Summary
In Transue Williams, Inc., v. Lindley (1978), 54 Ohio St.2d 351, this court determined that installation of a facility for the purpose of complying with Environmental Protection Agency standards does not automatically qualify the facility under the definition contained in R.C. 5709.20(B).
Summary of this case from White Rubber Co. v. LindleyOpinion
No. 77-1452
Decided June 14, 1978.
Taxation — Exemption — Air pollution control facility — R.C. 5709.20, 5709.21 and 5709.25 — Determinations by Tax Commissioner — Decision of Board of Tax Appeals — Supreme Court — Scope of review.
APPEAL from the Board of Tax Appeals.
This cause was initiated by appellant's filing with the Tax Commissioner of an application for an air pollution control certificate in June of 1976.
Transue Williams, Division of Standard Alliance Industries, Inc. ("Transue"), appellant herein, forges hot steel with mechanical hammers. Previously, the hammers were driven by steam which had been produced in Transue's five coal-fired boilers.
The federal (U.S.E.P.A.) and state environmental protection agencies, however, concluded that these boilers released an excessive amount of sulfur dioxide to the environment and Transue was cited by the U.S.E.P.A. for violating Ohio air pollution control regulations which were a part of a federally approved implementation plan. Transue then submitted a pollution control strategy which was approved by the U.S.E.P.A. and ultimately implemented.
Two small boilers were converted so that they burned low sulfur oil, and the two large boilers and another small boiler were removed. Transue changed its process by driving the hammers with forced air. The air was produced by electrically-powered air compressors. These conversions virtually eliminated air pollution emmissions.
Transue applied for an air pollution control certificate for the property installed in this conversion, which would result, if granted, in exemption of the property from taxation under R.C. 5709.25. The commissioner certified the boiler conversions and that portion of the piping, pumps and the electrical substation, which he determined to be related to the boiler conversions, as being primarily for the control of pollution of the air, but did not certify or exempt the remainder of the items related to the installation of the air compressors. The Board of Tax Appeals affirmed.
The cause is now before this court upon appeal as a matter of right.
Messrs. George, Greek, King, McMahon McConnaughey, Mr. Darold I. Greek and Mr. Kiehner Johnson, for appellant.
Mr. William J. Brown, attorney general, Mr. Michael J. Moushey and Mr. James R. Unger, for appellee.
R.C. 5709.20(B) defines an "air pollution control facility" as "* * * any property designed, constructed, or installed for the primary purpose of eliminating or reducing the emission of, or ground level concentration of, air contaminants which render air harmful or inimical to the public health or to property within the state."
Further, R.C. 5709.21 provides for the method of applying for an air pollution control certificate and states that such certificate shall issue "[i]f the commissioner, after obtaining the opinion of the director of environmental protection, finds that the proposed facility was designed primarily for the control of air or noise pollution * * *." This section states further that "[s]aid certificate shall permit tax exemption * * * only for the portion of such pollution control facility or that part used exclusively for air or noise pollution control."
Transue's argument is basically that but for the necessity that it bring itself into compliance with EPA standards, it would have made none of the expenditures for capital improvements being taxed and, therefore, all such new facilities were "designed primarily for the control of air pollution."
The commissioner maintains that that portion of the equipment concerning which he denied exemption is not "used exclusively for air or noise pollution control" as required under R.C. 5709.21, even if it might qualify as an air pollution control facility as defined in R.C. 5709.20. Therefore, since "[e]xemption from taxation is in derogation of rights of all taxpayers and effectively shifts a greater tax burden to the nonexempt * * *," it will be strictly construed against the one claiming its benefit. Ohio Children's Society v. Porterfield (1971), 26 Ohio St.2d 30, 33.
The determinations by the commissioner were basically factual in nature. (Cf. Statler Industries, Inc., v. Bd. of Environmental Protection [Me. 1975], 333, A.2d 703.)
This court's scope of review is that of determining whether the board's decisions are reasonable and lawful (R.C. 5717.04) and, ordinarily, not to engage in factual determinations. The decision of the board, being neither unreasonable nor unlawful, is affirmed.
Decision affirmed.
O'NEILL, C.J., HERBERT, CELEBREZZE, W. BROWN, P. BROWN, SWEENEY and LOCHER, JJ., concur.