Covert Township Assessor v. State Tax Commission

Ryan, J.

These two cases were consolidated for the purpose of hearing and decision. They involve the validity of certain tax exemption certificates issued by the State Tax Commission to Consumers Power Company covering both air pollution and water pollution control facilities located at the Palisades Nuclear Power Plant in Covert Township, Van Burén County.

In 1968, Consumers applied to the tax commission for tax exemption certificates pursuant to MCL 336.1 et seq.; MSA 7.793(1) et seq., hereafter the Air Exemption Act, which provides for the *574exemption of air pollution control facilities from certain taxes. The application sought exemption for the containment building which houses the nuclear reactor at the power plant, the building’s spray system, the building’s cooling system and the facility’s gaseous radioactive waste (radwaste) system.

In 1972, Consumers applied to the tax commission for tax exemption certificates pursuant to MCL 323.351 et seq.; MSA 7.793(51) et seqhereafter the Water Exemption Act, which provides for the exemption of water pollution control facilities from certain taxes. These applications sought exemption for the power plant’s liquid radioactive waste (radwaste) system and water cooling towers.

The commission granted each of the exemptions.1

Following this action by the commission, the Covert Township assessor pursued various administrative actions and judicial proceedings,2 chal*575lenging the exemptions. The circuit court finally affirmed the commission’s grant of the tax exemption certificates. The Court of Appeals affirmed the tax exemption for the air pollution control facilities, but reversed as to the tax exemption for the water pollution control facilities. Covert Twp Assessor v State Tax Commission, 77 Mich App 626; 259 NW2d 164 (1977).

We granted leave to appeal. 402 Mich 882; 262 NW2d 298 (1978). We affirm.

I. Air Pollution Control Facilities

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 pursu*576ant 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.

A. State Inspection, Review, Control

The Air Exemption Act empowers the tax commission to issue a certificate exempting certain facilities from real and personal property taxes3

"[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 collec*577tor, 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 *578and 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 "[cjooperate 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 *579citizens, 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.

B. Qualifying for Tax Exemption

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 *580such 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 Act4 evidences a legislative concern with the primary purpose served by the facility for which exemption is sought. This purpose need not, *581necessarily, 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 *582Administrative Procedures Act, MCL 24.306(1)(d); MSA 3.560(206)(10(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

*583Finally, 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 *584type controlled or disposed of by these facilities, are air contaminants.7_

*585We 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.

II. Water Pollution Control Facilities

Leave to appeal was granted in this case limited to the following specific questions concerning the Palisades water pollution control facilities:

"(1) [W]hether the liquid radwaste system and the cooling towers at the Consumers Power Palisades plant are real property and are ineligible for tax exemption under 1966 PA 222 [the Water Exemption Act];
"(2) whether the water pollution control facilities exemption act as construed to exempt from property taxation personal property used for control of water pollution, but not to exempt real property used for the same purpose, violates the Equal Protection Clause of the Michigan and United States Constitutions.” 402 Mich 882.

We find the Palisades water pollution facilities are real property and ineligible for tax exemption under the Water Exemption Act for all applicable tax years preceding 1977 PA 282 which amended the act to provide an exemption to qualifying facilities from real property taxes as well as personal property taxes.

Further, we find that our construction of the *586Water Exemption Act does not violate the Equal Protection Clauses of either the Michigan or the United States Constitution.

A. Real Property Questions

1. Exemption From Personal Property Taxes

The Water Exemption Act, MCL 323.351 et seq.; MSA 7.793(51) et seq., provides for the issuance of certificates by the State Tax Commission which exempt water pollution control facilities from certain taxes. Specifically, § 4 of that act provided, in part, at the time Consumers applied for exemption:

"For the period subsequent to the effective date of the certificate and continuing so long as the certificate is in force, a facility covered thereby is exempt from personal property taxes imposed under Act No. 206 of the Public Acts of 1893, as amended, being sections 211.1 to 211.157 of the Compiled Laws of 1948.” MCL 323.354; MSA 7.793(54). (Emphasis supplied.)

By 1977 PA 282, this section of the act was amended to provide that "a facility covered thereby is exempt from real and personal property taxes * * *”. (Emphasis supplied.)

When Consumers Power applied for tax exemption certificates under the Water Exemption Act for the Palisades liquid radwaste system and cooling towers, the State Tax Commission granted the exemptions. In its official order of July 9, 1975, affirming the grants of these exemptions, the commission addressed the question of the real property nature of these facilities and held that read*587ing the act as a whole and requiring that these facilities meet the other criteria of the act results in these facilities qualifying for the statutory tax exemption.

