Michigan Supreme Court Lansing, Michigan
Chief Justice: Justices: Clifford W. Taylor Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly 

# Opinion

Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED JULY 30, 2003 DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee,

v No. 133394 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellees, and CITY OF AUBURN HILLS, Respondent-Appellant.

FORD MOTOR COMPANY, Petitioner-Appellee,
v No. 133396 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellees, andv

v CITY OF DEARBORN,Intervening RespondentAppellant.

FORD MOTOR COMPANY, Petitioner-Appellee,
Nos. 133400-133402 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and CITY OF DEARBORN,Intervening RespondentAppellee.

DETROIT DIESEL CORPORATION, Petitioner-Appellee, Cross-Appellant,
No. 133403 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, Cross-Appellees, and

2v

v CHARTER TOWNSHIP OF REDFORD,Intervening RespondentAppellee.

FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133404 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants.

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee, Cross-Appellant,
No. 133405 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and TOWNSHIP OF SYLVAN, Respondent-Appellee.

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee,

3v No. 133406 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and CITY OF AUBURN HILLS, Respondent-Appellee.

BEFORE THE ENTIRE BENCH YOUNG, J. These consolidated appeals concern a tax exemption that aims to improve Michigan’s environment by encouraging entities to reduc e air pollution they create in Michigan. Based on the plain language of the statute, we hold that in order to for equipment to be exempt, it must be installed or acquired for the primary purpose of regulating or curb ing the spread of pollution in Michigan. Further, the equipment must actually and physically limit pollution. None of the equipment that is the subject of this appeal meets th ese tests. Therefore, the Court of Appeals erred by partially overturning the decision of the Department of Environmental Quality (DEQ) and the State Tax Commiss ion (STC) to that effect and holding that petitioners’ test cells qualify for th e exemption. We reverse the Court of Appeals in part and restore the DEQ and ST C decisions concludi ng that none of the equipment qualifies for the tax exemption.

4FACTS AND PROCEDURAL HISTORY The material facts in these consolidat ed appeals are undisputed. Pursuant to federal law, before issuing a certificate allowing for sales of new vehicles, the Environmental Protection Agency (EPA) mu st “test or require to be tested” new motor vehicles or new motor vehicle e ngines to ensure comp liance with emission standards that the EPA promulgates. 1 To that end, the ag ency has created a testing regime, requiring vehicle manufacturers to submit an application with an enormous amount of supporting data. 2 Ford Motor Company, DaimlerChrysler Corporation, and Detroit Diesel (petitioners) installed test cells. The test cells are large buildings that can replicate many temperature cond itions. They also house equipment that allows for up to 40 different types of tests and data collection. 3
Petitioners’ test cells are used in the manufacturing process to ensure compliance with the regulations. In ad dition to its test cell, Detroit Diesel installed a new engine production line to meet federal emissions regulations.

1 42 USC 7525(a)(1) and 7521. 2 See 40 CFR 86.1 et seq

. 3 Narrative Statement attach ed to DaimlerChrysler Au burn Hills Application for Tax Exemption Certifi cate, July 14, 2 003, pp 5-11. Th e Auburn Hills DaimlerChrysler test cell is similar to th e test cells of the other petitioners. The individual specifications of each test cell do not control the disposition of this case. Therefore, this Auburn Hills DaimlerChrysler test cell summary can serve as a general example for purposes of analysis.

5All the petitioners sought tax exem ptions from the STC under part 59 4 of the Natural Resources and Envir onmental Protection Act (NREPA) 5 for their test cells, and Detroit Diesel also petitioned for an exemption for its engine line. Part 59 provides real and persona l property tax exemptions, as well as sales and use tax exemptions for certain air pollution control facilities. 6 The law requires that the STC refer applications to the DEQ. The DEQ concluded that none of petitioners’ equipment qualified for an exemption und er part 59 because their primary purpose was not to reduce pollution, but to test products for comp liance with federal emissions standards and to manufacture engine s that comply with those standards. The DEQ also found th at all the equipment actually generated some pollution during the testing or manufact uring processes, instead of physically disposing of air pollution or controlling it as the law requires. The STC agree d and denied all the exemptions. Petitioners appealed to various circuit courts. Ford’s four exemption denials were reversed, while de nials for DaimlerChrysler and Detroit Diesel were affirmed.

4 MCL 324.5901 et seq

. 5 MCL 324.101 et seq

. 6 Ford had previously a pplied for and received a ta x exemption under part 59 for its Allen Park test ce ll facility in 2001. While the applications involved in the instant action were pending in 2004, DEQ notified Fo rd that it was requesting revocation of its exemption for the Alle n Park facility because the facility did not meet the requirements of part 59. Th e STC rejected the revocation, though, concluding that an exemp tion certificate under part 59 cannot be revok ed. That exemption dispute is not before the Court.

6The Court of Appeals granted the appella te applications of all the aggrieved parties and consolidated the cases on appe al. Its published opinion held that tax exemptions must be issued for all petiti oners’ test cells. The Court of Appeals concluded that the primary purpose of the test cells is to red uce pollution and that they need not physically or directly re duce pollution in order to qualify as tax

exempt. However, the Court of Appeals affirmed the deni al of an exemption for Detroit Diesel’s engine manufacturing line on the ground that its primary purpose was engine manufacturing, no t pollution reduction. The Co urt also held that no due process violation occurred during the STC’s considera tion of Detroit Diesel’s application for a tax exemption. 7 This Court granted leave to appeal. 8
STANDARD OF REVIEW The Court reviews de novo motions for summary disposition. 9 Issues of statutory construction a re also reviewed de novo. 10
ANALYSIS The primary issue on app eal is whether the Court of Appeals erred in its application of the tax exemption of part 59 of NREPA. As noted, the Court of

7 We agree with the Court of Appeals that the full hearing conducted by the STC satisfied Detroit Diesel’s due process rights. 8 480 Mich 880 (2007). 9 Spiek v Dep’t of Transportation , 456 Mich 331, 337; 572 NW2d 201 (1998). 10 City of Taylor v Detroit Edison Co , 475 Mich 109, 115; 715 NW2d 28 (2006).

7Appeals reached different conclu sions for the petitioners’ test cells and Detroit Diesel’s engine line. With regard to the test cells, the Court held [I]t is plainly apparent to us th at the test cells were “installed or acquired for the primary purpose of controlling or disposing of air pollution” and that the test ce lls were designed and are operated “primarily for the cont rol, capture, and removal of pollutants from the air, and [are] suitable, reasonably adequate, and meet[] the intent and purposes of part 55 . . . .” [11] However, with regard to Detroit Diesel ’s engine line, the Court reached the opposite conclusion, holding that “[c]learly, the engine line . . . is not ‘operated primarily for the control, capture, and rem oval of pollutants from the air . . . .’” 12 While the Court of Appeals quoted language from the proper statutory provisions, the Court did not offer a construction of that language. Instead, the Court held that it was plain and clear whic h equipment was eligible and which was not. As will be discussed later, the stat utory provisi ons provide no principled basis for distinguishing between the differen t equipment involved in this appeal. Under the plain language of these provisi ons, neither the test cells nor the engine line qualify for the exemption. MCL 324.5901 defines “fac ility,” in part, as machinery, equipment, structures, or any part or accessories of machinery, equipment, or structu res, installed or acquired for the primary purpose of contro lling or disposing of air pollution that if

11 Ford Motor Co v State Tax Comm , 274 Mich App 108 , 113; 732 NW2d 591 (2007) (alterations in Ford Motor ). 12 Id . at 118.

8released would render the ai r harmful or inimical to the public health or to property within this state. An exemption for a particular “facility” re quires a determinati on by the DEQ that “the facility is designed and operated primarily for the control, capture, and removal of pollutants from the air , and is suitable, reasona bly adequate, and meets the intent and purposes of part 55 [13] and rules promulgated under that part.” 14 Thus, the equipment mu st meet the requirements of both §§ 5901 and 5903 to qualify for the tax exem ption. Section 5901’s defi nition of “facility” expressly requires that the equipment be “installed or acquired for the primary purpose of controlling or disposing of air pollution . . . .” “Con trol” means to “exercise restraint or direction over; dominate, re gulate, or command; to hold in check; curb.” 15 “Dispose of” means “a. to deal with conclusively; settle. b. to get rid of; discard or destroy.” 16 The primary purpose of this equipment is to build engines (Detroit Diesel) or test engines (petitioners’ test cells). The ancillary effect of the equipment is the control of pollution emitted by the engines. While the test cells help petitioners ensure that they are producin g less polluting engines, the primary purpose of this equipment is not to regulate, curb the spread of, or destroy air pollution—and

13 MCL 324.5501 et seq. 14 MCL 324.5903 (emphasis added). 15 Webster’s Universal College Dictionary (1997). 16 Random House Webster’s College Dictionary (1997).

