Although many issues were raised in this case, the issue of most importance to municipalities is the scope of the pollution control property tax exemption under RSA 72:12-a. The case revolved around the taxation of various portions of the Seabrook Nuclear Power Station. RSA 72:12-a provides a tax exemption for “any treatment facility, device, appliance, or installation wholly or partly for the purpose of reducing, controlling, or eliminating any source of air or water pollution….” The Plant’s owner claimed an exemption for a variety of air and water systems. Unlike most tax exemptions, however, this one is administered by the Department of Environmental Services instead of the municipality. DES granted the exemption for all of the claimed systems, and the Town objected.
Most of the issues were fairly straightforward, and the DES exemption was upheld for many of them. Of particular interest, however, was the discussion of the facilities that are designed to operate only in emergencies. The issue was whether the exemption is available for facilities that will only treat pollution upon the occurrence of a non-routine event.
Under RSA 72:12-a, a facility is eligible for a tax exemption (1) if it is a treatment facility, and (2) if its purpose is, at least partially, to control, reduce or eliminate any source of air or water pollution. The exemption is available for as long as the facility “is used in accordance with” the provisions of the statute. Some of the facilities at the plant, however, do not operate on a regular basis because they were designed to operate only in the event of a loss-of-coolant accident. Looking to the language of the statute, the Court held that, to be considered a “treatment facility” under the law, it must regularly operate. In the case of the emergency containment systems in this matter, “it is merely speculation whether [they] will ever operate to treat anything.” The systems included no elements necessary for the normal operation of the Plant. Therefore, the Court determined, the emergency containment systems were not eligible for the exemption. The only open question is whether the facilities would be eligible for the exemption in years in which they actually operate in response to an emergency. Since that question was not before the Court, however, it was not answered.