The Independent Offices Appropriations Act of 1952: Who Should Pay for Preparing the Impact Statement?

Introduction

The Council on Environmental Quality estimates that the federal agencies will spend $65 million annually to administer the National Environmental Policy Act when its provisions are fully operable.¹ After some initial agency attempts to delegate substantially all of the burden of impact statement preparation, the Greene County case² reversed the trend by stressing that the federal agencies themselves were primarily responsible for preparing the impact statement. This Comment suggests that, consistent with Greene County, a significant portion of the cost of preparation can be shifted to the non-federal parties, without impairing the agencies' responsibility to undertake, on occasion, rather extensive field analyses for inclusion in the impact statement.

The mechanism for further shifting costs is the Independent Offices Appropriations Act of 1952, which confers authority on the federal agencies to charge parties for most, if not all, of the cost of impact statement preparation. The substantive burden of preparation, assessment and analysis would not change; only the distribution of costs would. While preserving the duty of the agency itself to make the environmental assessment, the Act could aid in shifting the cost of compliance with NEPA to the direct beneficiaries of the "major federal action" which they have stimulated.

Greene County Decision

In Greene County the Second Circuit held that the FPC was required by NEPA to prepare its own impact statement prior to any formal license hearings. Stating that NEPA supplemented the Administrative Procedure Act, the court thought that an agency's obligations under NEPA were not limited to adversary proceedings and were not concerned solely with one party's rebutting his adversary's testimony. Rather, NEPA places the responsibility for preparing the impact statement squarely upon the agencies.

The court then suggested reasons of policy and of congressional intent for rejecting the FPC approach:

The danger of the procedure, and one obvious shortcoming is the potential, if not likelihood, that the applicant's statement will be based upon self-serving assumptions … Intervenors generally have limited resources, both in terms of money and technical expertise, and thus may not be able to provide an effective analysis of environmental factors. It was in part for this reason that Congress has compelled agencies to seek the aid of all available expertise and formulate their own position early in the review process.

An earlier ELR Comment³ analyzing the Greene County decision agreed with the Second Circuit's conclusion that the many safeguards of the APA trial-type hearings were insufficient to insure that NEPA's goals were fully implemented:

The earliest possible injection of NEPA procedures into the administrative process could have a tonic effect.A detailed environmental analysis prepared by the agency staff of "environmentalists" — biologists as well as engineers, ecologists as well as systems analysts — who would develop their own expertise, might prevent a later hearing from becoming bogged down in the "wider" environmental issues. This would leave the presiding examiner free to assess the merits of the proceeding, dealing with … focused environmental issues [footnote omitted].

Sharing the burdens of compliance

Although the trend has not been irrevocably established,⁴ the courts will probably apply the Greene County rationale and require agencies to prepare their own impact statements at an early stage of agency decision-making. Yet the holding in Greene County does not appear to require the agency to bear all of the additional expense and conduct all the necessary studies; as long as the agency consults and then prepares a detailed statement which accompanies the proposed action at every distinct stage of agency decision-making, the agency is free to require state governments and private parties to supply information, hire consultants, [3 ELR 10060] conduct field studies and seek other assistance in aid of the agency's responsibilities. The synthesis and evaluation of such information, however, must be done by the agency.

The difference between requiring applicants to prepare the early drafts and requiring them to submit factual information is not as subtle as it may first seem. Allowing applicants to draft the entire statement puts the opportunity for framing the issues, weighing values and establishing emphases in the hands of the parties most interested in minimizing the appearance of adverse environmental impacts. The agency thus becomes vulnerable to manipulation as to what the important environmental values which may be effected are, unless the agency's staff itself examines the suggested project in the field and frames the issues upon which information is needed:

The test of whether the development of data may be safely entrusted to a private applicant should be whether it is of such an essentially factual nature that it may be subsequently validated through independent agency inquiry…. Although the agency cannot avoid hiring adequate staff for the preparation of impact statements, including field research, much can be done within the limits of NEPA to require applicants to conduct or fund factual studies. Fact-finding constitutes the bulk of the time and expense involved in an adequate environmental assessment. If the test suggested above regarding the permissible limits of involvement for applicants is applied, significant costs associated with fact-finding may be shifted to the applicant.⁵

The Independent Offices Appropriations Act of 1952⁶

The Independent Offices Appropriations Act, while not generally publicized,⁷ appears to contain the authority agencies need to shift the full cost of preparing impact statements to applicants for grants, licenses, permits, loans and other "major federal actions." The Act states the sense of Congress that anything of value granted by any federal agency should be self-sustaining, and authorizes heads of agencies to promulgate regulations to that end. The regulations are "to be fair and equitable, taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts."

