TITLE: B-306666, Forest Service--Surface Water Management Fees, June 5, 2006
BNUMBER: B-306666
DATE: June 5, 2006
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B-306666, Forest Service--Surface Water Management Fees, June 5, 2006

   Decision

   Matter of: Forest Service--Surface Water Management Fees

   File: B-306666

   Date:  June 5, 2006

   DIGEST

   Appropriated funds are not available to pay surface water management fees
   assessed by King County, Washington, against national forest lands and
   other Forest Service properties because those fees constitute a tax. The
   federal government is constitutionally immune from state and local
   taxation. Although section 313(a) of the Clean Water Act, 33 U.S.C. sect.
   1323(a), waives sovereign immunity from certain state and local
   environmental regulations and fees, it does not waive immunity from
   taxation. Such a waiver must clearly and expressly confer the privilege of
   taxing the federal government.

   DECISION

   The Chief Financial Officer of the Forest Service, United States
   Department of Agriculture, has requested an advance decision under 31
   U.S.C. sect. 3529 on the propriety of paying surface water management fees
   assessed by King County, Washington, against federal lands located within
   its jurisdiction. Letter from Jesse L. King, Associate Deputy Chief for
   Business Operations/Chief Financial Officer, Forest Service, to David M.
   Walker, Comptroller General, GAO, Oct. 11, 2005 (King Letter). The Forest
   Service believes that it is constitutionally immune from paying the fee,
   which the agency considers a tax. As we explain below, we agree that the
   United States is constitutionally immune from surface water management
   fees assessed by King County and find that appropriated funds are not
   available to pay such assessments. Furthermore, although section 313(a) of
   the Clean Water Act, 33 U.S.C. sect. 1323(a), requires federal agencies to
   comply with all state and local requirements respecting the control and
   abatement of water pollution, including the payment of reasonable service
   charges, that provision does not waive the federal government's sovereign
   immunity from taxation by state and local government. Such a waiver must
   clearly and expressly confer the privilege of taxing the federal
   government.

   BACKGROUND

   The National Pollutant Discharge Elimination System (NPDES) program under
   the Clean Water Act (CWA) establishes the basic structure for regulating
   discharges of pollutants into the waters of the United States, including
   rivers, lakes, and streams. 33 U.S.C. sect. 1342.[1] Under the NPDES
   program, the U.S. Environmental Protection Agency (EPA) and EPA-authorized
   states issue and enforce permits to regulate pollution from specific
   entities, including, for example, industrial dischargers and municipal
   wastewater treatment facilities, known as "point sources." Id. See, e.g.,
   GAO, Clean Water Act: Improved Resource Planning Would Help EPA Better
   Respond to Changing Needs and Fiscal Constraints, GAO-05-721 (Washington,
   D.C.: July 22, 2005), at 5--6. Section 319 of the CWA also requires states
   to implement management programs for controlling pollution from diffuse or
   "nonpoint" sources, such as agricultural runoff. 33 U.S.C. sect. 1329.
   See, e.g., State of Washington, Department of Ecology, Washington's Water
   Quality Management Plan to Control Nonpoint Source Pollution, Publ'n No.
   99-26 (April 2000); Vol. 1, Water Quality Summaries for Watersheds in
   Washington State, Publ'n No. 04-10-063 (August 2004).[2]

   Federal facilities are required under section 313(a) of the CWA to comply
   with all federal, state, interstate and local regulations respecting the
   control and abatement of water pollution, including the payment of
   reasonable service charges. 33 U.S.C. sect. 1323, quoted, in relevant
   part, infra p. 10. Accordingly, the Forest Service and the State of
   Washington have entered into an agreement whereby the Service agrees,
   among other things, to implement site specific "best management practices"
   on national forests in Washington to meet or exceed applicable state
   surface water quality laws and regulations. Memorandum of Agreement
   between the USDA  Forest Service, Region 6 and the Washington State
   Department of Ecology for Meeting Responsibilities under Federal and State
   Water Quality Laws, Nov. 21, 2000.[3]