9certainly not “pollution that if released would render the air h armful . . . to the public health or to property within this state .” 17 Instead, the primary purpose of the equipment is to test engines to ensure that petitione rs have prop erly designed their engines to meet federal regulations so that they can se ll them to consumers. 18 Furthermore, the equipment its elf does not get rid of or curb air pollution. Thus, petitioners’ test cells are not “facilities” as defined by MCL 324.5901. Even assuming that petitioners’ fed erally required pollu tion equipment and Detroit Diesel’s engine line qualify as “facilities,” petitioners are still not entitled to an exemption because none of the equipment qualifies under § 5903. Under that section, the DEQ must find “that the facility is designed and operated

17 MCL 324.5901 (emphasis added). The dissent is correct that the statute does not require that the equipment “solel y” control pollution in Michigan. However, this equipment does not control any pollution in Michig an. It is the engines and vehicles tested that emit less pollution. While those vehicles may be sold in Michigan and may em it less pollution than other vehicles sold in Michigan, the test cells and Detroit Diesel’s engine plan t do not control any pollution in Michigan or any other state. 18 The dissent misconstrues this statemen t to argue that th is interpretation would render any equipment required by a federal regulation ineligible for the exemption. Regardless of whether the federal government requires the installation of the pollution testing equipment, it is not a “facility” under this statute unless its primary purpose is pollution control or disposal. For example, in Covert Twp v State Tax Comm , 407 Mich 561; 287 NW2d 895 (1980), federal law required that the petitioner install a containment device at its nuclear facility. That equipment still qualified under the statute at issue b ecause its primary purpose was to control pollution at the site in th e case of an accident at th e nuclear facility. The primary purpose of the test cells and Detroit Diesel’s engine plant is not control or disposal of pollution. Therefore, regardless of wh ether federal law or “philanthropy” motivated petitioners to install the test cells or the engi ne plant, they do not qualify for the exemption.

10primarily for the control, capture, and removal of pollutants fro m the air.” There are a number of terms in this provision that need to be d efined to prop erly construe it. The focus of the section is on the “d esign” and the “operation” of the facility. “Design” means “to intend for a defin ite purpose,” while “operate” means “to work, perform, or function, as a mach ine does . . . to bring about, effect, or produce, as by action or the exer tion of force or influence.” 19 Thus, the facility must be intended to an d bring about “the contro l, capture, and removal of pollutants from the air.” “Control” ha s already been defined. “Capture” means “to gain control of or ex ert influence over,” and “remov e” means “to move or shift from a place or position; to eliminate; do away with or put an end to.” 20 Because the Legislature used the conjunction “an d,” a qualifying facility must do all three things: curb, control, and e liminate pollution. Furthermo re, the words suggest that the facility must actually and physically lim it pollution. They do not stand for the proposition that the facility its elf may contribute to the creation of a product that pollutes less than a similar product, which is what the equipment in this case does. Because the statutory language requires the facility to do the removing, controlling, and capturing of pollution, this equipment does not qualify. The Court of Appeals held that th e test cells qualified under § 5903 “because without the test cells , [petitioners] would not be able to ensu re that their

19 Random House Webster’s College Dictionary (1997). 20 Id

.

11products are adequately controlling, capturing, and removing pollutants from the air as compared to earlie r versions of their ve hicles and engines.” 21 This observation misses the mark. The fact th at the federal government may require such pollution control testi ng equipment has nothing to do with its eligibility for a tax exemption under Michigan law. The dissent makes a similar analytic mistake, asserting that the test cells qualify becau se they “control” pol lution “by regulating the emissions output” and “by curbing the le vels of pollutants released into the air in the first place”; they “cap ture” pollution by “ensur[i ng] that pollutants that would otherwise have been released into the atmosphere are ne ver produced in the first place”; and they “remove” pollution “b y preventing the po llutants from being created in the first place.” 22 The problem with both of these analyses is that the

test cells , much like Detroit Diesel’s engine lin e, are not the source of the removal, control, or capture of pollution as required by the exemption. The testing process both produces and releas es pollution contrary to the re quirements of the statute. The design of the engine , and the engine alone once pu t into manufacture and sold in a vehicle, accomplishes the removal, co ntrol, and capture of pollution because such an engine produces less pollution than other models. With out the changes to the design of the engine, the test cells would accomplish noth ing. Because the statutory language requires the facility to do the removing, controlling, and

21 Ford Motor , supra at 114 (emphasis added). 22 Post at 18.

12capturing, and the test cells and the pollution testing equi pment in the engine plant do not remove, control, or capture polluta nts, this equipment does not qualify for the tax exemption. Furt hermore, none of the po llution control created by redesigned engines tested by petitioners is intended to improve the quality of Michigan’s air. This fact does not trouble th e Court of Appeals or the dissent, which must presume that ou r Legislature intended a gift from Michigan taxpayers to the nation by advancing national , rather than local, air quality goals. Moreover, the Court of Appeals opini on does not directly address the requirement that a facility must “meet[] th e intent and purposes of part 55” of
NREPA. 23 A review of the other provisions in part 55 leaves little question that part 55 regulates the construction and oper ation of sources of air pollution, and

23 The dissent asserts that the purpose of that part is the prevention and abatement of air pollution. In add ition to being overly simplistic, this interpretation, when applie d to MCL 324.5903, violates the rule of statutory construction that the Court should not interp ret a statute in a way that renders part of it nugatory or mere surplusage. Grimes v Dep’t of Transportation , 475 Mich 72, 89; 715 NW2d 275 (2006). MCL 324.5 903 provides: “If the department finds that the facility is designed and operated primarily for the co ntrol, capture, and removal of pollutants from the air, and is suitable, reasonably adequate, and meets the intent and purposes of part 55 and rules promul gated under that part, the department shall notify the state tax commiss ion, which shall issu e a certificate.” Thus, the statute requires that the “facility” control, capture, an d remove pollutants and meet the intent a nd purposes of part 55. If th e dissent is correct that the “intent and purposes” of part 55 are simp ly the reduction of pollution, then that requirement adds nothing to the first re quirement. However, our interpretation that the “intent and purposes” of p art 55 are the reduction of pollution at stationary sources adds something to the first re quirement, namely a specific source of pollution that is to be targeted.

13part 55 itself defines “sou rce” as “a stationary source.” 24 The dissent attempts to overcome this fact by focusing on the definition of “air pollution control equipment,” MCL 324. 5501(c), arguing that because th at definition is arguably broad enough to encompass petitioners’ test cells, the test cells must fall within the “intent and purposes of part 55.” The diss ent’s analysis of the definition of “air pollution control equipment” must occur in a vacuum to reach its conclusion. 25

24 MCL 324.5501(t). The dissent decries our effort to ascertain the intent and purposes of part 55 by considering the whole of p art 55. The dissent would prefer to look at one sentence of § 5540 of part 55 that supports the dissent’s result to ascertain the intent and purposes of part 55. The entirety of § 5540 is: It is the purpose of this p art to provide additional and cumulative remedies to prevent and abate air pollution. This part does not abridge or alter rights of action or remedies now or hereafter existing. This part or anything done by virtue of this part shall not be construed as estopping persons fro m the exercise of their respective rights to suppress nuisan ces or to preven t or abate air pollution. [MCL 324.5540.] The clear import of this secti on is that p art 55 provides additional remedies to the existing remedies for the p revention or control of air pollution, namely private nuisance suits or citizen suits under MCL 324.1701. This s ection does not stand for the idea that the intent and purposes of part 55 are to cont rol air pollution in all its forms and from any source, as the dissent asserts. The dissent misconstrues the import of this discussion of § 5540. Unlike the dissent, we do not believe that th e “intent and purpose s” of part 55 are contained solely in § 5540. Inst ead, as noted, we believe that the entirety of part 55 should be consid ered to determine its “inten t and purposes.” Therefore, we think it is unnecessary “to explain how pollution-control facilities other than the test cells can provide ‘additional remed ies’ that the test cells cannot.” Post at 21. 25 Similarly, the dissent has chosen the one subsection of MCL 324.5512(1) that references “mode[s] of transportation” to bolster its conclusi on that the test cells meet the intent and purposes of part 55. Unfortunately, most of the subsections of MCL 324.5512(1) deal with “stati onary sources” in accordance (continued...)

14The air pollution control equipment is only relevant to the cont rol of pollution at “sources” and in “processes.” A “process” is defined as “an action, operation, or a series of actions or operations at a source that emits or has th e potential to emit an air contaminant.” MCL 324.5501(p) (em phasis added). Therefore, the fact that, as the dissent argues, a test cell theore tically qualifies as “air pollution control equipment” is wholly irrelev ant for purposes of part 55 because the test cell has no effect on air pollution at any source or in any process. Part 55 provides for permitting, mo nitoring to en sure compliance, reporting, and imposing sanctions for viol ations. Notably, emissions from vessels and motor vehicles are covered in part s 61, 63, and 65. The inescapable conclusion is that part 55 serv es to regulate air pollution from stationary sources , while air pollution from mobile sources is covered by other parts of NREPA. Nothing about the test cells affects air po llution from a stationary source; in fact, as stated, a test cell itself adds contaminants to the air in its location. If reduction of vehicle emissions qualifies as meeting th e purpose of part 55 , then the vehicles themselves would also qualify. Likewi se, any auto repair shop could claim as

(...continued) with the “intent and purposes” of part 55. We are uncertain why the Legislature decided to confer rulemaking authority with regard to m odes of transportation in part 55; however, we do not be lieve that this one subsection alters the fact that the “intent and purposes of part 55 and rule s promulgated under that part” are to regulate air pollution from stationary s ources. See Mich Admin Code, R 336.1101 et seq

.

