[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5219 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5219

 To amend the Internal Revenue Code of 1986 to allow a credit against 
    income tax for research related to developing vaccines against 
 widespread diseases and ensure that such vaccines are affordable and 
                          widely distributed.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 20, 2000

 Ms. Pelosi (for herself and Ms. Dunn) 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 allow a credit against 
    income tax for research related to developing vaccines against 
 widespread diseases and ensure that such vaccines are affordable and 
                          widely distributed.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Vaccines for the New Millennium Act 
of 2000''.

SEC. 2. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES 
              AGAINST WIDESPREAD DISEASES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45D. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES 
              AGAINST WIDESPREAD DISEASES.

    ``(a) General Rule.--For purposes of section 38, the vaccine 
research credit determined under this section for the taxable year is 
an amount equal to 30 percent of the qualified vaccine research 
expenses for the taxable year.
    ``(b) Qualified Vaccine Research Expenses.--For purposes of this 
section--
            ``(1) Qualified vaccine research expenses.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified vaccine research 
                expenses' means--
                            ``(i) vaccine clinical testing expenses, 
                        and
                            ``(ii) other vaccine research expenses (to 
                        the extent not taken into account under this 
                        clause for a prior taxable year).
                    ``(B) Limitations on other vaccine research 
                expenses.--
                            ``(i) Limitation on expenses taken into 
                        account.--The amount of other vaccine research 
                        expenses with respect to any vaccine or 
                        microbicide which may be taken into account 
                        under this section for any taxable year shall 
                        not exceed 25 percent of the vaccine clinical 
                        testing expenses with respect to such vaccine 
                        or microbicide for such year.
                            ``(ii) Limitation on credit.--The amount of 
                        credit determined under this section for any 
                        taxable year (determined without regard to this 
                        clause) with respect to other vaccine research 
                        expenses shall be reduced by the amount of 
                        credit allowed in any prior taxable year with 
                        respect to such expenses under section 41.
            ``(2) Vaccine clinical testing expenses.--
                    ``(A) In general.--The term `vaccine clinical 
                testing expenses' means the amounts which are paid or 
                incurred by the taxpayer during the taxable year which 
                would be described in subsection (b) of section 41 if 
                such subsection were applied with the modifications set 
                forth in subparagraph (B).
                    ``(B) Modifications; increased incentive for 
                contract research payments for collaborative vaccine 
                clinical testing projects.--For purposes of 
                subparagraph (A), subsection (b) of section 41 shall be 
                applied--
                            ``(i) by substituting `vaccine clinical 
                        testing' for `qualified research' each place it 
                        appears in paragraphs (2) and (3) of such 
                        subsection, and
                            ``(ii) by substituting `100 percent' for 
                        `65 percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) Vaccine clinical testing.--The term `vaccine 
                clinical testing' means human clinical testing which is 
                related to the use of any vaccine or microbicide 
                referred to in paragraph (3)(C) if--
                            ``(i) in the case of human clinical testing 
                        conducted in the United States, such testing is 
                        approved by the Federal Food and Drug 
                        Administration, or
                            ``(ii) in the case of human clinical 
                        testing conducted outside the United States, 
                        such testing is approved by the Federal Food 
                        and Drug Administration or the appropriate 
                        authority of a county included in the list 
                        under section 802(b)(1) of the Federal Food, 
                        Drug, and Cosmetic Act.
            ``(3) Other vaccine research expenses.--
                    ``(A) In general.--The term `other vaccine research 
                expenses' means the amounts (other than for vaccine 
                clinical testing) which are paid or incurred by the 
                taxpayer during the taxable year or any prior taxable 
                year which would be described in subsection (b) of 
                section 41 if such subsection were applied with the 
                modifications set forth in subparagraph (B).
                    ``(B) Modifications; increased incentive for 
                contract research payments for collaborative vaccine 
                research projects.--For purposes of subparagraph (A), 
                subsection (b) of section 41 shall be applied--
                            ``(i) by substituting `vaccine research' 
                        for `qualified research' each place it appears 
                        in paragraphs (2) and (3) of such subsection, 
                        and
                            ``(ii) by substituting `100 percent' for 
                        `65 percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) Vaccine research.--
                            ``(i) In general.--The term `vaccine 
                        research' means research to develop vaccines 
                        and microbicides for--
                                    ``(I) malaria,
                                    ``(II) tuberculosis,
                                    ``(III) HIV, or
                                    ``(IV) any infectious disease (of a 
                                single etiology) that is determined by 
                                the Secretary of Health and Human 
                                Services (after consultation with the 
                                Director of the Center for Disease 
                                Control and Prevention and the 
                                Administrator of the United States 
                                Agency for International Development) 
                                to cause the deaths of over 1,000,000 
                                people worldwide each year.
