*1 CURCHIN, Appellant, Alexander B.
MISSOURI INDUSTRIAL DEVELOP BOARD, body corporate a
MENT politic, Respondent.
No. 68784. Missouri,
Supreme
En Banc. 8, 1987.
Jan.
Rehearing Denied Feb. McFarland, Mallin, R.
Kenneth J. John Louis, appellant. St. Gilmore, Stensrud, D. Webb
Richard Stitt, Blunt, H. Kansas L. Charles Ronald respondent. City, for WELLIVER, Judge. Curchin, appeals
Appellant, Alexander Jasper County Court’s Novem- Circuit 3, 1986, upholding the constitu- order ber Supp.1985, tionality of In- the Missouri allowing respondent, Board, to issue reve- dustrial containing providing clause nue for losses on default state tax credit bonds. argument, many questions were
In oral
raised, including, among others:
filing
impropriety of
defend-
Jasper
when the
action in
only
board, generally suable
ant is a state
County;
in Cole
holding in
whether,
of our
view
Prop
Ashcroft, ex rel. Plaza
ex
inf
*2
City,
erties v. Kansas
resolving
raising the same issues that I requested were Horstman; to be determined in dispute. The facts in this case are not in Respondent, the Missouri Industrial Devel- is, fact, whether this in an adversarial (the opment Board), Board was created a proceeding cоnstituting justiciable a contro- 100.265, body corporate politic versy; and Supp.1985. The RSMo Board authorized the public being adequate- whether to include in industrial revenue a its bonds represented ly in proceeding. provision allowing a state tax credit for any unpaid principal amount of and ac- view, In the Court’s there three are 100.270(2), in crued interest default. persons legitimate, classes of having §§ a vital 100.297, Supp.1985. in promoting interest the issuance and sale of industrial revenue with bonds 2, 1986, approved June the Board a On upon default, credits are Jasper County project concerning Missouri They Supp.1985. Castings, pro- Specialty (Specialty) Inc. persons establishing interested in new busi- $5,000,000 posed to in issue nesses, persons in expanding ex- interested 21, 1986, July thereof. On businesses, isting persons interested in approved project concerning Board Kuhl- saving failing vitally in- businesses. Other (Kuhlman) Diecasting Company, Inc. man persons considering terested include those $15,000,000 proposed up issue bonds, and, purchase of such last but Sep- in support thereof. On revenue least, taxpayers have who 8, 1986, proposed au- tember Board preventing improper an interеst dis- thorize inclusion position of tax revenues. it Specialty bonds and million $2.8 view, disposition alleged
In our this case on that the Board will authorize a justiciability procedural or on some or all of the Kuhlman issues would all leave those who do have a bonds. 10,
1. Curchin v. Missouri Industrial
Board,
No. 68784
order dated Nov.
Curchin,
property
private per-
Appellant, Alexander
is a citizen
son,
corporation.4
and,
association
according
taxpayer
of Missouri
counsel, is
or President-elect
his
President
provides:
Section 100.297
Joplin
of Commerce.2
Chamber
On
Tax credit for owner оf revenue bonds
3, 1983, appellant filed suit as a
November
notes, when, amount,
limitations. —1.
*3
Jasper
of
taxpayer
in the Circuit Court
credit,
may
The board
authorize a tax
as
County, ostensibly
section,
to
a declaration
obtain
in
to
of
described
this
the owner
by
any
or notes issued
the
unconstitutionality
of
100.297 and
provisions
board under the
of sections
authority
lack
of the Board’s resultant
of
prior
100.250 to
to the is-
to
revenue bonds with the tax credit
issue
notes,
of
or
the board
suance
such bonds
Specialty
in
and
feature
determines that:
projects.
on
Kuhlman
Also
November
availability
The
of such tax credit is
answer,
filed its
the case was
resondent
undertaking
the
material inducement to
facts,
upon stipulated
Jasper
tried
the
in
Missouri
project
the state of
upheld
the constitu-
Circuit
notes;
to the sale of
bonds or
and
the
opinion,
in
tionality of
100.297
a written
respect
project
to
The loan with
the
appellant’s motion for a
trial was
new
adequately
by
secured
a first deed of
overruled,
appellant filed his
made and
and
lien,
mortgage
comparable
or
or
or
trust
Court,
appeal
utilizing
to this
all
notice of
satisfactory to
security
other
the board.
admittedly
which
pre-prepared instruments
making
Upon
the determinations
2.
legal
the
file.
now constitute
section,
1 of
specified in subsection
this
10, 1986,
re-
November
we sustained
On
that each owner
the board
declare
spondent’s
expedite.
to
Decem-
motion
On
of revenue bonds or notes
of an issue
3,1986,
special
session
ber
this Court sat
entitled,
other
any
in lieu of
shall be
argument
case.
to hear the oral
the
respect
or
to such bonds
deduction with
notes,
against any tax
to a tax credit
by such owner under the
otherwise due
II
143, RSMo, in
chapter
the
of
Appellant argues that
100.297 consti-
percent of the
of one hundred
amount
money
grant
property
or
tutes a
of
of
interest
unpaid principal
and accrued
lending
of
credit in violation of
and a
or
such
on such bonds
notes held
Constitution,
Sec-
owner
year
Missouri
Article
taxable
of such
owner
the
following
year of
default
38(a),3
prohibits
the taxable
of
tion
which
compen-
adjusted
Castings
Specialty
project would
to children —direct
2.
