2008 Initiative Petitions
Approved for Circulation in Missouri

Amendment to Chapters 208 and 143 of The Revised Statutes of Missouri, Relating to Missouri’s Children’s Health Insurance Program,
2008-038

THE PROPOSED ACT

Be it enacted by the people of the state of Missouri, as follows:

Section A. Sections 208.640 and 143.431, RSMo, are repealed and nine new sections enacted in lieu thereof, to be known as sections 1, 2, 3, 4, 5, 208.640, 6, 143.431 and 143.434 to read as follows:

Section 1. Title. This Act shall be known and may be cited as "The Cover all Kids Act.”

Section 2. Legislative declaration. The People of the State of Missouri hereby find and declare that:

1. It is the purpose of this Act to expand children ’s access to health care in Missouri through the Missouri Medicaid/SCHIP program, which is now called MO HealthNet:

2. Currently one hundred twenty-seven thousand Missouri children do not have health insurance; health care costs are rising faster than wages; many small businesses cannot afford to provide health care benefits to their employees; some employers choose not to offer health care benefits; many employees cannot afford health insurance even if their employer offers it; and more than 70,000 Missouri children have lost Medicaid and/or SCHIP health coverage since the 2005.

3. Medicaid/MO HealthNet and SCHIP programs are cost-effective, efficient, and successful programs for providing health insurance to low-income Missourians, including children; these programs have reduced the number of uninsured children in Missouri; the Medicaid/MO HealthNet program and SCHIP programs have improved access to health care and have resulted in better health outcomes for low-income Missourians, including children; and Medicaid reductions have increased the number of uninsured Missouri children and shifted the cost of caring for these uninsured Missourians to hospitals and privately-insured Missourians.

4. The Department of Social Services shall strengthen the state Medicaid/MO HealthNet program and SCHIP programs to reduce the number of uninsured Missouri children by implementing the provisions listed below.


Section 3:  Definitions: As used in this Act, unless the context clearly indicates otherwise, the following terms mean:

1.  “MO Health Net” and “Medicaid” refer to Missouri’s medical assistance program on behalf of needy persons, or its successor program(s), pursuant to Title XIX, Public Law 89-97, 1965 amendments to the federal Social Security Act, 42 U.S.C. Section 1396a et seq. or its successor provisions; and

2.  “SCHIP” refers to Missouri’s State Children’s Health Insurance Program for uninsured children, or its successor program(s), under Title XXI of the Social Security Act, 42 U.S.C. Sections 1397aa et seq., or its successor provisions.  


Section 4:  Restoring the 2005 cuts to children’s coverage and covering uninsured children:  Notwithstanding any other provision of Missouri law, Missouri’s SCHIP affordability standards and premium requirements shall be no more restrictive than the requirements in effect on January 1, 2005.


Section 5: There is hereby created in the state treasury the "Cover all Kids Fund," which shall consist of revenues derived from the closing of corporate tax loop-holes pursuant to 143.431 and 142.434 of this Act. Subject to appropriation, the cover all kids fund shall be used exclusively for the coverage to eligible children pursuant to this Act.  Moneys in fund the shall be kept separate from the general revenue fund as well as any other funds or accounts in the state treasury.  The state treasurer shall be custodian of the fund and may approve disbursements from the fund in accordance with sections 30.170 and 30.180, RSMo. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, any moneys remaining in the fund at the end of the biennium shall not revert to the credit of the general revenue fund. The state treasurer shall invest moneys in the fund in the same manner as other funds are invested. Any interest and moneys earned on such investments shall be credited to the fund. 


