In re Town of Bethlehem

• Citation: 911 A.2d 1,154 N.H. 314
• Decision Date: 02 November 2006
• Docket Number: No. 2004–435.,2004–435.
• Court: Supreme Court of New Hampshire
• Parties: Appeal of TOWN OF BETHLEHEM (New Hampshire Department of Environmental Services).

154 N.H. 314

911 A.2d 1

Appeal of TOWN OF BETHLEHEM (New Hampshire Department of Environmental Services).

No. 2004–435.

Supreme Court of New Hampshire.

Argued: June 7, 2006.

Opinion Issued: Nov. 2, 2006.

Boutin & Altieri, PLLC, of Londonderry (Brenda E. Keith on the brief, and Edmund J. Boutin orally), for the petitioner.

Brown, Olson & Gould, P.C., of Concord (Bryan K. Gould and Philip R. Braley on the brief, and Mr. Gould orally), for the respondent.

DUGGAN, J.

The petitioner, Town of Bethlehem (Town), appeals an order of the New Hampshire Department of Environmental Services (DES) granting the respondent, North Country Environmental Services (NCES), several tax exemptions under RSA 72:12–a (2003). We affirm.

The following facts were found by DES or appear in the record before us. NCES operates a solid waste landfill facility (facility) in Bethlehem. See generally N. Country Envtl. Servs. v. Town of Bethlehem, 150 N.H. 606, 843 A.2d 949 (2004) ; N. Country Envtl. Servs. v. Town of Bethlehem, 146 N.H. 348, 772 A.2d 330 (2001). On March 4, 2002, NCES applied to DES for pollution control property tax exemptions pursuant to RSA 72:12–a on all components of the facility. In response, DES conducted an investigation that included reviewing NCES' application and supporting documentation, reviewing documents filed by the Town and a resident of Bethlehem, reviewing a report prepared by the Town's engineer, and visiting the facility.

On March 12, 2003, after completing its investigation, DES ruled that only the following components of the facility qualified for some form of tax exemption: (1) the detention ponds and silt fencing listed as part of the excavation and stormwater control measures; (2) the enclosed flare component of the leachate evaporation system; (3) the oil and water separator listed as part of both the maintenance building and the shop floor drain and collection system; and (4) the candlestick flare used as part of the landfill gas collection system.

NCES moved for rehearing. By order dated January 5, 2004, DES granted NCES' motion in part, concluding that the following components of the facility also qualified for tax exemptions: (1) the stone check dams, 4,000 feet of lined, riprap and gabion swales, culverts and berms, grading, and grass seed and fertilization; (2) the double liner system; (3) the leachate collection, conveyance, and disposal system; (4) the sideslope riser buildings, instrumentation and power lines; (5) the groundwater monitoring wells; (6) the soil borrow area materials incorporated into the swales and liner system; (7) the landfill gas collection system; and (8) the landfill gas monitoring system. DES affirmed its March 12, 2003 decision insofar as it denied tax exemptions with respect to the maintenance buildings and shop floor drain collection system, the landfill cap system as to both air and water pollution, and the litter fencing.

The Town then moved for rehearing, which DES denied. The Town appealed to this court, and later sought to amend its appeal, asserting the existence of ex parte communications that it recently had received from the DES file. We remanded the case for further proceedings. On remand, DES invited the Town and NCES to submit further evidence and argument. In response, the Town filed a motion for rehearing, a motion to compel DES to answer questions concerning the alleged ex parte communications, and a motion to disqualify officials in the DES Commissioner's office due to the alleged ex parte communications. DES rejected the Town's arguments by order dated November 28, 2005.

In this appeal, the Town argues that: (1) DES misinterpreted and misapplied RSA 72:12–a ; (2) DES' orders violated Part II, Article 5 of the State Constitution ; (3) DES' orders violated Part I, Article 10 of the State Constitution ; (4) DES' orders violated New Hampshire Administrative Rule, Env–Wm 102.129; (5) DES' handling of this matter violated the Administrative Procedure Act (APA) and the procedural due process guarantees of our State Constitution; and (6) DES mishandled certain alleged ex parte communications. We address each argument in turn.