In reaching this decision the commission adopted the rationale proffered by Consumers Power that a reading of the act as a whole, and specifically the statutory definitions of "facility”, "treatment works”, and "disposal system”, MCL 323.351; MSA 7.793(51), compel the conclusion that the Legislature intended to redefine the term "personal property” for exemption purposes to include within that term various types of immovable plant equipment coming within these definitions and normally used for water pollution control purposes, even though they might be regarded as real property for other purposes. Any other interpretation, according to the commission, would defeat the purpose of the act and would mean thé Legislature wrote a useless law. The circuit court agreed, but the Court of Appeals reversed.

Consumers Power elaborates on this same rationale before this Court. We find its reasoning unpersuasive particularly in light of one very specific amendment to this act while it was in bill form, being considered for enactment into law by our state Legislature.

As originally introduced on January 19, 1966, House Bill No. 3075 (subsequently enacted as the Water Exemption Act), provided in part in § 4, beginning on page 3, line 21:

"(1) For the period subsequent to the effective date of the certificate and continuing so long as the certificate is in force, a facility covered thereby is exempt from real and personal property taxes imposed under Act No. 206 of the Public Acts of 1893, as amended, being *588sections 211.1 to 211.157 of the Compiled Laws of 1948.”8 (Emphasis supplied.)

This bill was first referred to the Committee on Conservation and Recreation, 1 Michigan House J (1966) 63, which reported it back with recommended amendments. 1 Michigan House J (1966) 650. The amendments were adopted and the bill was referred to the Committee on General Taxation, 1 Michigan House J (1966) 703. The Committee on General Taxation reported the bill back to the full House with recommended amendments, including the specific recommendation to: "4. Amend page 3, line 24, by striking out 'real and.’ ” 2 Michigan House J (1966) 1468. These amendments were adopted by the full House and the bill was passed. 3 Michigan House J (1966) 2196.

After adopting an additional amendment to the bill as passed by the House, which did not affect § 4(1), the Senate passed the bill. 2 Michigan Senate J (1966) 1947._

*589The House concurred in the Senate amendment and the bill was sent to the Governor for signature. 4 Michigan House J (1966) 3244. On June 11, 1966, it was approved by the Governor and given immediate eifect as 1966 PA 222.

We find that tracing this legislative history makes clear that the intent of the Legislature in enacting this law was to provide exemption to qualifying water pollution facilities from personal property taxes only. We have no supporting documentation in the legislative history to provide an insight into the reason for striking the reference to exemption from real property taxes.

Mere conjecture suggests that there may have been strong opposition to the bill as originally drafted by local units of government who could foresee the exemption of large water pollution control facilities from real property taxes as an erosion of their property tax base. Or the Legislature might simply have decided to proceed cautiously in granting these exemptions to determine whether granting exemptions from personal property taxes alone would provide adequate incentive for the acquisition and operation of socially desirable water pollution control facilities.

But whatever the unpreserved legislative intent was in 1966, we can only conclude that the Legislature as a whole, and particularly the members of the House Committee on General Taxation, adopted this amendment to the bill as introduced deliberately and with a purpose. While the act’s definitions of facilities, treatment works and disposal systems which may qualify for exemption appear to include many facilities that might normally be classified as real property, we do not read these definitions as an indication that the Legislature redefined personal property for purposes of *590the act. We do not think the brief legislative history of this bill warrants such a conclusion.

We also disagree with Consumers Power’s contention that the amendment to § 4 made by 1977 PA 282, to provide for exemption for water pollution facilities from real and personal property taxes was simply intended to clarify the purposes of the act.

We hold that, prior to the effective date of 1977 PA 282,9 qualifying water pollution control facilities were eligible for exemption from personal property taxes only under MCL 323.354(1); MSA 7.793(54)(1), and the Legislature did not redefine the term "personal property” for purposes of tax exemption under the act.

2. The Liquid Radwaste System and the Cooling Towers are Real Property

In the first issue on which leave to appeal was granted, we asked the parties in this case to address the question of whether the Palisades plant’s liquid radwaste system and cooling towers are real property. In its brief, Consumers Power argued that these facilities are not real property for purpose of exemption under the act because the act contemplated a definition of personal property that included these facilities. We have decided this argument against Consumers.