Section 208.640. 1. Parents and guardians of uninsured children with incomes of more than [one hundred fifty]two hundred twenty-five but less than three hundred percent of the federal poverty level who do not have access to affordable employer-sponsored health care insurance or other affordable health care coverage may obtain coverage for their children under this section. Health insurance plans that do not cover an eligible child's preexisting condition shall not be considered affordable employer-sponsored health care insurance or other affordable health care coverage. For the purposes of sections 208.631 to 208.659, "affordable employer-sponsored health care insurance or other affordable health care coverage" refers to health insurance requiring a monthly premium of [:

(1) Three percent of one hundred fifty percent of the federal poverty level for a family of three for families with a gross income of more than one hundred fifty and up to one hundred eighty-five percent of the federal poverty level for a family of three;

(2) Four percent of one hundred eighty-five percent of the federal poverty level for a family of three for a family with a gross income of more than one hundred eighty-five and up to two hundred twenty-five percent of the federal poverty level;

(3)] Five percent of two hundred twenty-five percent of the federal poverty level for a family of three for a family with a gross income of more than two hundred twenty-five but less than three hundred percent of the federal poverty level.

The parents and guardians of eligible uninsured children pursuant to this section are responsible for a monthly premium as required by annual state appropriation; provided that the total aggregate cost sharing for a family covered by these sections shall not exceed five percent of such family's income for the years involved. No co-payments or other cost sharing is permitted with respect to benefits for well-baby and well-child care including age-appropriate immunizations. Cost-sharing provisions for their children under sections 208.631 to 208.659 shall not exceed the limits established by 42 U.S.C. Section 1397cc(e). If a child has exceeded the annual coverage limits for all health care services, the child is not considered insured and does not have access to affordable health insurance within the meaning of this section.


2. [The department of social services shall study the expansion of a presumptive eligibility process for children for medical assistance benefits.]

The Department of Social Services shall explore, and where feasible adopt, all available state options for enrolling uninsured children who are eligible for the Medicaid/MO HealthNet program and attempt to maximize the amount of federal performance bonus payments that my become available to states that adopt these options under the Children’s Health and Medicare Protection Act of 2007 or other federal legislation.   The Department of Social Services shall implement at least the following measures to enroll eligible uninsured children:

(1).          Presumptive Eligibility for children pursuant to Section 1920A of the Social Security Act (42 § U.S.C. 1396r-1a.) and § 2107(e)(1) of the Social Security Act (42 U.S.C. § 1397gg(e)(1)).  The Department of Social Services shall promulgate rules to expand the presumptive eligibility process for children for Medicaid/MO HealthNet benefits. Such children shall be eligible during a period of presumptive eligibility in accordance with 42 U.S.C. Section 1396r-1a.

(a) The following organizations shall be considered qualified entities for the purpose of determining a child's temporary eligibility for medical assistance benefits under MO HealthNet and the state child health insurance program: federally qualified health centers, rural health clinics, hospitals, providers designated by the department of mental health, WIC agencies, the Family Support Division, and other entities as determined by the department of social services.  While no organization is required to participate as a qualified entity, all of the aforesaid qualified entities shall be offered the opportunity to make presumptive eligibility determinations in the MO HealthNet program.

(b) The Department of Social Services shall determine the feasibility, including the cost, of expanding of presumptive eligibility to all other qualified entities that are authorized under federal law and if appropriate, shall request appropriations from the Missouri General Assembly to expand presumptive eligibility to additional categories of qualified entities beyond the qualified entities that are required by paragraph (a) above.

(c)            The Department of Social Services shall train qualified entities and shall develop methods and procedures to monitor the performance of “qualified entities” that make presumptive eligibility determinations pursuant to this subsection. 

(d)           The Department of Social Services shall develop methods and procedures for ensuring that qualified entities assist presumptively eligible children in attaining ongoing eligibility for the Medicaid/MO HealthNet program after the presumptive eligibility period expires.

