,i #aadth ,,congress #ast ,session ,h4 ,r4 #ceci ,,in ,,the ,,house ,,of ,,representatives ,september #ag1 #bjae ,mr4 ,boustany 7for himself1 ,mr4 ,thompson of ,california1 ,mr4 ,paulsen1 ,mr4 ,shimkus1 and ,mr4 ,gene ,green of ,texas7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow a credit against tax for clinical testing expenses for qualified infectious disease drugs and rapid diagnostic tests4 #a4 ,short title ,this ,act may be cited as the ,reinvigorating ,antibiotic and ,diagnostic ,innovation ,act of #bjae4 #b4 ,clinical testing expenses for qualified infectious disease products 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,s4 ,clinical testing expenses for qualified infectious disease products 7a7 ,general rule ,for purposes of section #ch1 the qualified infectious disease product credit determined under this section for the taxable year is an amount equal to #ej percent of the qualified clinical testing expenses for the taxable year4 7b7 ,qualified clinical testing expenses ,for purposes of this section-- 7#a7 ,qualified clinical testing expenses 7,a7 ,in general ,except as otherwise provided in this paragraph1 the term qualified clinical testing expenses means the amounts which are paid or incurred by the taxpayer during the taxable year which would be described in subsection 7b7 of section #da if such subsection were applied with the modifications set forth in subparagraph 7,b74 7,b7 ,modifications ,for purposes of subparagraph 7,a71 subsection 7b7 of section #da shall be applied-- 7i7 by substituting clinical testing for qualified research each place it appears in paragraphs 7#b7 and 7#c7 of such subsection1 and 7ii7 by substituting #ajj percent for #fe percent in paragraph 7#c77;,a7 of such subsection4 7,c7 ,exclusion for amounts funded by grants1 etc ,the term qualified clinical testing expenses shall not include any amount to the extent such amount is funded by any grant1 contract1 or otherwise by another person 7or any governmental entity74 7,d7 ,special rule ,for purposes of this paragraph1 section #da shall be deemed to remain in effect for periods after enactment of this section4 7#b7 ,clinical testing 7,a7 ,in general ,the term clinical testing means any human clinical testing-- 7i7 which is carried out under an exemption for a drug being tested as an antibiotic or antifungal drug under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7or regulations issued under such section71 7ii7 which occurs before the date on which an application with respect to such drug is approved under section #eje7;b7 of such ,act or1 if the drug is a biological product1 before the date on which a license for such drug is issued under section #cea of the ,public ,health ,service ,act1 and 7iii7 which is conducted by or on behalf of the taxpayer to whom exemption under section #eje7;i7 of such ,act is granted4 7,b7 ,testing must be related to use as qualified infectious disease product ,human clinical testing shall be taken into account under subparagraph 7,a7 only to the extent such testing is related to the use of the drug as a qualified infectious disease product4 7c7 ,coordination with credit for increasing research expenditures 7#a7 ,in general ,except as provided in paragraph 7#b71 any qualified clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section #da for such taxable year4 7#b7 ,expenses included in determining base period research expenses ,any qualified clinical testing expenses for any taxable year which are qualified research expenses 7within the meaning of section #da7;b77 shall be taken into account in determining base period research expenses for purposes of applying section #da to subsequent taxable years4 7d7 ,definitions and special rules 7#a7 ,qualified infectious disease product ,for purposes of this section1 the term qualified infectious disease product means any drug or biological product for human use that-- 7,a7 is intended to treat a serious or life-threatening infection1 including those caused by-- 7i7 an antibacterial or antifungal resistant pathogen 7including novel or emerging infectious pathogens71 or 7ii7 qualifying pathogens listed by the ,secretary of ,health and ,human ,services under section #eje;,e7f7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cea et seq471 and 7,b7 is intended to treat an infection for which there is an unmet medical need as defined by the ,secretary of ,health and ,human ,services4 7#b7 ,special limitation on foreign testing 7,a7 ,in general ,no credit shall be allowed under this section with respect to any clinical testing conducted outside the ,united ,states unless-- 7i7 such testing is conducted outside the ,united ,states because there is an insufficient testing population