SENATE BILL NO. 606 May 19, 1999, Introduced by Senators SHUGARS, NORTH, GOSCHKA, ROGERS, HAMMERSTROM and JAYE and referred to the Committee on Health 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 vidualmeetingWHO 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 $600.00 per 6 individual. An expenditure for a prescription drug shall not be 7 included in the calculation of this credit unless the prescrip- 8 tion drug is purchased directly by the individual and the cost of 9 the prescription drug is not covered by a third party 10 reimbursement plan. 03552'99 RJA 2 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)TheEXCEPT AS OTHERWISE PROVIDED IN THIS SUBDIVISION, 6 THE individual's household income does not exceed 150% of the 7 federal poverty income standards as defined and determined annu- 8 ally by the United States office of management and budget and as 9 approved by the state treasurer. A TAXPAYER WITH HOUSEHOLD 10 INCOME THAT EXCEEDS THE FEDERAL POVERTY INCOME STANDARDS FOR THE 11 TAXPAYER'S FAMILY SIZE AS DEFINED AND DETERMINED ANNUALLY BY THE 12 UNITED STATES OFFICE OF MANAGEMENT AND BUDGET AND AS APPROVED BY 13 THE STATE TREASURER MAY CLAIM A CREDIT UNDER THIS SECTION, BUT 14 THAT CREDIT SHALL BE REDUCED BY $1.00 FOR EVERY $1.00 THAT A 15 TAXPAYER'S HOUSEHOLD INCOME EXCEEDS THE FEDERAL POVERTY INCOME 16 STANDARDS. 17 (c) The individual is not a resident in a health care or 18 mental health facility licensed or operated by the state.The19qualification prescribed by thisTHIS subdivision does not apply 20 to a resident of a licensed home for the aged. 21 (3) An individualclaimingWHO CLAIMS a credit under this 22 section shall not report the credit amount on the individual's 23 return filed under this act as an offset against the tax imposed 24 by this act, but shall claim the credit on a separate form pre- 25 scribed by the department. A credit claimed under this section 26 shall not be refunded unless the claim for the credit is filed 27 with the department not later than the June 1 immediately 03552'99 3 1 following the tax year for which the credit is claimed. The 2 department shall administer the credit under this section as a 3 refundable credit. 4 (4) The total amount of the credits refunded under this sec- 5 tion for each tax year shall not exceed $20,000,000.00 minus the 6 amount expended in that tax year for the older Michiganians phar- 7 maceutical assistance fund. The department shall reduce each 8 credit under this section by the percentage necessary to limit 9 the total credits to the maximum provided by this subsection. 10 (5) As used in this section: 11 (a) "Household income" means that term as defined in section 12 508. 13 (b) "Prescription drug" means that term as defined in sec- 14 tion 17708 of the public health code,Act No. 368 of the Public15Acts of 1978, being section 333.17708 of the Michigan Compiled16Laws1978 PA 368, MCL 333.17708. In addition, prescription drug 17 includes insulin, syringes, and needles. 03552'99 Final page. RJA