[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 142 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 142

     To amend the Internal Revenue Code of 1986 to allow medicare 
beneficiaries an advanced refundable credit against income tax for the 
               purchase of outpatient prescription drugs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 13, 2003

  Mr. Dayton introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
     To amend the Internal Revenue Code of 1986 to allow medicare 
beneficiaries an advanced refundable credit against income tax for the 
               purchase of outpatient prescription drugs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. ADVANCED REFUNDABLE CREDIT FOR OUTPATIENT PRESCRIPTION DRUGS 
              FOR MEDICARE BENEFICIARIES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. OUTPATIENT PRESCRIPTION DRUGS FOR MEDICARE BENEFICIARIES.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
an amount equal to so much of the amount paid during the taxable year, 
not compensated for by insurance or otherwise, for qualified outpatient 
prescription drugs for such individual as exceeds 10 percent of the 
taxpayer's taxable income for such taxable year.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means, with respect to any taxable year, any 
individual entitled to any benefits under title XVIII of the Social 
Security Act during such taxable year.
    ``(c) Qualified Outpatient Prescription Drugs.--For purposes of 
this section, the term `qualified outpatient prescription drugs' means, 
with respect to any taxable year, any prescription drug the cost of 
which is not covered under title XVIII of the Social Security Act 
during such taxable year.
    ``(d) Coordination With Medical Expense Deduction.--The amount 
which would (but for this paragraph) be taken into account by the 
taxpayer under section 162(l) or 213 for the taxable year shall be 
reduced by the credit (if any) allowed by this section to the taxpayer 
for such year.
    ``(e) Advanced Refundability.--The Secretary shall provide for the 
advanced refundability of the credit allowed under this section to be 
made in quarterly payments to taxpayers providing such information as 
the Secretary requires in order to make a proper determination of such 
payments.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 36 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

                              ``Sec. 36. Outpatient prescription drugs 
                                        for medicare beneficiaries.
                              ``Sec. 37. Overpayments of tax.''.
    (c) Notification of Credit.--The Secretary of Health and Human 
Services shall notify each individual who is or becomes entitled to 
benefits under title XVIII of the Social Security Act in 2002 of the 
individual's eligibility for the advanced refundable credit for 
outpatient prescription drugs under section 36 of the Internal Revenue 
Code of 1986 (as added by this section).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.
                                 <all>