[Congressional Record Volume 151, Number 131 (Monday, October 17, 2005)]
[Senate]
[Pages S11424-S11433]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BURR (for himself, Mr. Enzi, Mr. Gregg, Mr. Frist, and Mr. 
        Alexander):
  S. 1873. A bill to prepare and strengthen the biodefenses of the 
United States against deliberate, accidental, and natural outbreaks of 
illness, and for other purposes; to the Committee on Health, Education, 
Labor, and Pensions.

  Mr. BURR. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1873

       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 ``Biodefense and Pandemic 
     Vaccine and Drug Development Act of 2005''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Biomedical Advanced Research and Development Agency.
Sec. 4. Clarification of countermeasures covered by Project BioShield.
Sec. 5. Orphan drug market exclusivity for countermeasure products.
Sec. 6. Liability protections for pandemics, epidemics, and 
              countermeasures.
Sec. 7. Compensation.
Sec. 8. Rebates and grants for research development, and manufacturing 
              of vaccines, qualified countermeasures and pandemic or 
              epidemic products.
Sec. 9. Technical assistance.
Sec. 10. Animal models for certain diseases.
Sec. 11. Animal Model/Research Tool Scientific Advisory Committee.
Sec. 12. Collaboration and coordination.
Sec. 13. Procurement.
Sec. 14. National Pathology Center.

     SEC. 3. BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AGENCY.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.) is amended by inserting after section 319K the 
     following:

     ``SEC. 319L. BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT 
                   AGENCY.

       ``(a) Definitions.--In this section:
       ``(1) BARDA.--The term `BARDA' means the Biomedical 
     Advanced Research and Development Agency.
       ``(2) Fund.--The term `Fund' means the Biodefense Medical 
     Countermeasure Development Fund established under subsection 
     (d).
       ``(3) Other transactions.--The term `other transactions' 
     means transactions, other than procurement contracts, grants, 
     and cooperative agreements, including transactions for 
     prototypes, as provided to the Secretary of Defense under 
     section 2371 of title 10, United States Code.
       ``(4) Qualified countermeasure.--The term `qualified 
     countermeasure' has the meaning given such term in section 
     319F-1.
       ``(5) Qualified countermeasure and qualified pandemic or 
     epidemic product advanced research and development.--
       ``(A) In general.--The term `qualified countermeasure and 
     qualified pandemic or epidemic product advanced research and 
     development' means any applied research, testing, or 
     evaluation (including those conducted on humans or animals), 
     related to the safety or effectiveness, that is required for 
     approval, clearance, or licensing by the Secretary under this 
     Act or the Federal Food, Drug, and Cosmetic Act, of such 
     countermeasure or pandemic or epidemic product to diagnose, 
     mitigate, prevent, or treat harm from a deliberate, 
     accidental, or natural exposure to a chemical, biological, 
     radiological, or nuclear agent, particularly such exposure 
     resulting from an act of terrorism or potential pandemic 
     infectious disease.
       ``(B) Inclusion.--The term under subparagraph (A) includes 
     any investigation to improve the manufacturing, formulation, 
     finish, fill, delivery, or shelf-life of such qualified 
     countermeasures or qualified pandemic or epidemic products.
       ``(6) Qualified pandemic or epidemic product.--The term 
     `qualified pandemic or epidemic product' has the meaning 
     given the term in section 319F-3(c)(5).
       ``(7) Security countermeasure.--The term `security 
     countermeasure' has the meaning given such term in section 
     319F-2.
       ``(8) Person.--The term `person' includes an individual, 
     partnership, corporation, association, entity, or public or 
     private corporation, including a Federal, State, or local 
     agency or department.
       ``(b) Biomedical Advanced Research and Development 
     Agency.--
       ``(1) Establishment.--There is established within the 
     Department of Health and Human Services, the Biomedical 
     Advanced Research and Development Agency.
       ``(2) Purpose.--It shall be the purpose of the BARDA to 
     coordinate and oversee activities that support and accelerate 
     qualified countermeasure or qualified pandemic or epidemic 
     product (referred to in this section

[[Page S11425]]

     as `countermeasure or product') advanced research and 
     development by--
       ``(A) directing and coordinating collaboration among the 
     Department of Health and Human Services, other Federal 
     agencies, relevant industries, academia, and other persons, 
     with respect to such advanced research and development;
       ``(B) supporting countermeasure and product advanced 
     research and development;
       ``(C) recommending approaches to modernize and streamline 
     the countermeasure or product development process and reduce 
     regulatory burdens with respect to procurement of security 
     countermeasures and qualified pandemic or epidemic products; 
     and
       ``(D) supporting innovation to reduce the time and cost of 
     countermeasure and product advanced research and development.
       ``(3) Director.--The BARDA shall be headed by a Director 
     (referred to in this section as the `Director') who shall--
       ``(A) be appointed by the President, with the advice and 
     consent of the Senate;
       ``(B) report to the Secretary; and
       ``(C) serve as the principal advisor to the Secretary on 
     countermeasure and product advanced research and development.
       ``(4) Duties of Director.--
       ``(A) Collaboration.--To carry out the purpose described in 
     paragraph (2)(A), the Secretary, acting through the Director, 
     shall--
       ``(i) increase appropriate communication between the 
     Federal Government and relevant industries, academia, and 
     other interested persons with respect to countermeasure and 
     product advanced research and development by establishing 
     transparent, expeditious, and direct processes to--

       ``(I) facilitate regular, ongoing communication regarding 
     the processes established under subparagraph (C)(ii) and new 
     countermeasures or products of interest;
       ``(II) solicit research and associated data on potential 
     countermeasures and products and related technologies; and
       ``(III) provide technical assistance with respect to such 
     processes and the Food and Drug Administration approval 
     process;

       ``(ii) at least annually--

       ``(I) convene meetings with representatives from relevant 
     industries, academia, other Federal agencies, international 
     agencies, and other interested persons; and
       ``(II) sponsor relevant biodefense countermeasure 
     technology demonstrations;

       ``(iii) carry out the activities described in subsection 
     (g) of section 2 of the Clayton Act; and
       ``(iv) encourage and coordinate countermeasure or product 
     advanced research and development, including by convening 
     working groups as identified in paragraph (5).
       ``(B) Support advanced research and development.--To carry 
     out the purpose described in paragraph (2)(B), the Secretary, 
     acting through the Director, shall--
       ``(i) conduct continuous searches and support calls for 
     potential countermeasures or products for drugs, biological 
     products, devices, or research tools to diagnose, mitigate, 
     prevent, or treat harm from existing, emerging, or possible 
     chemical, biological, radiological, and nuclear agents or 
     potential pandemic infectious diseases that threaten public 
     health and national security, as identified by the Assistant 
     Secretary for Public Health Emergency Preparedness;
       ``(ii) direct the countermeasure and product advanced 
     research and development activities of the Department of 
     Health and Human Services, in consultation with the Assistant 
     Secretary for Public Health Emergency Preparedness, the 
     Director of the National Institutes of Health, the Director 
     of the Centers for the Disease Control and Prevention, and 
     the Commissioner of Food and Drugs; and
       ``(iii) award contracts, grants, cooperative agreements, 
     and enter into other transactions, to include use of 
     simplified acquisition authorities provided under sections 
     319F-1 and 319F-2(c)(7)(C)(iii), to public and private 
     persons, including for-profit and nonprofit persons, 
     federally funded research and development centers, and 
     universities, to--

       ``(I) support the cost of countermeasure and product 
     advanced research and development; and
       ``(II) ensure accelerated development of countermeasures 
     and products.

       ``(C) Streamline processes.--To carry out the purpose 
     described in paragraph (2)(C), the Secretary, acting through 
     the Director, shall--
       ``(i) receive from the Assistant Secretary for Public 
     Health Emergency Preparedness, requirements for national 
     civilian biodefense needs, particularly countermeasures or 
     products and other technologies, to diagnose, mitigate, 
     prevent, or treat harm from existing, emerging, or potential 
     chemical, biological, radiological, or nuclear agents or 
     potential pandemic infectious diseases;
       ``(ii) establish transparent, expeditious, and direct 
     processes for selecting promising countermeasures and 
     products, supporting them through advanced research and 
     development and recommending them for procurement;
       ``(iii) establish an office within the BARDA, in 
     consultation with the Commissioner of Food and Drugs, to--

       ``(I) facilitate regular and ongoing communication between 
     the BARDA and the Food and Drug Administration regarding the 
     status of BARDA advanced research and development activities;
       ``(II) ensure that such activities are coordinated with the 
     approval requirements of the Food and Drug Administration, 
     with the goal of expediting the development and approval of 
     countermeasures and products; and
       ``(III) connect interested persons with additional 
     technical assistance made available under section 565 of the 
     Federal Food, Drug, and Cosmetic Act;

       ``(iv) coordinate with the Food and Drug Administration to 
     facilitate regulatory review and approval of promising 
     classes of countermeasures or products through the 
     development of research tools; and
       ``(v) recommend to the Secretary, through the Assistant 
     Secretary for Public Health Emergency Preparedness, 
     procurement of the most promising eligible security 
     countermeasures or qualified pandemic or epidemic products 
     identified in clause (i).
       ``(D) Supporting Innovation.--To carry out the purpose 
     described in paragraph (2)(D), the Secretary, acting through 
     the Director, shall award contracts, grants, cooperative 
     agreements, or enter into other transactions, to include use 
     of simplified acquisition authorities provided under sections 
     319F-1 and 319F-2(c)(7)(C)(iii), to the entities described in 
     subparagraph (B)(iii), to promote innovation in technologies 
     supporting the advanced research and development and 
     production of qualified or security countermeasures or 
     qualified pandemic or epidemic products, such as research 
     tools, manufacturing, countermeasure administration, storage, 
     and bioinformatics and other devices.
       ``(E) Other duties.--
       ``(i) In general.--The Director may--

       ``(I) prepare and submit to the President and Congress, an 
     annual budget estimate for qualified countermeasure and 
     pandemic or epidemic product advanced research and 
     development and other BARDA activities, after opportunity for 
     comment by the Secretary; and
       ``(II) receive from the President and the Office of 
     Management and Budget directly all funds appropriated by 
     Congress for obligation and expenditure by the BARDA.