   To implement the CWA, King County has also established a surface water
   management (SWM) program to fulfill its requirements under its NPDES
   municipal stormwater permit and to regulate nonpoint source pollution. See
   generally King County, Wash., Code (hereafter K.C.C.) title 9 (2005); see
   also K.C.C. sect. 9.08.060(R) (findings of the county council regarding
   the county's implementation of the CWA).[4] Counties in the state of
   Washington are authorized to raise revenues through rates and charges
   assessed against those served by, or receiving benefits from, any storm
   water control facility or contributing to an increase of surface water
   runoff. Wash. Rev. Code sect. 36.89.080(1) (2005). Under this authority,
   King County imposes an annual service charge, or "surface water management
   fee" (hereinafter "SWM fee"), on all developed parcels in unincorporated
   areas of the county, for surface and storm water management services
   provided by the SWM program. K.C.C. sections 9.08.050(A), 9.08.070(C)
   (2005). These services include, but are not limited to:

     "basin planning, facilities maintenance, regulation, financial
     administration, public involvement, drainage investigation and
     enforcement, aquatic resource restoration, surface and storm water
     quality and environmental monitoring, natural surface water drainage
     system planning, intergovernmental relations, and facility design and
     construction."

   K.C.C. sect. 9.08.010(Y).[5]

   According to the county ordinance, SWM fees are necessary for various
   reasons: (1) to promote the public health, safety, and welfare by
   minimizing uncontrolled surface and storm water, erosion, and water
   pollution; (2) to preserve and utilize the many values of the county's
   natural drainage system including water quality, open space, fish and
   wildlife habitat, recreation, education, urban separation and drainage
   facilities; and (3) to provide for the comprehensive management and
   administration of surface and storm water. K.C.C. sect. 9.08.040.

   SWM fees must be based on the relative contribution of increased surface
   and storm water runoff from a given parcel to the surface and storm water
   management system.[6] K.C.C. sect. 9.08.070(A). The SWM fee structure
   consists of seven classes of developed parcels based on the parcel's
   relative percentage of impervious surfaces:[7] (1) residential, (2) very
   light, (3) light, (4) moderate, (5) moderately heavy, (6) heavy, and (7)
   very heavy. K.C.C. sect. 9.08.070(C). Residential and very lightly
   developed properties are assessed a flat annual fee of $102 per parcel,
   while light to very heavily developed parcels are assessed various per
   acre rates ranging from $255.01 per acre for lightly developed parcels to
   $1,598.06 per acre for very heavily developed parcels. Id. See also King
   County, Washington, SWM Fee Protocols (January 2004), at 3.[8]

   The Forest Service maintains approximately 363,543 acres of federal land
   within the jurisdictional boundary of King County, including the Mount
   Baker-Snoqualmie National Forest (MBS), roads, campgrounds, trailheads,
   and picnic areas. King Letter, Attachment. In 2001, the King County
   Treasury Division began assessing SWM fees against several parcels of
   Forest Service land. Id. The MBS Supervisor's Office questioned the
   applicability of the fee because no services were provided to the Forest
   Service and requested that the King County Treasury Division remove Forest
   Service properties from its tax rolls. Letter from Larry Donovan,
   Recreation Special Uses Coordinator, MBS National Forest Supervisor's
   Office, to King County Treasury, Mar. 28, 2001. The county treasury
   division informed the MBS financial manager that the SWM fee is not a tax
   assessment, but a fee, and that the U.S. government was not exempt from
   paying fees. King Letter, Attachment. Despite informing the King County
   Treasury Division on several occasions that the Forest Service believes it
   is exempt from the SWM fee, the MBS financial manager continues to receive
   "official property value notices" and "delinquent real estate tax
   statements" from King County. Letter from Mary E. Wells, Financial
   Manager, MBS National Forest Supervisor's Office, to King County Treasury
   Division, Oct. 15, 2001.

   DISCUSSION

   The issue before us is whether the Forest Service is constitutionally
   immune from paying the King County surface water management fee or whether
   the Forest Service may pay that fee as a "reasonable service charge" under
   the Clean Water Act's sovereign immunity waiver, 33 U.S.C. sect. 1323(a).