15exempt any equipment it installed to test motor vehicle exhaust for excess pollution. The Court of Appeals and the dissent si mply fail to give meaning to part 55. In so doing, they have broadly construed th is tax statute, co ntrary to the rule of construction that exemptions be n arrowly construed ag ainst the taxpayer; 26 distorted the purpose of this tax statut e; and awarded taxpay er money to business entities who fail to abate pollu tion in this state. In fact, the dissent actively conflates part 55 with the other parts of NREPA by concludi ng, “[a]s long as petitioners sell engines and vehicles in Michigan, thereby reducing harmful pollution in Michigan, the fact that they also sell engi nes and vehicles in other states, thereby reducing polluti on in those states as we ll, does not p revent them from qualifying for the in stant tax exemption.” 27 The two published opinions interpreting this part of NREPA support the conclusion that the exemp tion does not apply to petitioners’ equipment. In Meijer,
Inc v State Tax Comm , 28 the Court of Appeals held that a trash compactor and baler, which Meijer installed to replace an incinerator that po lluted the air when burning trash from Meijer’s grocery stores , was eligible for the tax exemption under MCL 336.1 (the pred ecessor to MCL 324.5901). In the second case, Covert

26 See Wexford Medical Group v City of Cadillac , 474 Mich 192, 207; 713 NW2d 734 (2006), and post at 10-11. 27 Post at 16 n 15. 28 66 Mich App 280; 23 8 NW2d 582 (1975).

16Twp Assessor v State Tax Comm , 29 this Court upheld the STC’s grant of a tax exemption to Consumers Po wer Company for a nuclear c ontainment building at its nuclear power plant. Both of these cases concerned s ources of pollution that would have been subject to the re gulatory statutes of part 55. This Court’s decision in Covert interpreted “primary purpose” to mean “the primary purpose served by the facility for which [the] exem ption is sought.” 30 While the equipment in Covert was installed pursuant to federal law, this Court stated that the “purpose s erved” need not “align with the motivation of” those installing the facilities. 31 Nonetheless, the statute requires that the primary purpose be the control or disposal of air pollution. The equipment in Covert was installed to prevent the release of hazardous materials in the event of an accident at the petitioner’s nuclear facility in this stat e. Therefore, the pr imary purpose was the control of air pollution in the event of an accide nt. That primary purpose qualified the equipment for the tax exemption. Similarly, the “facility” in Meijer , a compactor and baler, actually served the primary purpose of controlli ng pollution in Michigan. The Meijer petitioner installed the compactor and baler to replace its incinerat or because the incinerator produced pollution in excess of the amount allowed under the law. The compactor

29 407 Mich 561; 287 NW2d 895 (1980). 30 Id . at 580. 31 Id. at 580-581.

17and baler accomplished the same task as the incinerator but by producing less pollution. 32 Contrary to the Court of Appeals conclusion, the test cells are not analogous to the compactor and baler because the test cells did not replace a more polluting testing process. As noted by the Meijer panel, “had no pollution problem existed, and appellee simply chose the method of waste disposal by compacting and baling in order to dispose of waste, it would be ineligible for tax exemption because th e necessary element—primary pollution control purposes— would be lacking.” 33 The facilities in the instant case were installed for the primary purpose of testing engines, whic h will theoretically produce less pollution than other engines once put into production. However, petitioners simply chose a method of testing. They di d not install the test cells to replace a process that accomplishes the same task w ith more pollution. Thus, the Court of Appeals and the dissent erroneously relied on Meijer to conclude that ancillary equipment

32 The dissent argues that under our interpretation of MCL 324.5901, the compactor and baler would not qualify as a facility because the equipment simply compresses or bales material. This ar gument misconstrues both our interpretation and the facts of Meijer . The Meijer petitioner had been di sposing of its refuse with an incinerator that produced an abundance of pollution. As noted, the petitioner installed the compact or and baler for the primary purpose of controlling the air pollution produced by its refuse disposal system. Furthermore, when the compactor and baler were operated they actually “controlled, captured, and removed” pollutants at that site. The test cells simply do not perform these functions. Any reducti on of pollution that is connected to the test cells is entirely contingent on the redesign and manufacture of the engine s and vehicles that may be introduced for future sales across the country. 33 Meijer , supra at 285.

18installed primarily for the purpose of testing other equipment also qualifies for the exemption. The clear import of these cases and the statute is that the “facility” must reduce the air pollu tion caused by the operation of the petitioner’s Michigan site to qualify for the tax exemption. Howev er, the dissent argues that the reduction of air pollution caused by the petitioner’s engine products —well after those products have left the petitioner’s control—can qualify the testing e quipment used to manufacture those products fo r the exemption. This interpretation expands the exemption statute far beyond its plain mean ing and contrary to any rationale that our Legislature entertained for aff ecting this state’s environment.
CONCLUSION In denying DaimlerChrysler’s applicati on for its Auburn Hills test cell, the DEQ listed the following “Non-Air Polluti on Function(s) of Equipment”: “The testing of vehicles is one of the manufact uring steps that the applicant takes in researching, designing, manufacturing, tes ting, marketing and selling vehicles.” 34 In the “comments” section, the DEQ states: Testing vehicles at the Chry sler Technical Center actually generates and emits air contamin ants. None of the requested equipment controls, capture [sic] or removes pollutants generated by the vehicle testing equipment. Th e applicant has not satisfied its burden of establishing that its described machinery, equipment, structures, or related accessories were installed or acquired and

34 DEQ Tax Exemption Review, Decem ber 15, 2003. The DEQ reached the same conclusion with regard to the other petitioners’ test cells.

19designed and operated to physically control, di spose, capture, and/or remove air pollutants from the air, that if released would render the air harmful, pursuant to the intent of Sections 5901 and 5903 of Part 59, as separate and distinct fr om apparent other purposes of measuring, recording and assessing data to determine if a product is fit for continued production or commercial sales, or for other research, manufacturing, marketi ng or sales purposes. The Department finds that the appli cant has not established a primary purpose qualifying for a tax exemption under Part 59. [35] The DEQ properly applied §§ 5901 and 5903 and concluded that the test cells do not qualify for a tax exemp tion. Therefore, we reverse the Court of Appeals and reinstate the STC’s decisi on denying petitioners ’ request for tax exemptions for their test cells. However, we affirm the Court of Appeal s holding that the Detroit Diesel Equinox Line was not entitled to a tax exemp tion and that Detroit Diesel received due process.

Robert P. Young, Jr. Clifford W. Taylor Michael F. Cavanagh

35 Id

.

20v

v S T A T E O F M I C H I G A N
SUPREME COURT

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee,
No. 133394 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellees, and CITY OF AUBURN HILLS, Respondent-Appellant.

FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133396 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellees, and CITY OF DEARBORN,Intervening RespondentAppellant.v

v FORD MOTOR COMPANY, Petitioner-Appellee,
Nos. 133400-133402 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and CITY OF DEARBORN,Intervening RespondentAppellee.

DETROIT DIESEL CORPORATION, Petitioner-Appellee, Cross-Appellant,
No. 133403 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, Cross-Appellees, and
CHARTER TOWNSHIP OF REDFORD,Intervening RespondentAppellee.

2v

v FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133404 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants.

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee, Cross-Appellant,
No. 133405 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and TOWNSHIP OF SYLVAN, Respondent-Appellee.

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee,
No. 133406 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY,

3 vRespondents-Appellants, and CITY OF AUBURN HILLS, Respondent-Appellee.

KELLY, J. ( concurring in the result ). Justice Young and Justice Weaver disa gree about whether the test cells at Ford Motor Company, DaimlerChrysle r Corporation, and Detroit Diesel Corporation are entitled to ta x-exemption certificates. The justices reasonably apply the statutory la nguage, but reach opposite conclu sions. In this situation, judicial construction should be brought to bear to resolve the issue. When the applicable canon of interpret ation is applied, it becomes apparent that the test cells are not entitled to tax- exemption certificates. Thus, a lthough I disagree with some of his reasoning, I concur in the re sult of Justice Young’s opinion. In addition, I agree with both Justi ce Weaver and Justice Young that the Detroit Diesel Corporation engine pro duction equipment is not entitled to a tax

exemption certificate. Fina lly, I agree that th e corporation received a full hearing before the STC that satisfied its due process rights.
T HE T WO -P ART T EST OF NREPA The issue that divides Ju stice Young and Justice W eaver is whether the test cells qualify for tax-exemptio n certificates under part 59 of the Natural Resources

4and Environmental Pr otection Act (NREPA). 1 For purposes of this case, the key provisions of part 59 are §§ 5901 and 5903. Section 590 1 sets forth the definition of “facility.” It provides in relevant part: As used in this part, “facility ” means machinery, equipment, structures, or any part or accessor ies of machinery, equipment, or structures, installed or acquired for the primary purpose of controlling or disposing of air pollution that if released would render the air harmful or inimical to the pu blic health or to property within this state. . . . Section 5903 explains when a “fac ility” is entitled to a tax-exemption certificate. It states: If the department finds that the facility is designed and operated primarily for th e control, capture, an d removal of pollutants from the air, and is suitable, reasonably adequate, and meets the intent and purposes of part 55 and rules promulgated under that part, the department shall notify the st ate tax commission, which shall issue a certificate. The effective date of the certificate is the date on which the certificate is issued. Using these statutes, a two-part test must be applied to determine whether the test cells are entitled to tax-exemption certificates. First, the test cells must qualify as a “facility” under § 5901. Second, the “facility ” must meet the additional requirements se t forth in § 5903.
S ECTION 5901 With respect to the first consideration, the test cells are fac ilities if they are (1) machinery, equipment, structures, or any part or accessories of machinery, equipment, or structures a nd (2) installed or acquired for the primary purpose of

1 MCL 324.5901 et seq.

5controlling or disposing of air pollution (3 ) that if released would render the air harmful or inimical to the pub lic health or to property w ithin this state. It is uncontested that the test cells are mach inery, equipment, or structures. The dispute is over the other two statutory requirements. Respondents argue that the test cells were not installed or acquired for the primary purpose of contro lling or disposing of air pollution. I disagree. Petitioners installed the test cells solely to comply with pollu tion laws. The test cells have no other purpose. Were it not for pollution laws, petitioners could build their products without the n eed for test cells. In fact, it would be cheaper for them to do so. Thus, it seems clear to me that the primary purpose of installing test cells was to control air pollution. Respondents also argue th at the test cells do not qualify as facilities because their primary purpose is not to control or dispose of po llution within Michigan. I reject this argument because the statute does not require that the primary purpose of the equipment be to improve air quality in Michigan. In stead, the statutory command is satisfied if the pollution th at the equipment is concerned with controlling or disposing of, if released, w ould “render the air h armful or inimical to the public health or to property with in this state.” The command is satisfied here. If the pollutants th at the test cells are con cerned with c ontrolling were released into the air, they would be h armful to the public health and property within the state.