       ``(ii) Secretary duties.--The Secretary, acting through the 
     Director, may--

       ``(I) enter into such contracts, leases, cooperative 
     agreements, or other transactions, as may be necessary to 
     carry out the functions of BARDA, without regard to section 
     3648 and 3709 of the Revised Statutes of the United States 
     (31 U.S.C. 3324(a) and (b), (41 U.S.C. 5), with any public 
     agency, any firm, association, corporation, or educational 
     institution, or any other person;
       ``(II) support advanced research and development and 
     innovation of potential countermeasures or products by highly 
     qualified foreign nationals outside the United States that 
     may inure to the benefit of the American people and 
     collaborative research involving American and foreign 
     participants;
       ``(III) administer grants using milestone-based awards and 
     payments; and
       ``(IV) establish 1 or more federally funded research and 
     development centers or university affiliated research centers 
     in accordance with section 253(c)(3) of title 41, United 
     States Code.

       ``(5) Vulnerable populations.--In carrying out the 
     activities under this section, the Director, in consultation 
     with the Vulnerable Populations Working Group, may give 
     priority to supporting and facilitating advanced research and 
     development of countermeasures or products, and formulations 
     of countermeasures or products, that are likely to be safe 
     and effective for pediatric populations, pregnant women, and 
     other vulnerable populations.
       ``(6) Working groups.--
       ``(A) Identification of technologies.--
       ``(i) In general.--The Director may establish and convene, 
     or enter into a contract with a public or private research 
     institution to convene, one or more working groups that 
     consists of experts on countermeasure technology to identify 
     innovative technologies that have the potential to be 
     developed as countermeasures or products.
       ``(ii) Meetings.--A working group established under clause 
     (i) shall participate in regular meetings with sponsors of 
     countermeasures, products, or related technologies to--

       ``(I) review the scientific evidence or concept of such 
     countermeasures, products, or related technologies;
       ``(II) provide guidance on research protocols or studies; 
     and
       ``(III) provide guidance on the regulatory approval process 
     for countermeasures, products, and related technologies.

       ``(iii) Recommendations.--Not later than 30 days after each 
     meeting with a sponsor of a countermeasure, product, or 
     related technology, the working group shall make 
     recommendations to the Director concerning such 
     countermeasure, product, or related technology.
       ``(iv) Confidentiality.--Any commercial confidential or 
     proprietary information that is disclosed to the working 
     group in a meeting under this section shall remain 
     confidential and shall not be disclosed other than to the 
     Secretary or the Director, or their designees.
       ``(v) Construction.--Nothing in this subparagraph shall be 
     construed to prohibit a sponsor from meeting with the 
     Director to discuss potential countermeasures, products, or 
     related technologies.
       ``(B) Public working group.--The Director may establish and 
     convene one or more working groups composed of private 
     citizens

[[Page S11426]]

     and officials of Federal, State, and local governments to 
     advise such Director with respect to the functions of the 
     BARDA and the Director.
       ``(C) Vulnerable populations working group.--The Director 
     shall establish and convene a Vulnerable Populations Working 
     Group composed of experts on pediatric populations, pregnant 
     women, and other vulnerable populations to advise such 
     Director with respect to--
       ``(i) supporting and facilitating advanced research and 
     development of countermeasures, and formulations of 
     countermeasures, that are safe and effective for such 
     populations; and
       ``(ii) other activities of the BARDA that effect such 
     populations.
       ``(7) Personnel Authorities.--
       ``(A) Specially qualified scientific and professional 
     personnel.--In hiring personnel for the BARDA, the Director 
     shall have the hiring and management authorities described in 
     section 1101 of the Strom Thurmond National Defense 
     Authorization Act for Fiscal Year 1999 (5 U.S.C. 3104 note; 
     Public Law 105-261). With respect to the personnel of the 
     BARDA, the term of appointments for employees referred to 
     under subsection (c)(1) of that section may not exceed 5 
     years before the granting of any extension under subsection 
     (c)(2) of that section.
       ``(B) Special consultants.--The Director may accept special 
     consultants as personnel for the BARDA under section 207(f).
       ``(C) Intergovernmental personnel act.--The Director may 
     accept as personnel for the BARDA, employees under subchapter 
     VI of chapter 33 of subpart B of part III of title 5, United 
     States Code.
       ``(D) Other services.--The Director may accept voluntary 
     and uncompensated services.
       ``(c) National Biodefense Advisory Board.--
       ``(1) In general.--
       ``(A) Purpose.--The National Biodefense Advisory Board 
     shall provide expert advice and guidance to the Secretary on 
     the threats, challenges, and opportunities presented by 
     advances in biological and life sciences and the threat from 
     natural infectious diseases and chemical, biological, 
     radiological, and nuclear threats.
       ``(B) Membership.--There is established the National 
     Biodefense Advisory Board (hereinafter in this section 
     referred to as the `Board') to be composed of 23 members who 
     represent the Nation's preeminent scientific, public health, 
     and medical experts on the subject of biological, chemical, 
     nuclear, and radiological threats, whether naturally 
     occurring, accidental, or deliberate, as follows:
       ``(i) Ex officio.--The following members shall serve on the 
     Board ex officio:

       ``(I) The Assistant to the President for Homeland Security 
     and Counterterrorism.
       ``(II) The Director of the Office of Science and Technology 
     Policy.
       ``(III) The Assistant Secretary for Public Health Emergency 
     Preparedness.
       ``(IV) The Director of the National Institutes of Health.
       ``(V) The Director of the Centers for Disease Control and 
     Prevention.
       ``(VI) The Commissioner of Food and Drugs.
       ``(VII) The Director of BARDA.
       ``(VIII) The Assistant Secretary of Defense for Health 
     Affairs.
       ``(IX) The Assistant Secretary of Homeland Security for 
     Science and Technology.
       ``(X) The Secretary of Agriculture (or a designee).

       ``(ii) Appointed members.--The following individuals, as 
     appointed by the Secretary:

       ``(I) Four representatives of the pharmaceutical and 
     biotechnology industries.
       ``(II) Four representatives of academia.
       ``(III) Five other members as determined appropriate by the 
     Secretary.

       ``(C) Term of appointment.--A member of the Board described 
     in subparagraph (B)(ii) shall serve for a term of 3 years, 
     except that the Secretary may adjust the terms of the initial 
     Board appointees in order to provide for a staggered term of 
     appointment for all members.
       ``(D) Consecutive appointments; maximum terms.--A member 
     may be appointed to serve not more than 3 terms on the Board 
     and may serve not more than 2 consecutive terms.
       ``(2) Duties.--The Board shall--
       ``(A) advise the Secretary on major biodefense initiatives 
     and review ongoing and proposed biodefense programs, which 
     may include potential activities of the BARDA; and
       ``(B) in consultation with the Director of BARDA, and in 
     coordination with the Director of National Institute of 
     Allergy and Infectious Diseases, provide to the Secretary, 
     recommendations and findings for an expanded, intensified, 
     and coordinated biodefense research program encompassing the 
     programs of the BARDA and other Federal agencies and related 
     programs of the other research institutes.
       ``(3) Meetings.--The Board shall meet at the call of the 
     Secretary, but in no case less than twice annually to provide 
     to the Secretary updated assessments, findings, and 
     recommendations of the current trends, challenges, and 
     opportunities posed in biotechnology and genetic engineering.
       ``(4) Vacancies.--Any vacancy in the Board shall not affect 
     its powers, but shall be filled in the same manner as the 
     original appointment.
       ``(5) Chairperson.--The Secretary shall appoint a 
     chairperson from among the members of the Board.
       ``(6) Powers.--
       ``(A) Hearings.--The Board may hold such hearings, sit and 
     act at such times and places, take such testimony, and 
     receive such evidence as the Board considers advisable to 
     carry out this subsection.
       ``(B) Postal services.--The Board may use the United States 
     mails in the same manner and under the same conditions as 
     other departments and agencies of the Federal Government.
       ``(7) Personnel.--
       ``(A) Officers of the federal government.--A member of the 
     Board that is an employee of the Federal Government may not 
     receive additional pay, allowances, or benefits by reason of 
     the member's service on the Board.
       ``(B) Other members.--A member of the Board that is not an 
     employee of the Federal Government shall be compensated at a 
     rate equivalent to the daily equivalent of the annual rate of 
     basic pay prescribed for level IV of the Executive Schedule 
     under section 5315 of title 5, United States Code, for each 
     day (including travel time) during which the member is 
     engaged in the actual performance of duties as a member of 
     the Board.
       ``(C) Travel expenses.--Each member of the Board shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, in accordance with applicable provisions under 
     subchapter I of chapter 57 of title 5, United States Code.
       ``(D) Detail of government employees.--Any Federal 
     Government employee may be detailed to the Board without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       ``(d) Fund.--
       ``(1) Establishment.--There is established the Biodefense 
     Medical Countermeasure Development Fund, which shall be 
     administered by the Director of the BARDA.
       ``(2) Funds.--
       ``(A) First fiscal year.--Of the amounts appropriated to 
     carry out the Project BioShield Act of 2004 (Public Law 108-
     276) and not obligated, $1,000,000,000 shall be available to 
     the Fund to carry out this section for fiscal year 2006. Such 
     amounts shall remain available until expended.
       ``(B) Subsequent fiscal years.--There are authorized to be 
     appropriated such sums as may be necessary to carry out this 
     section for fiscal year 2007 and each subsequent fiscal year. 
     Such sums shall remain available until expended.
       ``(e) Effect of Section.--Nothing in this section shall be 
     construed to limit any authority of the Department of Health 
     and Human Services, including those authorities provided 
     under the Project BioShield Act of 2004 (Public Law 108-276).
       ``(f) Inapplicability of Certain Acts.--
       ``(1) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
     App.) shall not apply to the duties, activities, working 
     groups, and advisory boards of the BARDA.
       ``(2) FOIA.--Information that relates to the activities, 
     working groups, and advisory boards of the BARDA shall not be 
     subject to disclosure under section 552 of title 5, United 
     States Code, unless the Secretary or Director determines that 
     such disclosure would pose no threat to national security. 
     Such a determination shall not be subject to judicial review.
       ``(3) Certain cost principles and cost accounting 
     standards.--Notwithstanding any other provision of law, the 
     cost principles set forth under part 31 of title 48, Code of 
     Federal Regulations, the cost accounting standards set forth 
     under chapter 99 of title 48, Code of Federal Regulations, 
     and the requirement for the submission of certified cost and 
     pricing information under section 304A of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     254b), shall not apply to any contract, grant, cooperative 
     agreement, or other transaction entered into under the 
     Project BioShield Act of 2004 (Public Law 108-276).''.