   It is an unquestioned principle of constitutional law that the United
   States and its instrumentalities are immune from direct taxation by state
   and local governments. See McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316
   (1819). The Supreme Court has described a tax as "an enforced contribution
   to provide for the support of government." United States v. La Franca, 282
   U.S. 568, 572 (1931). A fee charged by a state or political subdivision
   for a service rendered or convenience provided, however, is not a tax. See
   Packet Co. v. Keokuk, 95 U.S. 80, 84 (1877) (wharf fee levied only on
   those using the wharf is not a tax); 73 Comp. Gen. 1 (1993) (federal
   agencies receive a tangible benefit from use of city sewer and may pay
   sewer service charges so long as they reflect the fair and reasonable
   value of service received by United States); 70 Comp. Gen. 687 (1991)
   (county landfill user fee is a reasonable, nondiscriminatory service
   charge based on level of service provided). See also 50 Comp. Gen. 343
   (1970) (county per-ton incinerator service charge not a tax against United
   States but a reasonable charge based on the quantum of direct service
   furnished). Taxation is a legislative function while 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." National Cable Television Ass'n v. United States, 415 U.S. 336,
   340 (1974).

   Distinguishing a tax from a fee requires careful analysis because the line
   between "tax" and "fee" can be a blurry one. Collins Holding Corp. v.
   Jasper County, South Carolina, 123 F.3d 797, 800 (4^th Cir. 1997). In
   determining whether a charge is a "tax" or "fee," the nomenclature is not
   determinative, and the inquiry must focus on explicit factual
   circumstances. Valero Terrestrial Corp. v. Caffrey, 205 F.3d 130, 134
   (4^th Cir. 2000). See also United States v. Columbia, Missouri, 914 F.2d
   151, 154 (8^th Cir. 1990) (applying a "facts and circumstances" test
   rather than "reduc[ing the] case to a question of pure semantics" in
   finding that city utility rate was not a tax). One court has described a
   "classic" tax as one meeting a three-part inquiry--an assessment that (1)
   is imposed by a legislature upon many, or all, citizens, (2) raises money,
   and (3) is spent for the benefit of the entire community. [9] San Juan
   Cellular Tel. Co. v. Public Service Comm'n of Puerto Rico, 967 F.2d 683,
   685 (1^st Cir. 1992). On the other hand, a classic "regulatory fee" is
   imposed by an agency upon those subject to its regulation, may serve
   regulatory purposes, and may raise money to be placed in a special fund to
   help defray the agency's regulation-related expenses. Id. See also
   B-288161, Apr. 8, 2002, n.1 at 4, and cases cited therein, aff'd on
   reconsideration, B-302230, Dec. 30, 2003 (applying Valero and San Juan
   Cellular in tax versus fee analysis).

   When the three-part inquiry yields a result that places the charge
   somewhere in the middle of the San Juan Cellular descriptions, that is,
   when assessments have characteristics of both "taxes" and "fees," the most
   important factor becomes the purpose behind the statute or regulation that
   imposes the charge. See Valero, 205 F.3d at 134 (citing South Carolina v.
   Block, 717 F.2d 874, 887 (4^th Cir. 1983)). In those circumstances, if the
   ultimate use of the revenue benefits the general public, then the charge
   will qualify as a "tax," while if the benefits are more narrowly
   circumscribed, then the charge will more likely qualify as a "fee." Id. 
   (citing San Juan Cellular, 967 F.2d at 685).

   In United States v. Huntington, West Virginia, the Fourth Circuit
   considered whether a "municipal service fee" was indeed a fee or a tax,
   and whether the federal government (in this case, the General Services
   Administration and the U.S. Postal Service) was immune from its
   assessment. United States v. Huntington, West Virginia, 999 F.2d 71 (4^th
   Cir. 1993), cert. denied, 510 U.S. 1109 (1994). A provision of the West
   Virginia Code authorizes any city furnishing an essential or a special
   municipal service to impose upon the users of such service reasonable
   rates, fees, and charges. W. Va. Code sect. 8-13-13 (2005). The city of
   Huntington, West Virginia, imposed a "municipal service fee" for fire and
   flood protection and street maintenance based on the square footage of
   buildings owned in the city. Huntington, 999 F.2d 71. The court found that
   liability for Huntington's municipal service fee arose not from any use of
   city services but from the federal government's status as property owner.
   Id.  at 74.

