Analysis: Fate of Mo. science initiative unclear

JEFFERSON CITY, Mo. -- Though seven years and several hundred million dollars behind Kansas, Missouri may finally be poised to enact a long-discussed initiative channeling state tax dollars to upstart companies in science- and technology-based ventures.

Or perhaps not.

Due to an intentional legislative quirk, the Missouri Science and Innovation Reinvestment Act, or MOSIRA, that recently passed the legislature contains a clause declaring that it cannot take effect unless a separate bill on state tax incentives also passes during the current special legislative session.

Thus far, that other business incentive bill has not passed. If lawmakers cannot settle their stalemate and send Gov. Jay Nixon that bill by the session's Nov. 5 automatic adjournment, the contingency clause in the MOSIRA legislation could be tested in court.

The question for judges to consider: Can lawmakers legally link one piece of legislation to the enactment of another one?

"From a layman's perspective, there's some really interesting issues there," said Kelly Gillespie, executive director of the Missouri Biotechnology Association, a leading advocate for the MOSIRA legislation.

For example, does tying one bill to the enactment of another run afoul of requirements in the state constitution that each bill address only one subject that is clearly expressed in its title? Does it amount to an unconstitutional delegation of the legislature's powers to make laws? And if the contingency clause is declared void, can the rest of the bill still be implemented?

On the surface, the answers to all of these questions might appear to be 'no' -- meaning there is no way for MOSIRA to take effect unless that separate, broader bill on business incentives also passes and becomes law. But there is enough uncertainty that supporters of MOSIRA are holding out hope.

"There might not be case law that tells you exactly what the outcome will be and would give us a warm and fuzzy assurance," Gillespie said. But "we know some of these issues that surround this -- especially in the case of logrolling and separation of powers and things like that -- someone might find some really interesting arguments" to be raised in court.

In one potentially relevant case, the state Supreme Court struck down a contingency clause in a 1993 education bill that would have placed a tax referendum on the ballot only if the Supreme Court ruled in a certain way on separate lawsuit challenging the state's school funding formula. The Supreme Court ruled that the contingent referendum was an improper delegation of legislative powers.

If it can be implemented, the MOSIRA legislation would create a special fund overseen by the Missouri Technology Corp. to offer incentives to "science and innovation" companies. It defines that to cover firms conducting research or making products related to agricultural biotechnology, veterinary medicine, biochemistry, energy or environmental issues, forestry, homeland security, information technology, medical devices, microbiology and pharmaceuticals, among other things.

The program would be financed by annual transfers from state revenues equal to a percentage of the growth in the wages paid to employees of existing science-based companies, using 2010 as a base year for the calculations.

In short: Tax revenues from existing biotechnology companies would be used as grants to help similar businesses get started in Missouri.

A similar 2004 law created the Kansas Bioscience Authority, which so far has directed about $360 million to a fund that could top out at $581 million over 15 years. That money has been used to fund research, develop products and entice businesses to expand or locate in Kansas. Other states also have initiatives to finance research and start-up companies in high-tech fields. Ohio has a $2.3 billion, 14-year project. Massachusetts and Maryland have each pledged at least $1 billion over 10 years toward life sciences initiatives.

Missouri's science-based initiative was separated by lawmakers from the broader economic development bill because of concerns that the bigger bill's title of "relating to taxation" might not cover the creation of a program that grants money to businesses. Yet Senate President Pro Tem Rob Mayer, R-Dexter, linked the bills with the contingency clause -- essentially leveraging the MOSIRA bill to try to spur passage of the other business incentive bill.

This is not the first time lawmakers have stuck a contingency clause in a bill. A manual entitled "The Essentials of Bill Drafting in the Missouri General Assembly" -- prepared by and for legislative staff -- includes a section on how to draft contingency clauses. One of the models cited is a 1998 education bill, which made changes to the state's school funding formula contingent upon the attorney general providing notice that school desegregation lawsuits had been settled.

A year earlier, the governor signed a bill about procedures for administrative rules that included a multi-part contingency clause referring to an executive order issued by then-Gov. Mel Carnahan. Attorney Brad Ketcher, who was Carnahan's chief of staff, helped negotiate the wording of that contingency clause with lawmakers.

Ketcher said a general principle for determining whether such clauses are OK is if the state's reviser of statutes -- who literally places bills in the law books -- can easily determine if the contingency has been met. Linking one bill to the enactment of another would seem to meet that test, he said.

In the case of the MOSIRA legislation, "I think it's an appropriate contingency, because it can be readily obtained if it has occurred or not," Ketcher said. "So the reviser of statutes will have a clear benchmark to tell whether it has been triggered."