New Hampshire's decision to tax out-of-state owners of the Seabrook nuclear plant is the target of a Supreme Court lawsuit filed yesterday by three of its sister New England states, attorneys general from those states announced.
Connecticut Attorney General Richard Blumenthal said he had filed the lawsuit to protect "the consumers of Connecticut from discriminatory taxation" that singles out electricity users in states other than New Hampshire that purchase Seabrook-generated electricity.
The supreme Court rules on interstate disputes, according to Article III, Section 2 of the U.S. Constitution.
The attorneys general from Rhode Island and Massachusetts joined Mr. Blumenthal in filing the suit to protest the tax law, which they say effectively grants exemption to ratepayers in New Hampshire.
"Connecticut and the other states are directly and adversely affected in a substantial and real way." Mr. Blumenthal said in a news release issued yesterday.
The Connecticut attorney general referred to a federal statute that he said prohibits states from taxing "the generation or transmission of electricity" in a way that "discriminates against out-of-state manufacturers, producers, wholesalers, retailers, or consumers of that electricity."
Mr. Blumenthal said the law impedes interstate commerce and violates the equal protection as well as the privileges and immunities clauses of the Constitution.
He also accused New Hampshire of trying to siphon budget balancing funds from citizens in neighboring states. "The state of New Hampshire," he said, "has chosen to be divisive and unfairly combative, rather than joining with the other states of this region to solve the complex issues we face."
This fiscal year, New Hampshire is expecting to net nearly $16 million from the tax, which took effect July 1, a source said. The levy is actually a property tax that applies to owners of nuclear facilities, such as the $3.5 billion Seabrook plant, at a rate of 0.64%.
Harold T. Judd, New Hampshire's senior assistant attorney general, called Mr. Blummenthal's charges "bunk."
"The only reason that there is any impact on those southern New England states is because they choose to do business in New Hampshire," Mr. Judd said. "And the only reason the majority of the tax is paid by states other than New Hampshire is because they own the majority of the plant."
He said that out-of-state owners, like New Hampshire's bankrupt Public Service Co., will receive credits on the state's business profits tax. "This is equal treatment of all owners," he said.
Mr. Judd said the attorneys were acting for political reasons and that their case would not meet the criteria of the Supreme Court. "This is not a dispute between states," he said. "This is a dispute between state governments acting on behalf of their corporations. It will not meet the standards of the Supreme Court."