HOUSE BILL No. 4078


     January 28, 1999, Introduced by Reps. Woronchak, Howell, Garcia, Sanborn, Law, DeWeese, Gilbert, Middaugh,
Ruth Johnson, Faunce, Hart, Caul, DeVuyst, Lockwood, Toy, Tabor, Hager, Van Woerkom and Mortimer 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:

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

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      vidual  meeting  WHO MEETS the qualifications  prescribed 
   in

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      subsection (2) may claim a refundable credit equal to the amount

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      by which the individual's expenditures for prescription drugs

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      exceed 5% of THAT INDIVIDUAL'S household income, but not more

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      than $600.00 per individual.  An expenditure for a prescription

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      drug shall not be included in the calculation of this credit

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      unless the prescription drug is purchased directly by the indi-

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      vidual and the cost of the prescription drug is not covered by a

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      third party reimbursement plan.




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

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      section unless the individual meets all of the following

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      qualifications:

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

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

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      of the federal poverty income standards as defined and determined

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      annually by the United States office of management and budget and

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      as approved by the state treasurer.

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

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      mental health facility licensed or operated by the state.  The

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      qualification prescribed by this  THIS subdivision does not apply

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      to a resident of a licensed home for the aged.

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

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

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

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

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      scribed by the department.  A credit claimed under this section

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

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

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

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      shall administer the credit under this section as a refundable

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      credit.

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

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      section for each tax year shall not exceed $20,000,000.00 minus

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      the amount expended in that tax year for the older Michiganians

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      pharmaceutical assistance fund.  The department shall reduce each





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      credit under this section by the percentage necessary to limit

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      the total credits to the maximum provided by this subsection. 

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           (4)  (5)  As used in this section:

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

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      508.

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

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

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      Acts of 1978, being section 333.17708 of the Michigan Compiled

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

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      includes insulin, syringes, and needles.




































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