Opinion ID: 2346458
Heading Depth: 2
Heading Rank: 5

Heading: Whether the DLN System's Primary Purpose is Pollution Control

Text: [¶ 15] Finally, the Town argues that the Board's determination that the DLN System's primary purpose was pollution control constituted legal error because its primary function was production and the Board's inquiry into Androscoggin Energy's motivation for installing the System was too narrow. [¶ 16] The primary purpose determination mandated by section 656 works as follows: First, the Board must determine the functions of the facility. Int'l Paper, 1999 ME 135, ¶ 17, 737 A.2d at 1051-52. If the facility serves no pollution control function, then of course the Board must deny an exemption. Id. ¶ 22, 737 A.2d at 1053; Ethyl Corp. v. Adams, 375 A.2d 1065, 1077-78 (Me.1977). If the facility serves dual functions, however, then the Board must determine the facility's primary function. Int'l Paper, 1999 ME 135, ¶¶ 17, 22, 737 A.2d at 1051, 1053; Statler, 333 A.2d at 707-08. If the facility's primary function is pollution control, then the Board must grant an exemption. See Statler, 333 A.2d at 708. Conversely, if pollution control is merely a secondary function, then the Board must consider various factors, including taxpayer motivation, to determine the facility's primary purpose. See Int'l Paper, 1999 ME 135, ¶¶ 7, 22, 24, 737 A.2d at 1049, 1053 (vacating Board's denial of exemption for ECF system where Board had found system's basic function was production, and ruling that Board needed to determine system's primary purpose). If the primary purpose for installing a facility is pollution control, then the Board must grant an exemption. Id. ¶ 17, 737 A.2d at 1051-52. [¶ 17] The Town argues that the motivation inquiry should extend beyond the facility at issue to include a comprehensive analysis of the [taxpayer's] business plan. Obviously, obtaining licensure required for the lawful operation of a new business is a primary motivation for most ventures. However, 36 M.R.S.A. § 656(1)(E)(2)(a) expressly limits the primary purpose analysis inquiry to the facility for which tax exemption is sought, and our interpretations of the primary purpose analysis conform to the narrowly focused scope of inquiry mandated by this statutory language. See Int'l Paper, 1999 ME 135, ¶ 22, 737 A.2d at 1053 (using the statutory language to define the scope of the primary purpose analysis); Statler, 333 A.2d at 706 (using the statutory language to limit exemption to facilities installed for primary purpose of pollution control). Contrary to the Town's position, section 656 does not compel DEP to analyze Androscoggin Energy's broader business interests served by its acquisition and integration of a new DLN System into a larger power generation plant to determine Androscoggin Energy's primary motivation. The Board's determination of primary motivation was appropriately specific to the particular facility for which the tax exemption was sought. [¶ 18] Under the circumstances, the Board did not commit legal error in determining that the primary purpose of the DLN System is pollution control when this upgrade brought turbines already owned by Androscoggin Energy into compliance with environmental regulations. The entry is: Judgment affirmed.