   Further, rejecting the city's argument that any assessment tied to some
   state-provided benefit is a user fee, the court added: "Under the theory
   advanced by the City, virtually all of what now are considered `taxes'
   could be transmuted into `user fees' by the simple expedient of dividing
   what are generally accepted as taxes into constituent parts, e.g., a
   `police fee.'" Id.  at 74. The court concluded that an assessment for such
   core government services is in fact a "thinly disguised tax" from which
   the General Services Administration and the U.S. Postal Service were
   constitutionally immune. Id. See also 20 Op. Off. Legal Counsel 12 (1996)
   (applying Huntington to conclude that District of Columbia clean air fee
   is not a user or service fee because revenue from the fee is used to
   provide an undifferentiated benefit to the entire public).

   King County's Surface Water Management Fee

   When subjected to the three-part inquiry of San Juan Cellular, King
   County's SWM fee has the classic attributes of a tax. The SWM fee is (1)
   imposed by the county council, under authority granted by the Washington
   State legislature, on all owners of developed parcels in unincorporated
   areas of the county (2) to raise money that is (3) spent to benefit the
   entire community. See Valero, 205 F.3d at 134; San Juan Cellular, 967 F.2d
   at 685. Though denominated a "service charge" or "fee," the facts and
   circumstances surrounding King County's assessment of SWM fees, Columbia,
   Missouri, 914 F.2d at 154, disclose that the county provides no direct,
   tangible service or convenience in exchange for payment of the SWM
   fee.[10] See Packet Co., 95 U.S. at 87--88; 73 Comp. Gen. 1; 50 Comp. Gen.
   343. Cf. Teter v. Clark, 104 Wash. 2d 227, 233--34 (Wash. 1985) (fees
   imposed under Wash. Rev. Code sect. 36.89.080 are an exercise of general
   police power and valid under state constitution even though no specific
   service received). Unlike a fee to use a city wharf or sewer or a county
   incinerator or landfill, the benefits paid for by King County's SWM
   fee--basin planning, facilities maintenance, regulation, drainage
   investigation, resource restoration, environmental monitoring, etc.--are
   not narrowly circumscribed but benefit the general population at large.
   See Valero, 205 F.3d at 134. Such broad benefits are more in the nature of
   core government services comparable to the provision of fire and flood
   protection and street maintenance financed through Huntington's "municipal
   service fee," 999 F.2d at 73, than a fee for a direct, tangible service or
   convenience provided.[11] 73 Comp. Gen. 1; 50 Comp. Gen. 343. Nor is
   assessment of the SWM fee incident to a voluntary act such as a request
   for a permit, see National Cable Television, 415 U.S. at 340; the
   assessment, rather, supports the provision of undifferentiated benefits to
   the entire public. See 20 Op. Off. Legal Counsel 12.

   King County's SWM fee, however, also shares some characteristics of a
   classic "regulatory fee." See San Juan Cellular, 967 F.2d at 685. The
   assessment, for example, serves regulatory purposes under the county's
   implementation of its municipal NPDES permit under the CWA. See K.C.C.
   sect. 9.08.060(R). Ascribing a regulatory purpose to a tax, however, does
   not convert it into a "fee." 20 Op. Off. Legal Counsel 12. Taxes, like
   fees or service charges, may also serve regulatory purposes. See
   Massachusetts v. United States, 435 U.S. 444, 455--56 (1978) ("[A] tax is
   a powerful regulatory device; a legislature can discourage or eliminate a
   particular activity that is within its regulatory jurisdiction simply by
   imposing a heavy tax on its exercise"). SWM fees must also be deposited in
   a special fund to be used only for maintaining and operating storm water
   control facilities; planning, designing, establishing, acquiring,
   developing, constructing, and improving such facilities; or to pay or
   secure the payment of general obligation or revenue bonds issued for such
   purpose. Wash. Rev. Code sect. 36.89.080(4); K.C.C. sect. 9.08.110. That
   fact, however, "is not enough reason on its own to warrant characterizing
   a charge as a `fee.'" Valero, 205 F.3d at 135 (internal citation omitted).
   "If the revenue of the special fund is used to benefit the population at
   large then the segregation of the revenue to a special fund is
   immaterial." Id. at 135.