                            ``(ii) Microbicide.--The term `microbicide' 
                        means a substance used topically for prevention 
                        from infection by an identified pathogen.
                            ``(iii) Vaccine.--The term `vaccine' means 
                        a product using all or portions of the disease-
                        causing organism or nucleic acid sequences for 
                        prevention from infection by an identified 
                        pathogen.
                    ``(D) Ordering rules.--For purposes of paragraph 
                (1)(B)(ii)--
                            ``(i) other vaccine research expenses shall 
                        be taken into account first from the taxable 
                        year for which the credit under this section is 
                        being determined and then from earlier taxable 
                        years beginning with the most recent prior 
                        year, and
                            ``(ii) credit shall be treated as allowed 
                        under section 41 with respect to any expense to 
                        the extent of the amount that the credit under 
                        section 41 would have been reduced but for such 
                        expense.
            ``(4) Exclusion for amounts funded by grants, etc.--The 
        term `qualified vaccine research expenses' shall not include 
        any amount to the extent such amount is funded by any grant, 
        contract, or otherwise by another person (or any governmental 
        entity).
    ``(c) Coordination With Credit for Increasing Research 
Expenditures.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        qualified vaccine research expenses for a taxable year to which 
        an election under this section applies shall not be taken into 
        account for purposes of determining the credit allowable under 
        section 41 for such taxable year.
            ``(2) Expenses included in determining base period research 
        expenses.--Any qualified vaccine research expenses for any 
        taxable year which are qualified research expenses (within the 
        meaning of section 41(b)) shall be taken into account in 
        determining base period research expenses for purposes of 
        applying section 41 to subsequent taxable years.
    ``(d) Special Rules.--
            ``(1) Denial of credit for certain foreign clinical testing 
        and research.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no credit shall be allowed under this 
                section with respect to any clinical testing or 
                research conducted outside the United States.
                    ``(B) Certain foreign clinical testing eligible for 
                credit.--Subparagraph (A) shall not apply to human 
                clinical testing conducted outside the United States if 
                the Director of the Centers for Disease Control and 
                Prevention determines that there is an insufficient 
                testing population in the United States.
                    ``(C) Special limitation for corporations to which 
                section 936 applies.--No credit shall be allowed under 
                this section with respect to any activities conducted 
                by a corporation to which an election under section 936 
                applies.
            ``(2) Certain rules made applicable.--Rules similar to the 
        rules of paragraphs (1) and (2) of section 41(f) shall apply 
        for purposes of this section.
            ``(3) Election.--This section shall apply to any taxpayer 
        for any taxable year only if such taxpayer elects to have this 
        section apply for such taxable year.''
    (b) Inclusion in General Business Credit.--
            (1) In general.--Section 38(b) of such Code is amended by 
        striking ``plus'' at the end of paragraph (11), by striking the 
        period at the end of paragraph (12) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(13) the vaccine research credit determined under section 
        45D.''.
            (2) Transition rule.--Section 39(d) of such Code is amended 
        by adding at the end the following new paragraph:
            ``(9) No carryback of section 45d credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the vaccine research 
        credit determined under section 45D may be carried back to a 
        taxable year ending before the date of the enactment of section 
        45D.''.
    (c) Denial of Double Benefit.--Section 280C of such Code is amended 
by adding at the end the following new subsection:
    ``(d) Credit for Qualified Vaccine Research Expenses.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified vaccine research expenses (as defined 
        in section 45D(b)) otherwise allowable as a deduction for the 
        taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 45D(a).
            ``(2) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (2), (3), and (4) of subsection (c) shall apply 
        for purposes of this subsection.''.
    (d) Deduction for Unused Portion of Credit.--Section 196(c) of such 
Code (defining qualified business credits) is amended by striking 
``and'' at the end of paragraph (7), by striking the period at the end 
of paragraph (8) and inserting ``, and'', and by adding at the end the 
following new paragraph:
            ``(9) the vaccine research credit determined under section 
        45D(a) (other than such credit determined under the rules of 
        section 280C(d)(2)).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 45D. Credit for medical research 
                                        related to developing vaccines 
                                        against widespread diseases.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after December 31, 2000, in taxable 
years ending after such date.
    (g) Distribution of Vaccines Developed Using Credit.--It is the 
sense of the Congress that if credit is allowed under section 45D of 
the Internal Revenue Code of 1986 to any corporation or shareholder of 
a corporation by reason of vaccine research expenses incurred by the 
corporation in the development of a vaccine, such corporation should 
certify to the Secretary of the Treasury that, within 1 year after that 
vaccine is first licensed, such corporation will establish a good faith 
plan utilizing technology transfer, differential pricing, in-country 
production, or other mechanisms to maximize international access to 
high quality and affordable vaccines. The preceding sentence shall not 
be construed to waive rights to set prices, patent ownership, or 
confidentiality of privileged information.
    (h) Study.--The Institute of Medicine shall conduct a study of the 
effectiveness of the credit under section 45D of the Internal Revenue 
Code of 1986 in stimulating vaccine research. Not later than the date 
which is 5 years after the date of the enactment of this Act, the 
Institute of Medicine shall submit to the Congress the results of such 
study together with any recommendations it may have to improve the 
effectiveness of such credit in stimulating vaccine research.