Next, Consumers contended that if common-law principles or the General Property Tax Act are determined to be material to a definition of real and personal property for purposes of this suit, then this matter should be remanded to the State Tax Commission for the development of a record as to the nature of these facilities.

*591While we acknowledge that the commission’s decision below appeared to render it unnecessary to decide whether these facilities were real or personal property for purpose of eligibility for exemption under the act, we find there is adequate evidence in the record for determining that these facilities are real property. Further, because this Court specifically invited the parties to address this issue, Consumers had the opportunity to refute the eyidence we find in the record to support this conclusion, yet failed to do so.

The most compelling evidence we find in the record to support the conclusion that these facilities are real property is found in Consumers Power’s admitted failure to report any portion of these facilities on its personal property tax statements for 1974 and 1975. The personal property statement which Consumers properly filed, pursuant to MCL 211.18; MSA 7.18, specifically requests the reporting of the following information on page 2:

"3. Air Pollution Control Facilities and Water Pollution Control Facilities certified exempt by the Michigan State Tax Commission. Use cost installed. Attach rider giving certificate number, year of acquisition and cost by year of acquisition.”

At the hearing before the commission, counsel for Consumers stipulated that Consumers reported nothing in this provision in either its 1974 or 1975 personal property statement.

In addition to this failure of Consumers to report any part of the water pollution control facilities as exempt personal property, the following unchallenged testimony of the Covert Township assessor (Mr. Sarno) supports the conclusion that these facilities are real property.

*592"Q. Mr. Sarno, in 1973, did Consumers Power Company furnish you the estimated cost of the partial construction of the liquid radwaste system and cooling towers?
"A. They did.
”Q. What was the amount furnished you by Consumers Power?
"A. $10,880,258.
”Q. Was that represented to you to be real property?
"A. It was included in the real [property] report.
”Q. Furnished to you by Consumers Power?
"A. That is correct.
"Q. Did you place the partially constructed facility on the real property roll for the year 1973?
'A. I did as work in progress.
"Q. Approximately what amount?
"A. On the assessed valuation approximately $1,250,-000.
"Q. Did Consumers Power Company appear at the Board of Review?
'A. Yes.
"Q. Were they aware of the fact it was on the real property roll?
"A. I would assume they were.
”Q. Did Consumers Power Company furnish you with a personal property statement for the year 1973?
'A. Yes.
”Q. Either the cooling tower, a portion of it or rad-waste system, any portion of it included in the personal property statement?
"A. It was not.
"Q. In 1974 did Consumers Power Company furnish you a statement of the value of the completed and partially completed cooling towers and radwaste system?
"A. Yes.
”Q. Was that furnished in the statement form?
"A. Yes.
*593”Q. Represented to you to be real property?
"A. Yes, sir.
"Q. Did Consumers Power furnish you a personal property statement for the year 1974?
"A. Yes.
"Q. Did that statement include all or any portion of the cooling towers, all or any portion of the liquid radwaste system?
"A. It did not.
”Q. Did Consumers Power Company furnish you a personal property statement for 1975?
"A. Yes.
"Mr. Tracy: Mr. Chairman, didn’t we go through all of this yesterday?
"Chairman Purnell: I think we did this yesterday.
"Mr. Reed: As I look through the record at one point it became colloquy, four-way colloquy.
"Chairman Purnell: This colloquy was going along. I realize what went on yesterday. What we finally ended up saying is that you agreed that you would refer to that report and introduce a blank personal property statement, you both stipulated that it was not reported on the personal property statement.”

Any argument that part or all of the Palisades plant’s liquid radwaste system or cooling towers should not properly be classified as real property for the purpose of this suit is foreclosed by Consumers’ failure to challenge this record evidence. We conclude that these facilities are real property and were not eligible for tax exemption under the Water Exemption Act prior to the 1977 amendment.

B. Equal Protection Question

One question remains for resolution. Having construed the Water Exemption Act to exempt *594water pollution control facilities from personal property taxes but not from real property taxes (prior to the 1977 amendment), we must determine whether the statute, as so construed, violates the Equal Protection Clauses of the Michigan and United States Constitutions. Const 1963, art 1, § 2; US Const, Am XIV. We find no violation of either clause.

Consumers’ contention that the construction we have given this statute violates equal protection guarantees is bottomed on the argument that distinguishing between classifications of property bears no reasonable relationship to the purposes of the act when property in both classifications achieves the object of the legislation, i.e., to prohibit pollution of the state’s waters. We do not agree.

