,i #aahth ,,congress #b;d ,session ,h4 ,r4 #geci ,,in ,,the ,,house ,,of ,,representatives ,march #e1 #bjbd,mr4 ,fitzpatrick 7for himself and ,mr4 ,bishop of ,georgia7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to require the ,secretary of the ,treasury to guarantee ,bio,bonds in order to provide funding for loans to eligible biomedical companies and universities to carry out clinical trials approved by the ,food and ,drug ,administration1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,long-term ,opportunities for ,advancing ,new ,studies for ,biomedical ,research ,act or the ,,loans for ,biomedical ,research ,act4 #b4 ,biobonds program 7a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary of the ,treasury1 in consultation with the ,secretary of ,health and ,human ,services1 shall establish a program1 to be known as the ,bio,bonds ,program1 to increase innovative biomedical research into therapies to address unmet medical needs1 under which biomedical researchers seeking to conduct clinical trials with respect to a drug or device1 but who cannot secure appropriate funding to conduct such trials1 receive financial assistance through-- 7#a7 the purchasing of loans by fiscal agents under section #c2 and 7#b7 the sale and guarantee of ,bio,bonds collateralized by such loans under section #d4 7b7 ,biomedical researchers eligible for financial assistance 7#a7 ,in general ,a person shall be eligible to receive a loan under the ,bio,bonds ,program if such person is conducting or seeking to conduct research with respect to a drug or device that is-- 7,a7 intended for use to meet an unmet medical need 7as determined by the ,secretary of ,health and ,human ,services72 and 7,b7 under investigation in a controlled clinical trial under-- 7i7 an investigational drug application in effect under section #eje7;i7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;i77 or section #cea7;a77#c7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb7;a77#c77 7as applicable72 or 7ii7 an investigational device exemption in effect under section #ebj7;g7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cfj;j7g774 7#b7 ,rulemaking ,the ,secretary of the ,treasury1 in consultation with the ,secretary of ,health and ,human ,services1 shall issue rules to carry out this subsection4 #c4 ,purchase of loans by fiscal agents 7a7 ,in general ,fiscal agents shall purchase loans-- 7#a7 made to an eligible recipient under section #b7;b7 for the purpose of conducting the applicable clinical trial described in that section2 and 7#b7 with respect to which the fiscal agent determines that the borrower has the ability to repay the loan1 based on collateral and financial capabilities and not on the prospects for success of the clinical trial4 7b7 ,priority for purchase of loans ,the ,secretary of the ,treasury shall issue rules to require fiscal agents1 in purchasing loans under this section1 to purchase loans with respect to a diverse range of biomedical projects and not to favor one disease or disability1 and to give priority to loans with potential to address unmet public health needs across the spectrum of diseases and disabilities2 7c7 ,maximum loan amount ,a fiscal agent may not purchase loans in any one year with respect to a single recipient in an amount more than #be1jjj1jjj4 7d7 ,loan terms and conditions 7#a7 ,in general ,the ,secretary of the ,treasury1 in consultation with the ,secretary of ,health and ,human ,services1 shall issue rules-- 7,a7 to establish criteria for the terms for loans that are eligible for purchase under this section2 7,b7 to establish criteria for the interest rate for loans that are eligible for purchase under this section1 which shall be based on applicable rates for obligations of the ,department of the ,treasury of comparable maturity plus a rate to be determined by the ,secretary of the ,treasury to reflect-- 7i7 prevailing market conditions2 7ii7 taxpayer protection2 and 7iii7 the need to ensure ample funding for clinical trials described in section #b2 7,c7 in accordance with paragraph 7#b71 to establish an upfront fee of not greater than #a percent of each loan principal amount at origination to cover administrative and financing costs associated with the loans eligible for purchase under this section2 and 7,d7 to permit the use of warrants and similar instruments with respect to loans that are eligible for purchase under this section1 where necessary to protect taxpayer interests4 7#b7 ,fees 7,a7 ,in general ,fees established under paragraph 7#a77;,c7 shall be financed by addition of the appropriate amount reflecting each upfront fee to the balance of each loan upon origination and shall be collected in concert with all loan payments collected by the fiscal agent4 7,b7 ,requirement ,if a loan is repaid ahead of its stated maturity1 becomes delinquent1 or defaults1 then the full unpaid balance of a fee established under paragraph 7#a77;,c7 that remains at such time shall be added to the principal that must be fully satisfied4 #d4 ,bio,bonds 7a7 ,issuance ,each fiscal agent that purchases a loan under section #c shall issue bonds1 to be known as ,bio,bonds1 collateralized by such loans1 and sell the ,bio,bonds to investors4 7b7 ,bio,bond guarantee ,the ,secretary of the ,treasury shall provide a guarantee of not greater than #ij percent of the payment of principal 7but not the payment of interest7 for a ,bio,bond4 7c7 ,auctions ,the ,secretary of the ,treasury may-- 7#a7 authorize fiscal agents to use an auction to select the purchasers of ,bio,bonds2 and 7#b7 require such auction to include a process that minimizes the risk to the ,federal ,government of the ,federal guarantee involved by allowing bidders for a ,bio,bond to compete against each other by bidding on the percentage of the ,federal guarantee under subsection 7b7 with respect to the ,bio,bond1 with the bid for the lowest percentage winning the