I 

108TH CONGRESS 

1ST SESSION H. R. 1670

To amend the Internal Revenue Code of 1986 to establish a pilot program 

to encourage the use of medical savings accounts by public employees 

of the State of Minnesota and political jurisdictions thereof. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 8, 2003

Mr. GUTKNECHT (for himself, Mr. SABO, Mr. PETERSON of Minnesota, Mr. 

RAMSTAD, Mr. KENNEDY of Minnesota, Ms. MCCOLLUM, and Mr. 

KLINE) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to establish 

a pilot program to encourage the use of medical savings 

accounts by public employees of the State of Minnesota 

and political jurisdictions thereof.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Minnesota MSA Em5 powerment Act of 2003’’.
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1 SEC. 2. DEDUCTION FOR MINNESOTA PUBLIC EMPLOYEE 

2 MSA PILOT PROGRAM. 

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 additional itemized deductions) is amended by redesig6 nating section 223 as section 224 and by inserting after 

7 section 222 the following new section: 

8 ‘‘SEC. 223. MINNESOTA PUBLIC EMPLOYEE MSAS. 

9 ‘‘(a) IN GENERAL.—In the case of an eligible indi10 vidual, there shall be allowed as a deduction an amount 

11 equal to the amount contributed during the taxable year 

12 by such individual to the Minnesota public employee MSA 

13 of such individual. 

14 ‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this 

15 section, the term ‘eligible individual’ means an individual 

16 who—

17 ‘‘(1) is in receipt of retirement benefits for the 

18 taxable year from a retirement plan associated with 

19 the State of Minnesota or a political subdivision 

20 thereof, or 

21 ‘‘(2) is an employee of the State of Minnesota 

22 or a political subdivision thereof. 

23 ‘‘(c) MINNESOTA PUBLIC EMPLOYEE MSA.—

24 ‘‘(1) IN GENERAL.—The term ‘Minnesota public 

25 employee MSA’ means an Archer MSA which is cre26 ated or organized exclusively for the purpose of pay-
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1 ing the qualified medical expenses of the eligible in2 dividual and—

3 ‘‘(A) which is designated as a Minnesota 

4 public employee MSA, and 

5 ‘‘(B) with respect to which no contribution 

6 may be made other than a contribution made 

7 by the eligible individual or the employer of the 

8 eligible individual. 

9 ‘‘(2) ARCHER MSA; QUALIFIED MEDICAL EX10 PENSES.—For purposes of this section, the terms 

11 ‘Archer MSA’ and ‘qualified medical expenses’ shall 

12 have the respective meanings given to such terms by 

13 section 220(d). 

14 ‘‘(d) SPECIAL RULES.—In applying section 220 to a 

15 Minnesota public employee MSA—

16 ‘‘(1) subsection (d)(1)(A)(ii) shall not apply, 

17 and 

18 ‘‘(2) subsection (f)(3) shall be treated as includ19 ing a reference to this section. 

20 ‘‘(e) REPORTS.—In the case of a Minnesota public 

21 employee MSA, the report under section 220(h)—

22 ‘‘(1) shall include the fair market value of the 

23 assets in such Minnesota public employee MSA as of 

24 the close of each calendar year, and 

25 ‘‘(2) shall be furnished to the account holder—
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1 ‘‘(A) not later than January 31 of the cal2 endar year following the calendar year to which 

3 such reports relate, and 

4 ‘‘(B) in such manner as the Secretary pre5 scribes. 

6 ‘‘(f) COORDINATION WITH LIMITATION ON NUMBER

7 OF TAXPAYERS HAVING ARCHER MSAS.—Subsection (i) 

8 of section 220 shall not apply to an individual with respect 

9 to a Minnesota public employee MSA, and Minnesota pub10 lic employee MSAs shall not be taken into account in de11 termining whether the numerical limitations under section 

12 220(j) are exceeded.’’. 

13 (b) DEDUCTION ALLOWED WHETHER OR NOT TAX14 PAYER ITEMIZES.—Subsection (a) of section 62 is amend15 ed by inserting after paragraph (18) the following new 

16 item: 

17 ‘‘(19) MINNESOTA PUBLIC EMPLOYEE MSAS.—

18 The deduction allowed by section 223.’’. 

19 (c) TAX ON EXCESS CONTRIBUTIONS.—Section 

20 4973(d)(1) of such Code (relating to excess contributions 

21 to Archer MSAs) is amended by inserting ‘‘or 223’’ after 

22 ‘‘220’’. 

23 (d) CLERICAL AMENDMENT.—The table of sections 

24 for part VII of subchapter B of chapter 1 of such Code 
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1 is amended by striking the last item and inserting the fol2 lowing new items:

‘‘Sec. 223. Minnesota public employee MSAs. 

‘‘Sec. 224. Cross reference.’’.

3 (e) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2003.

Æ