6Finally, respondents argue that the test cells are not facilities because they create a small amount of pollution. This fact is irrelevant. The test cells are facilities if their primary purpose is contro lling or dispos ing of pollutants that, if released, would be harm ful to the public health and property within this state. These requirements are satisfied.
S ECTION 5903 The next step of the inquiry is to de termine if the test -cell facilities meet the requirements of § 5903. A facility is en titled to a tax-exemption certificate under this section if it is (1) de signed and operated pr imarily for the control, capture, and removal of pollutants from the air, (2) su itable, reasonably adeq uate, and (3) meets the intent and purposes of part 55 of the act. Notably, § 5903 requires the “facility ” to be “designed and operated primarily for the control, capture, and removal of pollutants from the air.” This differs from § 5901, which requi res the test cells to be “installed or acquired for the primary purpose of controlling or disposing of air pollution.” It must be assumed that this difference in wording is purposeful. As a result, § 5903 imposes a more stringent requirement than § 5901. Accordingl y, it does not follow from the fact that the test cells qualify as “facilities” that they are “designed and operated primarily for the control, capture, and removal of pollutants from the air.” The test cells do not actually remove po llution that is already in the air. Instead, they are part of a pr ocess that reduces the amount of pollution in the air by

7preventing the creation of polluta nts. Because the test ce lls are not concerned with pollutants that are already in the air, it can be argued that the test cells are not “designed and operated primarily for the c ontrol, capture, and removal of pollutants from the air .” There is some merit to th is argument. Accordingly, I believe that it is reasonable to decide that the test cells do not qualify for tax

exemption certificates. This is the result reached by Justice Young. On the other hand, the test cells are op erated solely in an effort to comply with federal pollution standard s. By complying with these stand ards, the quantity of pollutants in the air is reduced. Cons idering that the test cells are part of a process that eliminates th e creation of pollutants, th ey remove pollutants that would otherwise be in the ai r. The statute does not explicitly require the facility to remove pollutants that are already in the ai r. Hence, I believe that it is also reasonable to decide that the facilities are entitled to tax -exemption certificates. Justice Weaver reaches th is conclusion. Because I believe that both Jus tice Young’s and Justice Weaver’s constructions of the statute are reasonable, I conclude that the correct application of the statute to the facts of this case is un certain. As a consequence, the statute is ambiguous. 2 The remaining provisions of NREP A do not clarify this ambiguity.

2 A statute is ambiguous when its app lication to the facts of the case is uncertain. Elias Bros Restaurants, Inc v Treasury Dep’t , 452 Mich 144, 150; 549 NW2d 837 (1996).

8Accordingly, I conclude that it is appr opriate to turn to sources outside the statutory language to resolve the case.
T HE E FFECT OF DEQ R ULINGS AND C ASELAW Both sides claim that th e rule that deference is owed to administrative interpretations supports their position. The Department of Environmental Quality (DEQ), which is authorized to determin e eligibility for part 59 tax exemptions, decided that the test cells at issue are not entitled to tax-exemption certificates. However, this decision is inconsistent w ith at least one recent DEQ decision that granted a tax-exemption certif icate to a test-ce ll facility. A ccordingly, because the DEQ’s current interpretation is incons istent with another of its recent interpretations, it does not weigh heav ily in favor of either position. The parties also identif y prior published court opini ons interpreting part 59 as supporting their positions . But these opinions do no t resolve the present case.
In Covert Twp Assessor v State Tax Comm , 3 the facilities at issue controlled, captured, and removed discharges resulting from a nuclear accident. 4 Accordingly, the facilities’ primary concern was with pollutants that had already been created. This differs fro m the test cells involved h ere that have a goal of preventing pollutants from ever being created. Thus, that case is not on point because the facts were materially different. The other case, Meijer, Inc v State Tax

3 Covert Twp Assessor v State Tax Comm, 407 Mich 561; 287 NW2d 895 (1980). 4 Id. at 580.

9Comm , 5 is also not directly on point. Furthermore, it is a Court of Appeals decision. As such, it is not binding on this Court. Finally, we are directed to decisions of other states int erpreting their tax

exemption statutes. Given that these cases involve statutes that differ from Michigan’s statutes, I find them of littl e assistance in de terming the proper interpretation of the Michigan statute.
T HE C ANONS OF S TATUTORY C ONSTRUCTION Because I cannot resolve the issue usin g the statute’s language alone and the other sources I have men tioned do not point in eith er direction, I turn to the canons of construction. Most applicable is the well-established canon that tax exemptions are to be strictly construed. 6 When this canon is applied, test-cell facilities are exempt from ta xation only if the statutor y language does not allow another construction. But another co nstruction is not only possible, but reasonable. As a result, I conclude th at the test cells are not entitled to tax

exemption certificates.
C ONCLUSION I conclude that the test cells qualify as facilities under § 5901, but that the correct application of § 5903 is unclear. DEQ rulings an d existing caselaw are not

5 Meijer, Inc v State Tax Comm, 66 Mich App 280; 238 NW2d 582 (1975). 6 See, e.g., East Saginaw Mfg Co v East Saginaw , 19 Mich 259, 279 (1869); Michigan United Conserva tion Clubs v Lansing Twp , 423 Mich 661, 664; 378 NW2d 737 (1985).

10dispositive of the issue. As a result, I e ngage in judicial cons truction to determine whether the facilities are entitled to tax-exemption certificates. The appropriate canon of construction is that tax exemptions are to be strictly construed. By strictly construi ng the exemption in question, I conclude that the test-cell facilities are not entitled to tax-exemption certificates. As a consequence, I concur with Justice Young’s resolution of this issue. I also agree that Detroit Diesel’s engine line is not e ligible for the tax ex emption. Therefore, I agree with Justice Young that the Court of Appeals decision should be partially affirmed and partially reversed.

Marilyn Kelly

11v

v S T A T E O F M I C H I G A N
SUPREME COURT

DAIMLERCHRYSLER CORP, Petitioner-Appellee,
No. 133394 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellees, and CITY OF AUBURN HILLS, Respondent-Appellant.

FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133396 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY,
Respondents-Appellees, and CITY OF DEARBORN,Intervening RespondentAppellant.v

v FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133400-02 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and CITY OF DEARBORN,Intervening RespondentAppellee.

DETROIT DIESEL CORPORATION,Petitioner-Appellee/CrossAppellant,
No. 133403 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY,Respondents-Appellants/CrossAppellees, and
CHARTER TOWNSHIP OF REDFORD,Intervening RespondentAppellee.

2v

v FORD MOTOR COMPANY, Petitioner-Appellee,
No. 133404 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY Respondent-Appellants,

DAIMLERCHRYSLER CORPORATION,Petitioner-Appellee/CrossAppellant,
No. 133405 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY, Respondents-Appellants, and TOWNSHIP OF SYLVAN, Respondent-Appellee.

DAIMLERCHRYSLER CORPORATION, Petitioner-Appellee,
No. 133406 STATE TAX COMMISSION and DEPARTMENT OF ENVIRONMENTAL QUALITY,

3 vRespondents-Appellants, and CITY OF AUBURN HILLS, Respondent-Appellee.

WEAVER, J. ( concurring in part an d dissenting in part ). I concur with the lead opi nion’s holding that Detro it Diesel’s Equinox Line does not qualify for tax exem ptions under part 59 of the Natural Resources and Environmental Protection Act (NREPA) 1 because the Equi nox Line was not installed for the primary purpose of cont rolling or disposing of air pollution, but was instead installed for th e primary purpose of producing a new type of vehicle engine for sale. However, I dissent from the lead opin ion’s holding that petitioners’ test-cell facilities do not qualify for tax exemption under part 59. I would affirm the Court of Appeals and hold that petitioners’ test-cell facilities qualify for tax exemptions under part 59 because they meet the definition of “facility” in MCL 324.5901 and, under MCL 324. 5903, are “designed and operated primarily for the control, captu re, and removal of pollutants from the air,” are “suitable” or “reasonabl y adequate” at abating air pollution, and “meet the intent and purposes of part 55” of NREPA, MCL 324.5501 et seq. , which regulates air pollution.

