For the tax years 1993 and 1994, the Institute of Nuclear Power Operations (“INPO” or “Taxpayer”) filed a total of eight applications for exemption from tangible property taxes on real and personal property located in Cobb County, Georgia, contending INPO is an institution “of purely public charity.” The property at issue consists of business assets such as a computer system, two airplanes, and the multi-story office building used as INPO’s headquarters.
After the 1979 nuclear incident at Three Mile Island, “[t]he U. S. nuclear electric utility industry established the [INPO] in 1979 [with the corporate mission] to promote the highest levels of safety and reliability ... in the operation of . . . nuclear [electric generating] plants, . . .” and thereby promote public health and safety. “All organizations having direct responsibility and legal authority to operate or construct commercial nuclear electric generating plants in the United States are INPO members. Many organizations that jointly own these nuclear power plants are associate members.” Conversely, “all INPO members which own Nuclear Power Plants have a commercial license issued by the Nuclear Regulatory Commission [(“NRC”)].” Specifically, “all members of INPO are investor-owned utilities with the exceptions of the Nebraska Public Power District, New York Power Authority, Omaha Public Power District, Tennessee Valley Authority, and Washington Public Power Supply System.” According to Angelina S. Howard, Director of the INPO Communications Division, “all activities of INPO are commercial in the sense that they relate to the commercial generation of electricity.” In 1994, the for-profit members of INPO earned a combined net income exceeding $12 billion. According to the 1995 annual report, “INPO’s value to the industry lies in its ability to provide utilities with timely performance insights that can be used to improve plant operation and to identify and follow up on initiatives to enhance safety, reliability and efficiency.” The 1995 financial statement lists “[m] embers’ net assets — unrestricted [at $]24,602,010.”
INPO is recognized as a charitable organization exempt from income taxes by both the Internal Revenue Service and the Georgia Department of Revenue. “All of INPO’s revenues are used to pay its expenses. It has no retained earnings and pays no dividends to its members.” All members of INPO’s Board of Directors are high officers employed by INPO members. These directors are not compensated for their services. But INPO’s 13 full-time officers are paid salaries competitive with the commercial nuclear electricity industry, ranging from $84,291.82 to a base salary of $390,000 plus a five-year deferred compensation bonus of $454,976.31 for the president and Chief Executive Officer, Zack T. Pate. Total salaries and benefits paid in 1995 amounted to $31,845,998. INPO paid ad valorem taxes on personalty from 1980 through 1992, before it acquired its headquarters.
All members of INPO must pay dues or lose their membership. For 1993, membership dues amounted to more than $50 million. In
According to the Memorandum of Agreement between INPO and the NRC, INPO is an organization sponsored by the nuclear electric utility industry. The NRC “[recognizes] the ability of INPO to contribute to safe and reliable operation with a resulting benefit to public health and safety. . . INPO’s major activities consist of four cornerstone technical programs: evaluation of member utilities; training and accreditation programs for member utilities; events analysis and information exchange programs for member utilities; and assistance programs, whereby INPO “collects and monitors nuclear plant performance indicator data and provides periodic reports to the industry.”
“INPO conducts an evaluation of a nuclear plant by sending a team of engineers and other technical specialists to the plant for two weeks. A team numbers approximately 15 people and includes both INPO personnel and peer evaluators from other nuclear plants. During the two-week evaluation at the plant, the members of the team observe plant personnel carrying out their assigned duties. INPO relies heavily on observations of people at work and on the frank [and confidential] feedback from working-level employees to determine the effectiveness of plant programs and activities. . . .” But because “INPO is not a government organization [it therefore reasons it] has no obligation to provide its reports to the public. The Institute, on behalf of its members, has worked diligently over the years to protect the confidential nature of its evaluation and other plant-specific reports.” Consequently, “Plant Evaluation Reports are provided only to the utility . . . responsible for operating the [evaluated] plant. . . .” INPO members who are also members of Nuclear Electric Insurance Limited (NEIL) have authorized and instructed INPO to make available to NEIL at the Institute’s office copies of INPO evaluation reports and other data.