     SEC. 4. CLARIFICATION OF COUNTERMEASURES COVERED BY PROJECT 
                   BIOSHIELD.

       (a) Qualified countermeasure.--Section 319F-1(a) of the 
     Public Health Service Act (42 U.S.C. 247d-6a(a)) is amended 
     by striking paragraph (2) and inserting the following:
       ``(2) Definitions.--In this section:
       ``(A) Qualified countermeasure.--The term `qualified 
     countermeasure' means a drug (as that term is defined by 
     section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 321(g)(1))), biological product (as that term is 
     defined by section 351(i) of this Act (42 U.S.C. 262(i))), 
     device (as that term is defined by section 201(h) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))), or 
     research tool (as that term is defined in section 201(rr) of 
     the Federal Food, Drug, and Cosmetic Act) that the Secretary 
     determines to be a priority (consistent with sections 302(2) 
     and 304(a) of the Homeland Security Act of 2002) to--
       ``(i) diagnose, mitigate, prevent, or treat harm from any 
     biological agent (including organisms that cause an 
     infectious disease) or toxins, chemical, radiological, or 
     nuclear agent that may cause a public health emergency 
     affecting national security;
       ``(ii) diagnose, mitigate, prevent, or treat harm from a 
     condition that may result in adverse health consequences or 
     death and may be caused by administering a drug, biological 
     product, or device that is used as described in this 
     subparagraph; or
       ``(iii) in the case of a research tool, enable the rapid 
     and effective identification, assessment, or development of a 
     drug, biological

[[Page S11427]]

     product, or device to diagnose, mitigate, prevent, or treat 
     harm, as described in clause (i) or (ii).
       ``(B) Infectious disease.--The term `infectious disease' 
     means a disease potentially caused by a pathogenic organism 
     (including a bacteria, virus, fungus, or parasite) that is 
     acquired by a person and that reproduces in that person.''.
       (b) Security countermeasure.--Section 319F-2(c)(1)(B) is 
     amended by--
       (A) striking ``treat, identify, or prevent'' each place it 
     appears and inserting ``diagnose, mitigate, prevent, or 
     treat''; and
       (B) inserting ``agent (including organisms that cause an 
     infectious disease) or toxin'' after ``any biological''.
       (c) Research tool.--Section 201 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 321) is amended by adding at the 
     end the following:
       ``(rr) Research tool.--The term `research tool' includes 
     the full range of tools and systems that assist in the 
     discovery, development, or manufacture of drugs, biological 
     products (as defined in section 351 of the Public Health 
     Service Act), or devices.''.

     SEC. 5. ORPHAN DRUG MARKET EXCLUSIVITY FOR COUNTERMEASURE 
                   PRODUCTS.

       (a) Market Exclusivity.--Subchapter A of chapter V of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) 
     is amended by inserting after section 505B the following:

     ``SEC. 505C. ORPHAN DRUG MARKET EXCLUSIVITY FOR 
                   COUNTERMEASURE PRODUCTS.

       ``(a) In General.--With respect to countermeasure products 
     (as such term is defined in this section), if a 
     countermeasure product is designated under section 526 for a 
     rare disease or condition, the period referred to in section 
     527(a) shall be 10 years instead of 7 years.
       ``(b) Definition.--For the purpose of this section, the 
     term `countermeasure' means a drug or biological product (as 
     such term is defined by section 351(i) of the Public Health 
     Service Act) that the Secretary determines to be a priority 
     (consistent with sections 302(2) and 304(a) of the Homeland 
     Security Act of 2002) to diagnose, mitigate, prevent, or 
     treat harm from any biological, chemical, radiological, or 
     nuclear agent (including organisms that cause an infectious 
     disease) or toxin identified as a material threat under 
     subsection (c)(2)(A)(ii) of section 319F-2 of the Public 
     Health Service Act.''.
       (b) Orphan Drugs.--For purposes of section 526 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) a 
     biological, chemical, radiological, or nuclear agent 
     (including organisms that cause an infectious disease) or 
     toxin identified as a material threat under subsection 
     (c)(2)(A)(ii) of section 319F-2 of the Public Health Service 
     Act shall be considered to be a ``rare disease or condition'' 
     within the meaning of such term in such section 526. The 
     Secretary may designate antibiotics and anti-infective 
     products that treat infectious diseases as designated drugs 
     or biological products under such section 526.
       (c) Effect of Section.--This section, and the amendments 
     made by this section, shall apply to new drug applications 
     and biological product licenses approved under the Federal 
     Food, Drug, and Cosmetic Act or the Public Health Service Act 
     after the date of enactment of this Act.

     SEC. 6. LIABILITY PROTECTIONS FOR PANDEMICS, EPIDEMICS, AND 
                   COUNTERMEASURES.

       Part B of title III of the Public Health Service Act is 
     amended by inserting after section 319F-2 (42 U.S.C. 247d-6b) 
     the following:

     ``SEC. 319F-3. LIABILITY PROTECTIONS FOR PANDEMIC AND 
                   EPIDEMIC PRODUCTS AND SECURITY COUNTERMEASURES.

       ``(a) Authority.--As provided in subsection (b), and 
     subject to subsection (b)(1)(C), a manufacturer, distibutor, 
     or administrator of a security countermeasure, or a qualified 
     pandemic and epidemic product, described in subsection 
     (b)(1)(A) or a health care provider shall be immune from suit 
     or liability caused by or arising out of the design, 
     development, clinical testing and investigation, manufacture, 
     labeling, distribution, sale, purchase, donation, dispensing, 
     prescribing, administration, or use of a security 
     countermeasure, or a qualified pandemic and epidemic product, 
     described in subsection (b)(1)(A).
       ``(b) Litigation Management.--
       ``(1) Limitation on cause of action.--
       ``(A) In general.--
       ``(i) In general.--No cause of action shall exist against a 
     person described in subsection (a) for claims for loss of 
     property, personal injury, or death arising out of, 
     reasonably relating to, or resulting from the design, 
     development, clinical testing and investigation, manufacture, 
     labeling, distribution, sale, purchase, donation, dispensing, 
     prescribing, administration, or use of a security 
     countermeasure or qualified pandemic or epidemic product 
     distributed, sold, purchased, donated, dispensed, prescribed, 
     administered, or used in anticipation of and preparation for, 
     in defense against, or in response to, or recovery from an 
     actual or potential public health emergency that is a 
     designated security countermeasure or a qualified pandemic or 
     epidemic product by the Secretary in a declaration described 
     in paragraph (2).
       ``(ii) Rule of construction.--For purposes of this section, 
     the phrase `arising out of, reasonably relating to, or 
     resulting from' shall not be construed to apply to loss of 
     property, personal injury, or death that has no alleged or 
     potential causal relationship with the design, development, 
     clinical testing and investigation, manufacture, labeling, 
     distribution, sale, purchase, donation, dispensing, 
     prescribing, administration, or use of a product described in 
     clause (i).
       ``(B) Rule.--
       ``(i) Subsequent injury.--The protections set forth in 
     subsection (a) and subparagraph (A) shall apply to all claims 
     identified in subparagraph (A) that involve products 
     distributed, sold, purchased, donated, dispensed, prescribed, 
     administered, or used during the effective period set forth 
     in the designation provided for in paragraph (2), regardless 
     of the date of alleged injury.
       ``(ii) Private donation or sale.--The protections set forth 
     in subsection (a) and subparagraph (A) shall apply to all 
     claims identified in subparagraph (A) that involve security 
     countermeasures or qualified pandemic or epidemic products 
     distributed, sold, purchased, donated, dispensed, prescribed, 
     administered, or used during the effective period set forth 
     in the designation provided for in paragraph (2) by a 
     manufacturer through the commercial market, provided that the 
     security countermeasures or the qualified pandemic or 
     epidemic product are the security countermeasure or qualified 
     pandemic or epidemic product described in a declaration 
     described in paragraph (2) and the Secretary does not 
     specifically prohibit such private donation or sale in such 
     declaration.
       ``(C) Potential liability upon determination.--
       ``(i) In general.--A manufacturer, distributor, 
     administrator, or health care provider shall not be immune 
     under subsection (a) or exempted from a cause of action under 
     subparagraph (A) if the Secretary makes a determination as 
     provided for in subparagraph (D).
       ``(ii) Investigation by secretary.--A party seeking a 
     determination under subparagraph (D) may petition the 
     Secretary to investigate allegations against a manufacturer, 
     distributor, administrator, or health care provider arising 
     out of, relating to, or resulting from the design, 
     development, clinical testing and investigation, manufacture, 
     labeling, distribution, sale, purchase, donation, dispensing, 
     prescribing, administration, or use of products as provided 
     for in subparagraph (A)(i). The decision to undertake such 
     investigation shall be within the Secretary's discretion and 
     shall not be subject to judicial review.
       ``(iii) Rule of construction.--Nothing in this section 
     shall be construed to abrogate or limit the application of 
     subtitle II of chapter 5 and chapter 7 of title 5, United 
     States Code (commonly known as the Administrative Procedure 
     Act).
       ``(D) Determination by secretary.--
       ``(i) In general.--In making a determination under this 
     subparagraph, the Secretary, acting through an administrative 
     law judge, must find clear and convincing evidence that--

       ``(I) the manufacturer, distributor, administrator, or 
     health care provider violated a provision of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or this 
     Act; and
       ``(II) in violating such Act, such manufacturer, 
     distributor, administrator, or health care provider acted 
     with willful misconduct.