1 MCL 324.5901 et seq.

4I. FACTS AND PROCEEDINGS The material facts in these seven consolidated cases are undisputed. Petitioners, Ford Motor Co mpany, DaimlerChrysler, and Detroit Diesel, manufacture motor vehicles and engines. Petitioners’ vehicles and engines are subject to federal air-quality regulations promulgated by the Environmental Protection Agency (EPA). 2 The vehicles and engine s must pass EPA-mandated emissions tests before the ve hicles and engines can be mass-produced and sold to consumers. Each of the petiti oners established “test cell” facilities designed to test vehicle and engine emissions to ensure co mpliance with EPA regulations. In the test cells, vehicles and engines are placed in a closed room or a bay with a hose attached to the exhaust pipe. While th e vehicle or engine is emitting exhaust, samples of the exhaust are sent through devices that measure the emissions and determine whether those emi ssions comply with federal regulations. The test cells then release the tested em issions into the air. In addition to a test-cell facility, Detroit Diesel built its Equinox Line facility after its existing Series 60 diesel engine failed to meet the newly enacted EPA emission standards. The Equinox Line facility wa s designed to manufacture new diesel engines that meet the newest federal pollution-contro l standards. In October 2002, after Detroit Diesel made si gnificant design changes to the original

2 See 42 USC 7401 et seq.

5Series 60 engine, Detroit Di esel’s new Equinox Line of diesel engines obtained EPA certification. In 2001, Ford Motor Company filed for tax ex emptions for test cells and equipment under part 59 of NREPA, 3 which permits tax ex emptions for certain facilities that reduce air pollution. This application was granted by the State Tax Commission (STC) after revie w and approval by the Mi chigan Department of Environmental Quality (DEQ). In 2003 and 2004, Ford, DaimlerChrysler, and Detroit Diesel filed for multiple exempti ons under part 59 for similar test-cell facilities located around the stat e. Additionally, in 2003 Detroit Diesel applied for tax exemptions for its Equinox Line facility. Th e STC referred the exemption requests to the DEQ, whic h concluded that the test -cell facilities and the Equinox Line facility did not meet the requirem ents for a part 59 tax exemption. The DEQ concluded that the primary purpose of the te st cells was to enable petitioners to sell their vehicles by comply ing with federal la w, not to reduce pollution. The DEQ explaine d that the test cells did not qualify for the exemption because they did not physically remove or control pollution, but rather actually created pollution during the testing process. In regard to Detroit Diesel’s Equinox Line, the DEQ determined that it was not a qualifying facility under part 59 because its primary purpose was “to manufactu re diesel engines fo r sale by Detroit Diesel.” The DEQ determined that b ecause the air emissions from the Equinox

3 MCL 324.5901 et seq

.

6Line manufacturing facility were not signif icantly different from those emitted by the Series 60 facility, the Equinox Line did not qualify as a “process change” under part 59 that met the goal of reducing pollution. As a result, the STC rejected the tax exemption requests for the test-ce ll facilities and the Equinox Line facility. In separate lawsuits, petitioners appeal ed to various circuit courts. In Ford’s suits, the Wayne Ci rcuit Court reversed the STC’s denials of the tax

exemption applications , ruling that the court was constrained by Meijer, Inc v
State Tax Comm , 66 Mich App 280; 238 NW2d 58 2 (1975), to conclude that the test-cell facilities met the p art 59 requirements becau se they were ancillary equipment for the control of pollution. The city of Dearbor n, an intervening respondent, filed four separate applications in the Court of Appeals, arguing that the circuit court had impr operly overturned fact-finding of the administrative
agency. In Detroit Diesel’s suit, the Wayn e Circuit Court affirmed the STC’s decision because there was competent, material, an d substantial evidence supporting the STC’s conclusion that the te st cells and the Equinox Line do not actually remove pollution, but rather operat e for the primary purpose of producing engines for sale. Detroit Diesel applie d for leave to appeal in the Court of Appeals. In DaimlerChrysler’s su its, the Oakland Circuit C ourt affirmed the STC’s decisions, holding that there was competent, material, a nd substantial evidence for the STC’s conclusion that the test cells do not actually remove pollution and that

7the primary purpose for the test cells was to ensure that DaimlerChrysler’s vehicles were sellable. Daim lerChrysler applied for leave to appeal in the Court of Appeals. The Court of Appeals issued an order consolidating all the appeals. The Court of Appeals, in a pu blished opinion, held that all the test-cell facilities met the requirements of the part 59 tax exempt ion as a matter of law, but that Detroit Diesel’s Equinox Li ne facility did not. 4 The panel concluded that the test cells qualified for tax-exemption certificates beca use petitioners installed the test cells solely to ensure co mpliance with EPA emission sta ndards. Thus, the test cells were installed for the primary purpose of controlling or disposing of air pollution and were designed and operated primarily fo r the control, capture, and removal of pollutants from the air. The panel held th at Detroit Diesel’s Equinox Line did not meet the requirements of p art 59 because it was operated primarily for production of a new type of engine for sale, not for the control, capture, or removal of pollutants in the air. The Court of App eals also rejected Detr oit Diesel’s claims that the STC’s hearing process violated th e Administrative Procedures Act (APA),
MCL 24.201 et seq. , and due-process principles. The DEQ and the STC filed separate app lications for leave to appeal in each case. Detroit Diesel cro ss-appealed. The city of Auburn Hills appealed the

4 Ford Motor Co v State Tax Comm , 274 Mich App 108; 732 NW2d 591 (2007).

8decision regarding DaimlerC hrysler’s Auburn Hills test cell, and the city of Dearborn appealed the decision involving Ford’s Dearborn test cell. This Court granted all the applications for leave to appeal or cross-appeal. 5

II. STANDARD OF REVIEW This case involves the interpretation of part 59 of NREPA. This Court reviews questions of statut ory interpretation de novo. 6 Clear and unambiguous statutory language is gi ven its plain meaning and is enforced as written. 7 Further, this case involves review of the STC and DEQ’s interpretation and application of part 59. This Court rev iews final decisions from administrative agencies by determining wh ether they are authorized by law and whether they are supported by competent, material, and su bstantial evidence on the whole record. 8 Although this Court afford s respectful consideration to the construction of statutory provisions by any particular department of the government, the department’s interpretation is not bindin g on this Court and cannot be used to

5 DaimlerChrysler Corp v State Tax Comm , 480 Mich 880 (2007). 6 Ayar v Foodland Distributors , 472 Mich 713, 715; 698 NW2d 875 (2005). 7 Id. at 716. 8 Reed v Hurley Medical Ctr, 153 Mich App 71, 75; 395 NW2d 12 (1986); MCL 24.306.

9overcome the statute’s unambiguous meaning. 9 Furthermore, this Court owes no deference to an agen cy determination when an agency issues contradictory rulings on the same issue and changes its policy mid -course, as the DEQ has in this case. “‘Substantial evidence’ is evidence that a reasonabl e person would accept as sufficient to support a conc lusion. While this require s more than a scintilla of evidence, it may be substantially less than a preponderance.” 10

III. PART 59 TAX EXEMPTIONS Part 59 of NREPA pr ovides real property, personal property, sales, and use tax exemptions for certain facilities desi gned to reduce air pollutants. Tax

9 Catalina Marketing Sales Co rp v Dep’t of Treasury , 470 Mich 13, 23-24; 678 NW2d 619 (2004). 10 Dep’t of Community Health v Risch , 274 Mich App 36 5, 372-373; 733 NW2d 403 (2007) (citation and quotation marks omitted). The city of Dearborn argues in its application that the STC’s decision to deny Ford’s application for a tax exemption was supported by competent, material, an d substantial evidence on the record and should theref ore not be disturbed on appeal. We reject this argument because it is based on the inco rrect assumption that the circuit court reversed the STC on a purely factual basis, in stead of a legal one. On appeal, the Court of Appeals did not consider wheth er the STC’s decision to deny Ford’s application for a tax exemp tion was unsupported by fact ual evidence. Rather, the Court of Appeals held that the STC’s le gal rulings were errone ous as a matter of law. Under MCL 24.306 of the APA, a reviewing court can set aside the STC’s decision on a legal basis or on a factual basis if the facts are not supported by competent, material, and substantial ev idence. Therefore, th e Court of Appeals was free to rule that the STC’s decision was legally erroneous, even if it was supported by competent, mat erial, and substantial evidence.

10exemptions are strictly cons trued against the taxpayer. 11 However, the Court interprets the statutory language creati ng the tax exemption according to common and approved usage. 12 In order to qualify for the tax exemptions under part 59, the property in question must firs t meet the definition of “facility ” in part 59. Part 59 defines “facility” as follows: [M]achinery, equipment, structur es, or any part or accessories of machinery, equipment, or structures, installed or acquired for the primary purpose of controlling or disposing of air pollution that if released would render the ai r harmful or inimical to the public health or to property within this state . Facility includes an incinerator equipped with a po llution abatement device in effective operation. Facility does not include an air co nditioner, dust collector, fan, or other similar facility for the benefit of personnel or of a business. Facility also means the following, if the installation was completed on or after July 23, 1965: (a) Conversion or modi fication of a fuel burning system to effect air pollution control. The fuel burner portion only of the system is eligible for tax exemption. (b) Installation of a new fuel burning system to effect air pollution control. The fuel burn er portion only of the system is eligible for tax exemption. (c) A process change involving pr oduction equipment made to satisfy the requirements of part 55 and rules promulgated under that part. The maximum cost allowed sha ll be 25% of the cost of the new process unit but sh all not exceed the cost of the conventional control equipment applied on the basis of the new process production rate on the preexisti ng process. [MCL 324.5901 (emphasis added).]

11 Elias Bros Restaurants, Inc v Dep’t of Treasury , 452 Mich 144, 150; 549 NW2d 837 (1996). 12 Id

.

11After property has been designate d as a facility under MCL 324.5901, the facility must meet the followi ng further requirements in order to qualify for tax exemptions: If the department finds that the facility is designed and operated primarily for th e control, capture, an d removal of pollutants from the air, and is suitable, reasonably adequate, and meets the intent and purposes of part 55 and rules promulgated under that part, the department shall notify the st ate tax commission, which shall issue a certificate. . . . [MCL 324.5903.] Therefore, property must meet the definition of “facilit y” under MCL 324.5901, and , under MCL 324.5903, (1) be “desig ned and operated primarily for the control, capture, and removal of polluta nts from the air,” (2) be “suitable, reasonably adequate,” and (3) “m eet the intent and purposes of part 55” in order to qualify for tax exemptions under part 59.

