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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1698 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1698

   To accelerate efforts to develop vaccines for diseases primarily 
         affecting developing countries and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 14, 2005

 Mr. Kerry (for himself and Mr. Lugar) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To accelerate efforts to develop vaccines for diseases primarily 
         affecting developing countries and for other purposes.

    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 ``Vaccines for the New Millennium Act 
of 2005''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) AIDS.--The term ``AIDS'' has the meaning given the term 
        in section 104A(g) of the Foreign Assistance Act of 1961 (22 
        U.S.C. 2151b-2).
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committee on 
        Appropriations and the Committee on Foreign Relations of the 
        Senate and the Committee on Appropriations and the Committee on 
        International Relations of the House of Representatives.
            (3) Developing country.--The term ``developing country'' 
        means a country that the World Bank determines to be a country 
        with a lower middle income or less.
            (4) HIV/AIDS.--The term ``HIV/AIDS'' has the meaning given 
        the term in section 104A(g) of the Foreign Assistance Act of 
        1961 (22 U.S.C. 2151b-2).
            (5) Global alliance for vaccines and immunizations.--The 
        term ``Global Alliance for Vaccines and Immunizations'' means 
        the public-private partnership launched in 2000 for the purpose 
        of saving the lives of children and protecting the health of 
        all people through the widespread use of vaccines.
            (6) Neglected disease.--The term ``neglected disease'' 
        means--
                    (A) HIV/AIDS;
                    (B) malaria;
                    (C) tuberculosis; or
                    (D) any infectious disease (of a single etiology), 
                which, according to the World Health Organization, 
                causes more than 1,000,000 deaths each year in 
                developing countries.
            (7) World bank.--The term ``World Bank'' means the 
        International Bank for Reconstruction and Development.

SEC. 3. FINDINGS.

    Congress makes the following findings:
            (1) Immunization is cheap, reliable, and effective, and has 
        made a profound impact on global health, in both rich and poor 
        countries.
            (2) During the 20th century, global immunization efforts 
        have successfully led to the eradication of smallpox and the 
        elimination of polio from the Western Hemisphere, Europe, and 
        most of Asia. Vaccines for diseases such as measles and tetanus 
        have dramatically reduced childhood mortality worldwide, and 
        vaccines for diseases such as influenza, pneumonia, and 
        hepatitis help prevent sickness and death of adults as well as 
        children.
            (3) According to the World Health Organization, combined, 
        AIDS, tuberculosis, and malaria kill more than 5,000,000 people 
        a year, most of whom are in the developing world, yet there are 
        no vaccines for these diseases.
            (4) It is estimated that just 10 percent of the world's 
        research and development on health is targeted on diseases 
        affecting 90 percent of the world's population.
            (5) Economic disincentives result in little private sector 
        investment in vaccines for neglected diseases, a situation 
        which disproportionately affects populations in developing 
        countries.
            (6) Of more than $100,000,000,000 spent on health research 
        and development across the world, only $6,000,000,000 is spent 
        each year on diseases that are specific to developing 
        countries, most of which is from public and philanthropic 
        sources.
            (7) Infants, children, and adolescents are among the 
        populations hardest hit by AIDS and malaria, but they are at 
        risk of being left behind in the search for effective vaccines 
        against such diseases.
            (8) Providing a broad range of economic incentives to 
        increase private sector research on neglected diseases, 
        including increased public and private sector funding for 
        research and development, guaranteed markets, tax credits, and 
        improved regulatory procedures would increase the number of 
        products in development and the likelihood of finding effective 
        vaccines for such diseases.

SEC. 4. SENSE OF CONGRESS ON SUPPORT FOR NEGLECTED DISEASES.