INPO’s president, Zack T. Pate, publicly acknowledged “there is increasing evidence that the highest levels of safety, reliability, and economic performance go hand in hand. . . . [Operators of nuclear power plants are required by law, NRC rules and good business practices to obtain or provide insurance coverage for their plants. The primary sources of insurance are: (1) commercial insurance pools . . .; (2) nuclear utility insurance pools [such as] NEIL; and (3) additional liability insurance as required by the secondary financial requirements of [federal law].” (Emphasis supplied.) NEIL is an “industry
“INPO’s meeting facilities are intended primarily for INPOsponsored and INPO-conducted meetings and trainings. . . . Nuclear industry groups may be approved to meet in INPO meeting facilities subject to the following considerations: . . . The meeting will not be open to the public.” An INPO airplane is routinely used by the president of INPO for personal use.
The superior court denied INPO’s motion for summary judgment and granted that of the Board, concluding that “INPO is not devoted entirely to charitable pursuits, and the use of the property is not exclusively devoted to those charitable pursuits.” These eight appeals concerning four tax accounts for two tax years raise identical issues of law based on the same facts, and so the appeals are hereby consolidated for disposition in a single appellate decision. Held:
In two related enumerations of error, INPO complains of the grant of the Board’s motion for summary judgment and the denial of its own motion, arguing it meets all elements of the appropriate test to be exempt from ad valorem taxes as a purely public charity.
1. “When the tax officer goes forth to search for taxable property, all which he finds employed in the ordinary uses of common life, unless it belongs to the public, he is to regard as taxable.” Trustees &c. of Richmond County v. Bohler,
2. INPO first contends it is an institution devoted entirely to
“ ‘A familiar meaning of the word “charity” is almsgiving, but as used in the law it may include “substantially any scheme or effort to better the condition of society or any considerable part of it.” [Cit.] “ ‘Charity,’ as used in tax exemption statutes, is not restricted to the relief of the sick or indigent, but extends to other forms of philanthropy or public beneficence, such as practical enterprises for the good of humanity, operated at moderate cost to the beneficiaries, or enterprises operated for the general improvement and happiness of mankind.” 61 CJ 455, § 505.’ Sharpe v. Central Ga. Council, B.S.A.,
We do not doubt that INPO’s stated mission and successful history of promoting excellence and the highest safety standards within the commercial nuclear power industry benefit all of mankind every day that a nuclear incident is thereby avoided. But such diffuse public benefit is, in our view, inevitably secondary to the immediate pecuniary benefit of INPO’s members, predominantly commercial suppliers, and their shareholders, in an industry generating $12 billion in net profits. Pursuant to the Price-Anderson Act, 42 USCS § 2210 et seq., federal law imposes strict liability in tort for a nuclear incident, via a waiver of all legal defenses in exchange for a limitation of liability. See Duke Power Co. v. Carolina Environmental Study Group,
The Taxpayer’s reliance on Chatham County Bd. of Tax Assessors v. Southside Communities Fire Protection,
3. “The fact that an institution serves a benevolent purpose does not necessarily make it a ‘purely public charity.’ United Hospitals Service Assn. v. Fulton County,
As the president of INPO acknowledges, plant safety and a high degree of reliability go “hand in hand” with economic performance. The same economic factors indicating that INPO’s efforts are not purely charitable also indicate that they are not purely public. The primary purpose of INPO is to collect, analyze and disseminate industry lessons learned based on highly confidential surveys. Moreover, there is not a single outside or disinterested director on INPO’s Board of Directors. Members must pay dues to belong. See Ga. Congress of Parents &c. v. Boynton,
4. Remaining contentions have been considered and are found to be rendered moot by our holdings in Divisions 2 and 3.
Judgment affirmed.
Notes
INPO leases approximately 25 percent of the floor space to third parties and does not seek exemption for that pro rata portion of its headquarters. See Church of God &c. v. City of Dalton,