Clyde J. Allen sues as taxpayer of Tooele County (and for others similarly situated) *385challenging .the constitutionality of the Utah Industrial Facilities Development Act, Chapter 29, S.L.U.1967.1 The district court rejected his contention and held the Act valid. He appeals.
The stated purpose of the Act referred to is to encourage and promote the greater industrial development in the state of Utah.2 In pursuance of this purpose and in accordance with the provisions of the Act, Tooele County, acting through its commissioners, and The Magnesium Project, a joint venture, consisting of the National Lead Company, a New Jersey corporation, and H-K Inc., a Utah corporation, have entered an arrangement whereby Tooele County will obtain finances and construct a plant to extract mineral residues of the Great Salt Lake, which will be leased to and operated by The Magnesium Project. The money to construct the plant is to be raised by revenue bonds issued by the County as allowed by Sec. 11-17-3 of the Act, which bonds are to be paid off by rentals from leasing the plant.
Plaintiff’s main argument against this project is that the Act is in violation of Sec. 31 of Art. VI of the Utah Constitution :
The Legislature shall not authorize the State, or any county, * * * to lend its credit * * * in aid of any * * * corporate enterprise or undertaking.
Both from the language just quoted, and from the constitutional history, it is evident that the framers were attempting to prevent a resort to the taxing power of the state for the benefit of private enterprise.3
The County could be deemed to “lend its credit” to the enterprise only if the County might in some eventuality be required to pay the obligation.
It seems evident that the legislature in framing this Act, and the defendants in planning this project, have been cognizant of the above constitutional interdiction and have exercised care to avoid collision with it by safeguarding against any possibility that Tooele County or its taxpayers will be charged with any obligation from this contract. The contracts provide that the construction of the plant is to be financed by the bonds issued by the County, and that the bonds are to be paid only by the rentals *386received from leasing the plant. And to further safeguard against any misunderstanding, it is to be stated on the face of the bonds that in no event will they constitute an indebtedness of Tooele County or a charge against the general credit or taxing powers of the County, all of which is in accord with the provisions of the Act. Inasmuch as the bonds are payable only out of the income to be derived from leasing the plant, and no resort can be had against the County or its taxpayers, it is our opinion that the project is not a “lending of credit” of the County as was intended to be prohibited by Sec. 31 of Article VI of the Utah Constitution.
The foregoing conclusion harmonizes with the “special fund doctrine” which has long been recognized in the law of this state. Its rationale is that bonds which are to be paid off only out of money derived from the project they are issued on, and not payable from taxes, are not debts within the meaning of the constitutional debt limitation on counties.4 What we have just said is also applicable to the plaintiff’s argument that the issuance of the revenue bonds will lessen the borrowing power of the County and thus result in an increased burden upon its taxpayers. There being no possibility of it becoming a debt of the County, there is no logical reason to believe that it will lessen its borrowing power, nor that it will increase the burden upon its taxpayers. In fact, the reverse is true. The establishment of a working industrial plant, with its properties and the income it produces, should result in increasing the taxes collectible by the County in several ways. This ought to lessen the plaintiff’s tax burden over the long run. And because borrowing power is based on income, it seems more likely to increase the County’s borrowing power than to diminish it.
Plaintiff urges that even if the “special fund doctrine” discussed above applies, it is violated if a county mortgages property acquired by tax money to insure the payment of the bonds. Scrutiny of the argument thus stated defeats itself. There is to be no property acquired by tax funds. In addition to what has been said above to the effect that the project is to be financed by the anticipated rentals from the plant, it is further provided that if any County funds are expended, they are to be reimbursed out of the proceeds of the bonds. It is not for .us to base a decision on a supposition that there may be some deviation from this plan, or that there may be some violation of the Act. If there is any such, it would be an act not in conformity with the law, for which the appropriate *387remedy could be sought, but that would not make the Act unconstitutional, nor the project itself unlawful.