    It is the sense of Congress that--
            (1) the President should continue to encourage efforts to 
        support the Global HIV Vaccine Enterprise, a virtual consortium 
        of scientists and organizations committed to accelerating the 
        development of an effective HIV vaccine;
            (2) the United States should work with the Global Fund to 
        Fight AIDS, Tuberculosis and Malaria, the Joint United Nations 
        Programme on HIV/AIDS (``UNAIDS''), the World Health 
        Organization, the International AIDS Vaccine Initiative, and 
        the World Bank to ensure that all countries heavily affected by 
        the HIV/AIDS pandemic have national AIDS vaccine plans;
            (3) the United States should support and encourage the 
        carrying out of the agreements of the Group of 8 made at the 
        2005 Summit at Gleneagles, Scotland, to increase direct 
        investment and create market incentives, including through 
        public-private partnerships and advance market commitments, to 
        complement public research in the development of vaccines, 
        microbicides, and drugs for HIV/AIDS, malaria, tuberculosis, 
        and other neglected diseases;
            (4) the United States should support testing of promising 
        vaccines in infants, children, and adolescents as early as is 
        medically and ethically appropriate, in order to avoid 
        significant delays in the availability of pediatric vaccines at 
        the cost of thousands of lives;
            (5) the United States should continue supporting the work 
        of the Global Alliance for Vaccines and Immunizations and the 
        Global Fund for Children's Vaccines as appropriate and 
        effective vehicles to purchase and distribute vaccines for 
        neglected diseases at an affordable price once such vaccines 
        are discovered in order to distribute them to the developing 
        world; and
            (6) the United States should work with others in the 
        international community to address the multiple obstacles to 
        the development of vaccines for neglected diseases including 
        scientific barriers, insufficient economic incentives, 
        protracted regulatory procedures, lack of delivery systems for 
        products once developed, liability risks, and intellectual 
        property rights.

SEC. 5. PUBLIC-PRIVATE PARTNERSHIPS.

    (a) Findings.--Congress makes the following findings:
            (1) Creative partnerships between governments and 
        organizations in the private sector (including foundations, 
        universities, corporations including pharmaceutical companies 
        and biotechnology firms, community-based organizations and 
        other nongovernmental organizations) are playing a critical 
        role in the area of global health, particularly in the fight 
        against neglected diseases, including HIV/AIDS, tuberculosis, 
        and malaria.
            (2) Public-private sector partnerships increase local and 
        international capacities to improve the delivery of health 
        services in developing countries and to accelerate research and 
        development of vaccines and other preventive medical 
        technologies essential to combating infectious diseases that 
        disproportionately kill people in developing countries.
            (3) These partnerships maximize the unique capabilities of 
        each sector while combining financial and other resources, 
        scientific knowledge, and expertise toward common goals which 
        cannot be achieved by either sector alone.
            (4) Public-private partnerships such as the International 
        AIDS Vaccine Initiative, the Malaria Vaccine Initiative, and 
        the Global TB Drug Facility are playing cutting edge roles in 
        the efforts to develop vaccines for these diseases.
            (5) Public-private partnerships serve as incentives to the 
        research and development of vaccines for neglected diseases by 
        providing biotechnology companies, which often have no 
        experience in developing countries, with technical assistance 
        and on the ground support for clinical trials of the vaccine 
        through the various stages of development.
            (6) Sustaining existing public-private partnerships and 
        building new ones where needed are essential to the success of 
        the efforts by the United States and others in the 
        international community to find a cure for these and other 
        neglected diseases.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) the sustainment and promotion of public-private 
        partnerships must be a central element of the strategy pursued 
        by the United States to create effective incentives for the 
        development of vaccines and other preventive medical 
        technologies for neglected diseases debilitating the developing 
        world; and
            (2) the United States Government should take steps to 
        address the obstacles to the development of these technologies 
        by increasing investment in research and development and 
        establishing market and other incentives.
    (c) Policy.--It is the policy of the United States to accelerate 
research and development for vaccines and microbicides for neglected 
diseases by substantially increasing funding for public-private 
partnerships that invest directly in research, such as the 
International AIDS Vaccine Initiative, the Malaria Vaccine Initiative, 
and the Global TB Drug Facility, and for partnerships such as the 
Vaccine Fund that incentivize the development of new vaccines by 
purchase existing vaccines.