Missouri
The
relief —
rehabilitation—partic-
Joplin.
Depart-
undertaken in
The Missouri
for
sation
veterans —
Development anticipates
generаl assembly
of
ipation
ment
Economic
aid.
In federal
jobs
directly
project
create 150
money
would
grant public
or
power to
have no
shall
$18,238,-
impact of
have a total economic
would
or
property, or lend
authorize
indirectly
project
eleven
would
cause
980.
any
person, associa-
.public
establishments, ninety-six new non-
new retail
excepting
corporation,
aid
tion or
manufacturing jobs,
population increase of
pen-
calamity,
general
providing for
laws
families,
of 153
and an increase
an influx
assistance,
blind,
age
for
for old
sions for the
ninety-two.
in school enrollment
dependent
crippled
or the
or
children
aid
blind,
relief,
compensa-
adjusted
direct
decide
Appellant
and we do not
does
raise
tion,
discharged
rehabilitation
bonus or
constitutionality
light of the
100.297 in
the United
armed services of
members
Fourteenth Amend-
Process Clause of the
Due
of this
residents
who
bona fide
States
were
Constitution. See
of the United States
ment
service,
rehabili-
during
and for the
their
Portland,
U.S.
generally
Jones
Money
property
(1917);
persons.
or
tation
other
Carmichael v.
S.Ct.
Finally, the tax credit violate by ap
other constitutional raised for the same reason that
pellant. At least Const, Ill, violate Mo. art. it does not 38(a), i.e., because it serves a
public purpose, the tax credit cannot be Const, 39(1) Mo. art. said to violate X, (2), Further or Mo.
more, re although 100.297 authorizes
spondent to determine when available, such does not constitute notes owner or own- This tax credit is as much a Notwithstanding any provi- ers thereof. property as much a any sion of contrary, Missouri law to the drain on the state’s coffers would be portion of the tax outright payment by the state to the bond owner a rеvenue bond or note enti- holder default. There is no differ tled under this section which exceeds the granting ence between the state a tax cred
Notes
notes tively pledged the security ultimate respect time with to which the the bonds. provided in credit this be section shall fifty available shall not exceed million Ill dollars. that, Respondent argues next even if the added.) (Emphasis grant public tax credit of constitutes a Respondent argues the that tax credit given “private money, person, it is to a not grant 100.297 not a of is corporation” the association or within public money or a of property III, meaning 38(a) of Article Section public payment required credit since no is examining In Missouri Constitution. During argument, of the state. oral are grants whether the parties agreed reported no there are entities, private required have made to we cases where a court has been called grants public purpose. serve a decide whether allowance a tax cred- & Center v. Health Menorah Medical grant public it constitutes a funds. This Auth., Educ. Facilities true, believe, so since the answer is constitutionality obvious. use, purpose ultimate dеpends The tax credit is on the available is raised and object all the fund subsequent bondholder and bondhold- A suf- or character of ers. bondholder who does not have not the nature corporation immediate person ficient state tax to take advan- whose liabilities A applying used in it. tage agency one is to sell bond to purpose is unconstitu- 100.- for a who able to utilize that credit. pass through the hands though it Any portion 297.2. unused of the credit officials; people may be ten may be carried forward undimished for though taxed for a work it is such sections as this in their fundamental оf an law under the direction individual private corporation. 11 Debates the Missouri Constitution (debate 23, 1944) (state- May Siebert, City v. State ex rel. St. Louis 19J/.5 Garten). ment of Mr. (Mo.1894)(quoting Sharp 24 S.W. (1853)). Mayor, 21 Pa. less IV, Article Section 46 of the Missouri predecessor Constitution of Respondent asserts that the tax credits III, 38(a) Article Section of the Missouri designed promote public purpose pre- adopted Constitution of was general economic welfare. In determin- grants. railroad vent was ing whether there is a sufficient adopted despite significant public bene- public money, a behind providеd by fit the railroads. “primary Missouri has used the effect” test, test. Under application Accordingly, of Article 38(a) Section of the Missouri Constitu- true distinction drawn in the au- [t]he tion, grants primarily held with a primary object If we have thorities is this: unconstitutional, private effect to be de- public expenditure subserve spite possible impact upon beneficial municipal purpose, expendi- locality and of the legal, notwithstanding ture is it also in- In ex rel. state. which, expense, volves as incident an of Jefferson (banc Smith, 348 Mo. alone, standing lawful. would 1941), municipal we held the issuance of