The cases which have resolved challenges to state legislative classifications under the Equal Protection Clause of the United States Constitution are legion.

In several cases, particularly pertinent to the challenge brought today, the United States Supreme Court has upheld the classification of property for taxation, and exemption from taxation, by state legislatures.

In Citizens’ Telephone Co of Grand Rapids v Fuller, 229 US 322; 33 S Ct 833; 57 L Ed 1206 (1913), the Court upheld a Michigan statute which provided a property tax exemption to telephone and telegraph companies whose receipts in Michigan did not exceed $500 per year. The statute was challenged as a violation of the Equal Protection Clause. In reaching its decision the Court said:

"The power of exemption would seem to imply the power of discrimination, and in taxation, as in other *595matters of legislation, classification is within the competency of the legislature.” 229 US at 329.

And, after citing numerous cases in which that Court had upheld state tax statutes which had variously classified the objects of taxation, the Court went on to say:

"[These cases] illustrate the power of the legislature of the State over the subjects of taxation, and the range of discrimination which may be exercised in classifying those subjects when not obviously exercised in a spirit of prejudice or favoritism. * * * Granting the power of classification, we must grant Government the right to select the differences upon which the classification shall be based, and they need not be great or conspicuous. Keeney v New York, 222 US 525, 536 [32 S Ct 105; 56 L Ed 299 (1912)]. The State is not bound by any rigid equality. This is the rule; — its limitation is that it must not be exercised in 'clear and hostile discriminations between particular persons and classes.’ See [Quong Wing v Kirkendall], 223 US 59, 62, 63 [32 S Ct 192; 56 L Ed 350-352 (1912)]. Thus defined and thus limited, it is a vital principle, giving to the Government freedom to meet its exigencies, not binding its actions by rigid formulas but apportioning its burdens, and permitting it to make those 'discriminations which the best interests of society require.’ ” 229 US at 331.

We find no prohibited spirit of prejudice or favoritism here. Indeed, as we noted in our discussion, supra, the Legislature may reasonably have decided that exempting water pollution control facilities from personal property taxes but not real property taxes would accomplish the act’s purpose of encouraging investments in those facilities which the Legislature deemed to be in the public interest.

Further support for our conclusion can be found in Nashville, C & SL R Co v Browning, 310 US *596362, 368-369; 60 S Ct 968; 84 L Ed 1254 (1940), where in the context of an equal protection challenge to a property tax assessed against a railroad, the United States Supreme Court said:

"That the states may classify property for taxation; may set up different modes of assessment, valuation and collection, may tax some kinds of property at higher rates than others; and in making all these differentiations may treat railroads and other utilities with that separateness which their distinctive characteristics and functions in society make appropriate— these are among the commonplaces of taxation and of constitutional law. [Cases cited.] Since, so far as the Federal Constitution is concerned, a state can put railroad property into one pigeonhole and other property into another, the only question relevant for us is whether the state has done so. If the discrimination of which the Railway complains had been formally written into the statutes of Tennessee, challenge to its constitutionality would be frivolous.” (Emphasis supplied.)

And finally, in an early case challenging a personal property tax levied against cattle grazing on tax exempt land, the United States Supreme Court said, without specifically citing the Equal Protection Clause:

"[I]t is the usual course in tax laws to treat personal property as one class and real estate as another, and it has never been supposed that such classification created an illegal discrimination, because there might be some persons who owned only personal property, and others who owned property of both classes.” Thomas v Gay, 169 US 264, 281; 18 S Ct 340; 42 L Ed 740 (1898).

Viewing the challenged classification before us in light of this authority, we find no violation of the United States constitutional guarantee of equal protection.

*597Similarly, we find no violation of our state constitutional guarantee of equal protection. Consumers Power does not contend that a more stringent equal protection test than that required under the United States Constitution should be applied under our state constitution, in the instant case, nor do we perceive any reason for applying a more stringent test. Furthermore, in the face of an equal protection challenge under the United States Constitution, this Court has recognized that tax statutes may discriminate among classifications of properties, businesses, trades, callings or occupations so long as the discrimination is not arbitrary but is based upon a reasonable distinction or if any state of facts can reasonably be conceived to sustain it. W S Butterfield Theatres, Inc v Dep’t of Revenue, 353 Mich 345, 353; 91 NW2d 269 (1958). We have found such reasonableness in the classification made by the Legislature here.