   When tax assessments also have some attributes of "fees," an important
   factor in determining whether it is a tax or a fee is the purpose behind
   the assessments. See Valero, 205 F.3d at 134. Broadly stated in the county
   ordinance, SWM fees are assessed: (1) to promote the public health,
   safety, and welfare; (2) to preserve and utilize the county's natural
   drainage system; and (3) to provide for the comprehensive management and
   administration of surface and storm water. K.C.C. sect. 9.08.040. As we
   discuss above, such broad purposes are more like core government services
   providing undifferentiated benefits to the entire public than narrowly
   circumscribed benefits incident to a voluntary act or a service or
   convenience provided. See discussion supra pp.7--8.

   Like Huntington's "municipal service fee," we conclude that the SWM fee is
   a "thinly disguised tax" for which liability arises from the United
   States' status as a property owner and not from the United States' use of
   any King County service. See Huntington, 999 F.2d at 73--74.[12]

   Clean Water Act and Federal Sovereign Immunity

   The state of Washington has explicitly exempted the federal government
   from taxation, except as permitted by federal law. Wash. Rev. Code
   sections 84.36.010(a); 84.40.315. In some instances Congress has waived
   sovereign immunity and permitted state and local taxation and/or
   regulation of certain federal activities, particularly in the field of
   environmental regulation. See, e.g., 42 U.S.C. sect. 2021d(b)(1)(B)
   (federal low-level radioactive waste disposal at nonfederal disposal
   facilities subject to "fees, taxes, and surcharges"). See also 42 U.S.C.
   sect. 7418 (Clean Air Act provision waiving federal sovereign immunity
   from state, interstate, and local air pollution regulation, including
   requirements to pay fees or charges imposed to defray costs of air
   pollution regulatory programs). Section 313(a) of the Clean Water Act,
   commonly known as the "federal facilities provision," subjects federal
   agencies to state, local, and interstate regulation of water pollution,
   including the payment of reasonable service charges. 33 U.S.C. sect.
   1323(a). The question arises whether section 313(a) also waives federal
   immunity from state and local taxation and permits the Forest Service to
   use appropriated funds to pay the King County SWM fee.

   Section 313(a) of the Clean Water Act provides, in pertinent part, that:

     "Each department, agency, or instrumentality of the executive,
     legislative, and judicial branches of the Federal Government (1) having
     jurisdiction over any property or facility, or (2) engaged in any
     activity resulting, or which may result, in the discharge or runoff of
     pollutants, and each officer, agent, or employee thereof in the
     performance of his official duties, shall be subject to, and comply
     with, all Federal, State, interstate, and local requirements,
     administrative authority, and process and sanctions respecting the
     control and abatement of water pollution in the same manner, and to the
     same extent as any nongovernmental entity including the payment of
     reasonable service charges. The preceding sentence shall apply (A) to
     any requirement whether substantive or procedural (including any
     recordkeeping or reporting requirement, any requirement respecting
     permits and any other requirement, whatsoever), (B) to the exercise of
     any Federal, State, or local administrative authority, and (C) to any
     process and sanction, whether enforced in Federal, State, or local
     courts or in any other manner. This subsection shall apply
     notwithstanding any immunity of such agencies, officers, agents, or
     employees under any law or rule of law."

   Id. (Emphasis added). Laws such as the section 313(a) federal facilities
   provision must be construed strictly in favor of the sovereign and not
   enlarged beyond what the language requires. See Ruckelshaus v. Sierra
   Club, 463 U.S. 680, 685 (1983) (holding that absent some degree of success
   on the merits by a claimant, a federal court may not award attorneys fees
   under section 307(f) of the Clean Air Act). A waiver of sovereign immunity
   cannot be implied but must be unequivocally expressed. United States v.
   Mitchell, 445 U.S. 535, 538 (1980). While section 313 subjects federal
   agencies to state and local regulation of water pollution, state and local
   taxation is not one of the governmental powers to which federal agencies
   are subjected under section 313(a). See United States Department of Energy
   v. Ohio, 503 U.S. 607, 623 (1992). Nothing less than an act of Congress
   clearly and explicitly conferring the privilege of taxing the federal
   government will suffice. Domenech v. National City Bank of New York, 294
   U.S. 199, 205 (1935). Section 313 does not expressly provide that federal
   agencies must pay state and local environmental taxes. See id. The
   provision "never even [mentions] the word `taxes' when referring to the
   obligations of the United States." New York State Department of
   Environmental Conservation v. United States Department of Energy, 772 F.
   Supp. at 98, comparing 42 U.S.C. sect. 2021d(b)(1)(B) (federal low-level
   radioactive waste disposal at nonfederal disposal facilities subject to
   "fees, taxes, and surcharges") with 33 U.S.C. sect. 1323(a).