The Act provides in pertinent part:

It is the sense of the Congress that any work, service, publication, report, document, benefit, privilege, authority, use, franchise, license, permit, certificate, registration, or similar thing of value or utility performed, furnished, provided, granted, prepared, or issued by any Federal agency … to or for any person … shall be self-sustaining to the full extent possible, and the head of each Federal agency is authorized by regulation (which, in the case of agencies in the executive branch, shall be as uniform as practicable and subject to such policies as the President may prescribe) to prescribe therefor such fee, charge, or price, if any, as he shall determine … to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts…. (31 U.S.C. § 483a)

The purpose of the Act is clearly shown by the Committee Report:⁸

The Committee is concerned that the Government is not receiving full return from many of the services which it renders to special beneficiaries. Many fees for such services are specifically fixed by law, and in some cases, it is specifically provided that no fees be charged. In other cases, however, no fees are charged even though the charging of fees is not prohibited; and in still others, fees are charged upon the basis of formulae prescribed in law, but the application of the formulae needs to be re-examined to bring the actual charges into line with present-day costs and other related considerations.

* * *

The bill would provide authority for Government agencies to make charges for these services in cases where no charge is made at present, and to revise charges where present charges are too low, except in cases where the charge is specifically fixed by law or the law specifically provides that no charge shall be made.

Implementation of the Appropriations Act is provided by the Office of Management and Budget (formerly the Bureau of the Budget).⁹ OMB states that a reasonable charge "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." A special benefit accrues and a charge should be imposed when government service:

(a) Enables the beneficiary to obtain more immediate or substantial gains or values (which may or may not be measurable in monetary terms) then those which accrue to the general public (e.g., receiving a patent, crop insurance, or a license to carry on a specific business); or

(b) Provides business stability or assures public confidence in the business activity of the beneficiary (e.g., certificates of necessity and convenience for airline routes, or safety inspections of craft; or

(c) Is performed at the request of the recipient and is above and beyond the services regularly received by other members of the same industry or group; or of the general public (e.g., receiving a passport, visa, airman's certificate, or an inspection after regular duty hours).

When an impact statement is required on an application for a grant, license, permit, loan or other "major federal action," and the agency prepares the statement, as it must after Greene County, the applicant receives a special benefit. Granting the application clearly provides a special benefit, and all procedures such as impact statement preparation which are prerequisite to the grant are also special benefits which the applicant should be required to pay for under the Appropriations Act.

The Act states that implementation regulations issued by agency heads "shall be as uniform as practicable and [3 ELR 10061] subject to such policies as the President may prescribe." A logical procedure would be for the Council on Environmental Quality to stimulate issuance of an Executive Order setting forth the standards for charging non-federal parties for the impact statement preparation cost. The Order could be implemented through CEQ's guidelines.

1. Environmental Quality, The Third Annual Report of the Council on Environmental Quality 258 (August, 1972).

2. Greene County Planning Board v. Federal Power Comm'n, 455 F.2d 412, 2 ELR 20017 (2d Cir.), cert. denied, 41 U.S.L.W. 3184 (Oct. 10, 1972).

3. Comment, 2 ELR 10153 (June, 1972).

4. While Greene County was making its way through the courts, two cases involving the Federal Highway Administration's compliance with NEPA held that FHWA's duties to prepare § 102 (2) (C) statements were delegable, while a third held that they were not delegable. In Northside Tenants' Rights Coalition v. Volpe, 346 F. Supp. 244, 2 ELR 20553 (E.D. Wis. 1972), __ F. Supp. __, 3 ELR 20154 (E.D. Wis. 1973), the court followed Greene County and held that delegation was impermissible. Iowa Citizens for Environmental Quality, Inc. v. Volpe, __ F. Supp. __, 3 ELR 20013 (S.D. Ia. 1972), and National Forest Preservation Group v. Butz, 343 F. Supp. 696, 2 ELR 20571 (D. Mont. 1972), both held that delegation was permitted. The Iowa case is clearly incorrect, as it erroneously relied on the Fifth Circuit's decision in Pizitz, Inc. v. Volpe, __ F. Supp. __, 2 ELR 20378 (M.D. Ala.), aff'd, 467 F.2d 208, 2 ELR 20379 (5th Cir.), modified on rehearing, 467 F.2d 208, 2 ELR 20635 (5th Cir. 1972), before that court deleted the portion of its decision on the delegation issue.

5. Note 3, supra, at 10160.

6. 31 U.S.C. 483 (a) (1970).

7. The Act is construed in a recent case, New England Power Co., v. FPC, 467 F.2d 425 (D.C. Cir. 1972), petition for cert. filed, 41 U.S.L.W. 3510 (U.S. Feb. 22, 1973) (No. 72-1162).

8. H.R. Rep. No. 384, 82d Cong., 1st Sess. 2-3 (1952).

9. Budget Circular No. A-25 (Sept. 23, 1959).