A. TEST-CELL FACILITIES I dissent from the lead opinion, and wo uld hold that the petitioners’ test-cell facilities qualify for tax exempt ions under part 59. In order to determine whether the petitioners’ test-cell facilitie s qualify for tax exemptions, it is necessary to first determine whether the test-cell facilities are “facilities” un der MCL 324.5901. MCL 324.5901 unamb iguously defines a facility as including “machinery, equipment, structures, or any part or accessories of machinery, equipment, or
structures, installed or acquired for the primary pur pose of controlling or disposing of air pollution that if released would render the air harmful or inimical to the public health or to property within this state.” (Emphasis added.)

12Accordingly, it is necessary to de termine whether the test cells were installed or acquired for the primary purp ose of controlling or disposing of air pollution in Michigan. An ordinary meaning of “control” means to “exercise restraint or direction over; dominate, re gulate, or command; to hold in check; curb.” 13 It is undisputed that petitioners inst alled and operated the test cells for the sole purpose of regulating emissions to meet federal standards and curb emissions output in the engines and ve hicles produced. Regulating and curbing emissions is thus a method of cont rolling emissions. The STC and the DEQ argue that petitione rs did not install the test cells with the primary motive of controlling emissions because the test cells were installed to create vehicles conforming to EPA regulations. However, the petitioners’ motive behind inst alling the test cells is not determina tive of the primary purpose of the test cells. It is i mmaterial that the test cells were created so that the petitioners’ engine and vehicl e emissions would satisfy federal emissions regulations: The use of the words “primary purpose” in § 1 [now MCL 324.5901], and “operated primarily for” in § 3 [now MCL 324.5903] of the Air Exemption Act [now p art 59] evidences a legislative concern with the primary purpose served by the facility for which exemption is sought. This purpos e need not, necessarily, align with

13 Webster’s Universal College Dictionary (1997).

13the motivation of the persons installing, acq uiring or operating the facilities. [14] The test cells primarily operate to regul ate and reduce air pollutants; for tax

exemption purposes, it does not matter why the test cells were implemented. The STC and the DEQ add itionally argue that the test-cell facilities are not “facilities” under MCL 324.5901 because the test-cell facilities actually create a small amount of pollution through the test ing process. This creation of a small amount of pollution does not, however, alter the primary purpose of the test cells, which is to control pollution through prev ention. As petitioners point out, many pollution-control machines al so create pollution. For example, mechanical balers and compactors, such as those in Meijer, supra, release some exhaust during recycling operations. The STC and the DEQ also argue that th e clause “within th is state” in MCL 324.5901 bars tax exempti on for petitioners becau se the exhaust emissions that the test cells reduce are released primarily outside Michigan. This argument is unpersuasive. First, the STC and the DE Q did not preserve this issue for appeal because they did not raise and argue it befo re the Court of Appeals. Furthermore, the phrase “within this state” modifies the conjoine d phrases “to the public health or to property,” not “the primary purpose of controlling air pollution.” In other words, the statute merely requires that the “primary purpos e” of the machinery

14 Covert Twp Assessor v State Tax Comm , 407 Mich 561, 580-581; 287 NW2d 895 (1980).

14installed be to “control . . . air pollution, ” not to specifically control air pollution that would be released primar ily within this state, as the STC and the DEQ argue. The statute then refines the category of “ai r pollution” to refer to a subcategory of pollution “that if released would render the air harmful or inim ical to the public health or to property w ithin this state.” This phrase indicates that if the pollution that has been controlled were to be released, that pollution must be of the type that would be harmful to public health or prop erty in Michigan in order for machinery that controls such air pollution to qualify as a “facility.” Thus, if the test cells at issue were installed for the primary purpose of controlling air po llution, and if the release of the controlled air pollution would render the air harmful to public health or property within Mi chigan, then the test cells qua lify as a “facility.” Here, the primary purpose of the test cells is to reduce air pollution by testing the emissions released by vehicles. More over, there is no question th at vehicles and engines manufactured by the petitioners are sold in Michigan, and th at the pollution controlled by the test cells is harmful to th e public health. It stands to reason then that the vehicles and engines sold in Mi chigan emit fewer noxi ous pollutants into Michigan’s atmosphere than they would have released without the test cells. Therefore, the test cells contro l air pollution that, if relea sed, “would render the air harmful or inimical to th e public health or to prop erty within this state.” Accordingly, the test cells ar e “facilities” under MCL 324.5901. 15

15 MCL 324.5901 does not requi re that pollution be reduced solely within (continued...)

15Petitioners’ test-cell facilities were inst alled or acquired for the primary purpose of controlling or di sposing of air pollution in Michigan becau se the test cells curb the spread of air pollution by ensuring that less pollution is released into the atmosphere in the firs t place; therefore, the test -cell facilities are “facilities” under MCL 324.5901. The lead opinion ar gues that the test cells are not “facilities” because their primary purpose is to “ test engines to ensure that petitioners have properly designed their engines to meet federal regulations so th at they can sell them to
consumers.” Ante at 10. However, this argument does not consider that without the federally mandated pollution regulations , petitioners would no t need or have test cells, but would conti nue to operate withou t them. As petiti oners point out, the test cells do not benefit petitioners’ businesses because conformance with EPA regulations increases expenses , resulting in higher vehicl e and engine prices and reduced sales. Thus, the test cells were not installed to foster sales. Further, every business must comply with fed eral pollution regulations and every business is trying to sell something. Under the lead opinion’s interpreta tion, it appears that any business that complies with federal regulations is not entitled to a Michigan tax exemption because it coul d always be said that the business complied with
(...continued) Michigan. As long as pe titioners sell engines and vehi cles in Mich igan, thereby reducing harmful pollution in Michigan, the fact that th ey also sell engines and vehicles in other states, thereby reducing poll ution in those states as well, does not prevent them from qualifying for the instant tax exemption.

16federal regulations merely to sell its pr oduct to consumers. Under the lead opinion’s interpretation, the only way a business would be entitled to a tax exemption is by philanthrop ically installing pollution -control equipment. The test cells perform a fundamental function in the air-pollution-control process. They measure the levels of pollution emitted by engines in order to assure compliance with air- pollution regulations. If th ese levels of pollution exceed limits, the engines are not manufact ured or sold, th ereby curtailing excessive air pollution. Without the test cells, petitioners w ould be unable to ensure that their products are less polluting. Because testing emissions is an essential component of “controlling or di sposing of air pollution,” and because the test cells were installed speci fically to test pollution, th e test cells can fairly be characterized as having been installed for “the primary purpose of controlling or disposing of air pollution” under MCL 324.5901. Moreover, under the lead opinion’s analysis, even co mpactors or balers, which were specifically held to qualify as “facilities” in Meijer , supra at 284, a decision with which the lead opinion apparently agrees, ante at 17-18, would not qualif y as such because their “primary purpose” is to compress or bale material, rather th an to “control” pollution. Next, in order to qualif y for tax exemptions under part 59, petitioners’ test

cell facilities must meet th e requirements of MCL 324.5903. First, the test cells must be designed and operated primarily for the contro l, capture, and removal of

17pollutants from the air. In this case, the test cells were created for the sole purpose of reducing air pollutants emitted by the peti tioners’ vehicles and engines, so that is the cells’ primary purpose.
As discussed earlier, the test cells control air pollutants directly by regulating the emissions output, and indirec tly by curbing the levels of pollutants released into the air in th e first place. The test ce lls also capture and remove pollutants from the atmosphere. An ordinary meaning of “capture” is “to gain control of or exert influence over.” 16 Again, by regulating and curbing emissions, the test cells ensure that po llutants that would otherwis e have been released into the atmosphere are never produce d in the first place and t hus control pollutants. An ordinary meaning of “remove” is “to move or shift from a place or position; to eliminate; do away wi th or put an end to.” 17 The test cells “e liminate” or “put an end to” air pollutants by p reventing the pollutants from being created in the first place; were it not for the test cells, th e abated pollutants would be in the atmosphere. Thus, the test cells operate primarily for the c ontrol, capture, and removal of air pollutants from the air.
Next, the test cells must be suita ble and reasonably adequate for the purpose of reducing air pollutants and must also meet the intent and purposes of part 55 of NREPA to qualify for tax exemptions. “The suitability and

16 Random House Webster’s College Dictionary (1997). 17 Id.

18adequacy . . . can be, and are, measured and tested th rough non-empirical studies based on accepted scientific principles and sound analysis. . . . [T]he resolution of this question is particularly well-suited to the expertise of the administrative agencies charged with assessing the technical suita bility and adequacy of facilities for which exemption is sought.” 18 It is undisputed that the test cells function to help petitioners reduce and regulate the ai r pollutants that their vehicles and engines ultimately emit in order to meet fe deral standards. As a result, the test cells are suitable and reasona bly adequate for the purpos e of reducing noxious air pollutants. The purpose of part 55, by its own terms, is “to provide additional and cumulative remedies to prev ent and abate air pollution. ” The test cells, by ensuring that vehicle and engine em issions are clean eno ugh to pass federal emissions standards, are desi gned to prevent and abate ai r pollution. Although the test cells were installed to ensure compliance with fede ral emissions regulations, they nonetheless accomplish the purpose of part 55—to prevent and abate air pollution. The test cells meet the intent and purpos es of part 55 of NREPA because the test cells f unction to prevent and abate noxious air pollutants. 19

18 Covert Twp , 407 Mich at 582. 19 Covert Twp agreed with the STC’ s holding that the inte nt and purposes of the predecessor to part 55 “‘are served by pollution co ntrol facilities constructed within the State of Mich igan whether required by reason of federal or state regulation. . . . It is the fact that pollution control is provided that is important and (continued...)