   Moreover, we cannot imply a waiver of federal sovereign immunity from
   state and local taxation, despite legislative history suggesting the CWA's
   federal facilities provision intended, "unequivocally," to subject federal
   agencies to "all of the provisions of State and local pollution laws," S.
   Rep. No. 95-370 at 67 (1977) (emphasis added). Mitchell, 445 U.S. at 538;
   Lane v. Pena, 518 U.S. 187, 192 (1996). The waiver of sovereign immunity
   must be expressed in the statutory text; a statute's legislative history
   cannot supply a waiver that does not appear clearly in any statutory text.
   Lane, 518 U.S. at 192, citing United States v. Nordic  Village, 503 U.S.
   30, 37 (1992).

   The Supreme Court has consistently viewed section 313, and its
   predecessors, narrowly. In 1976 the Supreme Court found that a prior,
   similar version of section 313 was not sufficiently clear and unambiguous
   as to require federal dischargers to obtain state NPDES permits.[13] EPA
   v. California, 426 U.S. 200, 211--12 (1976). Because of the fundamental
   importance of the principles shielding federal installations and
   activities from regulation by the states, an authorization of state
   regulation is found only when and to the extent there is a clear
   congressional mandate, that is, specific congressional action that makes
   this authorization of state regulation clear and unambiguous. Id. at 211,
   citing Hancock v. Train, 426 U.S. 167, 178 (1976).[14] The Court held that
   section 313 did not expressly provide that federal dischargers must obtain
   state NPDES permits. EPA v. California, 426 U.S.  at 212. Nor did the
   provision expressly state that obtaining a state NPDES permit was a
   "requirement respecting control and abatement of pollution," as the
   language of then-section 313 provided. Id. at 212--13. In response to the
   Supreme Court's holding in EPA v. California, Congress amended section 313
   "to indicate unequivocally that all Federal facilities and activities are
   subject to all of the provisions of State and local pollution laws." S.
   Rep. No. 95-370, at 67.

   Despite such statements of congressional intent, the Supreme Court again
   narrowly construed the CWA's waiver provision, holding that Congress had
   not waived the federal government's sovereign immunity from liability for
   civil fines imposed by the state of Ohio for past CWA violations. United
   States Department of Energy v. Ohio, 503 U.S. 607 (1992). Rejecting a
   broad reading of current section 313's "all . . . requirements" language,
   the Court found that the language "can reasonably be interpreted as
   including substantive standards and the means for implementing those
   standards, but excluding punitive measures." Id. at 627--28, quoting
   Mitzelfelt v. Department of the Air Force, 903 F.2d 1293, 1295 (10^th Cir.
   1990). Section 313(a)'s waiver provision, rather, only recognizes "three
   manifestations of governmental power to which the United States is
   subjected: substantive and procedural requirements; administrative
   authority; and `process and sanctions,' whether `enforced' in courts or
   otherwise." Id. at 623.

   Other federal courts also have construed the CWA's section 313(a) waiver
   provision narrowly. New York State Department of Environmental
   Conservation v. United States Department of Energy, 772 F. Supp. at 98
   (section 313 "not blanket [waiver] of the United States' sovereign
   immunity from the imposition and assessment of taxes by a State"). See
   also In re: Operation of the Missouri River System Litigation, 418 F.3d
   915 (8^th Cir. 2005) (section 313 a limited waiver of sovereign immunity);
   Sierra Club v. Lujan, 972 F.2d 312 (10^th Cir. 1992) (section 313 does not
   waive federal sovereign immunity from liability for punitive civil
   penalties).