(2).        Twelve-month continuous eligibility for children pursuant to Section 1902(e)(12) of the Social Security Act  (42 U.S.C. § 1396a(e)(12)) and for children qualifying under Title XXI of the Social Security Act.  42 U.S.C. § 1397ee(a)(4)(A)  

(3).          Automatic “Administrative” Renewal. The Department of Social Services (DSS) shall provide, in the case of renewal of a child's eligibility for Medicaid/MO HealthNet and/or SCHIP, a pre-printed form completed by DSS based on the information available to DSS and notice to the parent or caretaker relative of the child that eligibility of the child will be renewed and continued based on such information unless DSS is provided other information. Nothing in this clause shall be construed as preventing the State from verifying, through electronic and other means, the information so provided.  If there are no changes in information relating to eligibility (such as income or family composition), then the family does not need to send back the pre-printed form referenced in this subsection.  DSS shall renew children’s eligibility for Medicaid/MO HealthNet and/or SCHIP based on information available to DSS through electronic or other means, unless sufficient information is not in the State's possession and cannot be acquired from other sources (including other State agencies) without the participation of the applicant or the applicant's parent or caretaker relative.

(4).  Premium Grace Period--- The Department of Social Services: shall afford individuals enrolled in the Missouri SCHIP program who are required to pay a premium pursuant to Section 208.640.1 a grace period of at least 30 days from the beginning of a new coverage period to make premium payments before the individual's coverage under the plan may be terminated; and shall provide to such an individual, not later than 7 days after the first day of such grace period, notice that failure to make a premium payment within the grace period will result in termination of SCHIP coverage and of the individual's right to challenge the proposed termination pursuant to the applicable Federal regulations.  For purposes of this subdivision, the term `new coverage period' means the month immediately following the last month for which the premium has been paid.

Section 6. MO HealthNet Buy-in -- The Department of Social Services shall allow all Missouri children in families with incomes above 300% of poverty to enroll in the Medicaid/MO HealthNet Program.  Families with incomes above 300% of the federal poverty level shall be allowed to purchase Medicaid/MO HealthNet coverage by paying a premium for the full monthly cost of their coverage as determined by the Missouri Department of Social Services.  The Department of Social Services shall issue regulations pursuant to Chapter 536 of the Missouri Administrative Procedures Act to implement premium requirements for families with incomes over 300% of the federal poverty level.  


Section 143.431. 1. The Missouri taxable income of a corporation taxable under sections 143.011 to 143.996 shall be so much of its federal taxable income for the taxable year, with the modifications specified in subsections 2 to 4 of this section, as is derived from sources within Missouri as provided in section [143.451]32.200.  The tax of a corporation shall be computed on its Missouri taxable income at the rates provided in section 143.071.


2. There shall be added to or subtracted from federal taxable income the modifications to adjusted gross income provided in section 143.121, with the exception of subdivision (e) of subsection 2 of section 143.121, and the applicable modifications to itemized deductions provided in section 143.141. There shall be subtracted the federal income tax deduction provided in section 143.171. There shall be subtracted, to the extent included in federal taxable income, corporate dividends from sources within Missouri.

3. (1) If an affiliated group of corporations files a consolidated income tax return for the taxable year for federal income tax purposes and fifty percent or more of its income is derived from sources within this state as determined in accordance with section [143.451] 32.200, then it may elect to file a Missouri consolidated income tax return. The federal consolidated taxable income of the electing affiliated group for the taxable year shall be its federal taxable income.


(2) So long as a federal consolidated income tax return is filed, an election made by an affiliated group of corporations to file a Missouri consolidated income tax return may be withdrawn or revoked only upon substantial change in the law or regulations adversely changing tax liability under this chapter, or with permission of the director of revenue upon the showing of good cause for such action. After such a withdrawal or revocation with respect to an affiliated group, it may not file a Missouri consolidated income tax return for five years thereafter, except with the approval of the director of revenue, and subject to such terms and conditions as he may prescribe.

(3) No corporation which is part of an affiliated group of corporations filing a Missouri consolidated income tax return shall be required to file a separate Missouri corporate income tax return for the taxable year.


(4) For each taxable year an affiliated group of corporations filing a federal consolidated income tax return does not file a Missouri consolidated income tax return, for purposes of computing the Missouri income tax, the federal taxable income of each member of the affiliated group shall be determined as if a separate federal income tax return had been filed by each such member.


