[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1052 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1052

To amend the Internal Revenue Code of 1986 to make permanent the credit 
 for clinical testing expenses for certain drugs for rare diseases or 
   conditions and to provide for carryovers and carrybacks of unused 
                                credits.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 20 (legislative day, July 10), 1995

 Mr. Hatch (for himself and Mr. Baucus) 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 make permanent the credit 
 for clinical testing expenses for certain drugs for rare diseases or 
   conditions and to provide for carryovers and carrybacks of unused 
                                credits.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. CREDIT FOR CERTAIN CLINICAL TESTING EXPENSES MADE PERMANENT; 
              CARRYOVER AND CARRYBACK OF UNUSED CREDITS.

    (a) Credit Made Permanent.--Section 28 of the Internal Revenue Code 
of 1986 (relating to clinical testing expenses for certain drugs for 
rare diseases or conditions) is amended by striking subsection (e).
    (b) Carryover and Carryback of Unused Credits.--Paragraph (2) of 
section 28(d) of such Code is amended by adding at the end the 
following flush sentences:
        ``Rules similar to the rules of subsections (a), (b), and (c) 
        of section 39 shall apply to the credit under this section. No 
        credit under this section may be carried under such rules to a 
        taxable year beginning before January 1, 1995.''
    (c) Technical Amendments Related to Carryover and Carryback of 
Credits.--
            (1) Carryover of credit.--
                    (A) Subsection (c) of section 381 of such Code 
                (relating to items of the distributor or transferor 
                corporation) is amended by adding at the end thereof 
                the following new paragraph:
            ``(27) Credit under section 28.--The acquiring corporation 
        shall take into account (to the extent proper to carry out the 
        purposes of this section and section 28, and under such 
        regulations as may be prescribed by the Secretary) the items 
        required to be taken into account for purposes of section 28 in 
        respect to the distributor or transferor corporation.''
                    (B) Paragraph (2) of section 383(a) of such Code 
                (relating to special limitations on certain excess 
                credits, etc.) is amended by redesignating 
                subparagraphs (A) and (B) as subparagraphs (B) and (C), 
                respectively, and by inserting before subparagraph (B) 
                (as so redesignated) the following new subparagraph:
                    ``(A) any unused clinical testing credit under 
                section 28,''.
            (2) Carryback of credit.--
                    (A) Subparagraph (C) of section 6511(d)(4) of such 
                Code (defining credit carryback) is amended by 
                inserting ``any clinical testing credit carryback under 
                section 28 and'' after ``means''.
                    (B) Subsection (a) of section 6411 of such Code 
                (relating to tentative carryback and refund 
                adjustments) is amended--
                            (i) by inserting ``by a clinical testing 
                        credit carryback under section 28,'' after 
                        ``172(b),'' in the first sentence, and
                            (ii) by striking ``net capital loss'' the 
                        first place it appears in the second sentence 
                        and all that follows before ``in the manner and 
                        form'' and inserting ``net capital loss, unused 
                        clinical testing credit, or unused business 
                        credit from which the carryback results and 
                        within a period of 12 months after such taxable 
                        year or, with respect to any portion of a 
                        clinical testing credit carryback or business 
                        credit carryback attributable to a net 
                        operating loss carryback or a net capital loss 
                        carryback from a subsequent taxable year, 
                        within a period of 12 months from the end of 
                        such subsequent taxable year or, with respect 
                        to any portion of a business credit carryback 
                        attributable to a clinical testing credit 
                        carryback from a subsequent taxable year within 
                        a period of 12 months from the end of such 
                        subsequent taxable year,''.
                    (C) Paragraph (1) of section 6411(a) of such Code 
                is amended by inserting ``unused clinical testing 
                credit,'' after ``net capital loss,''.
    (d) Effective Date.--
            (1) Subsection  (a).--The amendment made by subsection (a) 
        shall apply to amounts paid or incurred after December 31, 
        1994.
            (2) Carryovers and carrybacks.--The amendments made by 
        subsections (b) and (c) shall apply to taxable years beginning 
        after December 31, 1994.
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