I 

118TH CONGRESS 

2D SESSION H. R. 7539 

To require the Secretary of the Treasury to guarantee BioBonds in order 

to provide funding for loans to eligible biomedical companies and universities to carry out clinical trials approved by the Food and Drug Administration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 5, 2024 

Mr. FITZPATRICK (for himself and Mr. BISHOP of Georgia) introduced the 

following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To require the Secretary of the Treasury to guarantee 

BioBonds in order to provide funding for loans to eligible 

biomedical companies and universities to carry out clinical trials approved by the Food and Drug Administration, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Long-term Opportuni5 ties for Advancing New Studies for Biomedical Research 

6 Act’’ or the ‘‘LOANS for Biomedical Research Act’’. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
2 

•HR 7539 IH

1 SEC. 2. BIOBONDS PROGRAM. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 date of enactment of this Act, the Secretary of the Treas4 ury, in consultation with the Secretary of Health and 

5 Human Services, shall establish a program, to be known 

6 as the ‘‘BioBonds Program’’, to increase innovative bio7 medical research into therapies to address unmet medical 

8 needs, under which biomedical researchers seeking to con9 duct clinical trials with respect to a drug or device, but 

10 who cannot secure appropriate funding to conduct such 

11 trials, receive financial assistance through— 

12 (1) the purchasing of loans by fiscal agents 

13 under section 3; and 

14 (2) the sale and guarantee of BioBonds 

15 collateralized by such loans under section 4. 

16 (b) BIOMEDICAL RESEARCHERS ELIGIBLE FOR FI17 NANCIAL ASSISTANCE.— 

18 (1) IN GENERAL.—A person shall be eligible to 

19 receive a loan under the BioBonds Program if such 

20 person is conducting or seeking to conduct research 

21 with respect to a drug or device that is— 

22 (A) intended for use to meet an unmet 

23 medical need (as determined by the Secretary of 

24 Health and Human Services); and 

25 (B) under investigation in a controlled 

26 clinical trial under— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
3 

•HR 7539 IH

1 (i) an investigational drug application 

2 in effect under section 505(i) of the Fed3 eral Food, Drug, and Cosmetic Act (21 

4 U.S.C. 355(i)) or section 351(a)(3) of the 

5 Public Health Service Act (42 U.S.C. 

6 262(a)(3)) (as applicable); or 

7 (ii) an investigational device exemp8 tion in effect under section 520(g) of the 

9 Federal Food, Drug, and Cosmetic Act (21 

10 U.S.C. 360j(g)). 

11 (2) RULEMAKING.—The Secretary of the Treas12 ury, in consultation with the Secretary of Health 

13 and Human Services, shall issue rules to carry out 

14 this subsection. 

15 SEC. 3. PURCHASE OF LOANS BY FISCAL AGENTS. 

16 (a) IN GENERAL.—Fiscal agents shall purchase 

17 loans— 

18 (1) made to an eligible recipient under section 

19 2(b) for the purpose of conducting the applicable 

20 clinical trial described in that section; and 

21 (2) with respect to which the fiscal agent deter22 mines that the borrower has the ability to repay the 

23 loan, based on collateral and financial capabilities 

24 and not on the prospects for success of the clinical 

25 trial. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
4 

•HR 7539 IH

1 (b) PRIORITY FOR PURCHASE OF LOANS.—The Sec2 retary of the Treasury shall issue rules to require fiscal 

3 agents, in purchasing loans under this section, to purchase 

4 loans with respect to a diverse range of biomedical projects 

5 and not to favor one disease or disability, and to give pri6 ority to loans with potential to address unmet public 

7 health needs across the spectrum of diseases and disabil8 ities; 

9 (c) MAXIMUM LOAN AMOUNT.—A fiscal agent may 

10 not purchase loans in any one year with respect to a single 

11 recipient in an amount more than $25,000,000. 

12 (d) LOAN TERMS AND CONDITIONS.— 

13 (1) IN GENERAL.—The Secretary of the Treas14 ury, in consultation with the Secretary of Health 

15 and Human Services, shall issue rules— 

16 (A) to establish criteria for the terms for 

17 loans that are eligible for purchase under this 

18 section; 

19 (B) to establish criteria for the interest 

20 rate for loans that are eligible for purchase 

21 under this section, which shall be based on ap22 plicable rates for obligations of the Department 

23 of the Treasury of comparable maturity plus a 

24 rate to be determined by the Secretary of the 

25 Treasury to reflect— 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
5 

•HR 7539 IH

1 (i) prevailing market conditions; 

2 (ii) taxpayer protection; and 

3 (iii) the need to ensure ample funding 

4 for clinical trials described in section 2; 

5 (C) in accordance with paragraph (2), to 

6 establish an upfront fee of not greater than 1 

7 percent of each loan principal amount at origi8 nation to cover administrative and financing 

9 costs associated with the loans eligible for pur10 chase under this section; and 

11 (D) to permit the use of warrants and 

12 similar instruments with respect to loans that 

13 are eligible for purchase under this section, 

14 where necessary to protect taxpayer interests. 

