to read the Act narrowly to avoid constitutional problems" (id. at 342). Thus, nothing in National Cable Television Ass'n casts doubt on the ability of Congress to pass a law that confers discretion on the Executive in matters related to raising revenue. In fact, National Cable Television Ass'n expressly notes that such a law, like any other statute challenged on non-delegation grounds, is constitutional if it satisfies the principles announced in Schechter Poultry and J.W. Hampton. /6/ b. In any event, Section 7005 does not create a "tax." This is clear from the Court's decision in the Head Money Cases, 112 U.S. 580 (1884), in which the Court considered the constitutionality of a statute requiring ship owners to pay a duty of 50 cents for every non-citizen they transported to the United States. The money was used to pay the costs of administering the immigration laws. The Court, in rejecting a challenge to the statute as an unconstitutional tax, noted that "the true answer to all these objections is that the power exercised in this instance is not the taxing power. The burden imposed on the ship owner by this statute is the mere incident of the regulation of commerce -- of that branch of foreign commerce which is involved in immigration" (id. at 595). For constitutional purposes, therefore, it is not necessary to identify a direct benefit conferred by the government in order to conclude that an exaction is a "fee" rather than a "tax"; a fee is also something which may properly be imposed on a party engaged in a particular activity in order to internalize costs imposed by that activity on the government or on society generally. The Court explained (id. at 595-596): The sum demanded of (the ship owner) is not * * * a tax or duty duty within the meaning of the Constitution. The money thus raised, though paid into the Treasury, is appropriated in advance to the uses of the statute, and does not go to the general support of the government. It constitutes a fund raised from those who are engaged in the transportation of these passengers, and who make profit out of it, for the temporary care of the passengers whom they bring among us and for the protection of the citizens among whom they are landed. Here, appellee is in the business of transporting hazardous liquids liquids through pipelines. Appellee profits from that business, and Congress has rationally determines that appellee should bear some of the social costs of engaging in this inherently hazardous activity, specifically, the costs of administering the Hazardous Liquid Pipeline Safety Act. Accordingly, Section 7005 is simply an exercise of Congress's "regulation of commerce" (Head Money Cases, 112 U.S. at 595). Thus, even if the Constitution placed special limits on the ability of Congress to confer discretionary authority on the Executive in matters related to taxation, such limits would not apply in this case. 3. The constitutional test summarizing the separation-of-powers concerns applicable in this case was announced in J.W. Hampton: "If Congress shall lay down by legislative act an intelligible principle to which the (Executive) * * * is directed to conform, such legislative action is not a forbidden delegation of legislative power" (276 U.S. at 409). This test has been repeatedly cited by this Court as the proper measure for judging the validity of Congress's creation of discretionary authority within the Executive Branch. See, e.g., FEA v. Algonquin SNG, Inc., 426 U.S. 548, 559 (1976); National Cable Television Ass'n 415 U.S. at 342; see also Industrial Union Dep't v. American Petroleum Inst., 448 U.S. 607, 685-686 (1980) (rehnquist, J., concurring in the judgment). If that test is satisfied, each Branch performs its constitutionally appointed function: Congress enacts substantive policy into law, the Executive Branch can understand that policy and know its limits, and the Judicial Branch can judge whether the Executive is obeying the law. Section 7005 of COBRA plainly sets forth "an intelligible principle to which the (Executive) * * * is directed to conform." Section 7005 directs the Secretary to assess and collect fees to cover the costs of administering the Hazardous Liquid Pipeline Safety Act and the Natural Gas Pipeline Safety Act. It requires that these fees be collected from persons operating facilities subject to the two pipeline safety statutes. The Secretary is instructed to collect funds "sufficient to meet the costs of (the) activities" of the two programs (Section 7005(d), 100 Stat. 141), and the fees may be used only "to the extent provided for in advance in approriation Acts" (Section 7005(c), 100 Sta. 141); thus Congress sets the total amount of fees to be collected each year. And the Secretary may not exercise unbridled discretion in setting the amount of fees that each company must pay. Rather, the statute sets forth the exclusive factors that the Secretary may consider in creating the schedule -- "volume-miles, miles, revenues, or an appropriate combination thereof, of natural gas and hazardous liquid pipelines" (COBRA Section 7005(a)(1)). The Secretary's task, therefore, is clearly defined. He may not collect fees that exceed 105% of Congress's annual appropriations for the pipeline safety programs. He may not collect fees from persons who are not subject to either of the two safety acts. He may not use the funds for purposes other than administering the two acts. He may not set fees on a case-by-case basis, /7/ and he may not consider any factors other than the three criteria set forth in the statute. Plainly, this is not a statute that suffers from "an absence of standards for the guidance of the (Secretary's) action, so that it would be impossible in a proper proceeding to ascertain whether the will of Congress has been obeyed" (Yakus v. United States, 321 U.S. at 426). Nor is Section 7005 invalid merely because Congress did not itself establish detailed fee schedules. In United States v. Rock