Opinion ID: 1810700
Heading Depth: 1
Heading Rank: 1

Heading: air pollution control facilities

Text: We granted leave to appeal on two specific questions concerning the exemptions for the air pollution control facilities: (1) [W]hether tax exemption can be granted pursuant to 1965 PA 250 as amended [the Air Exemption Act] to nuclear facilities that are not subject to mandatory inspection, review and control by an agency or agencies of the State of Michigan; (2) whether the containment building, the containment building spray system, the containment building cooling system and the gaseous radwaste system of Consumers Power Company meet the statutory requirements so as to qualify as tax exempt facilities under 1965 PA 250. 402 Mich 882. We answer both questions in the affirmative.
The Air Exemption Act empowers the tax commission to issue a certificate exempting certain facilities from real and personal property taxes [3] [i]f the director of public health finds that the facility is designed and operated primarily for the control, capture and removal of pollutants from the air, and is suitable, reasonably adequate and meets the intent and purpose of the air pollution act, Act No. 348 of the Public Acts of 1965, as amended, being sections 336.11 to 336.36 of the Compiled Laws of 1948, and rules promulgated thereunder   . MCL 336.3; MSA 7.793(3). At the time application for this exemption was made, a facility was defined, for purposes of the Air Exemption Act, to mean: machinery, equipment, structures, or any part or accessories thereof, installed or acquired for the primary purpose of controlling or disposing of air pollution which if released would render the air harmful or inimical to the public health or to property within this state. It does not include an air conditioner, dust collector, fan or other similar facility for the benefit of personnel or of a business. MCL 336.1; MSA 7.793(1). The township contends that the Palisades plant's air pollution control facilities cannot qualify for tax exemption unless they are subject to control and continuing inspection and review by a state agency, because such control, inspection and review is necessary to meet the intent and purpose of the Air Pollution Act, and the rules promulgated under that act, as required by MCL 336.3; MSA 7.793(3). Yet, no state control, inspection or review of these facilities is permitted because the Federal government has preempted the regulation of nuclear facilities. Northern States Power Co v Minnesota, 447 F2d 1143 (CA 8, 1971), aff'd without opinion 405 US 1035; 92 S Ct 1307; 31 L Ed 2d 576 (1972). Therefore, the township concludes, no tax exemption can lawfully be granted. We do not agree. Our review of the Air Pollution Act, MCL 336.11 et seq.; MSA 14.58(1) et seq., compels the conclusion that no state control, inspection or review of air pollution control facilities is required in order for such facilities to meet the intent and purpose of that act. The intent and purpose of the act is manifest in its statutory language. The title to that act provides, in pertinent part, that it is [a]n act to control air pollution in this state   . Air pollution was defined, with certain narrow exceptions not applicable here, to mean: [T]he presence in the outdoor atmosphere of air contaminants in quantities, of characteristics and under conditions and circumstances and of a duration which are injurious to human life or property or which unreasonably interfere with the enjoyment of life and property, and which are reasonably detrimental to plant and animal life in this state   . MCL 336.12; MSA 14.58(2). Another section of the act provides, in part: It is the purpose of this act to provide additional and cumulative remedies to prevent and abate air pollution. Nothing in this act contained shall abridge or alter rights of action or remedies now or hereafter existing, nor shall any provision of this act or anything done by virtue of this act be construed as estopping    other governmental units from the exercise of their respective rights to suppress nuisances or to prevent or abate air pollution. MCL 336.34; MSA 14.58(24). Finally, among its statutory powers, we note that the Air Pollution Control Commission is given the authority to [c]ooperate with the appropriate agencies of the United States    with respect to the control of air pollution   . MCL 336.15(n); MSA 14.58(5)(n). Contrary to the contention of the township, we find that the intent and purpose of this act is to control air pollution in the state; that the act itself contemplates that Federal agencies or other governmental units may have authority over the control of air pollution in the state; and that the commission need not have control over all activities regulating air pollution but may cooperate with other agencies or governmental units to meet the act's purpose of preventing and abating air pollution. We agree with the holding of the tax commission below that: The intent and purposes of the Air Pollution Act and Rules    are to control pollution and thereby to protect the health, welfare and safety of Michigan citizens, the productive capability of the assets of those citizens, and the natural resources of the State. That intent and those purposes are served by pollution control facilities constructed within the State of Michigan whether required by reason of federal or state regulation. Compatibility with intent and purposes is not dependent upon regulation. Such compatibility is established by the ability of a facility to control pollution. It is not regulation that is the quid pro quo for tax exemption. That quid pro quo is the control of pollution and, thereby, the protection of the health, welfare and safety of Michigan citizens and their assets. It is the fact that pollution control is provided that is important and not whether that pollution control is provided in response to state or federal regulation. If the Legislature had wanted to require more, it would have been a simple matter to require that all facilities eligible for exemption be subject to regulation under    the air pollution control act and rules   . (Emphasis in original.) We conclude that tax exemption can lawfully be granted for air pollution control facilities pursuant to the requirements of the Air Exemption Act even though such facilities may not be subject to mandatory inspection, review and control by the state.
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.