   CONCLUSION

   The Forest Service is constitutionally immune from surface water
   management fees assessed by King County, and appropriated funds are not
   available to pay for such assessments. Notwithstanding the fact that King
   County labels these assessments "service fees," the assessments, actually,
   are taxes. Furthermore, though section 313(a) of the Clean Water Act, 33
   U.S.C. sect. 1323(a), requires federal agencies to comply with all state
   and local requirements respecting the control and abatement of water
   pollution, including the payment of reasonable service charges, that
   provision does not waive the federal government's sovereign immunity from
   taxation by state and local government. Such a waiver must clearly and
   expressly confer the privilege of taxing the federal government.

   Anthony H. Gamboa

   General Counsel

   ------------------------

   [1] The Clean Water Act is codified, as amended, in scattered sections of
   33 U.S.C. sections 1251-1387.

   [2] Available at www.ecy.wa.gov/pubs.shtm (last visited Apr. 12, 2006).

   [3] See also State of Washington, Department of Ecology, Washington State
   and U.S. Forest Service's Forest Management Agreement, Publ'n No.
   00-10-048 (November 2000), available at www.ecy.wa.gov/biblio/0010048.html
   (last visited Apr. 12, 2006).

   [4] Available at www.metrokc.gov/mkcc/Code/index.htm (last visited Apr.
   12, 2006). See further King County, Water and Land Resources Division,
   Stormwater Management Program, 1996-2000 (Mar. 28, 1997), available at
   www.dnr.metrokc.gov/wlr/stormwater/SWMPDocument.htm (last visited Apr. 12,
   2006).

   [5] See also King County, Water and Land Resources Division, King County's
   Surface Water Management Fee--Services We Provide, available at
   www.dnr.metrokc.gov/wlr/surface-water-mgt-fee/ (last visited Apr. 12,
   2006) (additional information and history of the SWM program).

   [6] "Surface and storm water management system" means constructed drainage
   facilities and any natural surface water drainage features that do any
   combination of collection, storing, controlling, treating, or conveying
   surface and storm water. K.C.C. sect. 9.08.010(BB).

   [7] An impervious surface is a hard surface area which either prevents or
   retards the entry of water into the soil causing water to run off the
   surface in greater quantities than under natural conditions prior to
   development. Common impervious surfaces include roofs, walkways, patios,
   driveways, parking lots, storage areas, areas which are paved, graveled,
   or made of packed or oiled earthen materials, or other surfaces which
   similarly impede the natural infiltration of surface and storm water. See
   K.C.C. sect. 9.08.010(K).

   [8] Available at
   www.dnr.metrokc.gov/wlr/surface-water-mgt-fee/pdf/swm-fee-protocols.pdf
   (last visited Apr. 12, 2006).

   [9] In two cases, courts have applied a test based on Massachusetts v.
   United States, 435 U.S. 444, 466-67 (1978), to determine whether certain
   state environmental regulatory assessments were "taxes" or "fees." See New
   York State Department of Environmental Conservation v. United States
   Department of Energy, 772 F. Supp. 91, 98-99 (N.D.N.Y. 1991), aff'd 218
   F.3d 96 (2^nd Cir. 2000) (applying Massachusetts test to determine whether
   New York's water regulatory charge was an impermissible tax or a
   permissible fee or regulatory charge under the CWA); Maine v. Department
   of Navy, 973 F.2d 1007 (1^st Cir. 1992) (applying Massachusetts test in
   analyzing state waste regulatory fee vis-`a-vis the Resource Conservation
   and Recovery Act's sovereign immunity waiver provision). We view the
   Massachusetts test as factually and conceptually inapposite, and
   accordingly we do not apply it to analyze the constitutionality of King
   County's SWM fee as assessed against the federal government. The Supreme
   Court articulated the Massachusetts test in the situation where the United
   States was assessing a federal aircraft registration tax against a state.
   The test asks whether the charges (1) discriminate against state
   functions, (2) are based on a fair approximation of use of the system, and
   (3) are structured to produce revenues that will not exceed the total cost
   to the federal government of the benefits to be supplied. Massachusetts,
   435 U.S. at 466-67 (emphasis added). The Supreme Court declined to apply
   the Massachusetts test in United States v. United States Shoe Corporation,
   523 U.S. 360, 367-68 (1998) (Harbor Maintenance Tax is unconstitutional as
   applied to exported goods under the Export Clause of the U.S.
   Constitution, art. I, sect. 9, cl. 5). It explained that the test involved
   a different constitutional provision than the Export Clause. Id. The
   Fourth and Eighth Circuits used the same logic to reject the Massachusetts
   test in the context of federal immunity from state taxation. United States
   v. Huntington, West Virginia, 999 F.2d 71, 73 (4^th Cir. 1993), cert.
   denied, 510 U.S. 1109 (1994) ("Inasmuch as the states' immunity from
   federal taxation is more limited than the federal government's immunity
   from state taxation, and is based on a different constitutional source . .
   . the [Massachusetts] test is inapplicable here."), citing Columbia,
   Missouri, 914 F.2d at 153-54 (Eighth Circuit refusing to adopt the
   Massachusetts test in holding that a Veterans Administration Hospital is
   not constitutionally immune from Columbia, Missouri's "payment in lieu of
   taxes" assessment). See also Massachusetts, 435 U.S. at 455 (plurality
   opinion) ("The immunity of the Federal Government from state taxation is
   bottomed on the Supremacy Clause [art. VI, cl. 2], but the States'
   immunity from federal taxes was judicially implied from the States' role
   in the constitutional scheme.").