15 (2) FEES.— 

16 (A) IN GENERAL.—Fees established under 

17 paragraph (1)(C) shall be financed by addition 

18 of the appropriate amount reflecting each up19 front fee to the balance of each loan upon origi20 nation and shall be collected in concert with all 

21 loan payments collected by the fiscal agent. 

22 (B) REQUIREMENT.—If a loan is repaid 

23 ahead of its stated maturity, becomes delin24 quent, or defaults, then the full unpaid balance 

25 of a fee established under paragraph (1)(C) 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
6 

•HR 7539 IH

1 that remains at such time shall be added to the 

2 principal that must be fully satisfied. 

3 SEC. 4. BIOBONDS. 

4 (a) ISSUANCE.—Each fiscal agent that purchases a 

5 loan under section 3 shall issue bonds, to be known as 

6 ‘‘BioBonds’’, collateralized by such loans, and sell the 

7 BioBonds to investors. 

8 (b) BIOBOND GUARANTEE.—The Secretary of the 

9 Treasury shall provide a guarantee of not greater than 

10 90 percent of the payment of principal (but not the pay11 ment of interest) for a BioBond. 

12 (c) AUCTIONS.—The Secretary of the Treasury 

13 may— 

14 (1) authorize fiscal agents to use an auction to 

15 select the purchasers of BioBonds; and 

16 (2) require such auction to include a process 

17 that minimizes the risk to the Federal Government 

18 of the Federal guarantee involved by allowing bid19 ders for a BioBond to compete against each other by 

20 bidding on the percentage of the Federal guarantee 

21 under subsection (b) with respect to the BioBond, 

22 with the bid for the lowest percentage winning the 

23 auction, taking into account other terms and condi24 tions set by the issuer to ensure the lowest total cost 

25 to the Federal Government. 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
7 

•HR 7539 IH

1 (d) PORTFOLIO DIVERSITY.—With respect to an 

2 issuance of BioBonds and the loans collateralizing such 

3 issuance, not greater than 15 percent of the principal 

4 amount of such issuance may relate to a group of related 

5 diseases or disabilities (as defined by the Secretary of 

6 Health and Human Services). 

7 (e) PRIORITIZATION OF TAXPAYER INTERESTS.—All 

8 proceeds received from Biobond issuance shall be invested 

9 in obligations of the Federal Government in order to en10 sure a revenue stream in addition to loan repayment that 

11 protects taxpayers. All BioBonds shall be structured to 

12 give first priority to protecting the interests of the United 

13 States by ensuring that— 

14 (1) all cash proceeds received from the repay15 ment of a BioBond and income derived from loan16 proceed reinvestment are first used to reduce the 

17 amount of principal guaranteed by the Secretary of 

18 the Treasury; 

19 (2) the Secretary of the Treasury has a senior 

20 claim on all assets and collateral under a BioBond 

21 to the extent the guarantee provided by the Sec22 retary is not extinguished; and 

23 (3) to the extent that a Biobond is fully repaid 

24 without resort to the guarantee, all proceeds from 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
8 

•HR 7539 IH

1 reinvested funds shall be the property of the United 

2 States. 

3 (f) RULE OF CONSTRUCTION.—Nothing in this sec4 tion may be construed to prohibit underwriters from vary5 ing terms and conditions consistent with the rules issued 

6 by the Secretary of the Treasury with respect to 

7 BioBonds. 

8 SEC. 5. FISCAL AGENTS. 

9 (a) IN GENERAL.—The Secretary of the Treasury 

10 shall contract with institutions to carry out the duties of 

11 fiscal agents under this Act, under such criteria as the 

12 Secretary determines appropriate. 

13 (b) SOUND UNDERWRITING PRACTICES.—The Sec14 retary of the Treasury shall issue rules to ensure that fis15 cal agents use sound underwriting practices that protect 

16 the interests of— 

17 (1) the United States; 

18 (2) BioBond investors; and 

19 (3) the long-term promotion of innovative bio20 medical research into therapies to address unmet 

21 medical needs. 

22 (c) COMPENSATION.—A fiscal agent shall be com23 pensated for performing duties under this Act from the 

24 proceeds from the sale of Biobonds issued by the fiscal 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
9 

•HR 7539 IH

1 agent, at such rate and on such terms as the Secretary 

2 of the Treasury may provide. 