       ``(ii) Effect of determination.--If the Secretary finds 
     such clear and convincing evidence under clause (i), the 
     Secretary shall examine whether such willful misconduct to 
     violate an Act under such clause--

       ``(I) caused the product to present a significant or 
     unreasonable risk to human health; and
       ``(II) proximately caused the injury alleged by the party.

       ``(ii) Notice and hearing.--Prior to the Secretary's making 
     a determination under clause (i), the manufacturer, 
     distributor, administrator, or health care provider shall 
     have notice and a right to a formal hearing in accordance 
     with section 556 of title 5, United States Code.
       ``(iii) Effect of determination.--Subject to subsection 
     (c), the sole exception to the immunity from suit and 
     liability of manufacturers, distributors, administrators, or 
     healthcare providers set forth in subsection (a) and 
     subparagraph (A) shall be for actions against a manufacturer, 
     distributor, administrator, or healthcare provider as 
     provided in subparagraph (A).
       ``(iv) Judicial review.--At any time prior to the 90th day 
     following a determination by the Secretary under clause (i), 
     any manufacturer, distributor, administrator, or health care 
     provider named in such determination may file a petition with 
     the United States Court District Court for the District of 
     Columbia, for a judicial review of such determination. A copy 
     of the petition shall be forthwith transmitted by the clerk 
     of the court to the Secretary or other officer designated by 
     the Secretary for that purpose. The Secretary thereupon shall 
     file in the court the record of the findings on which the 
     Secretary based his or her determination. The filing of a 
     petition under this clause shall automatically stay the 
     Secretary's determination for the duration of the judicial 
     proceeding. The sole parties to the judicial proceeding shall 
     be the Secretary and the petitioner. Intervention by third 
     parties in the judicial proceeding shall not be permitted. No 
     subpoenas shall be issued nor shall other compulsory process 
     apply. The court's review of a determination by the Secretary 
     under this clause shall conform to the procedures for 
     judicial review of administrative

[[Page S11428]]

     orders set forth in paragraphs (2) through (6) of section 
     701(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     371(f)) to the extent consistent with this section.
       ``(v) Tolling of statute of limitations.--The computation 
     of the statute of limitations for any action against a 
     manufacturer, distributor, administrator, or health care 
     provider described under this subparagraph shall not include 
     any time occurring before the determination by the Secretary 
     under this subparagraph.
       ``(vi) Regulatory authority.--The Secretary, in 
     consultation with the Attorney General, shall promulgate 
     regulations defining what actions by a manufacturer, 
     distributor, administrator, or healthcare provider of a 
     security countermeasure or a qualified pandemic and epidemic 
     product shall be deemed to constitute `willful misconduct' 
     for purposes of clause (i). In promulgating such regulations, 
     the Secretary shall consider the nature of the actual or 
     potential public health emergency, the timing and extent of 
     any vaccination or countermeasure program, and any other 
     circumstances they deem significant, so that any civil 
     actions permitted under this subsection will not adversely 
     affect the public health. The Secretary may specify the 
     period of time for which such regulations apply.
       ``(vii) Evidence required.--The Secretary, in consultation 
     with the Attorney General, shall promulgate regulations that 
     require, in order to be a party under this section, that an 
     individual present evidence that reasonably demonstrates 
     that--

       ``(I) such individual has suffered a loss as a direct 
     result of the design, development, clinical testing and 
     investigation, manufacture, labeling, distribution, sale, 
     purchase, donation, dispensing, prescribing, or 
     administration of a security countermeasure or qualified 
     epidemic or pandemic product; and
       ``(II) the loss as described in subclause (I) was a direct 
     result of the willful misconduct of the manufacturer, 
     distributor, administrator, or health care provider in 
     violating the Federal Food, Drug, and Cosmetic Act or this 
     Act.

       ``(E) Scope.--Subparagraph (C) shall apply regardless of 
     whether the suit or liability described in subsection (a) or 
     the claim described in subparagraph (A) arises from the 
     design, development, clinical testing and investigation, 
     manufacture, labeling, distribution, sale, purchase, 
     donation, dispensing, prescribing, administration, or use by 
     the Federal Government or by any person.
       ``(2) Declaration by secretary.--
       ``(A) In general.--The Secretary may issue a declaration, 
     pursuant to this paragraph, that an actual or potential 
     public health emergency makes advisable the distribution, 
     administration, or use of a security countermeasure or 
     qualified pandemic or epidemic product.
       ``(B) Security countermeasure or qualified pandemic or 
     epidemic product.--The Secretary shall specify in such 
     declaration the security countermeasures or qualified 
     pandemic or epidemic products to be sold by, purchased from, 
     or donated by a manufacturer or drawn from the Strategic 
     National Stockpile.
       ``(C) Effective period.--The Secretary shall specify in 
     such declaration the beginning and the ending dates of the 
     effective period of the declaration, which shall be not 
     longer than 6 months. The Secretary may subsequently amend 
     such declaration to shorten or extend such effective period, 
     provided that the new ending data is after the date on which 
     the declaration is amended.
       ``(D) Publication.--The Secretary shall promptly publish 
     each such declaration and amendment in the Federal Register.
       ``(c) Actions by the United States.--Nothing in this 
     section shall be construed to abrogate or limit any right, 
     remedy, or authority that the United States or any agency 
     thereof may possess under any other provision of law.
       ``(d) Definitions.--In this section:
       ``(1) Administrator.--The term `administrator' means a 
     person employed by the State or local government, or their 
     designee, who supervised or administered a program with 
     respect to the administration, dispensing, distribution, or 
     provision of a security countermeasure or a qualified 
     pandemic or epidemic product, including a person who has 
     established requirements, provided policy guidance, supplied 
     technical or scientific advice or assistance.
       ``(2) Health care provider.--The term `health care 
     provider' means a person, including a volunteer, who 
     distributes, prescribes, administers, dispenses, provides a 
     facility to administer, or supervises or oversees the 
     administration of a security countermeasure or a qualified 
     pandemic or epidemic product, including persons who 
     distribute, prescribe, administer, dispense, or provide a 
     facility to administer in accordance with a designation under 
     subsection (b)(2).
       ``(3) Loss.--The term `loss' means death, physical injury, 
     or loss of or damage to property, including business 
     interruption loss.
       ``(4) Manufacturer.--The term `manufacturer' includes--
       ``(A) a contractor or subcontractor of a manufacturer;
       ``(B) a supplier of any product or service, research tool, 
     or component to the manufacturer; and
       ``(C) any or all of the parents, subsidiaries, affiliates, 
     successors, and assigns of a manufacturer.
       ``(5) Qualified pandemic or epidemic product.--The term 
     `qualified pandemic or epidemic product' means a drug (as 
     such term is defined in section 201(g)(1) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1))), 
     biological product (as such term is defined by section 351(i) 
     of this Act) or device (as such term is defined by section 
     201(h) of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 
     321(h))) designed, developed, modified, or procured to 
     diagnose, mitigate, prevent, treat, or cure a pandemic or 
     epidemic or limit the harm such pandemic or epidemic might 
     otherwise cause or a serious or life-threatening disease or 
     condition caused by such a product, that--
       ``(A) is approved or cleared under chapter V of the Federal 
     Food, Drug, and Cosmetic Act or licensed under section 351 of 
     this Act;
       ``(B) is a product for which the Secretary determines that 
     sufficient and satisfactory clinical experience or research 
     data (including data, if available, from pre-clinical and 
     clinical trials) support a reasonable conclusion that the 
     product will qualify for approval or licensing within 8 years 
     after the date the Secretary makes a declaration under 
     paragraph (2); or
       ``(C) is authorized for emergency use section 564 of the 
     Federal Food, Drug, and Cosmetic Act, except that subsection 
     (b) of such section shall not apply.
       ``(6) Party.-- The term `party' means an individual who can 
     reasonably demonstrate to the Secretary that such individual 
     has suffered a loss (as defined in paragraph (3)) as a direct 
     result of the willful misconduct of a manufacturer, 
     distributor, administrator, or health care provider.
       ``(7) Person.--The term `person' includes an individual, 
     partnership, corporation, association, entity, or public or 
     private corporation, including a Federal, State, or local 
     agency or department.
       ``(8) Security countermeasure.--The term `security 
     countermeasure' has the meaning given such term in section 
     319F-2(c)(1)(B).''.

     SEC. 7. COMPENSATION.

       Title II of the Public Health Service Act (42 U.S.C. 202 et 
     seq.) is amended by adding at the end the following:

                 ``PART D--OTHER COMPENSATION PROGRAMS

     ``SEC. 271. COVERED COUNTERMEASURES PROGRAM.