   [10] The assessment is variously called a "service charge" or "surface
   water management fee." Compare K.C.C. sect. 9.08.070 with SWM Fee
   Protocols. The terms "service charge" and "fee," however, are synonymous.
   See B-301126, Oct. 22, 2003, n.4 (citing Black's Law Dictionary 629 (7^th
   ed. 1999) (defining "fee" as a charge for labor or services)).

   [11] Further, the SWM fee structure, based on a parcel's relative
   percentage of impervious surfaces, is also similar to Huntington's square
   footage-based "municipal service fee." 999 F.2d at 72. See also 49 Comp.
   Gen. 72 (1969) (a claim for an amount representing the fair and reasonable
   value of services provided in rehabilitation of a drainage ditch is
   payable, while an invoice assessing the government a fee for the drainage
   ditch calculated in the manner that taxes are assessed is a tax and may
   not be paid).

   [12] Were we to have found the opposite--that SWM assessments were "fees"
   or "service charges" and not "taxes"--we would still conclude that
   appropriated funds are not available to pay SWM fees. To be payable, such
   fees must not be manifestly unjust, unreasonable, or discriminatory. 70
   Comp. Gen. 687 (1991) (county landfill user fee payable as a reasonable,
   nondiscriminatory service charge based on level of service provided); 67
   Comp. Gen. 220 (1988) (rates charged for utility services are payable by
   federal agencies unless they are manifestly unjust, unreasonable, or
   discriminatory); 27 Comp. Gen. 580, 582-83 (1948). Examining the SWM fee,
   we find its assessment discriminatory. The Washington State Department of
   Transportation is only liable for 30 percent of fees imposed under section
   36.89 of the Revised Code of Washington, the provision that authorizes
   counties to impose assessments such as King County's SWM fee. Wash. Rev.
   Code sect. 90.03.525(1). See also K.C.C. sect. 9.08.060(O) (rate charged
   to county roads and state highways shall be calculated in accordance with
   Wash. Rev. Code sect. 90.03.525). No similar discount is afforded to
   federal agencies despite, for example, the federal facilities compliance
   mandate in section 313(a) of the CWA, 33 U.S.C. sect. 1323(a), and the
   Forest Service's nonpoint source pollution mitigation efforts under its
   memorandum of agreement with the state of Washington (supra p. 2).

   [13] Then-section 313 provided, in relevant part, that federal agencies
   "shall comply with Federal, State, interstate, and local requirements
   respecting control and abatement of pollution to the same extent that any
   person is subject to such requirements, including the payment of
   reasonable service charges. . . ." 33 U.S.C. sect. 1323 (Supp. IV 1970).

   [14] Hancock v. Train and EPA v. California were companion cases decided
   on the same day. Hancock concerned the extent of the sovereign immunity
   waiver in the Clean Air Act's federal facilities provision, 42 U.S.C.
   sect. 7418. For a more detailed discussion of these cases and the
   legislative histories of the federal facilities provisions in the Clean
   Water Act, Clean Air Act, and Safe Drinking Water Act,  see B-286951, Jan.
   10, 2002.