Mo. court to hear challenge to business incentives
Sunday, September 16, 2012
JEFFERSON CITY, Mo. (AP) — A year after lawmakers passed it, the Missouri Supreme Court will decide whether legislation creating an incentive fund for high-tech companies can now legally take effect or whether it was doomed from the start by the way it was written.
The state's high court is to hear arguments Wednesday on the constitutionality of the Missouri Science and Innovation Reinvestment Act, or MOSIRA, which would use a portion of the tax revenues of existing biotechnology companies to finance grants for similar start-up businesses.
The merits of the incentive program are not at issue in the legal challenge. Rather, the court will be considering the appropriateness of a contingency clause in the legislation. The wording said the program could take effect only if a separate, broader bill dealing with other tax incentives also passed during an autumn 2011 special session and was signed into law.
That other bill never passed, yet Gov. Jay Nixon nonetheless directed his administration to start implementing the new incentives for science-based firms. Cole County Circuit Judge Dan Green put a halt to that. He ruled in February that the contingency clause was unconstitutional and struck down the entire bill. Attorney General Chris Koster, whose office defends state laws, appealed to the state Supreme Court.
In legal briefs filed with court, the attorney general's office argues that Green was right to strike down the contingency clause but should have allowed the MOSIRA program to take effect anyway under a legal analysis that unconstitutional sections of legislation can be severed from the rest the bill.
The state's position is seconded by a brief submitted by the Missouri Biotechnology Association. It says that severing the unconstitutional section from the rest of the bill helps provide certainty for the business community, so it can act with greater confidence on the laws passed by the Legislature.
Attorneys for the Missouri Roundtable for Life and other anti-abortion plaintiffs argue in written court briefs that Green reached the right conclusion but for the wrong reason. They contend the contingency clause is legal, and because the second bill never passed, the MOSIRA program cannot take effect.
The anti-abortion groups contend that clauses making bills effective upon future events have been upheld by Missouri courts dating back to 1856. While acknowledging that this particular type of contingency clause is unusual in Missouri, their court brief cites cases from eight other states in which they said contingency clauses linking the effectiveness of one law to a separate law were found constitutional.
Green ruled that contingency clause in the MOSIRA legislation was unconstitutional because it infringed on the governor's authority to sign and veto bills — essentially giving the final say-so to lawmakers, who could nullify the governor's signature by not passing the separate, contingent legislation. The judge said the legislation also violated a state constitutional requirement that bills contain only one subject.
The brief by attorney general's office praised those rulings. It asserted, for example, that by linking the MOSIRA bill to the other tax credit bill, lawmakers had essentially combined two subjects into a single package that was not reflected in the title of the MOSIRA legislation.
In his ruling, Green concluded that lawmakers would not have passed the MOSIRA legislation without the contingency clause. Thus the unconstitutionality of the contingency clause doomed the whole bill, he said.
The attorney general's office contends that Green used the wrong analysis to determine whether the whole bill must fail. It said the judge should have focused more on the structure of the bill, considering such things as whether the contingency clause was essential to the main substance of the legislation and whether the rest of the bill could be considered complete without the clause. Under those criteria, the MOSIRA program should been allowed to take effect, the attorney general's office wrote in its brief.
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