       ``(a) In General.--If the Secretary issues a Proclamation 
     stating that there is a critical public health need for a 
     covered individual to receive a covered countermeasure during 
     the effective period of the Proclamation, the Secretary shall 
     establish a process to provide compensation to such covered 
     individuals for a covered injury, consistent with the 
     Smallpox Emergency Personnel Protection program under part C.
       ``(b) Definition.--For purposes of this section:
       ``(1) Covered countermeasure.--The term `covered 
     countermeasure' means a qualified pandemic or epidemic (as 
     defined in section 319F-3(c)(5)) or a security countermeasure 
     (as defined in section 319F-2(c)(1)(B)) specified in the 
     Proclamation.
       ``(2) Covered individual.--The term `covered individual' 
     means an individual--
       ``(A) who is a health care worker, law enforcement officer, 
     firefighter, security personnel, emergency medical personnel, 
     other public health or safety personnel, or support personnel 
     for such occupational specialties;
       ``(B) who is or will be functioning in a role identified in 
     a State, local, or Department of Health and Human Services 
     emergency response plan approved by the Secretary;
       ``(C) who has volunteered and been selected to be a member 
     of an emergency response plan; and
       ``(D) to whom a covered countermeasure is administered 
     pursuant to such approved plan during the effective period of 
     the Proclamation and prior to the time at which the Secretary 
     declares a public health emergency pursuant to section 319 
     related to a covered countermeasure specified in the 
     Proclamation.
       ``(3) Covered injury.--The term `covered injury' means an 
     injury, disability, illness, condition, or death (other than 
     a minor injury such as minor scarring or minor local 
     reaction) determined by the Secretary to have been sustained 
     by a covered individual as the direct result of 
     administration to the individual of a covered countermeasure.
       ``(4) Effective period of the proclamation.--The term 
     `effective period of the Proclamation' means the effective 
     period specified in the Proclamation, unless extended by the 
     Secretary.
       ``(5) Emergency response plan.--The term `emergency 
     response plan' or `plan' means a response plan detailing 
     actions to be taken in preparation for a pandemic, epidemic, 
     or biological, chemical, nuclear agent or toxin that 
     presents, or may present, a public health emergency.
       ``(6) Proclamation.--The term `Proclamation' means a 
     Proclamation regarding the critical public health need for 
     the administration of a covered countermeasure issued by the 
     Secretary and published in the Federal Register. Such 
     Proclamation shall specify the specific covered 
     countermeasure recommended for administration.
       ``(c) Rule of Construction.--Nothing in this section shall 
     be construed to require the creation of a compensation 
     program if the covered injuries are only minor injuries 
     consistent with section (b)(3).''.

[[Page S11429]]

     SEC. 8. REBATES AND GRANTS FOR RESEARCH DEVELOPMENT, AND 
                   MANUFACTURING OF VACCINES, QUALIFIED 
                   COUNTERMEASURES AND PANDEMIC OR EPIDEMIC 
                   PRODUCTS.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') may award 
     to a person with respect to an investment described in this 
     section (or an amendment made by this section)--
       (1) a rebate pursuant to subsection (b); or
       (2) a grant pursuant to section 319M of the Public Health 
     Service Act (as added by subsection (c)).
       (b) Surge Capacity and Research Rebates.--
       (1) In general.--The Secretary may award rebates out of any 
     money in the Treasury not otherwise appropriated to persons 
     for the expansion of surge capacity for manufacturing 
     vaccines, qualified countermeasures (as defined in 319F-1 of 
     the Public Health Service Act, as amended by this Act) or 
     qualified pandemic or epidemic products (as defined in 319F-
     3(c)(5) of such Act, as added by this Act) (referred to in 
     this section as ``vaccines, countermeasures or products'') 
     and for vaccines, countermeasures, or products research.
       (2) Vaccines, countermeasures or products manufacturing 
     facilities investment rebate.--
       (A) In general.--For purposes of this section, vaccines, 
     countermeasures or products manufacturing facilities 
     investment rebate for any taxable year for a person (as 
     defined with respect to such person for purposes of the 
     Internal Revenue Code of 1986) shall be an amount equal to 20 
     percent of the qualified investment for such taxable year.
       (B) Vaccines, countermeasures or products manufacturing 
     facilities investment.--For purposes of subparagraph (A), the 
     qualified investment for any taxable year for a person is the 
     basis of each vaccines, countermeasures or products 
     manufacturing facilities property placed in service by the 
     person during the taxable year involved.
       (C) Vaccines, countermeasures and products manufacturing 
     facilities property.--For purposes of this subsection, the 
     term ``vaccines, countermeasures and products manufacturing 
     facilities property'' means real and tangible personal 
     property--
       (i)(I) the original use of which commences with the person 
     applying for the rebate; or
       (II) which is acquired through purchase (as defined by 
     section 179(d)(2) of the Internal Revenue Code of 1986);
       (ii) which is depreciable under section 167 of the Internal 
     Revenue Code of 1986;
       (iii) which is physically located in a State;
       (iv) which is used for the manufacture, distribution, or 
     research and development of vaccines, countermeasures, or 
     products; and
       (v) which is in compliance with applicable good 
     manufacturing practice and with any other applicable 
     requirements which are promulgated by the Secretary, the 
     Occupational Safety and Health Administration, or the 
     Environmental Protection Agency, and which are applicable to 
     such property.
       (D) Denial of double benefit for manufacturing facilities 
     expenses.--If any portion of the vaccines, countermeasures, 
     and products manufacturing facilities property investment 
     expenses is otherwise allowable as a deduction for the 
     taxable year involved, the Secretary shall only provide a 
     rebate under this section for the portion of such expenses 
     not covered by the rebate determined by such deduction.
       (E) Eligibility.--To be eligible to receive a rebate under 
     this subsection, a manufacturer shall submit to the Secretary 
     an application at such time, in such manner, and containing 
     such information as the Secretary may require, including--
       (i) a detailed description and intended use of the 
     facilities that is the basis of application;
       (ii) a detailed description of the vaccine, countermeasure, 
     or product being produced or that may be produced at the 
     facility;
       (iii) a detailed accounting of qualified manufacturing 
     facilities investment of the person;
       (iv) a certification as to the compliance of the person 
     with clauses (i) through (iv) of subparagraph (C); and
       (v) copies of tax returns for the taxable year involved.
       (F) Effective date.--This paragraph shall apply to property 
     placed in service after December 31, 2005.
       (G) Termination.--This paragraph shall not apply to any 
     property placed in service after December 31, 2010.
       (3) Medical research related to developing vaccines, 
     countermeasures or qualified pandemic or epidemic products 
     rebate.--
       (A) In general.--For purposes of this subsection, the 
     research rebate determined under this section for the taxable 
     year involved (as determined as provided for in paragraph 
     (2)(A)) is an amount equal to 35 percent of the vaccines, 
     qualified countermeasures, or qualified pandemic or epidemic 
     products (referred to in this section as ``vaccine, 
     countermeasure, or product'') research expenses for the 
     taxable year.
       (B) Vaccines, countermeasures, or products research 
     expenses.--Except as otherwise provided in this paragraph, 
     the term ``vaccines, countermeasures, or products research 
     expenses'' means the amounts which are paid or incurred by 
     the researcher or manufacturer during the taxable year with 
     respect to any research and development of vaccines, 
     countermeasures, or products. Qualified research and 
     development expenses include expenses related to 
     reformulating existing vaccines, countermeasures, or 
     products.
       (C) Determining research expenses.--Any vaccines, 
     countermeasures, or products research expenses for any 
     taxable year which are qualified research expenses (within 
     the meaning of this subsection) shall be taken into account 
     in determining base period research expenses for purposes of 
     applying this paragraph to subsequent taxable years.
       (D) Denial of double benefit for vaccines, countermeasures, 
     or products research expenses.--If any portion of the 
     vaccines, countermeasures, or products research expenses is 
     otherwise allowable as a deduction for the taxable year 
     involved, the Secretary shall only provide a rebate under 
     this section for the portion of such expenses not covered by 
     any rebate determined by such deduction.
       (E) Eligibility.--To be eligible to receive a rebate under 
     this paragraph, a manufacturer or researcher shall submit to 
     the Secretary an application at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including--
       (i) a detailed description of the vaccine, countermeasure, 
     or product being researched or developed;
       (ii) a detailed description of the research that is the 
     subject of the rebate;
       (iii) a detailed accounting of the qualified research 
     expenses involved;
       (iv) an assurance that the researcher or manufacturer is 
     following good laboratory practice, as required by the 
     Secretary pursuant to the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 301 et seq.) and the Public Health Service Act 
     (42 U.S.C. 201 et seq.); and
       (v) copies of tax returns for the taxable year involved.
       (F) Effective date.--This paragraph shall apply to expenses 
     for taxable years beginning after December 31, 2005.
       (4) Exclusion for amounts funded by grants, etc.--The terms 
     ``vaccines, countermeasures, or products manufacturing 
     investment'' and ``qualified research expenses'' shall not 
     include any amount to the extent such amount is funded by any 
     grant, contract, or otherwise funded by another person (or 
     any governmental entity).
       (c) Grants to Expand and Improve Research and Development 
     and Manufacturing of Vaccines, Countermeasures or Products.--
     Part B of title III of the Public Health Service Act is 
     amended by inserting after section 319L, as added by this 
     Act, the following:

     ``SEC. 319M. GRANTS TO EXPAND AND IMPROVE RESEARCH AND 
                   DEVELOPMENT AND MANUFACTURING OF VACCINES, 
                   QUALIFIED COUNTERMEASURES OR QUALIFIED PANDEMIC 
                   OR EPIDEMIC PRODUCTS.

       ``(a) In General.--The Secretary may award grants to a 
     manufacturer to purchase or improve real property and 
     tangible personal property used in the research and 
     development, manufacture, or distribution of a vaccine, 
     qualified countermeasure (as defined in section 319F-1) or 
     qualified pandemic or epidemic product (as defined in section 
     319F-3(c)(5)).
       ``(b) Eligibility.--To be eligible to receive a grant under 
     subsection (a), a manufacturer shall submit to the Secretary 
     an application at such time, in such manner, and containing 
     such information as the Secretary may require, including--
       ``(1) a detailed description of the planned expansion;
       ``(2) a detailed description of the equipment, facility, or 
     property involved;
       ``(3) a certification that such facility or property is 
     physically located in a State;
       ``(4) a detailed description of the vaccine, qualified 
     countermeasure or qualified pandemic or epidemic product 
     involved;
       ``(5) a detailed description of the research and 
     development, manufacturer, or distribution involved;
       ``(6) a description of how such equipment, facility, or 
     property is to be used;
       ``(7) a description of whether such equipment, facility, or 
     property can be used for the research and development, 
     manufacture, or distribution of a drug, biological product, 
     device or other countermeasure not described in paragraph 
     (4); and
       ``(8) a certification that the equipment, facility, or 
     property involved complies with all applicable Federal, 
     State, and local laws.
       ``(c) Recapture.--
       ``(1) In general.--If, at any time prior to the expiration 
     of the 20-year period beginning on the date on which a grant 
     is awarded under this section, the facility or property 
     involved ceases to be used for the purpose for which the 
     grant was awarded, the United States shall be entitled to 
     recover from the manufacturer an amount bearing the same 
     ratio to the value of the facility or property at such time 
     as the amount of the grant bore to the total cost of the 
     purchase or improvement involved. The value of the facility 
     or property at such time may be determined by agreement of 
     the manufacturer and the Secretary, or by order of the United 
     States District Court for the district in which such facility 
     or property is situated.
       ``(2) Limitation.--The Secretary may not recapture the 
     facility or property under this subsection if the Secretary 
     determines, in accordance with regulations promulgated by the 
     Secretary, that there is good cause for the failure of proper 
     use.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated such

[[Page S11430]]

     sums as may be necessary to carry out this section.''.