auction1 taking into account other terms and conditions set by the issuer to ensure the lowest total cost to the ,federal ,government4 7d7 ,portfolio diversity ,with respect to an issuance of ,bio,bonds and the loans collateralizing such issuance1 not greater than #ae percent of the principal amount of such issuance may relate to a group of related diseases or disabilities 7as defined by the ,secretary of ,health and ,human ,services74 7e7 ,prioritization of taxpayer interests ,all proceeds received from ,biobond issuance shall be invested in obligations of the ,federal ,government in order to ensure a revenue stream in addition to loan repayment that protects taxpayers4 ,all ,bio,bonds shall be structured to give first priority to protecting the interests of the ,united ,states by ensuring that-- 7#a7 all cash proceeds received from the repayment of a ,bio,bond and income derived from loan-proceed reinvestment are first used to reduce the amount of principal guaranteed by the ,secretary of the ,treasury2 7#b7 the ,secretary of the ,treasury has a senior claim on all assets and collateral under a ,bio,bond to the extent the guarantee provided by the ,secretary is not extinguished2 and 7#c7 to the extent that a ,biobond is fully repaid without resort to the guarantee1 all proceeds from reinvested funds shall be the property of the ,united ,states4 7f7 ,rule of construction ,nothing in this section may be construed to prohibit underwriters from varying terms and conditions consistent with the rules issued by the ,secretary of the ,treasury with respect to ,bio,bonds4 #e4 ,fiscal agents 7a7 ,in general ,the ,secretary of the ,treasury shall contract with institutions to carry out the duties of fiscal agents under this ,act1 under such criteria as the ,secretary determines appropriate4 7b7 ,sound underwriting practices ,the ,secretary of the ,treasury shall issue rules to ensure that fiscal agents use sound underwriting practices that protect the interests of-- 7#a7 the ,united ,states2 7#b7 ,bio,bond investors2 and 7#c7 the long-term promotion of innovative biomedical research into therapies to address unmet medical needs4 7c7 ,compensation ,a fiscal agent shall be compensated for performing duties under this ,act from the proceeds from the sale of ,biobonds issued by the fiscal agent1 at such rate and on such terms as the ,secretary of the ,treasury may provide4 7d7 ,rulemaking ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary of the ,treasury shall issue final rules to carry out this section4 #f4 ,reports 7a7 ,,gao study and reports on other research projects 7#a7 ,ongoing study ,the ,comptroller ,general of the ,united ,states shall carry out an ongoing study to consider whether a program similar to the ,bio,bonds ,program should be established for other biomedical research projects4 7#b7 ,report ,the ,comptroller ,general shall issue a report to the ,congress1 not less frequently than annually1 on all findings and determinations made in carrying out the study required under paragraph 7#a74 7b7 ,reports on the ,bio,bonds ,program ,not later than #b years after the date on which ,bio,bonds are first issued1 and annually thereafter during the period ending on the date that is #d years after the date on which ,bio,bonds are first issued1 the ,comptroller ,general and the ,secretary of the ,treasury1 in consultation with the ,secretary of ,health and ,human ,services1 shall each issue a separate report to the ,congress on-- 7#a7 the progress of the issuance of ,bio,bonds2 7#b7 the reasons for any problems achieving desired volumes of ,bio,bonds or the ability of the ,bio,bonds ,program to proceed at a faster pace2 7#c7 an analysis of the risk to the ,government in providing the ,federal guarantee described under section #d7;b72 7#d7 any recommended improvements to the ,bio,bonds ,program2 and 7#e7 any other matter that the ,comptroller ,general or the ,secretary1 respectively1 determines is appropriate4 #g4 ,authorization of appropriations 7a7 ,in general ,there is authorized to be appropriated to the ,secretary of the ,treasury to pay for the cost of guaranteeing ,bio,bonds under this ,act #aj1jjj1jjj1jjj for each of fiscal years #bjbe1 #bjbf1 and #bjbg4 7b7 ,program funding 7#a7 ,administrative expenses paid from bond sales ,except as provided under paragraph 7#b71 the cost of carrying out this ,act1 including the cost to the ,secretary of the ,treasury in administering the ,bio,bond ,program1 shall be recovered from the proceeds from the sale of ,bio,bonds or from fees as set forth in paragraph 7#c74 7#b7 ,specific appropriation or contribution ,no guarantee shall be made under this ,act unless-- 7,a7 an appropriation for the full cost of the guarantee has been made2 7,b7 the ,secretary has received from the ,bio,bond issuer a payment in full for the cost of the guarantee2 or 7,c7 a combination of an appropriation and the deposit of a payment from the ,bio,bond issuer has been made in a sufficient amount to cover the full cost of the guarantee4 7#c7 ,guarantee fees ,the ,secretary of the ,treasury shall charge and collect fees for guarantees under this ,act in amounts the ,secretary determines are sufficient to recover applicable administrative expenses1 and such fees-- 7,a7 shall be available to the ,secretary1 without further appropriation1 to pay for the administrative expenses related to guarantees under this ,act2 and 7,b7 are authorized to remain available until expended4 #h4 ,definitions ,in this ,act1 the following definitions apply3 7#a7 ,cost ,the term cost has the meaning given to the term cost of a loan guarantee in section #ejb7e77;,c7 of the ,federal ,credit ,reform ,act of #aiij 7#b ,u4,s4,c4 #ffa;a7#e77;,c774 7#b7 ,eligible recipient ,the term eligible recipient means a person described under section #b7;b74 7#c7 ,fiscal agent ,the term fiscal agent means a person selected as a fiscal agent under section #e7;a74