Opinion of the Justices

To the House of Representatives:

The undersigned Justices of the Supreme Court submit the following answer to your request for advice with respect to House Bill No. 154 in new draft. The bill in its original form, with certain proposed amendments, was referred to us for consideration in March of this year, when answers were returned which were unfavorable to the bill, in the form in which it was then presented. Opinion of the Justices, 106 N. H. 180. As noted in the cited opinion House Bill No. 153 is a related bill which presents no constitutional questions. It is designed to permit financing of the construction of an industrial facility with private capital by a method which will meet the requirements of s. 1.103-1 of the Federal income tax regulations, and revenue ruling 63-20 relating thereto. See Rogers, Municipal Debt Restrictions and Lease-Purchase Financing, 49 A.B.A.J. 49 at 52.

House Bill No. 154 in new draft contains provisions which serve to clarify the purposes and scope of the bill. The declaration of need and purpose of the bill as now contained in the first section states that “competition between communities in this state merely for the purpose of seeking relocation of industrial facilities located in this state is contrary to the policy of this chapter.”

Section 1 further provides that the proposed act shall be used “to furnish additional means for the development of industrial facilities without the use of public funds, where such development is more appropriate under this chapter than under RSA 162-A.” RSA ch. 162-A (see RSA Replacement Vol. 2 (1964) pp. 553-561) is the chapter which established the Industrial Park Authority (see Opinion of the Justices, 99 N. H. 528; Opinion of the Justices, 103 N. H. 258), the activities of which may be limited from time to time by reason of prior commitments, diversification of investments, or statutory limitation upon capital expenditures. See RSA 162-A:12.

Changes in the remaining sections of House Bill No. 154 are designed to assure, among other things, that any industrial facility which the State or any of its subdivisions may propose to acquire under the bill shall be constructed, acquired and utilized without public expense; and that any lease of the facility shall contain provisions which will charge the lessee with all cost and expense of operation, maintenance, and upkeep of the facility, and with annual payments to the municipality where the facility is located, equivalent to a just share of the public expense, in lieu of taxes upon the facility itself.

Likewise, by provisions not previously in the bill, the new draff provides that prior to construction of the facility the Governor and Council shall first determine that the undertaking will meet the several requirements of the bill, including those just mentioned.

The requirements to be thus enforced by findings of the Governor and Council, include the fundamental one that the entire undertaking and its operation and use “will serve a public use and provide a public benefit,” and aid in the development, growth and prosperity of the State or a subdivision thereof. S. 5. Such a finding will necessarily be predicated upon a determination, conversely, that the facility and its use will not be “primarily of benefit to private persons or private uses ” even though such benefits may incidentally result. See Opinion of the Justices, 106 N. H. 180, supra; Conway v. Water Resources Board, 89 N. H. 346. Under section 5 of the bill the Governor and Council must also find before construction of any facility can commence that the policies stated in section 1 of the bill are to be complied with.

Robert B. Buckley for the city of Claremont, Representative Margaret B. DeLude and others, for the bill. William E. JVolin for the Joy Manufacturing Co., for the bill. William Maynard, Attorney General and George S. Pappagianis, Deputy Attorney General and for the Governor’s Special Committee on Industrial Development, for the bill.

We are of the opinion that House Bill No. 154 in new draft establishes adequate criteria for determining that a proposed undertaking shall comply with the requirement of the bill, and will serve a public purpose and benefit; and that such a determination shall be made before the State or its subdivisions may participate. We are also of the opinion that such an undertaking, when validly approved by the Governor and Council, will not violate the provisions of the Constitution. See State ex rel Thompson v. Giessel, 271 Wis. 15.

Accordingly we answer the first four questions in the affirmative, witii the qualification that the annual payments referred to in question three are to be made “to the municipality [or municipalities] in which [the] facility is located.” S. 7. For the same reason, the fifth question is answered in the negative. Our answer to the sixth question, as to whether the proposed legislation is constitutional in respects other than those embraced by prior questions, is that the bill is constitutional upon its face.

Frank R. Kenison. Laurence I. Duncan. Amos N. Blandin, Jr. Edward J. Lampron. Stephen M. Wheeler.

April 22, 1965.