19Petitioners’ test-cell facilities qualify for tax exemptions under part 59 because they meet the d efinition of “facility” in MCL 324.5901 and, under MCL 324.5903, are “designed and operated prim arily for the cont rol, capture, and removal of pollutants from the air,” are “suitable” or “reasona bly adequate” at abating air pollution, and “meet the intent and purposes of part 55.” The lead opinion argues th at the test cells do not meet the requirements of MCL 324.5903 because they do not actually remov e, control, and capture pollution caused by the operation of petitioners’ businesses. Ante at 11-13. disagree. The statute does not require that the exempt equipment itself physically remove air pollutants; rather, it merely requires that it be intended and operated primarily for that purpose . Moreover, the statute does not require that the pollution removed by the exempt equipment be that created by the operation of petitioners’ businesses ; rather, the statute only refers to air pollution generally, without specifying any particular source of po llution. As explained earlier, the test cells here were intended prim arily for, and functioned as, integral parts of a pollution-control process designed to regul ate and curb air pollution produced by petitioners’ engines and vehi cles. Therefore, the test cells were “designed and operated primarily for the control, captu re, and removal of pollutants from the air.”

(...continued) not whether that pollution control is provided in res ponse to state or federal regulation.’” Id. at 579 (emphasis in original).

20 IThe lead opinion also su a sponte injects the argumen t that in order for a facility to meet the intent and purposes of part 55, it must regulate a “source” of pollution as defined by MCL 324.5501(t). Ante at 13-14. The lead opinion attempts to extrapolate the intent a nd purposes of “the whole of part 55,” ante at 13 n 23, by putting together bits and pieces of part 55. This method is flawed. MCL 324.5540 clearly and unambiguously states the purpose of part 55: It is the purpose of this p art to provide additional and cumulative remedies to prevent and abate air pollution. This part does not abridge or alter rights of action or remedies now or hereafter existing. This part or anyt hing done by virtue of this part shall not be construed as estopping persons fro m the exercise of their respective rights to suppress nuisan ces or to preven t or abate air pollution. We give this language its plain meaning and enforce it as written. Ayar v Foodland Distributors , 472 Mich 713, 715; 698 NW2d 875 (2005). The title and declared purpose of part 55 refer to air- pollution control gen erally. The lead opinion wrongly argues that the intent and purposes of part 55 are not to prevent and abate air pollution generally, but inst ead to provide remed ies in addition to private or citizen suits relat ed to pollution control. U nder the lead opinion’s faulty interpretation of the intent of part 55, only facilities that provide “additional remedies” would be eligib le for a tax exemption und er MCL 324.5903. The lead opinion fails to explain how pollution-control facilities oth er than the test cells can provide “additional remedies” that the test cells cannot.

21Moreover, although part 55 mainly deals with stationary sources, this fact is not dispositive because part 55 also refer s to nonstationary sources used for transportation. 20 The lead opinion discusses p art 55’s definition of “source” in a vacuum, while ignoring the other defined t erms in part 55. Fo r example, part 55 also governs “process equipment,” which it defines as “all equi pment, devices, and auxiliary components, including air pollution control equipment , stacks, and other emission points, used in a process.” MCL 324.5501(q) (emphasis added). Part 55 defines “air pollution control equipment” as “any method, process, or equipment that removes, reduces, or renders less noxious air contaminants discharged into the atmosphere.” MCL 324.5501(c). Test cells arguably qualify as “air pollution control equipment” because they ensure that vehicles and engines do not exceed federal emissions standards, thus reducing air contaminants di scharged into the atmosphere. The important po int, however, is that th e lead opinion identifies no language from part 55 or elsewhere stati ng that the “intent an d purposes” of part 55 are to regulate pollution ex clusively from “sources.”

20 See, e.g., MCL 324.5501(b) (“W ith respect to any mode of transportation, nothing in this part or in the rules pr omulgated under this part shall be inconsistent with the federal regul ations, emission limits . . . .”); MCL 324.5513 (“Notwithstanding any other pr ovision of this part or the rules promulgated under this part, car ferries having the capacity to carry more than 110 motor vehicles and coal-fuel ed trains used in connec tion with tourism or an historical museum or carrying works of art or items of historical interest are not subject to regulation under th is part.”); MCL 324.5512 (1) (“The department shall promulgate rules for purposes of doing all of the following: . . . (c) Controlling any mode of transportation that is capable of causing or contributing to air pollution.”

22Even if the lead opin ion were correct that part 55 exclusively governs “sources,” this would not preclude the te st cells from meeting the intent and purposes of part 55. The l ead opinion neglects to quot e the following part of the definition of “source” in part 55: “ A source includes all the processes and process equipment under common control that are locat ed within a contiguous area, or a smaller group of processes and process eq uipment as requested by the owner or operator of the source, if in accordance with th e clean air act.” MCL 324.5501(t) (emphasis added). As disc ussed earlier, because a test cell qualifies as “air pollution control equipment,” it also qualifies as “process equipment,” and accordingly as a “source” as defined by part 55. The lead opinion’s argumen t that part 55 is not intended to reduce motor

vehicle emissions because those emissions are covered by parts 61, 63, and 65 is misplaced. Ante at 15. Part 61 is not appli cable because it merely prohibits marine vessels from blowing flues und er certain conditions. Parts 63 and 65 include procedures for requiring certain motor vehicles in west and southeast Michigan that are mo re than one year old to be periodically inspected for emissions and obtain a certificate of co mpliance that would be necessary for registration renewal. Parts 63 and 65 do not include emissions standards for motor-vehicle engines during the design, manufacture, and sale stages, but only ensure that certain vehicles, which satisfy emissions standards when initially purchased, maintain a mini mum level of emissions aft er one year on the road.

23Further, parts 63 and 65 do not currently ev en regulate motor-veh icle emissions in west and southeast Michigan because thos e parts of the state have apparently attained the national ambient air qua lity standards for ozone. See MCL 324.6306(2); MCL 324.6507(2). In sum, parts 61, 63, and 65 in no way detract from the intent and purposes of part 55, which are to generally prev ent and abate air pollution, including by re ducing that air pollution fr om motor-vehicle engines by regulating their design an d manufacture before sale. The lead opinion al so ignores the prov ision that a facility qualifies for a tax exemption only if it “meets the intent and pu rposes of part 55 and rules promulgated under that part . . . .” MCL 324.5903 (emphasis added). Reading the “intent and purposes” language in context with the “rules promulgated” language 21 makes it clear that one of the intent s and purposes of part 55 is to reduce pollution from motor vehicles. P art 55 expressly provides that “[t]he department shall promulgate rules fo r the purpose of doing all of the following: . . . (c) Controlling any mode of transportation that is capable of causing or contributing to air pollution. ” MCL 324.5512(1)(c) (emphasis added). This provision supports the conc lusion that the intent of p art 55 is not confined to the reduction of pollution from stationary sources. Thus, the te st cells both meet

21 This Court must consider “both the pl ain meaning of the critical word or phrase as well as ‘its placement and pur pose in the statutory scheme.’” Sun Valley Foods Co v Ward , 460 Mich 230, 237; 596 NW2d 119 (1999), quoting Bailey v United States , 516 US 137, 145; 116 S Ct 501 ; 133 L Ed 2d 472 (1995).

24the intent and purposes of part 55 and comply with the rule s promulgated under part 55 governing pollution created by motor vehicles. Moreover, the lead opinion errs by stating that ou r interpretation renders part of MCL 324.5903 “nugat ory or mere surplusage.” Ante at 13 n 23. MCL 324.5903 requires that the “facility” be “designed and operated primarily for the control, capture, and removal of pollu tants from the air, and [be] suitable, reasonably adequate, and meet[] the intent and purposes of part 55,” which are “to prevent and abate air pollution,” MCL 324. 5540. The lead opinion argues that if “the ‘intent and purpos es’ of part 55 are simply the red uction of air pollution, then [the second requirement of MCL 324.5903 , that the facility meet this purpose,] adds nothing to the first requirement [of MCL 324.5903, that the facility control, capture, and remove pollutants from the air].” Ante at 13 n 23. I respectfully disagree. The second requirement indicates the purpose of the “facility,” i.e., “to prevent and abate air po llution,” while the first requirement describes the means by which this purpose is to be achieved, i.e., by “co ntrol[ing], captur[ing], and remov[ing] pollutants from the air.” Thus , this interpretation does not render any part of this statute “nugatory or mere surplusage.”

B. DETROIT DIESEL’S EQUINOX LINE FACILITY I concur with the lead opinion’s hold ing that Detroit Dies el’s Equinox Line facility does not qualify for tax exemptions under part 59 because the primary

25purpose of the Equinox Line is to produce engines, not to control or dispose of air pollution. In order to qualify for the tax exemption, the Equinox Line must meet the definition of “facility” under MCL 324.5901. MCL 324.5901 defines “facility,” in pertinent part, as follows: [M]achinery, equipment, structur es, or any part or accessories of machinery, equipment, or struct ures, installed or acquired for the primary purpose of contro lling or disposing of air pollution that if released would render the ai r harmful or inimical to the public health or to property within this state. Facility include s an incinerator equipped with a po llution abatement device in effective operation. Facility does not include an air co nditioner, dust collector, fan, or other similar facility for the benefit of personnel or of a business. Facility also means the following , if the installation was completed on or after July 23, 1965: * * * (c) A process change involvin g production equipment made to satisfy the requirements of p art 55 and rules pr omulgated under that part. The maximum cost allowe d shall be 25% of the cost of the new process unit but sh all not exceed the cost of the conventional control equipment applied on the basis of the new process production rate on the preexisti ng process. [MCL 324.5901 (emphasis added).]