(5) The director of revenue may prescribe such regulations not inconsistent with the provisions of this chapter as he may deem necessary in order that the tax liability of any affiliated group of corporations making a Missouri consolidated income tax return, and of each corporation in the group, before, during, and after the period of affiliation, may be returned, determined, computed, assessed, collected, and adjusted, in such manner as clearly to reflect the Missouri taxable income derived from sources within this state and in order to prevent avoidance of such tax liability.


4. If a net operating loss deduction is allowed for the taxable year, there shall be added to federal taxable income the amount of the net operating loss modification for each loss year as to which a portion of the net operating loss deduction is attributable. As used in this subsection, the following terms mean:


(1) "Loss year", the taxable year in which there occurs a federal net operating loss that is carried back or carried forward in whole or in part to another taxable year;


(2) "Net addition modification", for any taxable year, the amount by which the sum of all required additions to federal taxable income provided in this chapter, except for the net operating loss modification, exceeds the combined sum of the amount of all required subtractions from federal taxable income provided in this chapter;


(3) "Net operating loss deduction", a net operating loss deduction allowed for federal income tax purposes under Section 172 of the Internal Revenue Code of 1986, as amended, or a net operating loss deduction allowed for Missouri income tax purposes under paragraph (d) of subsection 2 of section 143.121, but not including any net operating loss deduction that is allowed for federal income tax purposes but disallowed for Missouri income tax purposes under paragraph (d) of subsection 2 of section 143.121;


(4) "Net operating loss modification", an amount equal to the lesser of the amount of the net operating loss deduction attributable to that loss year or the amount by which the total net operating loss in the loss year is less than the sum of:


(a) The net addition modification for that loss year; and


(b) The cumulative net operating loss deductions attributable to that loss year allowed for the taxable year and all prior taxable years.


5. For all tax years ending on or after July 1, 2002, federal taxable income may be a positive or negative amount. Subsection 4 of this section shall be effective for all tax years with a net operating loss deduction attributable to a loss year ending on or after July 1, 2002, and the net operating loss modification shall only apply to loss years ending on or after July 1, 2002.


Section 143.434. 1. As used in this chapter, the following terms mean:


(1) "Affiliated group", one or more chains of corporations that are connected through stock ownership with a common parent corporation that meet the following requirements:

(a) At least eighty percent of the stock of each of the corporations in the group, excluding the common parent corporation, is owned by one or more of the other corporations in the group; and

(b) The common parent directly owns at least eighty percent of the stock of at least one of the corporations in the group. "Affiliated group" does not include corporations that are qualified to do business but are not otherwise doing business in this state. For purposes of this section, "stock" does not include nonvoting stock which is limited and preferred as to dividends;

(2) "Common ownership", the direct or indirect control or ownership of more than fifty percent of the outstanding voting stock of:

(a) A parent-subsidiary controlled group as defined in Section 1563 of the United States Internal Revenue Code of 1986, as amended, except that the amount of fifty percent shall be substituted for all references of "80 percent" in such definition;

(b) A brother-sister controlled group as defined in Section 1563 of the United States Internal Revenue Code of 1986, as amended, except that the amount of fifty percent shall be substituted for all references of "80 percent" in such definition; or

(c) Three or more corporations, each of which is a member of a group of corporations described in subdivision (1) of this subsection, and one of which is:

a. A common parent corporation included in a group of corporations described in paragraph (a) of subdivision (1) of this subsection; and

b. Included in a group of corporations described in paragraph (b) of subdivision (1) of this subsection. Ownership of outstanding voting stock shall be determined in accordance with Section 1563 of the United States Internal Revenue Code of 1986, as amended;

(3) "Corporate return" or "return", includes a combined report;

(4) "Doing business", any transaction in the course of its business by a domestic corporation, or by a foreign corporation qualified to do or doing intrastate business in this state. "Doing business" includes:

(a) The right to do business through incorporation or qualification;

(b) The owning, renting, or leasing of real or personal property within this state; and

(c) The participation in joint ventures, working and operating agreements, the performance of which takes place in this state;

(5) "Foreign corporation", a corporation that is not incorporated or organized pursuant to the laws of this state;

(6) "Foreign operating company", a corporation that:

(a) Is incorporated in the United States; and

(b) Eighty percent or more of whose business activity is conducted without the United States.  "Foreign operating company" does not include a corporation that qualifies for the Puerto Rico and Possession Tax Credit provided pursuant to Section 936 of the United States Internal Revenue Code of 1986, as amended;

(7) "Unitary group", a group of corporations that:

(a) Are related through common ownership; and

(b) By a preponderance of the evidence as determined by a court of competent jurisdiction or the director, are economically interdependent with one another as demonstrated by the following factors:

a. Centralized management;

b. Functional integration; and

c. Economies of scale;

(8) "Water's edge combined report", a report combining the income and activities of:

(a) All members of a unitary group that are:

a. Corporations organized or incorporated in the United States, including those corporations qualifying for the Puerto Rico and Possession Tax Credit as provided in Section 936 of the United States Internal Revenue Code of 1986, as amended; and

b. Corporations organized or incorporated without the United States that meet the threshold level of business activity; and

(b) An affiliated group electing to file water's edge combined report pursuant to subdivision (1) of subsection 2 of this section.

2. (1) If any corporation is doing business in Missouri and is a member of a unitary group, the unitary group shall file a water's edge combined report. A group of corporations that are not otherwise a unitary group may elect to file a water's edge combined report if each member of the group is:

(a) Doing business in Missouri;

(b) Part of the same affiliate group; and

(c) Qualified pursuant to Section 1501 of the United States Internal Revenue Code of 1986, as amended, to file a federal consolidated return.

(2) Each corporation within the affiliated group that is doing business in Missouri shall file a combined report. If an affiliated group elects to file a combined report, each corporation within the affiliated group that is doing business in Missouri shall file a combined report.

(3) A corporation that elects to file a water's edge combined report pursuant to this section shall not thereafter elect to file a separate return without the consent of the director.

3. If two or more corporations, whether or not organized or doing business in this state, and whether or not affiliated, are owned or controlled directly or indirectly by the same interests, the director shall be authorized to distribute, apportion, or allocate gross income or deductions between or among such corporations, if it determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any such corporations.

4. The director shall, by rule, prescribe for adjustments to Missouri taxable income when, solely by reason of the enactment of this section, a taxpayer would otherwise receive or have received a double tax benefit or suffer or have suffered a double tax detriment. However, the director may not make any adjustment pursuant to this section which will result in an increase or decrease of tax liability that is less than twenty-five dollars.

5. A group filing a combined report shall calculate federal taxable income of the combined group by:

(1) Computing federal taxable income on a separate return basis;

(2) Combining income or loss of the members included in the combined report; and

(3) Making appropriate eliminations and adjustments between members included in the combined report.

For purposes of this subsection, if an entity does not calculate federal taxable income, then the federal taxable income shall be calculated based on the applicable federal tax laws.

6. For purposes of the apportionment provisions within section 32.200, RSMo, corporations filing a combined report shall not include intercompany sales or other transactions between the corporations included in the combined report when determining the sales factor   Intercompany rents between members of a combined report shall not be considered in the computation of the property factor.

7. The director of revenue may prescribe such regulations not inconsistent with the provisions of this chapter as the director may deem necessary in order that the tax liability of any affiliated group of corporations making a Missouri consolidated income tax return, and of each corporation in the group, before, during, and after the period of affiliation, may be returned, determined, computed, assessed, collected, and adjusted, in such manner as clearly to reflect the Missouri taxable income derived from sources within the state and in order to prevent avoidance of such tax liability.

8. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536, RSMo, and, if applicable, section 536.028, RSMo. This section and chapter 536, RSMo, are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536, RSMo, to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2007, shall be invalid and void.

9. All revenue derived from the closing of a corporate tax loophole pursuant to this section shall be deposited into the cover all kids fund and be subject to appropriation by the General Assembly for the purposes of that fund.


EXPLANATION Matter enclosed in brackets [thus] in this law is not enacted and is intended to be omitted in the law; new matter enacted and intended to be included in the law is shown underlined thus.