[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1718 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1718

  To amend the Internal Revenue Code of 1986 to provide a credit for 
  medical research related to developing vaccines against widespread 
                               diseases.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 12, 1999

 Mr. Kerry (for himself and Mr. Durbin) 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 provide a credit for 
  medical research related to developing vaccines against widespread 
                               diseases.

    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 ``Lifesaving Vaccine Technology Act of 
1999''.

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 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.--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 `75 percent' for `65 
                        percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) 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).
            ``(2) Vaccine research.--The term `vaccine research' means 
        research to develop vaccines and microbicides for--
                    ``(A) malaria,
                    ``(B) tuberculosis, or
                    ``(C) HIV.
    ``(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) Limitations on foreign testing.--No credit shall be 
        allowed under this section with respect to any vaccine research 
        (other than human clinical testing) conducted outside the 
        United States by any entity which is not registered with the 
        Secretary.
            ``(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 (other than subsection (e)) 
        shall apply to any taxpayer for any taxable year only if such 
        taxpayer elects to have this section apply for such taxable 
        year.
    ``(e) Shareholder Equity Investment Credit in Lieu of Research 
Credit.--
            ``(1) In general.--For purposes of section 38, the vaccine 
        research credit determined under this section for the taxable 
        year shall include an amount equal to 20 percent of the amount 
        paid by the taxpayer to acquire qualified research stock in a 
        corporation if--
                    ``(A) the amount received by the corporation for 
                such stock is used within 18 months after the amount is 
                received to pay qualified vaccine research expenses of 
                the corporation for which a credit would (but for 
                subparagraph (B) and subsection (d)(3)) be determined 
                under this section, and
                    ``(B) the corporation waives its right to the 
                credit determined under this section for the qualified 
                vaccine research expenses which are paid with such 
                amount.
            ``(2) Qualified research stock.--For purposes of paragraph 
        (1), the term `qualified research stock' means any stock in a C 
        corporation--
                    ``(A) which is originally issued after the date of 
                the enactment of the Lifesaving Vaccine Technology Act 
                of 1999,
                    ``(B) which is acquired by the taxpayer at its 
                original issue (directly or through an underwriter) in 
                exchange for money or other property (not including 
                stock), and
                    ``(C) as of the date of issuance, such corporation 
                meets the gross assets tests of subparagraphs (A) and 
                (B) of section 1202(d)(1).''
    (b) Inclusion in General Business Credit.--
            (1) In general.--Section 38(b) of the Internal Revenue Code 
        of 1986 (relating to current year business credit) 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 (relating 
        to transitional rules) 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 the Internal Revenue 
Code of 1986 (relating to certain expenses for which credits are 
allowable) 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 the 
Internal Revenue Code of 1986 (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 the Internal Revenue Code of 
1986 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 taxable years ending after the date of the enactment of this 
Act.
    (g) Distribution of Vaccines Developed Using Credit.--It is the 
sense of Congress that if a tax 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 to maximize international access to high quality and affordable 
vaccines.
    (h) Study.--The Secretary of the Treasury, in consultation with 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 4 years 
after the date of the enactment of this Act, the Secretary shall submit 
to the Congress the results of such study together with any 
recommendations the Secretary may have to improve the effectiveness of 
such credit in stimulating vaccine research.

SEC. 3. SENSE OF CONGRESS.

    (a) Acceleration of Introduction of Priority Vaccines.--It is the 
sense of Congress that the President and Federal agencies (including 
the Department of State, the Department of Health and Human Services, 
and the Department of the Treasury) should work together in vigorous 
support of the creation and funding of a multi-lateral, international 
effort, such as a vaccine purchase fund, to accelerate the introduction 
of vaccines to which the tax credit under section 45D of the Internal 
Revenue Code of 1986 applies and of other priority vaccines into the 
poorest countries in the world.
    (b) Flexible Pricing.--It is the sense of Congress that flexible or 
differential pricing for vaccines, providing lowered prices for the 
poorest countries, is one of several valid strategies to accelerate the 
introduction of vaccines in developing countries.
                                 <all>