HOUSE BILL No. 4169


     February 9, 1999, Introduced by Reps. Gilbert, Lockwood, Wojno, Jelinek, Garcia, Bradstreet and DeWeese 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 THE INDIVIDUAL'S household income, but not more than

 6    $600.00 per individual FOR TAX YEARS BEFORE THE 1999 TAX YEAR AND

 7    NOT MORE THAN $800.00 FOR THE 1999 TAX YEAR AND TAX YEARS AFTER

 8    THE 1999 TAX YEAR.  An expenditure for a prescription drug shall

 9    not be included in the calculation of this credit unless the

10    prescription drug is purchased directly by the individual and the




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

 2    reimbursement plan.

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

 4    section unless the individual meets all of the following

 5    qualifications:

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

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

 8    of the federal poverty income standards as defined and determined

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

10    as approved by the state treasurer.

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

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

13     qualification prescribed by this  THIS subdivision does not apply

14    to a resident of a licensed home for the aged.

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

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

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

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

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

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

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

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

23    shall administer the credit under this section as a refundable

24    credit.

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

26    tion for each tax year shall not exceed $20,000,000.00 FOR TAX

27    YEARS BEFORE THE 1999 TAX YEAR AND $25,000,000.00 FOR THE 1999



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 1    TAX YEAR AND TAX YEARS AFTER THE 1999 TAX YEAR minus the amount

 2    expended in that tax year for the older Michiganians pharmaceuti-

 3    cal assistance fund.  The department shall reduce each credit

 4    under this section by the percentage necessary to limit the total

 5    credits to the maximum provided by this subsection.

 6         (5) As used in this section:

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

 8    508.

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

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

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

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

13    includes insulin, syringes, and needles.































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