Royal Co-Operative, 307 U.S. 533 (1939), the Court upheld a statute authorizing the Secretary of Agriculture to set milk prices. The Court noted that Congress did not give the Secretary of Agriculture a "mathematical formula" but, rather, prescribed "the various factors to be considered by the Secretary" (id. at 577). Likewise, Congress in this case did not attempt to eliminate the Secretary's discretion entirely by legislating a specific formula; it reasonably set out the factors that the Secretary may consider in executing Congress's policy and left to "administrative judgment * * * the relative weights to be given to these factors." Opp Cotton Mills, Inc. v. Administrator, 312 U.S. 126, 145 (1941) (upholding statute authorizing Executive Branch to fix minimum wages). The validity of Section 7005 is most evident when that statutory provision is compared to other statutes that the Court has upheld against a non-delegation challenge. The Court has upheld statutes authorizing the Executive to recover excessive profits earned on military contracts (Lichter v. United States, 334 U.S. at 785), to set maximum prices, that are generally fair and equitable (Yakus v. United States, 321 U.S. at 427), to set just and reasonable rates for natural gas (FPC v. Hope Natural Gas Co., 320 U.S. 591, 600 (1944)), to license radio communications as public convenience, interest or necessity requires (National Broadcasting Co. v. United States, 319 U.S. at 225-226), to prohibit unfair methods of competition (FTC v. R.F. Keppel & Bro., 291 U.S. at 310), and to approve consolidation of carriers when in the public interest (New York Central Securities Corp. v. United States, 287 U.S. 12, 24 (1932)). When compared to these other statutes, the Executive authority created under Section 7005 is quite modest -- and plainly constitutional. 4. The district court concluded (App., infra, 10a) that Section 7005 is unconstitutional because the Secretary has discretion to select among three different criteria set forth in the statute in establishing a schedule of fees. But the court ignored the many limits that Congress placed on the Secretary before he was given some discretion in creating a fee schedule. Whenever Congress passes a statute conferring a measure of discretion on the Executive, at some level the agency charged with implementing the statute must exercise judgment in carrying out Congress's policy. But that fact does not give rise to a constitutional problem. As the Court noted in Yakus v. United States, 321 U.S. at 425-426, Congress "is not confined to that method of executing its policy which involves the least possible delegation of discretion to administrative officers." So long as the statute meets the "intelligible principle" test of J.W. Hampton, the Constitution's requirement of separation of powers is satisfied. CONCLUSION Probable jurisdiction should be noted. Respectfully submitted. CHARLES FRIED Solicitor General JOHN R. BOLTON Assistant Attorney General THOMAS W. MERRILL Deputy Solicitor General BRIAN J. MARTIN Assistant to the Solicitor General ROBERT S. GREENSPAN BRUCE G. FORREST Attorneys GEORGE W. TENLEY, JR. Chief Counsel BARBARA BETSOCK Attorney Department of Transportation JUNE 1988 /1/ Congress has passed a bill that repeals 28 U.S.C. 1252. See S. 952, 100th Cong, 2d Sess. (1988); 134 Cong. Rec. H3988-H3989 (daily ed. June 7, 1988). The President has not yet signed this bill. In any event, that legislation does not affect this case because Section 7 of the bill states that the law "shall take effect ninety days after the date of the enactment of this Act * * * (and) shall not * * * affect the right to review or the manner of reviewing the judgment or decree of a court which was entered before such effective date." /2/ Those acts, in general, authorize the Secretary to establish national pipeline safety standards to ensure compliance with those standards through enforcement measures including inspections. /3/ The total costs of $7.773 million in that year for the two pipeline safety programs were allocated 80% to gas pipelines and 20% to hazardous liquid pipelines (51 Fed. Reg. 25783 (1986)). Total costs of both programs for fiscal year 1987 were $8.523 million, and for 1988 are projected to be $8.550 million. Department of Transportation and Related Agencies Appropriations Act, 1988, Pub. L. No. 100-202, 101 Stat. 1329-375. /4/ The Magistrate referred to figures presented by appellee in oral argument and stated that Section 7005 allows the Secretary to charge appellee anywhere between 5% and 28.3% of the total appropriation (App., infra, 9a). The figures relied upon by the Magistrate were contained in an exhibit used by appellee that had in fact been ruled inadmissible (Mar. 25, 1987 Tr. of Oral Arg. 11-13). /5/ The constitutionality of FERC's new fee authority is currently being challenged before the same district court that rendered the judgement in this case. See Mid-America Pipeline Co. v. FERC, Civil Action No. 87-C-571B (N.D. Okla). /6/ The length of the Internal Revenue Code suggests that Congress often legislates with great precision in the area of taxation. But Congress has also chosen to give the Executive considerable discretionary authority in executing Congress's tax policies. For example, Congress has directed the Secretary of the Treasury to prescribe regulations for the filing of consolidated tax returns "in such manner as clearly to reflect the income-tax liability and the various factors necessary for the determination of such liability * * *" (26 U.S.C. 1502). And to ensure proper collection of the Windfall Profit Tax on oil companies, Congress has instructed the Secretary of the Treasury to "prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter" (26 U.S.C. 4997). /7/ Thus, the Magistrate clearly erred when he said that "the Secretary is given the power to set tax brackets or rates for individual pipeline companies" (App., infra, 10a (second emphasis added)).