The scope of our review of agency decisions under RSA 72:12–a is narrow. Appeal of Town of Newington, 149 N.H. 347, 349, 821 A.2d 1100 (2003). Agency findings are deemed prima facie lawful and reasonable and we do not sit as a trier of fact in reviewing them. Id. However, we will overturn agency decisions when the appealing party shows by a clear preponderance of the evidence that the agency's decision is unjust, unreasonable or unlawful. Id.

I. RSA 72:12–a

The Town argues that DES unjustly, unreasonably or unlawfully determined that eight components of the facility qualified for tax exemptions under RSA 72:12–a because: (1) a landfill, in its entirety, may not be exempt from taxation under RSA 72:12–a ; and (2) DES misinterpreted and then misapplied RSA 72:12–a with respect to each of the components for which NCES sought an exemption.

As to the Town's first argument, even if we assume arguendo that a landfill, in its entirety, does not constitute a treatment facility within the meaning of RSA 72:12–a, DES did not determine that the NCES facility, in its entirety, was eligible for a tax exemption. Rather, DES focused upon certain components of that facility and determined that eight of twelve of those components were eligible for a tax exemption. Thus, insofar as the Town contends that DES essentially granted a tax exemption to the whole facility, we reject its assertions. Accordingly, we turn to the Town's arguments pertaining to how DES interpreted and applied the statute to the facility's components.

RSA 72:12–a, I, provides:

Any person, firm or corporation which builds, constructs, installs, or places in use in this state 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 shall be entitled to have the value of said facility and any real estate necessary therefore, or a percentage thereof determined in accordance with this section, exempted from the taxes levied under this chapter for the period of years in which the facility, device, appliance, or installation is used in accordance with the provisions of this section.

In matters of statutory interpretation, we are the final arbiter of the legislature's intent as expressed in the words of the statute considered as a whole. In the Matter of Beal & Beal, 153 N.H. 349, 350, 897 A.2d 993 (2006). When examining the language of a statute, we ascribe the plain and ordinary meaning to the words used. Id. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add words that the legislature did not include. Id.

The Town makes two statutory-based arguments: (1) that the statute requires DES to evaluate the facility as a whole rather than as separate components; and (2) even if it is proper for DES to evaluate individual components, it erred in determining that these components effectuated treatment. NCES counters that components of an integrated system designed to reduce, control or eliminate a source of pollution satisfy the requirements of RSA 72:12–a.

As to the Town's first argument, the statute does not require DES to evaluate the facility as a whole rather than as separate components. That is, the plain language of the statute does not indicate that every single component of a landfill facility must reduce, control, or eliminate a source of air or water pollution in order for any one part of that facility to qualify for a tax exemption under RSA 72:12–a. Rather, the statute speaks of "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." RSA 72:12–a, I (emphasis added); see also RSA 72:12–a, III; Appeal of City of Berlin, 131 N.H. 285, 290, 553 A.2d 758 (1988) ( "To obtain a tax exemption under RSA 72:12–a (Supp.1988), as it is written, the applicant must have a facility, device, appliance or installation which ‘treats' something for the purpose of air or water pollution ‘reduction, control, or elimination.’ " (emphasis added)). Thus, DES' decision to evaluate whether particular components constituted a treatment facility, device, appliance or installation was not unjust, unlawful or unreasonable.

The Town next asserts that DES erred in concluding that the asserted components effectuated "treatment" within the meaning of the statute. In the context of RSA 72:12–a, we previously held that "treatment" is "the subjection of something to some action or process with a special end in view, the end often being to improve the quality of the thing undergoing treatment." Berlin, 131 N.H. at 290, 553 A.2d 758. Both sides agree that we should apply this interpretation of "treatment" in analyzing DES' decision regarding the components of the NCES facility.

In support of its position that the NCES facility and its components did not effectuate treatment, the Town argues that our analysis of the bark-burning boiler in Berlin, 131 N.H. at 289–90, 553 A.2d 758, requires us to conclude that the NCES facility and its components do not effectuate treatment. In Berlin, we held that a newly-built bark-burning boiler system, which did not emit sulfur dioxide into the air, did not constitute a pollution treatment facility, device, appliance or installation within the meaning of RSA 72:12–a. Id. at 290, 553 A.2d 758. Our decision, at least in part, was based upon the legislature's not expressly excluding non-polluting fuels or non-polluting processes from taxation under RSA 72:12–a. Here, however, DES found that the components of the facility do not simply generate less pollution from the start; rather, these components reduce, control or eliminate sources of air or water pollution which already have been created. Thus,...