SENATE BILL No. 50

January 30, 2001, Introduced by Senator MILLER and referred to the Committee on

Finance.

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 THE INDIVIDUAL'S household income, but not more than

6 $600.00 per individual AS ADJUSTED UNDER SUBSECTION (5). An

7 expenditure for a prescription drug shall not be included in the

8 calculation of this credit unless the prescription drug is pur-

9 chased directly by the individual and the cost of the

10 prescription drug is not covered by a third party reimbursement

11 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 THIS subdivision does not apply

12 to a 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) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2000, THE

4 MAXIMUM AMOUNT OF THE CREDIT ALLOWED PER PERSON UNDER SUBSECTION

5 (1) SHALL BE ADJUSTED BY THE PERCENTAGE INCREASE IN THE DETROIT

6 CONSUMER PRICE INDEX FOR THE IMMEDIATELY PRECEDING CALENDAR YEAR.

7 (6) (5) As used in this section:

8 (A) "DETROIT CONSUMER PRICE INDEX" MEANS THE MOST COMPREHEN-

9 SIVE INDEX OF CONSUMER PRICES AVAILABLE FOR THE DETROIT AREA FROM

10 THE UNITED STATES DEPARTMENT OF LABOR, BUREAU OF LABOR

11 STATISTICS.

12 (B) (a) "Household income" means that term as defined in

13 section 508.

14 (C) (b) "Prescription drug" means that term as defined in

15 section 17708 of the public health code, Act No. 368 of the

16 Public Acts of 1978, being section 333.17708 of the Michigan

17 Compiled Laws 1978 PA 368, MCL 333.17708. In addition, pre-

18 scription drug includes insulin, syringes, and needles.

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