in the ,united ,states1 and 7ii7 such testing is conducted by a ,united ,states person or by any other person who is not related to the taxpayer to whom exemption under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act is granted4 7,b7 ,insufficient testing population ,for purposes of this section1 the testing population in the ,united ,states is insufficient if there are not within the ,united ,states the number of available and appropriate human subjects needed to produce reliable and timely data from the clinical investigation4 7#c7 ,certain rules made applicable ,rules similar to the rules of paragraphs 7#a7 and 7#b7 of section #da7;f7 shall apply for purposes of this section4 7#d7 ,election ,this section shall apply to any taxpayer for any taxable year only if such taxpayer elects 7at such time and in such manner as the ,secretary may by regulations prescribe7 to have this section apply for such taxable year4 7e7 ,transferability 7#a7 ,in general ,any taxpayer holding a credit under this section may transfer for valuable consideration unused but otherwise allowable credit for use by a qualified pharmaceutical research taxpayer4 ,a taxpayer that transfers any amount of credit under this section shall file a notification of such transfer to the ,secretary in accordance with procedures and forms prescribed by the ,secretary4 7#b7 ,use of transferred credit ,any qualified pharmaceutical research taxpayer that receives credit that has been transferred shall use such credit for the taxable year in which the transfer occurred4 ,any unused amounts of such credit may be carried back or forward to other taxable years in accordance with section #ci4 7#c7 ,definition of qualified pharmaceutical research taxpayer ,for purposes of this section1 the term qualified pharmaceutical research taxpayer means any domestic corporation the primary mission of which is pharmaceutical research or development4 4 7b7 ,made part of business credit ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#ce71 by striking the period at the end of paragraph 7#cf7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cg7 the qualified infectious disease product credit determined under section #de,s7a74 4 7c7 ,clerical amendments ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 #de,s4 ,clinical testing expenses for qualified infectious disease products4 4 7d7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred after the date of the enactment of this ,act4 #c4 ,clinical testing expenses for rapid infectious diseases diagnostic tests 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #b1 is amended by adding at the end the following new section3 #de,t4 ,clinical testing expenses for rapid infectious diseases diagnostic tests 7a7 ,general rule ,for purposes of section #ch1 the credit determined under this section for the taxable year is an amount equal to #ej percent of the qualified clinical testing expenses for the taxable year4 7b7 ,qualified clinical testing expenses ,for purposes of this section-- 7#a7 ,qualified clinical testing expenses 7,a7 ,in general ,except as otherwise provided in this paragraph1 the term qualified clinical testing expenses means the amounts which are paid or incurred by the taxpayer during the taxable year which would be described in subsection 7b7 of section #da if such subsection were applied with the modifications set forth in subparagraph 7,b74 7,b7 ,modifications ,for purposes of subparagraph 7,a71 subsection 7b7 of section #da shall be applied-- 7i7 by substituting clinical testing for qualified research each place it appears in paragraphs 7#b7 and 7#c7 of such subsection1 and 7ii7 by substituting #ajj percent for #fe percent in paragraph 7#c77;,a7 of such subsection4 7,c7 ,exclusion for amounts funded by grants1 etc ,the term qualified clinical testing expenses shall not include any amount to the extent such amount is funded by any grant1 contract1 or otherwise by another person 7or any governmental entity74 7,d7 ,special rule ,for purposes of this paragraph1 section #da shall be deemed to remain in effect for periods after enactment of this section4 7#b7 ,clinical testing 7,a7 ,in general ,the term clinical testing means any human clinical testing-- 7i7 which is carried out under an exemption for a device being tested under section #ebj7;g7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7or regulations issued under such section71 7ii7 which is related only to such use as a qualified rapid infectious diseases diagnostic test1 7iii7 which occurs before the date on which an application with respect to such device receives premarket approval1 if required1 under section #eae of such ,act1 or receives clearance1 if required1 under section #eaj7k7 of