HOUSE BILL No. 4440


     March 5, 1997, Introduced by Reps. DeHart, Harder, Schermesser, Goschka, Callahan, Cherry, Tesanovich, Kelly, Martinez, Parks, Hanley, LaForge, Bogardus, Hale, Schauer, Varga, Willard and Scott and referred to the Committee on Tax Policy.


        A bill to amend 1967 PA 281, entitled

   "Income tax act of 1967,"

   by amending section 273 (MCL 206.273), as added by 1988 PA 516.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 273.  (1) For a tax year beginning after 1988, an indi-

 2    vidual  meeting  WHO MEETS the qualifications prescribed in sub-

 3    section (2) may claim a refundable credit equal to the amount by

 4    which the individual's expenditures for prescription drugs exceed

 5    5% of household income,  but  not  more than  TO EXCEED $600.00

 6    per individual.  An expenditure for a prescription drug shall not

 7    be included in the calculation of this credit unless the pre-

 8    scription drug is purchased directly by the individual and the

 9    cost of the prescription drug is not covered by a third party

10    reimbursement plan.




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 1         (2) An individual shall not claim the credit allowed by this

 2    section unless the individual meets all of the following

 3    qualifications:

 4         (a) The individual is 65 years of age or older.

 5         (b) The individual's household income does not exceed 150%

 6    of the federal poverty income standards as defined and determined

 7    annually by the United States office of management and budget and

 8    as approved by the state treasurer.

 9          (c) The individual is not a resident in a health care or

10     mental health facility licensed or operated by the state.  The

11     qualification prescribed by this subdivision does not apply to a

12     resident of a licensed home for the aged. 

13         (3) An individual  claiming  WHO CLAIMS a credit under this

14    section shall not report the credit amount on the individual's

15    return filed under this act as an offset against the tax imposed

16    by this act, but shall claim the credit on a separate form pre-

17    scribed by the department.  A credit claimed under this section

18    shall not be refunded unless the claim for the credit is filed

19    with the department not later than the June 1 immediately follow-

20    ing the tax year for which the credit is claimed.  The department

21    shall administer the credit under this section as a refundable

22    credit.

23         (4) The total amount of the credits refunded under this sec-

24    tion for each tax year shall not exceed $20,000,000.00 minus the

25    amount expended in that tax year for the older Michiganians phar-

26    maceutical assistance fund.  The department shall reduce each





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 1    credit under this section by the percentage necessary to limit

 2    the total credits to the maximum provided by this subsection.

 3         (5) As used in this section:

 4         (a) "Household income" means that term as defined in section

 5    508.

 6         (b) "Prescription drug" means that term as defined in sec-

 7    tion 17708 of the public health code,  Act No. 368 of the Public

 8     Acts of 1978, being section 333.17708 of the Michigan Compiled

 9     Laws  1978 PA 368, MCL 333.17708.  In addition, prescription drug

10    includes insulin, syringes, and needles.




































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