     SEC. 9. TECHNICAL ASSISTANCE.

       Subchapter E of chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 360bbb et seq.) is amended by adding 
     at the end the following:

     ``SEC. 565. TECHNICAL ASSISTANCE.

       ``The Secretary, in consultation with the Commissioner of 
     Food and Drugs, shall establish within the Food and Drug 
     Administration a team of experts on manufacturing and 
     regulatory activities (including compliance with current Good 
     Manufacturing Practices) to provide both off-site and on-site 
     technical assistance to the manufacturers of qualified 
     countermeasures (as defined in section 319F-1 of the Public 
     Health Service Act), security countermeasures (as defined in 
     section 319F-2 of such Act), or vaccines, at the request of 
     such a manufacturer and at the discretion of the Secretary, 
     if the Secretary determines that a shortage or potential 
     shortage may occur in the United States in the supply of such 
     vaccines or products and that the provision of such 
     assistance would be beneficial in helping alleviate or avert 
     such shortage.''.

     SEC. 10. ANIMAL MODELS FOR CERTAIN DISEASES.

       Part B of title IV of the Public Health Service Act (42 
     U.S.C. 284 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 409J. ANIMAL MODELS FOR CERTAIN DISEASES.

       ``(a) In General.--The Secretary, acting through the 
     Director of NIH, in coordination with the Director of the 
     Biomedical Advanced Research and Development Agency, the 
     Director of the Centers for Disease Control and Prevention, 
     and the Commissioner of Food and Drugs, shall establish and 
     award grants under this section to eligible entities, 
     including other Federal agencies, to study the physiological 
     responses of certain animal species and, where appropriate, 
     juvenile models, to chemical, biological, radiological, or 
     nuclear agents or toxins or potential pandemic infectious 
     disease, and to develop and validate such animal models.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section, an entity shall--
       ``(1) provide assurances to the Secretary that the entity--
       ``(A) has access to an appropriate biosafety laboratory or 
     facility, as determined by the Secretary; and
       ``(B) will follow good laboratory practices;
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require, including--
       ``(A) a detailed description of the animal model involved;
       ``(B) a detailed description of the chemical, biological, 
     radiological, nuclear, or other infectious agents involved;
       ``(C) a detailed description of how the animal model will 
     be used for the development of a drug, biological product, or 
     device for use as a countermeasure;
       ``(D) a detailed description of validation methods; and
       ``(E) an assurance that the entity will follow good 
     laboratory practices; and
       ``(3) agree to submit the results of the research funded 
     under the grant to the Director of the Biomedical Advanced 
     Research and Development Agency and the Director of NIH.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this section.''.

     SEC. 11. ANIMAL MODEL/RESEARCH TOOL SCIENTIFIC ADVISORY 
                   COMMITTEE.

       Subchapter E of chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 360bbb et seq.), as amended by this 
     Act, is amended by adding at the end the following:

     ``SEC. 566. ANIMAL MODEL/RESEARCH TOOL SCIENTIFIC ADVISORY 
                   COMMITTEE.

       ``(a) Establishment.--Not later than 6 months after the 
     date of enactment of this section, the Secretary shall 
     establish an 11-member advisory committee to be known as the 
     `Animal Model/Research Tool Scientific Advisory Committee' 
     (referred to in this section as the `Advisory Committee').
       ``(b) Membership.--
       ``(1) In general.--The Secretary shall appoint as members 
     of the Advisory Committee individuals who are technically 
     qualified by training and experience, including in medicine, 
     veterinarian medicine, biology, technology involving the 
     manufacture, evaluation, or use of research tools, who are of 
     appropriately diversified professional backgrounds to 
     evaluate the priority animal models and research tools.
       ``(2) Ex officio members.--The Secretary may appoint 
     Federal officials, including at least 1 representative of the 
     Biomedical Advanced Research and Development Agency, to serve 
     as ex officio members of the Advisory Committee.
       ``(3) Chairperson.--The Secretary shall designate 1 of the 
     members of the Advisory Committee to serve as the 
     chairperson.
       ``(c) Duties.--The Advisory Committee shall provide advice, 
     information, and recommendations to the Secretary on--
       ``(1) accepted animal models for diseases and conditions 
     associated with any biological (including organisms that 
     cause infectious diseases), chemical, radiological, or 
     nuclear agent or toxin or potential pandemic infectious 
     disease;
       ``(2) strategies to accelerate animal model and research 
     tool development and validation; and
       ``(3) scientific issues raised in applications as requested 
     by the Secretary.
       ``(d) Priorities.--Priorities for animal models and 
     research tools shall be established by the Secretary.
       ``(e) Compensation; Support; FACA.--
       ``(1) Compensation and travel.--Members of the Advisory 
     Committee who are not officers or employees of the United 
     States, while attending conferences or meetings of the 
     committee or otherwise engaged in its business, shall be 
     entitled to receive compensation at rates to be fixed by the 
     Secretary, which may not exceed daily equivalent of the rate 
     in effect for level 4 of the Senior Executive Schedule under 
     section 5382 of title 5, United States Code, for each day 
     (including travel time) they are so engaged, and while so 
     serving away from their homes or regular places of business 
     each member may be allowed travel expenses, including per 
     diem in lieu of subsistence, as authorized by section 5703 of 
     title 5, United States Code, for persons in the Federal 
     Government service employed intermittently.
       ``(2) Administrative support.--The Secretary shall furnish 
     the Advisory Committee clerical and other assistance.
       ``(3) Nonapplication of faca.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
     Advisory Committee.
       ``(f) Proceedings.--The Advisory Committee shall make and 
     maintain a transcript of any proceeding of the Committee. The 
     Committee shall delete from any transcript made under this 
     subsection information, which is exempt from disclosure under 
     section 552(b) of title 5, United States Code.''.

     SEC. 12. COLLABORATION AND COORDINATION.

       Section 2 of the Clayton Act (15 U.S.C. 13) is amended by 
     adding at the end the following:
       ``(g) Limited Antitrust Exemption.--
       ``(1) Security countermeasures, qualified countermeasures 
     and qualified pandemic or epidemic product development 
     meetings.--
       ``(A) Countermeasures and products development meetings and 
     consultations.--The Secretary of Health and Human Services 
     (referred to in this subsection as the `Secretary') or the 
     Director of the Biomedical Advanced Research and Development 
     Agency (referred to in this subsection as the `Director'), in 
     coordination with the Attorney General and the Secretary of 
     Homeland Security, may conduct meetings and consultations 
     with parties involved in the development of security 
     countermeasures (as defined in section 319F-2 of the Public 
     Health Service Act) qualified countermeasures (as defined in 
     section 319F-1 of the Public Health Service Act) or qualified 
     pandemic or epidemic products (as defined in section 319F-
     3(c)(5) of the Public Health Service Act) (referred to in 
     this section as ``countermeasures or products'') for the 
     purpose of the development, manufacture, distribution, 
     purchase, sale, or storage of countermeasures or products 
     consistent with the purposes of this title. The Secretary or 
     Director may convene such meeting or consultation at the 
     request of any person, the Secretary of Homeland Security, 
     the Attorney General, the Chairperson of the Federal Trade 
     Commission, an industry representative or member, or upon 
     initiation by such Secretary. The Secretary or Director shall 
     give notice of such meetings and consultations to the 
     Chairperson of the Federal Trade Commission (referred to in 
     this subsection as the `Chairperson') and the Attorney 
     General.
       ``(B) Meeting and consultation conditions.--A meeting or 
     consultation conducted under subparagraph (A) shall--
       ``(i) be chaired or, in the case of a consultation, 
     facilitated by the Secretary or Director;
       ``(ii) be open to parties involved in the development, 
     manufacture, distribution, purchase, or sale of 
     countermeasures or products, as determined by the Secretary 
     or Director;
       ``(iii) be open to the Attorney General, the Secretary of 
     Homeland Security, and the Chairperson;
       ``(iv) be limited to discussions involving the development, 
     manufacture, distribution, or sale of countermeasures or 
     products, consistent with the purposes of this title; and
       ``(v) be conducted in such manner as to ensure that 
     national security, confidential, and proprietary information 
     is not disclosed outside the meeting or consultation.
       ``(C) Limitation.--The Secretary or Director may not 
     require the disclosure of confidential commercial or 
     proprietary information.
       ``(D) Minutes.--The Secretary or Director shall maintain 
     minutes of meetings and consultations under this subsection, 
     which shall not be disclosed under section 552 of title 5, 
     United States Code, unless such Secretary or Director, in 
     consultation with the Attorney General, determines that 
     disclosure would pose no threat to national security. Such 
     determination shall not be subject to judicial review.
       ``(E) Exemption.--
       ``(i) In general.--The antitrust laws shall not apply to 
     meetings and consultations under this paragraph.
       ``(ii) Limitation.--Clause (i) shall not apply to any 
     agreement or conduct that results from a meeting or 
     consultation and that does not receive an exemption pursuant 
     to this subsection.