SEC. 6. COMPREHENSIVE STRATEGY FOR ACCELERATING THE DEVELOPMENT OF 
              VACCINES FOR NEGLECTED DISEASES.

    (a) Requirement for Strategy.--The President shall establish a 
comprehensive strategy to accelerate efforts to develop vaccines and 
microbicides for neglected diseases such as HIV/AIDS, malaria, and 
tuberculosis. Such strategy shall--
            (1) expand public-private partnerships and the leveraging 
        of resources from other countries and the private sector;
            (2) include initiatives to create economic incentives for 
        the research, development, and manufacturing of vaccines for 
        HIV/AIDS, tuberculosis, malaria, and other neglected diseases;
            (3) include the negotiation of advanced market commitments;
            (4) address intellectual property issues surrounding the 
        development of vaccines and microbicidies for neglected 
        diseases;
            (5) maximize United States capabilities to support clinical 
        trials of vaccines and microbicidies in developing countries;
            (6) address the issue of regulatory approval of such 
        vaccines, whether through the Commissioner of the Food and Drug 
        Administration, or the World Health Organization or another 
        internally-recognized and agreed upon entity;
            (7) expand the purchase and delivery of existing vaccines; 
        and
            (8) address the challenges of delivering vaccines in 
        developing countries in advance so as to minimize historical 
        delays in access once vaccines are available.
    (b) Report.--Not later than 270 days after the date of enactment of 
this Act, the President shall submit to the appropriate congressional 
committees a report setting forth the strategy described in subsection 
(a) and the steps to implement such strategy.

SEC. 7. ADVANCED MARKET COMMITMENTS.

    (a) Purpose.--The purpose of this section is to create incentives 
for the private sector to invest in research, development, and 
manufacturing of vaccines for neglected diseases by creating a 
competitive market for future vaccines through advanced market 
commitments.
    (b) Authority to Negotiate.--
            (1) In general.--The Secretary of the Treasury shall enter 
        into negotiations with the appropriate officials of the World 
        Bank, the International Development Association, and Global 
        Alliance for Vaccines and Immunizations, the member nations of 
        such entities, and other interested parties for the purpose of 
        establishing advanced market commitments to purchase vaccines 
        and microbicides to combat neglected diseases.
            (2) Report.--Not later than 180 days after the date of the 
        enactment of this Act, the Secretary shall submit to the 
        appropriate congressional committees a report on the status of 
        the negotiations to create advanced market commitments under 
        this section.
    (c) Requirements.--The Secretary of the Treasury shall work with 
the entities referred to in subsection (b) to ensure that there is an 
international framework for the establishment and implementation of 
advanced market commitments and that such commitments include--
            (1) legally binding contracts for product purchase that 
        include a fair market price for a guaranteed number of 
        treatments to ensure that the market incentive is sufficient;
            (2) clearly defined and transparent rules of competition 
        for qualified developers and suppliers of the product;
            (3) clearly defined requirements for eligible vaccines to 
        ensure that they are safe and effective;
            (4) dispute settlement mechanisms; and
            (5) sufficient flexibility to enable the contracts to be 
        adjusted in accord with new information related to projected 
        market size and other factors while still maintaining the 
        purchase commitment at a fair price.
    (d) Trust Fund.--
            (1) Authority to establish.--On the date that the Secretary 
        of the Treasury determines that a vaccine to combat a neglected 
        disease is available for purchase, the Secretary shall 
        establish in the Treasury of the United States a fund to be 
        known as the Lifesaving Vaccine Purchase Fund consisting of 
        amounts appropriated pursuant to paragraph (4).
            (2) Investment of fund.--Amounts in such Fund shall be 
        invested in accordance with section 9702 of title 31, United 
        States Code, and any interest on, and proceeds from any such 
        investment shall be credited to and become part of the Fund.
            (3) Use of fund.--The Secretary is authorized to expend 
        amounts in such Fund for the purchase of a vaccine to combat a 
        neglected disease pursuant to an advanced market commitment 
        undertaken on behalf of the Government of the United States.
            (4) Authority to accept contributions.--The President may 
        accept and use in furtherance of the purposes of this Act 
        contributions from nongovernmental organizations, international 
        health agencies, the United Nations, the Global Fund to Fight 
        AIDS, Tuberculosis and Malaria, private nonprofit organizations 
        that are organized to support public health research and 
        programs, and any other organizations willing to contribute to 
        the Lifesaving Vaccine Purchase Fund.
            (5) Appropriations.--
                    (A) In general.--For each fiscal year beginning 
                after the date that the Secretary determines that a 
                vaccine to combat a neglected disease is available for 
                purchase, there are authorized to be appropriated out 
                of any funds in the Treasury not otherwise appropriated 
                such sums as may be necessary to carry out the purposes 
                of such Fund.
                    (B) Transfer of funds.--The Secretary shall 
                transfer the amount appropriated under paragraph (1) 
                for a fiscal year to such Fund.
                    (C) Availability.--Amounts appropriated pursuant to 
                this paragraph shall remain available until expended 
                without fiscal year limitation.