such ,act1 and 7iv7 which is conducted by or on behalf of the taxpayer to whom the exemption under section #ebj7;g7 of such ,act was granted4 7c7 ,coordination with credit for increasing research expenditures 7#a7 ,in general ,except as provided in paragraph 7#b71 any qualified clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section #da for such taxable year4 7#b7 ,expenses included in determining base period research expenses ,any qualified clinical testing expenses for any taxable year which are qualified research expenses 7within the meaning of section #da7;b77 shall be taken into account in determining base period research expenses for purposes of applying section #da to subsequent taxable years4 7d7 ,definitions and special rules 7#a7 ,qualified rapid infectious diseases diagnostic test ,for purposes of this section1 the term qualified rapid infectious diseases diagnostic test means an in-vitro diagnostic 7,,ivd7 device that provides results in less than four hours and that is used to identify or detect the presence1 concentration1 or characteristics of a serious or life-threatening infection1 including those caused by 7#a7 an antibacterial or antifungal resistant pathogen1 including novel or emerging infectious pathogens or 7#b7 qualifying pathogens listed by the ,secretary of ,health and ,human ,services under ,chapter ,v 7#ba ,u4,s4,c4 #cea et seq47 section #eje;,e7f74 7#b7 ,special limitation on foreign testing 7,a7 ,in general ,no credit shall be allowed under this section with respect to any clinical testing conducted outside the ,united ,states unless-- 7i7 such testing is conducted outside the ,united ,states because there is an insufficient testing population in the ,united ,states1 and 7ii7 such testing is conducted by a ,united ,states person or by any other person who is not related to the taxpayer to whom the exemption under section #ebj7;g7 of ,federal ,food1 ,drug1 and ,cosmetic ,act was granted4 7,b7 ,insufficient testing population ,for purposes of this section1 the testing population in the ,united ,states is insufficient if there are not within the ,united ,states the number of available and appropriate human subjects needed to produce reliable and timely data from the clinical investigation4 7#c7 ,certain rules made applicable ,rules similar to the rules of paragraphs 7#a7 and 7#b7 of section #da7;f7 shall apply for purposes of this section4 7#d7 ,election ,this section shall apply to any taxpayer for any taxable year only if such taxpayer elects 7at such time and in such manner as the ,secretary may by regulations prescribe7 to have this section apply for such taxable year4 7e7 ,transferability 7#a7 ,in general ,any taxpayer holding a credit under this section may transfer for valuable consideration unused but otherwise allowable credit for use by a qualified diagnostics research taxpayer4 ,a taxpayer that transfers any amount of credit under this section shall file a notification of such transfer to the ,secretary in accordance with procedures and forms prescribed by the ,secretary4 7#b7 ,use of transferred credit ,any qualified diagnostics research taxpayer that receives credit that has been transferred shall use such credit for the taxable year in which the transfer occurred4 ,any unused amounts of such credit may be carried back or forward to other taxable years in accordance with section #ci4 7#c7 ,definition of qualified diagnostics research taxpayer ,for purposes of this section1 the term qualified diagnostics research taxpayer means any domestic corporation that derives-- 7,a7 any gross income from research or development on diagnostic tests used to identify or detect the presence1 concentration or characteristics of a serious or life-threatening infectious disease or pathogen2 or 7,b7 any gross income from research or development on qualified infectious disease products within the meaning given to such term in section #eje;,e7g7 of the ,federal1 ,food1 ,drug1 and ,cosmetic ,act2 or 7,c7 more than #ej percent of its gross income from activities related to health care4 4 7b7 ,made part of business credit ,section #ch7;b7 of such ,code1 as amended by section #b1 is amended by striking plus at the end of paragraph 7#cf71 by striking the period at the end of paragraph 7#cg7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#ch7 the credit determined under section #de,t7a74 4 7c7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by section #b1 is amended by adding at the end the following new item3 ,sec4 #de,t4 ,clinical testing expenses for rapid infectious diseases diagnostic tests4 4 7d7 ,effective date ,the amendment made by this section shall apply to amounts paid or incurred after the date of the enactment of this ,act4