SEC. 3. CREDIT FOR CERTAIN SALES OF LIFESAVING VACCINES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45E. CREDIT FOR CERTAIN SALES OF LIFESAVING VACCINES.

    ``(a) In General.--For purposes of section 38, the lifesaving 
vaccine sale credit determined under this section with respect to a 
taxpayer for the taxable year is an amount equal to the amount of 
qualified vaccine sales for the taxable year.
    ``(b) Qualified Vaccine Sales.--For purposes of this section--
            ``(1) In general.--The term `qualified vaccine sales' means 
        the aggregate amount paid to the taxpayer for a qualified sale.
            ``(2) Qualified sale.--
                    ``(A) In general.--The term `qualified sale' means 
                a sale of a qualified vaccine--
                            ``(i) to a nonprofit organization or to a 
                        government of any foreign country (or 
                        instrumentality of such a government), and
                            ``(ii) for distribution in a developing 
                        country.
                    ``(B) Developing country.--For purposes of this 
                paragraph, the term `developing country' means a 
                country which the Secretary determines to be a country 
                with a lower middle income or less (as such term is 
                used by the International Bank for Reconstruction and 
                Development).
            ``(3) Qualified vaccine.--The term `qualified vaccine' 
        means any vaccine and microbicide--
                    ``(A) which is described in section 45D(b)(3)(C), 
                and
                    ``(B) which is approved as a new drug after the 
                date of the enactment of this paragraph by--
                            ``(i) the Food and Drug Administration,
                            ``(ii) the World Health Organization, or
                            ``(iii) the appropriate authority of a 
                        county included in the list under section 
                        802(b)(1) of the Federal Food, Drug, and 
                        Cosmetic Act.
    ``(c) Limit on Amount of Credit.--The maximum amount of the credit 
allowable under subsection (a) with respect to a sale shall not exceed 
the portion of the limitation amount allocated under subsection (d) 
with respect to such sale.
    ``(d) National Limitation on Amount of Credits.--
            ``(1) In general.--Except as provided in paragraph (3), 
        there is a lifesaving vaccine sale credit for each calendar 
        year equal to--
                    ``(A) $100,000,000 for each of years 2002 through 
                2006, and
                    ``(B) $125,000,000 for each of years 2007 through 
                2010.
            ``(2) Allocation of limitation.--The limitation amount 
        under paragraph (1) shall be allocated for any calendar year by 
        the Administrator of the United States Agency for International 
        Development among organizations with an application approved by 
        the Administrator. The Administrator shall prescribe the 
        procedures for applications for an allocation under this 
        subsection and the factors to be taken into account in making 
        such allocations. Such applications shall be made at such time 
        and in such form and manner as the Administrator shall 
        prescribe and shall include a detailed plan for distribution of 
        the vaccine.
            ``(3) Carryover of unused limitation.--If the limitation 
        amount under paragraph (1) for any calendar year exceeds the 
        aggregate amount allocated under paragraph (2), such limitation 
        for the following calendar year shall be increased by the 
        amount of such excess. No amount may be carried under the 
        preceding sentence to any calendar year after 2020.
    ``(e) Special Rules.--For purposes of this section, rules similar 
to the rules of section 41(f)(2) shall apply.''
    (b) Inclusion in General Business Credit.--
            (1) In general.--Section 38(b) of such Code (relating to 
        current year business credit) is amended by striking ``plus'' 
        at the end of paragraph (12), by striking the period at the end 
        of paragraph (13) and inserting ``, plus'', and by adding at 
        the end the following new paragraph:
            ``(14) the lifesaving vaccine sale credit determined under 
        section 45E.''.
            (2) Transition rule.--Section 39(d) of such Code (relating 
        to transitional rules) is amended by adding at the end the 
        following new paragraph:
            ``(10) No carryback of section 45e credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the lifesaving vaccine 
        sale credit determined under section 45E may be carried back to 
        a taxable year ending before the date of the enactment of 
        section 45E.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 45E. Credit for certain sales of 
                                        lifesaving vaccines.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to sales of vaccines after December 31, 2001, in taxable years 
ending after such date.
                                 <all>