Credit for research activities of small businesses related to the mitigation of certain drug threats

(a)

In general

Section 41(a) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting , and, and by adding at the end the following new paragraph:

(4)in the case of a small business (as defined in subsection (b)(3)(D)(iii)), 10 percent of the qualified drug threat mitigation research expenses (as defined in subsection (i)) for the taxable year.

(b)

Definitions

Section 41 of such Code is amended by adding at the end the following new subsection:

(i)

Qualified drug threat mitigation research expenses

For purposes of this section— (1)

Qualified drug threat mitigation research expenses

The term qualified drug threat mitigation research expenses means the qualified research expenses which would be determined under subsection (b) if qualified drug threat mitigation research were substituted for qualified research each place it appears therein. (2)

Qualified drug threat mitigation research

The term qualified drug threat mitigation research means qualified research which is undertaken for the purpose of discovering information related to mitigating or treating the effects of the use of a specified drug or to preventing, diverting, or intervening in such use. Such term shall not include any clinical research unless such research complies with the policies and guidelines of the National Institutes of Health for clinical research. (3)

Specified drug

(A)

In general

The term specified drug means any emerging drug, fentanyl, fentanyl-related substance, or methamphetamine. (B)

Emerging drug

The term emerging drug means a drug designated as an emerging drug threat under section 709(c) of the Office of National Drug Control Policy Reauthorization Act of 1998 (21 U.S.C. 1708(c)). Such term shall include any such drug for any taxable year if such designation is in effect under such section at any time during such taxable year. (C)

Fentanyl-related substance

The term fentanyl-related substance means any substance that is structurally related to fentanyl by 1 or more of the following modifications: (i)By replacement of the phenyl portion of the phenethyl group by any monocycle, whether or not further substituted in or on the monocycle. (ii)By substitution in or on the phenethyl group with alkyl, alkenyl, alkoxyl, hydroxyl, halo, haloalkyl, amino, or nitro groups. (iii)By substitution in or on the piperidine ring with alkyl, alkenyl, alkoxyl, ester, ether, hydroxyl, halo, haloalkyl, amino, or nitro groups. (iv)By replacement of the aniline ring with any aromatic monocycle whether or not further substituted in or on the aromatic monocycle. (v) By replacement of the N–propionyl group with another acyl group.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (d)

GAO report

5 years after the date of the enactment of this Act, the Comptroller General shall submit a written report to Congress regarding the amount of tax credits allowed under section 41(a)(4) of the Internal Revenue Code of 1986 for qualified drug threat mitigation expenses and the types of qualified drug threat mitigation research with respect to which such credits were allowed. The Comptroller General shall ensure that the data in such report is anonymous and that any studies undertaken to prepare such report do not impede qualified drug threat mitigation research.