To amend the Internal Revenue Code of 1986 to allow individuals a refundable credit for amounts paid for products and counseling designed to assist individuals to cease using tobacco products.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Quit Smoking Incentive and 
Opportunity Act of 2003''.

SEC. 2. FINDINGS.

    Congress finds as follows:
            (1) Unless the prevalence of tobacco use is cut 
        dramatically, about 24,000,000 Americans, 1 out of every 2 
        current smokers in America, will die prematurely of a disease 
        directly caused by their dependence on tobacco.
            (2) Smoking is the leading preventable cause of death in 
        the United States with 400,000 premature deaths annually, and 
        $157,000,000,000 in annual health-related economic losses, 
        including more than $75,000,000,000 in excess medical 
        expenditures.
            (3) Clinical studies have shown that pharmacological 
        treatments are an effective treatment for tobacco dependence, 
        and there are currently 6 medications that have been approved 
        by the FDA for tobacco use cessation.
            (4) Clinical studies have shown that counseling is an 
        effective treatment for tobacco dependence, and that counseling 
        can be provided in individual or group settings, or via 
        telephone, such as the Quit Lines provided by 33 States.
            (5) Studies have also shown that when counseling is 
        combined with pharmacological treatment, the effectiveness of 
        treatment doubles or triples (compared to counseling alone).
            (6) The cost of over-the-counter Nicotine Replacement 
        Therapy (gum, patch, lozenges) is not covered by Medicare, and 
        is rarely covered by private insurance. Fifteen states under 
        Medicaid cover no Nicotine Replacement Therapy and many of the 
        remaining 35 states do not cover all Nicotine Replacement 
        Therapies. Nicotine Replacement Therapy is rarely tax-
        deductible, and typically costs about $300 for a suggested 10-
        week course of treatment.
            (7) The Guide to Community Preventive Services: Tobacco Use 
        Prevention and Control (CDC 2000) and Treating Tobacco Use and 
        Dependence: Clinical Practice Guideline (2000) recommended a 
        reduction or elimination of out-of-pocket costs to increase the 
        use of tobacco use cessation treatments.
            (8) Under current law, unreimbursed tobacco use cessation 
        counseling programs and prescribed nicotine-withdrawal drugs 
        are considered expenses for medical care that are deductible 
        subject to the 7.5 percent of adjusted gross income limitation.
            (9) Two-thirds of all filers do not itemize.

SEC. 3. REFUNDABLE CREDIT FOR AMOUNTS PAID TO ASSIST INDIVIDUALS TO 
              CEASE USING TOBACCO PRODUCTS.

    (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 inserting after section 35 the following new section:

``SEC. 35A. CERTAIN EXPENSES TO ASSIST INDIVIDUALS TO CEASE USING 
              TOBACCO PRODUCTS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
an amount equal to the qualified tobacco use cessation expenses paid by 
the taxpayer during the taxable year for the benefit of the taxpayer, 
the taxpayer's spouse, or any dependent of the taxpayer.
    ``(b) Limitation.--The credit allowed under this section shall not 
exceed--
            ``(1) $300 for amounts described in subsection (c)(1)(A), 
        and
            ``(2) $100 for amounts described in subsection (c)(1)(B).
    ``(c) Qualified Tobacco Use Cessation Expenses.--For purposes of 
this section--
            ``(1) In general.--The term `qualified tobacco use 
        cessation expenses' means expenses--
                    ``(A) for products determined by the Food and Drug 
                Administration to be safe and effective in promoting a 
                reduction in the use of tobacco products by 
                individuals, and
                    ``(B) for counseling for cessation of tobacco use.
            ``(2) Counseling.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `counseling for cessation of tobacco use' means 
                diagnostic, therapy, and counseling services for 
                cessation of tobacco use for individuals who use 
                tobacco products or who are being treated for tobacco 
                use which are furnished--
                            ``(i) by or under the supervision of a 
                        physician, or
                            ``(ii) by any other health care 
                        professional who is legally authorized to 
                        furnish such services under State law (or the 
                        State regulatory mechanism provided by State 
                        law) of the State in which the services are 
                        furnished.
                    ``(B) Limitation.--Such term is limited to--
                            ``(i) services recommended in `Treating 
                        Tobacco Use and Dependence: A Clinical Practice 
                        Guideline', published by the Public Health 
                        Service in June 2000, or any subsequent 
                        modification of such Guideline, and
                            ``(ii) such other services that the 
                        Secretary of Health and Human Services 
                        recognizes to be effective.''
    (b) Technical Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``section 
        35''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 35 following new item:

                              ``Sec. 35A. Certain expenses to assist 
                                        individuals to cease using 
                                        tobacco products.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

Summary: Quit Smoking Incentive and Opportunity Act of 2003 - Amends the Internal Revenue Code to allow a limited credit for the qualified tobacco use cessation expenses (approved cessation products and counseling) of a taxpayer, the taxpayer's spouse, or any dependent of the taxpayer.