[[Page S11431]]

       ``(2) Written agreements.--The Secretary or the Director 
     shall file a written agreement regarding covered activities, 
     made pursuant to meetings or consultations conducted under 
     paragraph (1) and that is consistent with this paragraph, 
     with the Attorney General and the Chairperson for a 
     determination of the compliance of such agreement with 
     antitrust laws. In addition to the proposed agreement itself, 
     any such filing shall include--
       ``(A) an explanation of the intended purpose of the 
     agreement;
       ``(B) a specific statement of the substance of the 
     agreement;
       ``(C) a description of the methods that will be utilized to 
     achieve the objectives of the agreement;
       ``(D) an explanation of the necessity of a cooperative 
     effort among the particular participating parties to achieve 
     the objectives of the agreement; and
       ``(E) any other relevant information determined necessary 
     by the Secretary or Director in consultation with the 
     Attorney General and the Chairperson.
       ``(3) Determination.--The Attorney General, in consultation 
     with the Chairperson, shall determine whether an agreement 
     regarding covered activities referred to in paragraph (2) 
     would likely--
       ``(A) be in compliance with the antitrust laws, and so 
     inform the Secretary or Director and the participating 
     parties; or
       ``(B) violate the antitrust laws, in which case, the filing 
     shall be deemed to be a request for an exemption from the 
     antitrust laws, limited to the performance of the agreement 
     consistent with the purposes of this title.
       ``(4) Action on request for exemption.--
       ``(A) In general.--The Attorney General, in consultation 
     with the Chairperson, shall grant, deny, grant in part and 
     deny in part, or propose modifications to a request for 
     exemption from the antitrust laws under paragraph (3) within 
     15 business days of the receipt of such request.
       ``(B) Extension.--The Attorney General may extend the 15-
     day period referred to in subparagraph (A) for an additional 
     period of not to exceed 10 days. Such additional period may 
     be further extended only by the United States district court, 
     upon an application by the Attorney General after notice to 
     the Secretary or Director and the parties involved.
       ``(C) Determination.--In granting an exemption under this 
     paragraph, the Attorney General, in consultation with the 
     Chairperson and the Secretary or Director--
       ``(i) shall find--

       ``(I) that the agreement involved is necessary to ensure 
     the availability of countermeasures or products;
       ``(II) that the exemption from the antitrust laws would 
     promote the public interest; and
       ``(III) that there is no substantial competitive impact to 
     areas not directly related to the purposes of the agreement; 
     and

       ``(ii) may consider any other factors determined relevant 
     by the Attorney General and the Chairperson.
       ``(5) Limitation on and renewal of exemptions.--An 
     exemption granted under paragraph (4) shall be limited to 
     covered activities, and shall be renewed (with modifications, 
     as appropriate) on the date that is 3 years after the date on 
     which the exemption becomes effective (and at 3-year 
     intervals thereafter, if renewed) unless the Attorney General 
     in consultation with the Chairperson determines that the 
     exemption should not be renewed (with modifications, as 
     appropriate) considering the factors described in paragraph 
     (4).
       ``(6) Limitation on parties.--The use of any information 
     acquired under an exempted agreement by the parties to such 
     an agreement for any purposes other than those specified in 
     the antitrust exemption granted by the Attorney General shall 
     be subject to the antitrust laws and any other applicable 
     laws.
       ``(7) Guidelines.--The Attorney General and the Chairperson 
     may develop and issue guidelines to implement this 
     subsection.
       ``(8) Report.--Not later than 1 year after the date of 
     enactment of the Biodefense and Pandemic Vaccine and Drug 
     Development Act of 2005, and annually thereafter, the 
     Attorney General and the Chairperson shall report to Congress 
     on the use and continuing need for the exemption from the 
     antitrust laws provided by this subsection.
       ``(9) Status of memorandums.--Minutes maintained by the 
     Secretary or Director pursuant to paragraph (1)(D) shall not 
     be disclosed under section 552 of title 5, United States 
     Code, if the exemption is not renewed under paragraph (5), or 
     if meetings are no longer conducted, unless the Secretary or 
     Director, in consultation with the Attorney General, 
     determines that the disclosure would pose no threat to 
     national security. Such determination shall not be subject to 
     judicial review.
       ``(h) Sunset.--The authority of the Attorney General to 
     grant or renew a limited antitrust exemption under this 
     section shall expire at the end of the 6-year period that 
     begins on the date of enactment of the Biodefense and 
     Pandemic Vaccine and Drug Development Act of 2005.
       ``(i) Definitions.--In this section:
       ``(1) Antitrust laws.--The term `antitrust laws'--
       ``(A) has the meaning given such term in subsection (a) of 
     the first section of this Act, except that such term includes 
     the Act of June 19, 1936 (15 U.S.C. 13 et seq.) (commonly 
     known as the Robinson-Patman Act), and section 5 of the 
     Federal Trade Commission Act (15 U.S.C. 45) to the extent 
     such section 5 applies to unfair methods of competition; and
       ``(B) includes any State law similar to the laws referred 
     to in subparagraph (A).
       ``(2) Covered activities.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `covered activities' means any group of activities 
     or conduct, including attempting to make, making, or 
     performing a contract or agreement or engaging in other 
     conduct, for the purpose of--
       ``(i) theoretical analysis, experimentation, or the 
     systematic study of phenomena or observable facts necessary 
     to the development of countermeasures or products;
       ``(ii) the development or testing of basic engineering 
     techniques necessary to the development of countermeasures or 
     products;
       ``(iii) the extension of investigative findings or theory 
     of a scientific or technical nature into practical 
     application for experimental and demonstration purposes, 
     including the experimental production and testing of models, 
     prototypes, equipment, materials, and processes necessary to 
     the development of countermeasures or products;
       ``(iv) the production, distribution, or marketing of a 
     product, process, or service that is a countermeasures or 
     products;
       ``(v) the testing in connection with the production of a 
     product, process, or services necessary to the development of 
     countermeasures or products;
       ``(vi) the collection, exchange, and analysis of research 
     or production information necessary to the development of 
     countermeasures or products; or
       ``(vii) any combination of the purposes described in 
     clauses (i) through (vi);

     and such term may include the establishment and operation of 
     facilities for the conduct of covered activities described in 
     clauses (i) through (vi), the conduct of such covered 
     activities on a protracted and proprietary basis, and the 
     processing of applications for patents and the granting of 
     licenses for the results of such covered activities.
       ``(B) Exception.--The term `covered activities' shall not 
     include the following activities involving 2 or more persons:
       ``(i) Exchanging information among competitors relating to 
     costs, profitability, marketing, or distribution of any 
     product, process, or service if such information is not 
     reasonably necessary to carry out the purposes of covered 
     activities.
       ``(ii) Entering into any agreement or engaging in any other 
     conduct--

       ``(I) to restrict or require the sale, licensing, or 
     sharing of inventions, developments, products, processes, or 
     services not developed through, produced by, or distributed 
     or sold through such covered activities; or
       ``(II) to restrict or require participation by any person 
     who is a party to such covered activities in other research 
     and development activities, that is not reasonably necessary 
     to prevent the misappropriation of proprietary information 
     contributed by any person who is a party to such covered 
     activities or of the results of such covered activities.

       ``(iii) Entering into any agreement or engaging in any 
     other conduct allocating a market with a competitor that is 
     not expressly exempted from the antitrust laws by a 
     determination under subsection (g)(4).
       ``(iv) Exchanging information among competitors relating to 
     production (other than production by such covered activities) 
     of a product, process, or service if such information is not 
     reasonably necessary to carry out the purpose of such covered 
     activities.
       ``(v) Entering into any agreement or engaging in any other 
     conduct restricting, requiring, or otherwise involving the 
     production of a product, process, or service that is not so 
     expressly exempted from the antitrust laws by a determination 
     under subsection (g)(4).
       ``(vi) Except as otherwise provided in this subsection, 
     entering into any agreement or engaging in any other conduct 
     to restrict or require participation by any person who is a 
     party to such activities, in any unilateral or joint activity 
     that is not reasonably necessary to carry out the purpose of 
     such covered activities.
       ``(vii) Entering into any agreement or engaging in any 
     other conduct restricting or setting the price at which a 
     product is offered for sale, whether by bid or otherwise.
       ``(4) Development.--The term `development' includes the 
     identification of suitable compounds or biological materials, 
     the conduct of preclinical and clinical studies, the 
     preparation of an application for marketing approval, and any 
     other actions related to preparation of a countermeasure or 
     product.''.

     SEC. 13. PROCUREMENT.

       Section 319F-2 of the Public Health Service Act (42 U.S.C. 
     247d-6b) is amended--
       (1) in the section heading, by inserting ``AND SECURITY 
     COUNTERMEASURE PROCUREMENTS'' before the period; and
       (2) in subsection (c)--
       (A) in the subsection heading, by striking ``Biomedical'';
       (B) in paragraph (5)(B)(i), by striking ``to meet the needs 
     of the stockpile'' and inserting ``to meet the stockpile 
     needs'';
       (C) in paragraph (7)(C)(ii)--
       (i) by amending clause (I) to read as follows:

       ``(I) Payment conditioned on delivery.--The contract shall 
     provide that no payment may be made until delivery of a 
     portion, acceptable to the Secretary, of the total number of 
     units contracted for, except that, notwithstanding any other 
     provision of law, the

[[Page S11432]]

     contract may provide that, if the Secretary determines (as 
     the Secretary's discretion) that an advance payment, partial 
     payment for significant milestones, or payment to increase 
     manufacturing capacity is necessary to ensure success of a 
     project, the Secretary shall pay an amount, not to exceed 10 
     percent of the contract amount, in advance of delivery. The 
     contract shall provide that such advance payment is required 
     to be repaid if there is a failure to perform by the vendor 
     under the contract. The contract may also provide for up to 3 
     additional advance payments of 5 percent each for meeting the 
     milestones specified in such contract. Provided that the 
     specified milestones are reached, these advanced payments of 
     5 percent shall not be required to be repaid. Nothing in this 
     subclause shall be construed as affecting the rights of 
     vendors under provisions of law or regulation (including the 
     Federal Acquisition Regulation) relating to the termination 
     of contracts for the convenience of the Government.''; and