SEC. 8. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES 
              AGAINST NEGLECTED DISEASES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45J. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES 
              FOR NEGLECTED DISEASES.

    ``(a) General Rule.--For purposes of section 38, the vaccine 
research credit determined under this section for the taxable year is 
an amount equal to 30 percent of the qualified vaccine research 
expenses for the taxable year.
    ``(b) Qualified Vaccine Research Expenses.--For purposes of this 
section--
            ``(1) Qualified vaccine research expenses.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified vaccine research 
                expenses' means the amounts which are paid or incurred 
                by the taxpayer during the taxable year which would be 
                described in subsection (b) of section 41 if such 
                subsection were applied with the modifications set 
                forth in subparagraph (B).
                    ``(B) Modifications; increased incentive for 
                contract research payments.--For purposes of 
                subparagraph (A), subsection (b) of section 41 shall be 
                applied--
                            ``(i) by substituting `vaccine research' 
                        for `qualified research' each place it appears 
                        in paragraphs (2) and (3) of such subsection, 
                        and
                            ``(ii) by substituting `100 percent' for 
                        `65 percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) Exclusion for amounts funded by grants, 
                etc.--The term `qualified vaccine research expenses' 
                shall not include any amount to the extent such amount 
                is funded by any grant, contract, or otherwise by 
                another person (or any governmental entity).
            ``(2) Vaccine research.--The term `vaccine research' means 
        research to develop vaccines and microbicides for--
                    ``(A) HIV/AIDS (as that term is defined in section 
                104A(g) of the Foreign Assistance Act of 1961 (22 
                U.S.C. 21516-2)),
                    ``(B) malaria,
                    ``(C) tuberculosis, or
                    ``(D) any infectious disease (of a single etiology) 
                which, according to the World Health Organization, 
                causes more than 1,000,000 human deaths each year in 
                developing countries.
    ``(c) Coordination With Credit for Increasing Research 
Expenditures.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        qualified vaccine research expenses for a taxable year to which 
        an election under this section applies shall not be taken into 
        account for purposes of determining the credit allowable under 
        section 41 for such taxable year.
            ``(2) Expenses included in determining base period research 
        expenses.--Any qualified vaccine research expenses for any 
        taxable year which are qualified research expenses (within the 
        meaning of section 41(b)) shall be taken into account in 
        determining base period research expenses for purposes of 
        applying section 41 to subsequent taxable years.
    ``(d) Special Rules.--
            ``(1) Limitations on foreign testing.--No credit shall be 
        allowed under this section with respect to any vaccine research 
        (other than human clinical testing) conducted outside the 
        United States.
            ``(2) Pre-clinical research.--No credit shall be allowed 
        under this section for pre-clinical research unless such 
        research is pursuant to a research plan an abstract of which 
        has been filed with the Secretary before the beginning of such 
        year. The Secretary, in consultation with the Secretary of 
        Health and Human Services, shall prescribe regulations 
        specifying the requirements for such plans and procedures for 
        filing under this paragraph.
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of paragraphs (1) and (2) of section 41(f) shall apply 
        for purposes of this section.
            ``(4) Election.--This section (other than subsection (e)) 
        shall apply to any taxpayer for any taxable year only if such 
        taxpayer elects to have this section apply for such taxable 
        year.
    ``(e) Credit To Be Refundable for Certain Taxpayers.--
            ``(1) In general.--In the case of an electing qualified 
        taxpayer--