3 (d) RULEMAKING.—Not later than 180 days after the 

4 date of enactment of this Act, the Secretary of the Treas5 ury shall issue final rules to carry out this section. 

6 SEC. 6. REPORTS. 

7 (a) GAO STUDY AND REPORTS ON OTHER RE8 SEARCH PROJECTS.— 

9 (1) ONGOING STUDY.—The Comptroller Gen10 eral of the United States shall carry out an ongoing 

11 study to consider whether a program similar to the 

12 BioBonds Program should be established for other 

13 biomedical research projects. 

14 (2) REPORT.—The Comptroller General shall 

15 issue a report to the Congress, not less frequently 

16 than annually, on all findings and determinations 

17 made in carrying out the study required under para18 graph (1). 

19 (b) REPORTS ON THE BIOBONDS PROGRAM.—Not 

20 later than 2 years after the date on which BioBonds are 

21 first issued, and annually thereafter during the period 

22 ending on the date that is 4 years after the date on which 

23 BioBonds are first issued, the Comptroller General and 

24 the Secretary of the Treasury, in consultation with the 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
10 

•HR 7539 IH

1 Secretary of Health and Human Services, shall each issue 

2 a separate report to the Congress on— 

3 (1) the progress of the issuance of BioBonds; 

4 (2) the reasons for any problems achieving de5 sired volumes of BioBonds or the ability of the 

6 BioBonds Program to proceed at a faster pace; 

7 (3) an analysis of the risk to the Government 

8 in providing the Federal guarantee described under 

9 section 4(b); 

10 (4) any recommended improvements to the 

11 BioBonds Program; and 

12 (5) any other matter that the Comptroller Gen13 eral or the Secretary, respectively, determines is ap14 propriate. 

15 SEC. 7. AUTHORIZATION OF APPROPRIATIONS. 

16 (a) IN GENERAL.—There is authorized to be appro17 priated to the Secretary of the Treasury to pay for the 

18 cost of guaranteeing BioBonds under this Act 

19 $10,000,000,000 for each of fiscal years 2025, 2026, and 

20 2027. 

21 (b) PROGRAM FUNDING.— 

22 (1) ADMINISTRATIVE EXPENSES PAID FROM

23 BOND SALES.—Except as provided under paragraph 

24 (2), the cost of carrying out this Act, including the 

25 cost to the Secretary of the Treasury in adminVerDate Sep 11 2014 23:52 Mar 08, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7539.IH H7539

kjohnson on DSK7ZCZBW3PROD with $$_JOB
11 

•HR 7539 IH

1 istering the BioBond Program, shall be recovered 

2 from the proceeds from the sale of BioBonds or 

3 from fees as set forth in paragraph (3). 

4 (2) SPECIFIC APPROPRIATION OR CONTRIBU5 TION.—No guarantee shall be made under this Act 

6 unless— 

7 (A) an appropriation for the full cost of 

8 the guarantee has been made; 

9 (B) the Secretary has received from the 

10 BioBond issuer a payment in full for the cost 

11 of the guarantee; or 

12 (C) a combination of an appropriation and 

13 the deposit of a payment from the BioBond 

14 issuer has been made in a sufficient amount to 

15 cover the full cost of the guarantee. 

16 (3) GUARANTEE FEES.—The Secretary of the 

17 Treasury shall charge and collect fees for guarantees 

18 under this Act in amounts the Secretary determines 

19 are sufficient to recover applicable administrative ex20 penses, and such fees— 

21 (A) shall be available to the Secretary, 

22 without further appropriation, to pay for the 

23 administrative expenses related to guarantees 

24 under this Act; and 


kjohnson on DSK7ZCZBW3PROD with $$_JOB
12 

•HR 7539 IH

1 (B) are authorized to remain available 

2 until expended. 

3 SEC. 8. DEFINITIONS. 

4 In this Act, the following definitions apply: 

5 (1) COST.—The term ‘‘cost’’ has the meaning 

6 given to the term ‘‘cost of a loan guarantee’’ in sec7 tion 502(5)(C) of the Federal Credit Reform Act of 

8 1990 (2 U.S.C. 661a(5)(C)). 

9 (2) ELIGIBLE RECIPIENT.—The term ‘‘eligible 

10 recipient’’ means a person described under section 

11 2(b). 

12 (3) FISCAL AGENT.—The term ‘‘fiscal agent’’ 

13 means a person selected as a fiscal agent under sec14 tion 5(a). 

Æ 


kjohnson on DSK7ZCZBW3PROD with $$_JOB