Skinner v. Mid-America Pipeline Co.
Headline: Court upholds law letting the Transportation Secretary set pipeline safety user fees, rejecting a challenge that Congress unconstitutionally gave taxing power to the Executive and keeping the fee program in effect.
Holding: The Court held that Congress did not unconstitutionally delegate its taxing power by authorizing the Transportation Secretary to set pipeline safety user fees, so the fee statute is constitutional and remains effective.
- Allows continued collection of pipeline safety user fees under statutory limits.
- Keeps FY1986 fee choices and small-operator exemptions in effect unless changed.
- Confirms Congress may delegate tax-related fee-setting with clear statutory limits.
Summary
Background
A pipeline company that ships hazardous liquids was assessed a large fee under a 1986 law directing the Transportation Secretary to create user fees for pipeline safety programs. The law required fees be based on usage measures like miles, volume-miles, or revenues, limited how the money could be used, and capped total fees at 105 percent of congressional appropriations. The company paid under protest, sued the Secretary, and a federal district court struck the fee law down as an unconstitutional delegation of Congress’ taxing power.
Reasoning
The Court addressed whether Congress wrongly gave the Executive power to set what were effectively taxes. It held that Congress had provided clear limits and criteria: who may be charged, allowable bases for fees, a requirement that fees bear a reasonable relationship to those bases, restrictions on use of funds, and a yearly ceiling tied to appropriations. The Court also rejected the idea that delegations under the taxing power require stricter rules than other delegations. Even if the charges were called taxes, the statutory guidance met the normal standards for delegations to agencies, so the law is constitutional.
Real world impact
The decision keeps the pipeline safety fee system in place and allows the Secretary to continue assessing and collecting fees under the statute’s detailed limits. Regulated pipeline operators remain subject to the fee formulas, exemptions, and the annual cap Congress set. The ruling also confirms that Congress may give the Executive authority to set certain tax-related charges so long as Congress provides clear guiding limits.
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