MCC Letter to the Missouri Senate - Sale of Assets of Missouri Higher Education Loan Authority - SS#2 for SCS/SB 389

TO: Members of the Missouri Senate

FROM: Larry Weber, Executive Director and General Counsel, Missouri Catholic Conference

RE: SS#2 for SCS/SB 389 regarding sale of assets of Missouri Higher Education Loan Authority

DATE: February 15, 2007

Questions have been directed to the Missouri Catholic Conference by a number of senators regarding whether the proposed Senate Substitute #2 for SCS/SB 389 addresses the pro-life concerns raised by my earlier memo to all senators regarding the Senate Committee Substitute for this bill. In order to clarify the MCC’s position, let me assure you that the proposed Senate Substitute bill does not address pro-life concerns. Although perhaps a step in the right direction, the provisions of Senate Substitute #2 still leave unresolved the concerns raised by the MCC’s earlier memo regarding the Senate Committee Substitute bill.

As offered, the section of the Senate Substitute bill addressing the MOHELA transaction (Section 173.475) has been amended to include a provision (subsection 8) stating that the provisions of the section authorizing the transaction are non-severable, and that if any court rules any portion of the section invalid, the entire section shall be invalid. Notwithstanding that courts disfavor non-severability of legislation, Section 173.475 now contains an internal inconsistency, since subsection 5 of the section states that if any person or party challenges this section and this section is determined invalid with respect to a particular person or party, the section shall remain valid with respect to all other persons or parties. Therefore, if a challenge is made to the validity of the provisions of the agreement restricting MOHELA proceeds from being used to subsidize human cloning or embryonic stem cell research and those restrictions are determined invalid, the agreement and transaction will remain in effect with respect to all other institutions and parties to this transaction.

These provisions of the bill and the provisions of the cooperation agreement still do not effectively address the issue of funding unethical human life sciences research. The Cooperation Agreement entered into between the Missouri Development Finance Board, the University of Missouri and MOHELA provides, with respect to the schedule of projects to be constructed with proceeds of the MOHELA sale: "Exhibit A may be amended by written agreement of MDFB, the Governor, the President Pro Tem of Senate, the Speaker of the House, the Senate Minority Floor Leader and the House Minority Floor Leader. In addition, any amendment to a particular line item that affects the University shall require the consent of the University." This language would allow the six named officials to simply agree between themselves not to be bound by Section 196.1127, RSMo, since the only place where this restriction is found is within the cooperation agreement.

In order to avoid this result and in order to achieve the claimed result, the non-severability provisions of SS#2/SCS/SB 389 (Section 173.475.8) would have to expressly provide, at a minimum, that(1) the restrictions on the scope of ethical research in the cooperation agreement found in Section 196.1127, RSMo; (2) the provisions of the cooperation agreement itself (and all successor and amended agreements); and(3) the provisions of Section 173.475 –– are ALL non-severable; and that if the provisions of Section 196.1127, RSMo, for any reason whatsoever no longer govern disposition of the proceeds of the MOHELA transaction, the entire transaction shall fail with respect to all institutions receiving MOHELA sale proceeds. The non-severability provision will have to expressly incorporate reference to all three of these restrictions in order to be at all effective, and state that if application of Section 196.1127, RSMo, is no longer effective with respect to either the cooperation agreement or this section, then the MOHELA transaction is invalidated, that the cooperation agreement is thereafter void and unenforceable, and that all MOHELA sale proceeds shall be returned from all institutions that received these funds.

Furthermore, in order to have the effect of restricting research activities in these facilities, the Section 196.1127 restrictions should be addressed, not so much to use of the MOHELA sale proceeds, as to research activities within the facilities constructed with these proceeds, and to that end, the restrictions should be perpetual. This can be accomplished by either a) an agreement entered into between the state and the institution that receives the funds that research at the institution shall be subject to the restrictions contained in Section 196.1127; or b) by operation of law, and that Section 173.475 should provide that any institution receiving funds from the transaction authorized by Section 173.475 shall be bound, by operation of law, by the provisions of Section 196.1127, RSMo – again, subject to the non-severability provisions described above.

The bill should clarify that the reference to Section 196.1127, RSMo, is applicable to all institutions, and that if a court invalidates Section 196.1127 or determines that Section 196.1127 is inapplicable to the activities of any institution, then the transaction is ineffective for all institutions, notwithstanding the provisions of Section 173.475.5 (or the Section 173.475.5 could simply be deleted by the substitute bill).

This in no way removes the Missouri Catholic Conference’s objections relating to this transaction and SB 389 relating to access to affordable higher education. The foregoing, however, would be positive and effective steps to address the pro-life concerns raised by the Missouri Catholic Conference and other pro-life groups in the state.