Thus, under MCL 32 4.5901, a “facility” may be eith er “machinery, equipment, structures, or any part or accessories of machinery, equipment, or structures, installed or acquired for the primary purp ose of controlling or disposing of air pollution that if released would render th e air harmful or inimical to the public health or to property within this state” or “[a] process change involving production equipment made to satisfy the requiremen ts of part 55 and rules promulgated under that part.”

26The Equinox Line does not satisfy th e requirements of the tax exemption under MCL 324.5901 for a “facility” because the Equino x Line was not designed for the primary purpose of controlling or removing ai r pollutants. Unlike the test cells, which were installed for the prim ary and sole purpos e of testing and controlling exhaust emissions, the Equinox Line was installed for the primary purpose of manufacturing en gines. Although the Eq uinox Line assists in controlling and disposing of air pollution by manufactur ing less-polluting engines that meet EPA standards, this purpose is secondary. Instead , the primary purpose of the line remains manufacturing engines for sale. Just because a manufacturing facility is altered or built to assure compliance with envi ronmental laws does not mean that its primary purpose of manufacturing is tran sformed into a new primary purpose of controlling air pollution. The latter purpose remains secondary. 22 Therefore, because, unlik e the test cells, the Equinox Line was not installed primarily to control or dispose of air po llution, I concur with the lead opinion’s

22 To further illustrate, we offer the following hypothe tical situation: if a manufacturing plant builds a new office building for pol lution-control engineers charged with controlling an d disposing of air pollution released by the plant and its products, the office building woul d not qualify as a “facility” under MCL 324.5901. That is so b ecause the primary purpose of the office building is to provide offices for employees, not to control or reduce pollution. The fact that the office building provides necessary accommodations for pollution-control engineers, and, therefore, indirectly or secondarily aims at controlling air pollution, does not transform its primary purpose.

27holding that Detroit Diesel’s Equinox Li ne is not a facility under MCL 324.5901. As a result, the Equinox Line does not qualify for tax exemp tions under part 59. 23 Although the lead opinion does not address this argument, Detroit Diesel’s argument that the Equino x Line is a “facility” becau se it is “[a] process [24] change involving production equipment made to satisfy the requirements of part 55 and rules promulgated under that part” is not valid. 25 The stated purpose of part 55 is to prevent and abate air pollution. 26 Detroit Diesel did not install the Equinox Line specifically to meet the requirements of part 55, but rather installed the Equinox Line to manufacture engines that comp ly with EPA requirements. That the installation of the Equinox Line furthers the purpose of p art 55 does not mean that it was done to satisfy the requirements of part 55. As a resu lt, the Equinox Line is not a “facility” under MCL 324.5901 because it is not “[a] process change

23 Detroit Diesel also is not entitled to a tax exemption because the Equinox Line does not satisfy MC L 324.5903, which mandates that a “facility is designed and operated primarily for the control, capture, and removal of pollutants from the air” in order to qualify for a tax exemp tion. The Equinox Li ne was designed for the primary purpose of manufacturing engi nes for sale, not for the purpose of abating pollution. 24 Part 55 defines “process” as “an acti on, operation, or a series of actions or operations at a source that emits or has the potential to emit an air contaminant.” MCL 324.5501(p). Part 55 defines “process equipment” as “all equipment, devices, and auxiliary comp onents, including ai r pollution control equipment, stacks, and ot her emission points, used in a process.” MCL 324.5501(q). 25 MCL 324.5901(c). 26 MCL 324.5540.

28involving production equipment made to satisfy the requirements of part 55 and rules promulgated under that part.” Detroit Diesel’s Equino x Line does not qualify fo r tax exemptions because the Equinox Line is neither “machinery, equipment, stru ctures, or any part or accessories of machinery, equipment, or st ructures, installed or acquired for the primary purpose of controllin g or disposing of air pollu tion that if released would render the air harmful or inim ical to the public health or to property within this state” nor “[a] process change involving production equipment ma de to satisfy the requirements of part 55 and rules promulga ted under that part.” As a result, the Equinox Line is not a facility under MCL 324.5901 and does not qualify for a tax exemption.
IV. DUE PROCESS I do not find Detroit Diesel’s due-process argumen t persuasive. Detroit Diesel argues that the STC’s hearing proc ess violated due process because the STC announced at the beginni ng of the hearing: “It is th e position of the State Tax Commission after consultation with legal couns el that it has ne ither the authority nor the technical expertise to override a determination by the DEQ in regards to whether particular assets qua lify for an air pollution cont rol exemption.” Detroit Diesel argues that the STC, by abdicatin g its role as a true decision maker, deprived Detroit Diesel of a meaningful hearing. Generally, due process in civ il cases requires notice of the nature of the proceedings and an opportunity to be heard in a meaningful time and manner by an impartial decisionmaker.

29Because the collection of a tax cons titutes a deprivation of property, a state must provide sufficient pro cedural safeguards to satisfy due process requirements. But states are afforded great flexibility in satisfying the requirements of due pr ocess in the field of taxation. Due process is satisfie d when a taxpayer has “a fair opportunity to challenge the accuracy and legal valid ity of their tax obligation and a clear and certain remedy for an y erroneous or unlawful tax collection to ensure that the oppor tunity to contest the tax is a meaningful one. [27]
Here, part 59 provides that an applicant for a tax exemption is entitled to a hearing: Before issuing a certificate, the state tax commission shall seek approval of the department and give notice in writing by certified mail to the department of treasury and to the assessor of the taxing unit in which the facility is located or to be located, and shall afford to the applican t and the assessor an opportunity for a hearing. [28]
Under MCL 324.5902(1), a petitioner sends an application for a tax

exemption certificate to the STC. MCL 324.5902(2) requires the STC to both allow the applicant an opportunity for a h earing and forward the application to the DEQ for approval. If the hearing concludes before the DEQ makes a determination, the STC must then refer th e matter to the DEQ for consideration of factual developments at the hearing and to s eek approval of the tax certificate. If the hearing concludes after the DEQ makes a determination, as in the instant case,

27 By Lo Oil Co v Dep’t of Treasury , 267 Mich App 19, 29; 703 NW2d 822 (2005) (internal citations and quotations omitted). 28 MCL 324.5902(2) (emphasis added).

30the STC may grant or deny the certificate on the basis of the original DEQ determination and the develo pments at the hearing, or refer the matter again to the DEQ for consideration of an y new information develope d at the hearing. The DEQ, not the STC, has the authority a nd expertise to det ermine whether the facility is entitled to a tax ex emption under part 59. MCL 324.5903 provides , in pertinent part: If the department finds that the facility is designed and operated primarily for th e control, capture, an d removal of pollutants from the air, and is suitable, reasonably adequate, and meets the intent and purposes of part 55 and rules promulgated under that part, the department shall notify the state tax commission, which shall issue a certificate . [Emphasis added.]
MCL 324.5908 provides that although the STC may adop t rules considered necessary for administration of part 59 of NREPA, “[t]h ese rules shall not abridge the authority of the department to det ermine whether or not air pollution control exists within the meaning of this part.” Thus, although the STC is the agency that actually issues the tax-exemption cer tificate, it must defer to the DEQ’s determination whether a petiti oner is entitled to a tax exem ption under part 59. Further, even assuming that the STC can grant a tax-exemption certificate without the DEQ’s approv al, the hearing conducted by the STC in this case complied with due process. As require d by MCL 324.5902(2) , the STC forwarded Detroit Diesel’s application for tax -exemption certificates to the DEQ for approval. After receiving the DEQ’s det ermination that Detroit Diesel was not entitled to the tax exemptions, the STC afford ed Detroit Diesel an opportunity for

31a hearing. The hearing at the STC was not meaningless. Th e STC gave Detroit Diesel a full hearing in which it was allo wed to present evid ence and argue that the STC was not bound by the DEQ fi ndings. Detroit Diesel identifies no evidence or legal argument that it was prevented from submitting. Although the STC stated at the outset of the hearing th at it lacked the auth ority to override a DEQ determination regarding an air-pollu tion-control tax exem ption, the STC did not conduct the hearing merely to rubber-stamp the DEQ’s earlier decision. Rather, the STC conducted the hearing to gather additiona l information and forward this information to the DEQ for further consideration and another determination. Unfortunately for Detr oit Diesel, the DEQ again decided that Detroit Diesel was not entitled to the tax exemptions. But because the DEQ considered the information developed at the hearing to determine whether to change its determination, the hearing was not meaningless. T hus, Detroit Diesel was afforded due process dur ing the STC proceedings.

V. CONCLUSION In conclusion, I di ssent from the lead opinion an d would affirm the Court of Appeals. I would hold that petitioners’ test-cell facilities qualify for tax exemptions under part 59 because they meet the defi nition of “facility” in MCL 324.5901 and, under MCL 324.5903, are “designed an d operated primarily for the control, capture, and removal of polluta nts from the air,” are “suitable” or “reasonably adequate” at aba ting air pollution, and “meet the intent and purposes

32of part 55.” I concur with the lead opinion’s holding that Detro it Diesel’s Equinox Line does not qualify for ta x exemptions under part 59 because the Equinox Line is not a “facility” under MCL 32 4.5901. Lastly, I would hold that Detroit Diesel was not deprived of due pro cess during the ST C proceedings.

Elizabeth A. Weaver Maura D. Corrigan Stephen J. Markman

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