                    ``(A) the credit under this section shall be 
                determined without regard to section 38(c), and
                    ``(B) the credit so determined shall be allowed as 
                a credit under subpart C.
            ``(2) Electing qualified taxpayer.--For purposes of this 
        subsection, the term `electing qualified taxpayer' means, with 
        respect to any taxable year, any domestic C corporation if--
                    ``(A) the aggregate gross assets of such 
                corporation at any time during such taxable year are 
                $500,000,000 or less,
                    ``(B) the net income tax (as defined in section 
                38(c)) of such corporation is zero for such taxable 
                year and the 2 preceding taxable years,
                    ``(C) as of the close of the taxable year, the 
                corporation is not under the jurisdiction of a court in 
                a title 11 or similar case (within the meaning of 
                section 368(a)(3)(A)),
                    ``(D) the corporation provides such assurances as 
                the Secretary requires that, not later than 2 taxable 
                years after the taxable year in which the taxpayer 
                receives any refund of a credit under this subsection, 
                the taxpayer will make an amount of qualified vaccine 
                research expenses equal to the amount of such refund, 
                and
                    ``(E) the corporation elects the application of 
                this subsection for such taxable year.
            ``(3) Aggregate gross assets.--Aggregate gross assets shall 
        be determined in the same manner as such assets are determined 
        under section 1202(d).
            ``(4) Controlled groups.--A corporation shall be treated as 
        meeting the requirement of paragraph (2)(B) only if each person 
        who is treated with such corporation as a single employer under 
        subsections (a) and (b) of section 52 also meets such 
        requirement.
            ``(5) Special rules.--
                    ``(A) Recapture of credit.--The Secretary shall 
                promulgate such regulations as necessary and 
                appropriate to provide for the recapture of any credit 
                allowed under this subsection in cases where the 
                taxpayer fails to make the expenditures described in 
                paragraph (2)(D).
                    ``(B) Exclusion of certain qualified vaccine 
                research expenses.--For purposes of determining the 
                credit under this section for a taxable year, the 
                qualified vaccine research expenses taken into account 
                for such taxable year shall not include an amount paid 
                or incurred during such taxable year equal to the 
                amount described in paragraph (2)(D) (and not already 
                taken into account under this subparagraph for a 
                previous taxable year).''.
    (b) Inclusion in General Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 is amended by striking ``plus'' at the 
end of paragraph (18), by striking the period at the end of paragraph 
(19) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(20) the vaccine research credit determined under section 
        45J.''.
    (c) Denial of Double Benefit.--Section 280C of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(e) Credit for Qualified Vaccine Research Expenses.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified vaccine research expenses (as defined 
        in section 45J(b)) otherwise allowable as a deduction for the 
        taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 45J(a).
            ``(2) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (2), (3), and (4) of subsection (c) shall apply 
        for purposes of this subsection.''.
    (d) Deduction for Unused Portion of Credit.--Section 196(c) of the 
Internal Revenue Code of 1986 (defining qualified business credits) is 
amended by striking ``and'' at the end of paragraph (11), by striking 
the period at the end of paragraph (12) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(13) the vaccine research credit determined under section 
        45J(a) (other than such credit determined under the rules of 
        section 280C(e)(2)).''.
    (e) Technical Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``or from section 45J(e) of such Code,'' 
        after ``1978,''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new item:

``Sec. 45J. Credit for medical research related to developing vaccines 
                            against widespread diseases.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.
    (g) Study.--
            (1) In general.--The National Institutes of Health shall 
        conduct a study of the extent to which the credit under section 
        45J of the Internal Revenue Code of 1986, as added by 
        subsection (a), has stimulated vaccine research.
            (2) Report.--Not later than the date that is 5 years after 
        the date of the enactment of this Act, the National Institutes 
        of Health shall submit to Congress the results of the study 
        conducted under paragraph (1), together with recommendations 
        (if any) to improve the effectiveness of such credit in 
        stimulating vaccine research.

SEC. 9. CREDIT FOR CERTAIN SALES OF LIFESAVING VACCINES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits), as amended by section 4, is amended by adding at the end the 
following new section:

``SEC. 45K. CREDIT FOR CERTAIN SALES OF LIFESAVING VACCINES.

    ``(a) In General.--For purposes of section 38, the lifesaving 
vaccine sale credit determined under this section with respect to a 
taxpayer for the taxable year is an amount equal to the amount of 
qualified vaccine sales for the taxable year.
    ``(b) Qualified Vaccine Sales.--For purposes of this section--
            ``(1) In general.--The term `qualified vaccine sales' means 
        the aggregate amount paid to the taxpayer for a qualified sale.
            ``(2) Qualified sale.--
                    ``(A) In general.--The term `qualified sale' means 
                a sale of a qualified vaccine--
                            ``(i) to a nonprofit organization or to a 
                        government of any foreign country (or 
                        instrumentality of such a government), and
                            ``(ii) for distribution in a developing 
                        country.
                    ``(B) Developing country.--For purposes of this 
                paragraph, the term `developing country' means a 
                country which the Secretary determines to be a country 
                with a lower middle income or less (as such term is 
                used by the International Bank for Reconstruction and 
                Development).
            ``(3) Qualified vaccine.--The term `qualified vaccine' 
        means any vaccine and microbicide--
                    ``(A) which is described in section 45J(b)(2), and
                    ``(B) which is approved as a new drug after the 
                date of the enactment of this paragraph by--
                            ``(i) the Food and Drug Administration,
                            ``(ii) the World Health Organization, or
                            ``(iii) the appropriate authority of a 
                        country included in the list under section 
                        802(b)(1) of the Federal Food, Drug, and 
                        Cosmetic Act.
    ``(c) Limit on Amount of Credit.--The maximum amount of the credit 
allowable under subsection (a) with respect to a sale shall not exceed 
the portion of the limitation amount allocated under subsection (d) 
with respect to such sale.
    ``(d) National Limitation on Amount of Credits.--
            ``(1) In general.--Except as provided in paragraph (3), 
        there is a lifesaving vaccine sale credit limitation amount for 
        each calendar year equal to--
                    ``(A) $100,000,000 for each of years 2006 through 
                2010, and
                    ``(B) $125,000,000 for each of years 2011 through 
                2012.
            ``(2) Allocation of limitation.--
                    ``(A) In general.--The limitation amount under 
                paragraph (1) shall be allocated for any calendar year 
                by the Administrator of the United States Agency for 
                International Development (referred to in this section 
                as the `Administrator') among organizations with an 
                application approved by the Administrator in accordance 
                with subparagraph (B).
                    ``(B) Application for allocation.--The 
                Administrator shall prescribe the procedures for an 
                application for an allocation under this subsection and 
                the factors to be taken into account in making such 
                allocations. Such applications shall be made at such 
                time and in such form and manner as the Administrator 
                shall prescribe and shall include a detailed plan for 
                distribution of the vaccine.
            ``(3) Carryover of unused limitation.--If the limitation 
        amount under paragraph (1) for any calendar year exceeds the 
        aggregate amount allocated under paragraph (2), such limitation 
        for the following calendar year shall be increased by the 
        amount of such excess. No amount may be carried under the 
        preceding sentence to any calendar year after 2024.
    ``(e) Special Rules.--For purposes of this section, rules similar 
to the rules of section 41(f)(2) shall apply.''.
    (b) Inclusion in General Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 (relating to current year business 
credit), as amended by section 4(b), is amended by striking ``plus'' at 
the end of paragraph (19), by striking the period at the end of 
paragraph (20) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(21) the lifesaving vaccine sale credit determined under 
        section 45K.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986, as amended by section 2(c), is amended by adding at the end the 
following new item:

``Sec. 45K. Credit for certain sales of lifesaving vaccines.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to sales of vaccines after December 31, 2005, in taxable years 
ending after such date.

SEC. 10. SBIR AND STTR PROGRAM FUNDING FOR VACCINE DEVELOPMENT.

    (a) Pilot Program.--Section 9 of the Small Business Act (15 U.S.C. 
638) is amended by adding at the end the following:
    ``(x) Required Expenditures for the Development of Vaccines for 
Neglected Diseases.--
            ``(1) SBIR expenditures.--Each agency required to make 
        expenditures under subsection (f)(1) or under subsection 
        (n)(1), that is determined by the Administrator to have a 
        mission related to global health or disease prevention shall 
        expend with small business concerns, in addition to any amounts 
        required to be expended under subsections (f) and (n), not less 
        than $10,000,000 for fiscal year 2006 and each fiscal year 
        thereafter, specifically in connection with SBIR and STTR 
        programs which meet the requirements of this section, policy 
        directives, and regulations to carry out this section, to carry 
        out the pilot program established under this subsection.
            ``(2) Pilot program.--During the 4-year period beginning on 
        the date of enactment of the Vaccines for the New Millennium 
        Act of 2005, the Administrator shall establish and carry out a 
        program to encourage the development of vaccines and 
        microbicides to combat a neglected disease, including outreach 
        activities to raise awareness of such program.
            ``(3) Administrative costs.--The limitations in subsection 
        (f)(2) and (n)(2) shall not apply to agency expenditures under 
        the pilot program established under this subsection.
            ``(4) Report.--Six months before the date of expiration of 
        the pilot program established under this subsection, the 
        Administrator shall submit to the Committee on Small Business 
        and Entrepreneurship of the Senate and the Committee on Small 
        Business of the House of Representatives a report containing an 
        assessment of whether the pilot program is meeting the 
        objective of providing incentives to small business concerns to 
        research the development of vaccines and microbicides to combat 
        a neglected disease, and an accounting of the expenditures for 
        the pilot program.
            ``(5) Definitions.--As used in this subsection and 
        subsection (j), the terms `neglected disease' and `developing 
        country' have the same meanings as in section 2 of the Vaccines 
        for the New Millennium Act of 2005.''.
    (b) Policy Objectives.--Section 9(j) of the Small Business Act (15 
U.S.C. 638(j)) is amended by adding at the end the following:
            ``(4) Additional modifications for the development of 
        vaccines for a neglected disease.--Not later than 90 days after 
        the date of enactment of the Vaccines for the New Millennium 
        Act of 2005, the Administrator shall modify the policy 
        directives issued pursuant to this subsection to ensure that 
        agencies participating in the SBIR and STTR programs develop an 
        action plan for implementing the pilot program for the 
        development of vaccines and microbicides to combat a neglected 
        disease under subsection (x), including outreach to raise 
        awareness of the pilot program.''.
                                 <all>
```