Another attack plaintiff makes upon the Act is that Sec. 11-17-10 thereof grants a partial exemption from property taxes. To test the validity of this contention we look to the reality rather than the superficiality of the situation. In doing so it will be seen that in the final analysis the lessee will pay a tax equivalent to the tax it would if it owned and operated the plant in Tooele County. The pertinent portion of the Act is Sec. 11-17-10:
* * * All property acquired or held by the county or municipality under this act is declared to be public property used for essential public and governmental purposes; and all such property and bonds issued under this act and the income from them are exempt from all taxes imposed by the state of Utah, any county, any municipality, or any other political subdivision of the state. This exemption shall not extend to the interests of any private person, firm, association, partnership, corporation or other private business entity in such property or in any other property such business entity may place upon or use in connection with any project, all of zvhich shall be subject to the provisions of section 59-13-73 and all other applicable laws, nor to any income of such private business entity, which, except as provided in this section for such bonds and the income from them, shall be subject to all applicable laws regarding the taxing of such income.
As will be seen from the emphasized language, the exemption applies only to the county (or municipality), and that it expressly does not apply to any private enterprise. The latter “shall be subject to the provisions of Sec. 59-13-73 and all other applicable laws.” That section imposes “a tax upon the possession or other beneficial use * * * of any property, real or personal, which for any reason is exempt from taxation, when such property is used in connection with a business conducted for profit”; and the following section, 59-13-74, provides that the tax shall be “in the same amount * * * as the ad valorem property tax would be if the possessor or user were the owner thereof.” So there is actually no tax exemption to the lessee.5
Inasmuch as all persons similarly situated would be treated equally under this statute, we see no merit to plaintiff’s further arguments relating to inequality and discrimination in taxation.6
*388 The final point we comment on is the plaintiff’s charge that the Act must be held invalid because of the lack of a substantial public purpose. This question has been determined at three levels preceding the prerogative of this court to make such a determination. The first is the legislature ; the second is the county commission; and the third is the trial court. All of them appear to have regarded industrial development as a proper public purpose. In deference to those prior prerogatives, this court would not upset such a determination except upon a persuasive showing that it was so clearly in error as to be capricious and arbitrary,7 a circumstance we do not find present here.
The conclusion we have reached herein is in accord with the majority and what we regard as the better considered decisions which uphold similar statutes,8 though we are aware that there are some decisions to the contrary.9
The judgment of the trial court holding the Industrial Development Act constitutional is affirmed. The parties to bear their own costs.
TUCKETT and ELLETT, JJ., concur.. Now codified as Secs. 11-17-1 through 15, U.C.A.1953 (1967 Supp.).
. Sec. 1 of the Act.
. See proceedings of Constitutional Convention, Yol. 1, p. 953. David Evans:
“What is loaning the credit of a State or county or municipality? In short, it means that any corporation or enterprise, desiring to start a business, and for the pur'pose of aiding it, the State endorses or rather guarantees the bond or paper of such individual or corporation * * *”; and at p. 979: Samuel R. Thurman: “It is not a question of the State being permitted to make donations and give bonuses from time to time * * *, but it is a question of mortgaging the State, not for the payment of its oion debt but for the payment of the debt of another.”
. See Barnes v. Lehi City, 74 Utah 321, 279 P. 878 (1929); Fjeldsted v. Ogden City, 83 Utah 278, 28 P.2d 144; and Barlow v. Clearfield City, 1 Utah 2d 419, 268 P.2d 682.
. See Thiokol Chemical Corp. v. Peterson, 15 Utah 2d 355, 393 P.2d 391, cited and relied on in Marquardt Corp. v. Weber County, 360 F.2d 168 (10th Cir. 966).
. See State v. Mason, 94 Utah. 501, 78 P.2d 920, 117 A.L.R. 330; that the authority of the legislature to exempt from income tax the interest on bonds issued *388by subdivisions of the state provided by 11-17-10 is merely an exercise by the legislature of the power granted them, see See. 3, Art XIII, Utah Constitution.
. See Carmichael v. Southern Coal and Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245 (1937); and see also Lehi City v. Meiling, 87 Utah 237, 48 P.2d 530.
. E.g., Green v. City of Mt. Pleasant, 250 Iowa 1184, 131 N.W.2d 5 (1964); State ex rel. Ferguson v. City of Pittsburgh, 188 Kan. 612, 364 P.2d 71 (1961); Carruthers v. Port of Astoria, Or., 438 P.2d 725 (1968); State v. Barczak, 34 Wis.2d 57, 148 N.W.2d 683 (1967); Powers v. City of Cheyenne, 435 P.2d 448 (Wyo. 1967).
. E.g., State v. Town of North Miami, 59 So.2d 779 (Fla.1952); State ex rel. Saxbe v. Brand, 176 Ohio St. 44, 197 N.E.2d 328 (1964).