17053.96.

 (a) For each taxable year beginning on or after January 1, 2001, and before January 1, 2006, there shall be allowed to a taxpayer who is 65 years of age or older on or before December 31 of the taxable year a credit against the “net tax,” as defined by Section 17039, for that amount, not to exceed six hundred fifty dollars ($650), that is paid or incurred by the taxpayer during the taxable year for prescription drugs, and is not reimbursable or payable by a health plan.

(b) For purposes of this section:

(1) “Prescription drug” means a drug or biological that requires a prescription from a licensed health care provider acting within the scope of that provider’s license for its use by an individual.

(2) “Health plan” means an individual or group plan that provides, or pays the cost of, medical care (as that term is defined in Section 300gg-91 of Title 42 of the United States Code Annotated). Code). “Health Plan” includes, but is not limited to, the following, and any combination thereof:

(A) A group health plan (as defined in Section 300gg-91(a) of Title 42 of the United States Code Annotated), Code), but only if the plan meets either of the following:

(i) Has 50 or more participants (as defined in Section 1002(7) of Title 29 of the United States Code Annotated). Code).

(ii) Is administered by an entity other than the employer who established and maintains the plan.

(B) A health insurance issuer (as defined in Section 300gg-91(b) of Title 42 of the United States Code Annotated Code).

(C) A health maintenance organization (as defined in Section 300gg-91(b) of Title 42 of the United States Code Annotated). Code).

(D) Part A or Part B of the Medicare program under Subchapter XVIII (commencing with Section 1395) of Chapter 7 of Title 42 of the United States Code Annotated.

(E) The medicaid program under Subchapter XIX (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code Annotated.

(F) A Medicare supplemental policy (as defined in Section 1395ss(g)(1) of Title 42 of the United States Code Annotated). Code).

(G) A long-term care policy, including a nursing home fixed indemnity policy (unless the policy does not provide sufficiently comprehensive coverage of a benefit so that the policy should be treated as a health plan.

(H) An employer welfare benefit plan or any other arrangement that is established or maintained for the purpose of offering or providing health benefits to the employees of two or more employers.

(I) The health care program for active military personnel under Title 10 of the United States Code Annotated.

(J) The veterans health care program under Chapter 17 of Title 38 of the United States Code Annotated.

(K) The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), as defined in Section 1072(4) of Title 10 of the United States Code Annotated.

(L) The Indian health service program under the Indian Health Care Improvement Act (25 U.S.C.A. Sec. 1601, et seq.).

(M) The Federal Employees Health Benefit Plan under Chapter 89 of Title 5 of the United States Code Annotated.

(c) No credit shall be allowed by this section to any taxpayer whose adjusted gross income for the taxable year exceeds seventy-five thousand dollars ($75,000).

(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding the succeeding seven years if necessary, until the credit has been exhausted.