We have also held that a legislative classification will be upheld in the face of an equal protection challenge under our state constitution if it rationally furthers the object of the legislation and involves neither a suspect class nor fundamental rights. In re Kasuba Estate, 401 Mich 560, 569; 258 NW2d 731 (1977). We find that the instant classification involves no suspect class or fundamental right and rationally furthers the object of the legislation.

III. Conclusion

The judgment of the Court of Appeals is affirmed.

No costs.

Coleman, C.J., and Kavanagh, Williams, *598Levin, and Fitzgerald, JJ., concurred with Ryan, J.

The total exemption granted for the air pollution control facilities was less than the amount claimed exempt by Consumers Power. The commission deducted an amount from that claimed by Consumers which represented the cost of a conventional building that would simply have provided weather housing for the reactor, as well as the cost that would have been saved had Consumers placed certain radiation shielding closer to the reactor. In the opinion of the Division of Air Pollution Control of the Public Health Department, these costs did not qualify for the statutory exemption.

This litigation has an involved history that is not necessarily pertinent to the issues addressed today, but which is briefly recounted for purposes of clarifying the background of these cases.

In May, 1968, Consumers Power Company applied for an exemption for the Palisades plant’s containment building as well as the building’s spray system, the building’s cooling system and the facility’s gaseous radwaste system. The original application was denied, but an amended application was approved in January, 1972. The Covert Township assessor then sought leave to appeal this decision in the Court of Appeals. In May, 1974, the Court of Appeals decided that appellate jurisdiction over this matter was vested in the circuit court and remanded the appeal to the Thirty-Sixth Judicial Circuit for consideration on the merits. Covert Twp Assessor v State Tax Commission, 53 Mich App 300; 218 NW2d 807 (1974).

In the fall of 1972, Consumers Power filed two applications for tax *575exemption under the Water Exemption Act for the liquid radwaste system and the cooling towers located at the Palisades plant. Both of these applications were granted in September, 1973. The Covert Township assessor appealed this decision to the Court of Appeals and that court determined that appellate jurisdiction was vested in circuit court and remanded to the Thirty-Sixth Judicial Circuit on the authority of the Air Exemption Act case, on September 9, 1974.

Thereafter, Consumers Power, the assessor and the State Tax Commission stipulated in circuit court for entry of an order remanding both of these cases to the State Tax Commission for determination of certain stipulated issues concerning the tax exemption certificates issued for both the air pollution and water pollution control facilities at the Palisades plant. On the same day, orders for partial summary judgment were entered by the circuit court which provided, in part, that the final determination of this proceeding would determine the validity and effect of the air and water pollution control facilities exemption certificates for the tax year 1974 and all subsequent years in which the facts and the law remained unchanged.

On July 9, 1975, the State Tax Commission issued its order affirming both the air pollution control exemption certificate and the water pollution control exemption certificate. This decision was affirmed by the circuit court in an order filed July 30, 1976, following a written opinion filed June 23, 1976.

The Court of Appeals affirmed the tax exemption for the air pollution control facilities but reversed as to the tax exemption for the water pollution control facilities. Covert Twp Assessor v State Tax Commission, 77 Mich App 626; 259 NW2d 164 (1977).

MCL 336.4; MSA 7.793(4).

MCL 336.1; MSA 7.793(1) and MCL 336.3; MSA 7.793(3).

At the commission hearing, witness Keeley, at that time the Director of Quality Assurance Services for Consumers Power Company, described the function of the containment building:

"The principal purpose [of the containment building], as far as I’m concerned, is to, number one, contain the fission products that result from various postulated conditions, these being accidents of various severity, and also to contain fission products that are released from the nuclear steam supply system during normal operation, and under the worst assumed accident condition, to contain the water-steam mixture that occurs when the design basis accident occurs and the fission products that occur after this design basis accident.”

Witness Keeley further testified that the purpose of the containment building’s spray and cooling systems was to assure the integrity of the containment building through reduction of temperature and pressure in the event of an accident. Finally, witness Keeley testified that the gaseous radwaste system contained waste gases resulting from the operation of the reactor in "hold-up” tanks until the radioactivity being emitted by the fission gases decayed to a point at which the gases could safely be released into the environment.

The testimony of Covert Township’s witness Lapp, an energy consultant with primary emphasis on nuclear power systems, was in accord with witness Keeley’s testimony. Concerning the containment *582building, witness Lapp said, "The primary purpose of the containment building is to prevent the release of radioactive material to the environment in the event of an accident.” His testimony concerning the building’s spray and cooling systems as well as the gaseous radwaste system were similarly in agreement with the testimony of witness Keeley.

