Opinion ID: 1810700
Heading Depth: 2
Heading Rank: 2

Heading: Qualifying for Tax Exemption

Text: The township next contends that the various facilities for which tax exemption was granted do not qualify under the Air Exemption Act as tax exempt facilities. Specifically, the township contends that these facilities were not installed or acquired for the primary purpose of controlling or disposing of air pollution, MCL 336.1; MSA 7.793(1); that the facilities are not designed and operated primarily for the control, capture and removal of pollutants from the air; that the facilities are not suitable and reasonably adequate for such purposes; and that the facilities do not meet the intent and purposes of the Air Pollution Act and rules promulgated thereunder, MCL 336.3; MSA 7.793(3). We disagree with each of these contentions. The first two contentions are based on similar reasoning. It is the position of the township that the containment building and its component systems were not installed or acquired for the primary purpose of controlling or disposing of air pollution, and were not designed and operated primarily for the control, capture and removal of pollutants from the air. Rather, the primary purpose for the installation, acquisition, design and operation of these facilities was to meet the requirements of the Federal government in order to obtain an operating license for the nuclear power plant. Further, the township argues that the use of the word primary indicates that tax exempt status may be granted only to those facilities which are installed or acquired for the purpose of capturing and removing air pollutants during normal plant operations. Because the type of facilities installed at the Palisades plant are designed to specifications intended to contain discharges resulting from an accident having a probability of occurrence of 1 in 17,000 per year, the primary purpose of the installation, acquisition, design and operation of these facilities does not comport with the statutory requirement. Neither of these arguments can be sustained. The use of the words primary purpose in § 1, and operated primarily for in § 3 of the Air Exemption Act [4] evidences a legislative concern with the primary purpose served by the facility for which exemption is sought. This purpose need not, necessarily, align with the motivation of the persons installing, acquiring or operating the facilities. As to the township's second argument, we find nothing in the language of the Air Exemption Act drawing a distinction between the control of air pollutants resulting from normal operations of the plant, and those resulting from an accident. We do not agree that the use of the word primary indicates a legislative intent to draw such a distinction. Rather, we find the use of the word primary in these sections of the act is intended to insure that tax exemption is not granted to facilities that, incidental to their primary purpose, serve to control, prevent or abate air pollution. Because there is no error in the commission's interpretation of this statutory language, the scope of our review is necessarily limited to a determination whether the commission's decision is supported by competent, material and substantial evidence on the whole record, [5] as required by the Administrative Procedures Act, MCL 24.306(1)(d); MSA 3.560(206)(1)(d). We conclude that it is. The township next contends that whether these facilities are suitable, and reasonably adequate under MCL 336.3; MSA 7.793(3) is a matter yet unproved. The township apparently bases this contention on the ground that these statutory requirements can only be met by measuring and ascertaining the effectiveness of the facilities in actual operation. Because the operation of these facilities can only be fully measured in the event of a serious accident which has not yet occurred, the township argues that the facilities' suitability and reasonable adequacy cannot be established so as to qualify for exemption. Again, we disagree. The suitability and adequacy of many devices and structures to serve a given purpose can be, and are, measured and tested through non-empirical studies based on accepted scientific principles and sound analysis. We agree with Consumers that the resolution of this question is particularly well-suited to the expertise of the administrative agencies charged with assessing the technical suitability and adequacy of facilities for which exemption is sought. Our review of the record indicates that the commission's decision that these facilities are suitable and reasonably adequate was based on competent, material and substantial evidence. [6] Finally, the township contends that these facilities do not meet the intent and purposes of the Air Pollution Act, as required under MCL 336.3; MSA 7.793(3), for two reasons. First, in order to meet the intent and purposes of the Air Pollution Act, the township argues that these facilities must be subject to control and continuing inspection and review by a state agency. We have already resolved this argument against the township. Second, the township argues that the failure to mention radiation in the definition of air contaminant in the Air Pollution Act indicates that the intent and purposes of that act were not to control and prevent the type of pollution that may occur at the Palisades plant. The pertinent section of the act provides: (b) `Air contaminant' means a dust, fume, gas, mist, odor, smoke, vapor or any combination thereof. MCL 336.12; MSA 14.58(2). While our review of the record indicates that radiation per se might not be an air contaminant within this definition, there is competent, material and substantial evidence to support the commission's decision that radioactive materials, of the type controlled or disposed of by these facilities, are air contaminants. [7] We conclude that there is competent, material and substantial evidence on the whole record to support the commission's finding that the Palisades containment building, the containment building spray system, the containment building cooling system and the gaseous radwaste system meet the statutory requirements to qualify as tax exempt facilities under the Air Exemption Act.