New Jersey Sues to Deny Big State Tax Credit to Nuclear Firm Holtec
State is disputing tax credit Holtec seeks for Camden R&D and manufacturing complex, but firm said it still plans to expand it to house growing units.
Photo courtesy of Holtec International
New Jersey’s attorney general wants the state high court to overturn lower court rulings that nuclear technology firm Holtec International is entitled to a 10-year state tax credit for construction of its $350-million R&D and manufacturing campus in Camden.
Holtec applied in 2017 for the estimated $260-million credit, but Attorney General Matthew Platkin claims in a Feb. 1 appeal to the state supreme court that the firm did not disclose that it previously was debarred from working at the Tennessee Valley Authority.
The application asks if the company had ever been debarred by any state or federal agency. The company answered “no,” according to Platkin.
Platkin claims the lower courts made legal errors by excusing Holtec for not disclosing the TVA debarment. The company had been required to pay a $2-million fine and be overseen by an independent monitor for allegedly bribing a TVA employee. No civil, criminal or administrative proceedings took place, but Holtec was debarred for 10 days.
Holtec sued New Jersey for breach of contract for not honoring its tax credit agreement with the state Economic Development Authority. Both the state Superior Court and the appeals court ruled in the firm's favor.
The lower courts said rescinding tax credits to a company that lawfully fulfilled its agreement to make substantial investments in Camden, “an economically disadvantaged city,” would hardly be equitable considering all relevant circumstances.
But the state attorney general told the high court that left intact, the rulings allows applicants to take advantage of self-reporting regimes that many agencies rely on. “The decision sends a pernicious message to companies seeking business in the state: investments matter more than honesty,” the New Jersey petition says.
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Holtec on Jan. 29 also settled with the state regarding a separate 2018 tax incentive for $1-million it sought under the state’s Angel Investor Tax Credit program. The settlement was reached after a state criminal investigation.
The company agreed to pay $5 million in penalties and retain an independent reviewer approved by the state to monitor future applications for benefits. A spokesman said it agreed to settle the dispute, noting that "the payment avoids protracted litigation and resolves the threat of criminal proceedings
It denied any misconduct.
Holtec also had announced Jan. 18 that that it is funding construction of a new facility at the 55-acre Camden campus for its expanding security and government services units.
The firm also is set to gain a $1.5 billion conditional loan from the U.S. Energy Dept to restart the Palisades nuclear power plant in Michigan, which it owns—which would be the first such closed facility to be restarted in the U.S., said media reports, noting the award could be made by the end of February. Holtec also is decommissioning New Jersey's closed Oyster Creek nuclear plant, with a proposed 2029 completion date, after purchasing the facility in 2019.
Neither Holtec nor DOE have confirmed the Palisades plant loan award.
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