Illustrative of the testimony concerning the suitability and reasonable adequacy of these facilities was the following statement of witness Lapp:

"In the event of an accident of this kind, a loss of cooling accident, and a failure of emergency core cooling, you would have these [sic] *583pressurization of the atmosphere within containment. It would get hot and it would raise in pressure. The reactor at the Palisades is sized to, I believe, sustain 55 pounds per square inch of pressure and 285 degrees Fahrenheit temperature.
"We have had accidents in which containment has been pressurized, in which pressures have gone up to 20 pounds per square inch and temperatures have gone up to over 300 degrees Fahrenheit.
"Containment has been tested and it works. There is no doubt about that.” (Emphasis added.)

Witness Keeley’s testimony was that the design of the containment building involved the assumption of the most severe accident (a full core meltdown) and that the containment structure is necessary to meet limitations on radioactive emissions under either normal operating or accident conditions.

In a memo admitted into evidence at the commission hearing, from the Air Pollution Control Division of the Department of Natural Resources to the State Tax Commission, the Division stated:

"It is the opinion of the Air Pollution Control Division, Michigan Department of Natural Resources, that the definition of air contaminants includes radioactive materials such as gases and particulates but does not include radiation itself.”

Consumers Senior Health Physicist, witness Sinderman, testified on direct examination before the commission:

"Q. Would you look at page 76 of the record?
"A. Yes.
"Q. What does that show?
"A. That shows — that is table 11-4, and it is entitled, 'Activity in Coolant and Gaseous Waste.’ It essentially shows the seven krypton and xenon radio nuclid[es] and their concentration in various portions of the gaseous radwaste system.
"Q. Are those all radioactive gases?
'A. Yes.
"Q. All right. If they were permitted to get outside the containment into the environment, would they all contribute to a radiation dose to an individual who might be at the site boundary?
"A. If these materials are released to the environment, because they are radioactive, they emit radiation, and as a result would contribute to the exposure or dose to a person in the vicinity of those gases, yes.
"Q. All right. If you were operating with the amount of failed fuel that you license — excuse me — the Palisades Plant operating license permitted you to operate with, assuming no holdup in the gaseous radioactive waste system, would you release radioactive materials to the environment?
"A. Yes.
"Q. All right. What nature? Would they — would they all be gases?
"A. May I ask you a question? Are we speaking specifically of gaseous radwaste system at this point?
"Q. Yes.
"A. No, they would not. They would be the gases, and the operation of the plant to date has shown there would be particulates, some of the other fission products that are not gases, and even some of these gases decay to what are called daughter products that are also radioactive and are particulate in nature.
”Q. Are those particulates respirable?
"A. Yes.
”Q. What is your deñnition of respirable?
"A. My deñnition of respirable is a particle that is sufficiently small to enter the respiratory tract, but sufficiently large so it is retained in the tract and not exhaled. And I believe that is essentially the definition given to this Commission by Mr. Jager.” (Emphasis added.) See, also, Appendix, pp 910a-924a.

*585Portions of witness Lapp’s testimony could also support a finding by the commission that the radioactive materials controlled and disposed of by these facilities constituted air contaminants (Appendix, pp 614a-629a).

The following definitions were found in § 1 of House Bill 3075, as introduced:

"Sec. 1. As used in this act:
"(a) 'Facility’ means any disposal system, including disposal wells, or any treatment works, pretreatment works, appliance, equipment, machinery or installation constructed, used or placed in operation primarily for the purpose of reducing, controlling or eliminating water pollution caused by industrial waste including the real property upon which any of the preceding is located.
"(b) 'Industrial waste’ means any liquid, gaseous or solid waste substance resulting from any process of industry, manufacture, trade or business, or from the development, processing or recovery of any natural resource which is capable of polluting the waters of the state.
"(c) 'Treatment works’ means any plant, disposal field, lagoon, dam, pumping station, incinerator or other works or reservoir used for the purpose of treating, stabilizing, isolating or holding industrial waste: "(d) 'Disposal system’ means system for disposing of or isolating industrial waste and includes pipelines or conduits, pumping stations and force mains, and all other constructions, devices, appurtenances and facilities used for collecting or conducting water borne industrial waste to a point of disposal, treatment or isolation.”

December 23, 1977.