A new bill could force Maine Yankee to pay millions of dollars in taxes on its Wiscasset nuclear storage facility that the town says it’s owed.

Maine Yankee, which in 1997 shut down its nuclear plant on Bailey Point and transferred 542 metric tons of radioactive waste into canisters there, paid annual property taxes to the town under an agreement that expired last year. The two sides have been unable to reach a new tax agreement and the Maine Department of Environmental Protection last year granted Maine Yankee a tax exemption based on a state law that gives breaks to industrial facilities for reducing air pollution.

Wiscasset officials argue the exemption is meant for operational facilities and not a storage facility like Maine Yankee’s. The town valued the facility at nearly $94 million and said the company owes nearly $1.6 million in property taxes this year.

Without that money, the town could be forced to cut services or raise taxes, according to Wiscasset Select Board Chairperson Sarah Whitfield.

“The only people who lose are the taxpayers of Wiscasset,” she said. “Maine Yankee should pay us what we’re owed.”

Whitfield was among dozens of Wiscasset officials and residents who testified Tuesday in Augusta in favor of a bill by state Sen. Cameron Reny that would prohibit Maine Yankee from qualifying for the tax exemption.

“I don’t think this particular tax exemption was created with nuclear waste storage facilities in mind,” said Reny, a Democrat whose district includes Wiscasset.

Maine Yankee representatives have argued the $1.6 million tax assessment is too high, at nearly double its prior tax payments. They said they have made “good faith” tax payment offers that the town rejected.

“Maine Yankee expects to pay a reasonable amount in property taxes,” lobbyist Jim Mitchell, who represents Maine Yankee, testified Tuesday. “But like any taxpayer, we expect to be assessed fairly.”

The federal government, which was supposed to remove the nuclear waste by 1998, has reimbursed Maine Yankee for the costs to maintain the storage facility. The company said those costs can exceed $10 million annually.

“Maine Yankee must prove that each cost is foreseeable, caused by the government’s breach and reasonable,” Mitchell said. “To the extent that any cost is found to not meet those requirements, it is unrecoverable in litigation. Although Maine Yankee has historically recovered a significant portion of its incurred costs, continued recoveries are not guaranteed.”

Wiscasset Town Manager Dennis Simmons said the town is responsible for ancillary costs related to the storage facility, like road maintenance, plowing and police/fire protection. He said the town is undertaking a $1.9 million project to replace a failing stream culvert on the only access road to the facility, which is double the normal cost because the town needs to build a temporary bridge to maintain 24-hour access to it.

“If this exemption is allowed to stand, it will have long-term implications for the town’s fiscal stability, resulting in higher taxes and cuts to the very services that Maine Yankee relies on,” Simmons testified Tuesday. “This Legislature has the opportunity to clarify that a high-level nuclear waste site, a blight and a burden on our community, should not be operated tax-free.”

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