       (ii) by adding at the end the following:

       ``(VII) Sales exclusivity.--The contract may provide that 
     the vendor is the sole and exclusive supplier of the product 
     to the Federal Government for a specified period of time, not 
     to exceed 15 years, on the condition that the vendor is able 
     to satisfy the needs of the Government. During the agreed 
     period of sales exclusivity, the vendor shall not assign its 
     rights of sales exclusivity to another entity or entities 
     without approval by the Secretary.
       ``(VIII) Surge capacity.--The contract may provide that the 
     vendor establish domestic manufacturing capacity of the 
     product to ensure that additional production of the product 
     is available in the event that the Secretary determines that 
     there is a need to quickly purchase additional quantities of 
     the product. Such contract may provide a fee to the vendor 
     for establishing and maintaining such capacity in excess of 
     the initial requirement for the purchase of the product. 
     Additionally, the cost of maintaining the domestic 
     manufacturing capacity shall be an allowable and allocable 
     direct cost of the contract.
       ``(IX) Contract terms.--The Secretary, in any contract for 
     procurement under this section, may specify--

       ``(aa) the dosing and administration requirements for 
     countermeasures to be developed and procured;
       ``(bb) the amount of funding that will be dedicated by the 
     Secretary for research and development of the countermeasure; 
     and
       ``(cc) the specifications the countermeasure must meet to 
     qualify for procurement under a contract under this 
     section.''; and
       (D) in paragraph (8)(A), by adding at the end the 
     following: ``Such agreements may allow other executive 
     agencies to order qualified and security countermeasures 
     under procurement contracts or other agreements established 
     by the Secretary. Such ordering process (including transfers 
     of appropriated funds between an agency and the Department of 
     Health and Human Services as reimbursements for such orders 
     for countermeasures) may be conducted under the authority of 
     section 1535 of title 31, United States Code, except that all 
     such orders shall be processed under the terms established 
     under the Biodefense and Pandemic Vaccine and Drug 
     Development Act of 2005 and the Project BioShield Act of 
     2004, for the procurement of countermeasures under section 
     319F-1 or 319F-2.''

     SEC. 14. NATIONAL PATHOLOGY CENTER.

       (a) In General.--Title IV of the Public Health Service Act 
     (42 U.S.C. 281 et seq.) is amended--
       (1) in section 401(b)(2), by adding at the end the 
     following:
       ``(H) The National Pathology Center.''; and
       (2) by adding at the end of part E (42 U.S.C. 287 et seq.) 
     the following:

                 ``Subpart 7--National Pathology Center

     ``SEC. 485A. ESTABLISHMENT OF NATIONAL PATHOLOGY CENTER.

       ``In order to provide pathology consultation for civilian 
     and military health professionals (including Department of 
     Veterans Affairs health professionals) there is established 
     the National Pathology Center (in this subpart referred to as 
     the `Center'). The Center shall be headed by a director, who 
     shall be appointed by the Secretary. The Director of the 
     Center shall report directly to the Director of NIH.

     ``SEC. 485B. PURPOSES AND FUNCTIONS OF THE CENTER.

       ``(a) Purposes of the Center.--The general purposes of the 
     Center are to--
       ``(1) conduct and support research, education, training, 
     and other programs with respect to the science and clinical 
     practice of pathology;
       ``(2) maintain and improve a pathology tissue repository; 
     and
       ``(3) provide pathology consultation services.
       ``(b) Activities of the Director.--In order to carry out 
     the purposes of the Center described in subsection (a), the 
     Director of the Center--
       ``(1) shall--
       ``(A) maintain and improve a comprehensive repository of 
     pathological specimens;
       ``(B) provide consultations on request regarding clinical 
     cases;
       ``(C) conduct educational programs and publish educational 
     materials on the science and clinical practice of pathology;
       ``(D) maintain and improve registries on such clinical 
     conditions as the Director of the Center determines 
     appropriate; and
       ``(E) conduct and support research on pathology; and
       ``(2) may--
       ``(A) collect reasonable and appropriate fees for the 
     activities described in paragraph (1)(B); and
       ``(B) conduct such other activities as the Director of the 
     Center determines appropriate to carry out the purposes 
     described in subsection (a).
       ``(c) Authority for Expert Opinions.--The Director of the 
     Center may enter into memoranda of understanding with 
     officials at the Department of Veterans Affairs and the 
     Department of Defense to provide expert second opinion 
     pathology consultations and pathology education or training 
     if the Secretary of either such Department determines that 
     such provision would be in the best interest of either of 
     their respective departments.

     ``SEC. 485C. BOARD OF REGENTS.

       ``(a) Membership.--
       ``(1) In general.--There is established a Board of Regents 
     of the Center (in this subpart referred to as the `Board') 
     consisting of--
       ``(A) the Surgeons General of--
       ``(i) the Public Health Service;
       ``(ii) the Army;
       ``(iii) the Navy; and
       ``(iv) the Air Force;
       ``(B) the Chief Medical Director of the Department of 
     Medicine and Surgery of the Department of Veterans Affairs;
       ``(C) the Deputy Director of the National Library of 
     Medicine;
       ``(D) the Assistant Secretary of Health of the Department 
     of Defense;
       ``(E) the Dean of the Uniformed Services University of the 
     Health Sciences; and
       ``(F) 11 members to be appointed by the Secretary from 
     among leaders in pathology research, education and clinical 
     practice.
       ``(2) Ex officio members.--The members of the Board 
     described in subparagraphs (A) through (E) of paragraph (1) 
     shall serve as ex officio members of the Board.
       ``(3) Chairperson.--The members of the Board appointed 
     under paragraph (1)(F) shall annually elect one of such 
     members to serve as the Chairperson of the Board until the 
     next election.
       ``(b) Duties of the Board.--It shall be the duty of the 
     Board to advise, consult with, and make recommendations to 
     the Director of NIH on important matters of policy in regard 
     to the Center, including such matters as the scope, content 
     and organization of the research, education and consultative 
     services provided by the Center. The Board shall make 
     recommendations to the Director of NIH regarding the rules 
     under which specimens from the tissue repository will be used 
     and under which it's publications, facilities and services 
     will be made available to various kinds of users.
       ``(c) Terms of Office.--Each appointed member of the Board 
     shall hold office for a term of 4 years, except that any 
     member appointed to fill a vacancy occurring prior to the 
     expiration of the term for which the predecessor of such 
     member was appointed shall be appointed for the remainder of 
     such term. None of the appointed members shall be eligible 
     for reappointment within 1 year after the end of the 
     preceding term of such member.
       ``(d) Compensation.--Appointed members of the Board who are 
     not otherwise in the employ of the United States, while 
     attending conferences of the Board or otherwise serving at 
     the request of the Secretary in connection with the 
     administration of the Board, shall be entitled to receive 
     compensation, per diem in lieu of subsistence, and travel 
     expenses in the same manner and under the same conditions as 
     that prescribed under section 208(c).

     ``SEC. 485D. GIFTS TO THE CENTER.

       ``Section 231 shall be applicable to the acceptance and 
     administration of gifts made for the benefit of the Center or 
     for carrying out any of its functions.

     ``SEC. 485E. CENTER FACILITIES.

       ``There are authorized to be appropriated amounts 
     sufficient for the erection and equipment of suitable and 
     adequate buildings and facilities for use of the Center. The 
     Administrator of General Services may acquire, by purchase, 
     condemnation, donation, or otherwise, a suitable site or 
     sites, selected by the Secretary in accordance with the 
     direction of the Board, for such buildings and facilities and 
     to erect thereon, furnish, and equip such buildings and 
     facilities. The amounts authorized to be appropriated by this 
     section include the cost of preparation of drawings and 
     specifications, supervision of construction, and other 
     administrative expenses incident to the work. The 
     Administrator of General Services shall prepare the plans and 
     specifications, make all necessary contracts, and supervise 
     construction.''.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall submit a report to the appropriate committees 
     of Congress that contains--
       (1) a review of all functions and duties of the National 
     Pathology Center under subpart 7 of part E of title IV of the 
     Public Health Service Act,as established by subsection (a);
       (2) areas where such functions and duties overlap with the 
     functions and duties of the National Institutes of Health; 
     and
       (3) recommendations concerning necessary modifications to 
     the National Pathology Center.
       (c) Transfer of the Armed Forces Institute of Pathology.--

[[Page S11433]]

       (1) In general.--
       (A) In general.--Except as provided in subparagraph (B), 
     there are transferred to the National Pathology Center 
     established under subpart 7 of part E of title IV of the 
     Public Health Service Act all functions, duties, personnel, 
     assets, liabilities, contracts, property, records, and 
     unexpended balances of appropriations of the Armed Forces 
     Institute of Pathology. The preceding sentence shall not 
     affect any proceedings, pending applications, suits, or other 
     actions pending on the date of enactment of this Act.
       (B) Exceptions.--The following components of the Armed 
     Forces Institute of Pathology shall not be transferred from 
     the Department of Defense pursuant to subparagraph (A):
       (i) The Armed Forces Medical Examiner.
       (ii) The Department of Defense DNA registry.
       (iii) Accident Investigation Program.
       (iv) The histopathology training program.
       (v) The patient safety center.
       (vi) Department of Legal Medicine.
       (vii) Center for Clinical Laboratory Medicine.
       (viii) Drug Testing and Quality Assurance Program.
       (ix) Subject to the discretion of the Secretary of Defense, 
     medical research programs on the following:

       (I) Body armor.
       (II) Environmental sarcoidosis.
       (III) Depleted uranium.
       (IV) Military working dogs.
       (V) Such other areas of research related to pathology as 
     the Secretary of Defense shall choose to conduct.

       (2) References.--Any reference in any Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or relating to the Armed Forces 
     Institute of Pathology shall be deemed to be a reference to 
     the National Pathology Center established under subpart 7 of 
     part E of title IV of the Public Health Service Act.
                                 ______