I 
110TH CONGRESS 
1ST SESSION H. R. 4200 
To amend the Internal Revenue Code of 1986 to provide a tax credit for 
medical research related to developing qualified infectious disease products. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 15, 2007 
Mr. TOWNS (for himself, Mr. DAVIS of Illinois, Mr. WYNN, and Mr. RUSH) 
introduced the following bill; which was referred to the Committee on 
Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a tax credit for medical research related to developing 
qualified infectious disease products. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. TAX CREDIT FOR MEDICAL RESEARCH RE-
LATED TO DEVELOPING QUALIFIED INFEC-
TIOUS DISEASE PRODUCTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter 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: 
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‘‘SEC. 45O. CREDIT FOR MEDICAL RESEARCH RELATED TO 
DEVELOPING QUALIFIED INFECTIOUS DIS-
EASE PRODUCTS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the infectious disease research credit determined under 
this section for the taxable year is an amount equal to 
50 percent of the qualified infectious disease research ex-
penses for the taxable year. 
‘‘(b) QUALIFIED INFECTIOUS DISEASE RESEARCH 
EXPENSES.—For purposes of this section— 
‘‘(1) QUALIFIED
INFECTIOUS
DISEASE
RE-
SEARCH EXPENSES.—Except as otherwise provided 
in this subsection, the term ‘qualified infectious dis-
ease research expenses’ means the amounts which 
are paid or incurred by the taxpayer during the tax-
able year with respect to any research and develop-
ment of any qualified infectious disease product 
which would be described in subsection (b) of section 
41 if such subsection were applied with the modifica-
tions set forth in paragraph (2). 
‘‘(2) MODIFICATIONS; INCREASED
INCENTIVE 
FOR
CONTRACT
RESEARCH
PAYMENTS.—For pur-
poses of paragraph (1), subsection (b) of section 41 
shall be applied— 
‘‘(A) by substituting ‘qualified infectious 
disease research’ for ‘qualified research’ each 
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place it appears in paragraphs (2) and (3) of 
such subsection, and 
‘‘(B) by substituting ‘100 percent’ for ‘65 
percent’ in paragraph (3)(A) of such sub-
section. 
‘‘(3) EXCLUSION
FOR
AMOUNTS
FUNDED
BY 
GRANTS, ETC.—The term ‘qualified infectious dis-
ease 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). 
‘‘(4) QUALIFIED
INFECTIOUS
DISEASE
RE-
SEARCH.—The term ‘qualified infectious disease re-
search’ means qualified research (as defined in sec-
tion 41(d)) which relates to the development of a 
qualified infectious disease product, except that 
qualified infectious disease research shall include ex-
penses related to re-formulating existing qualified in-
fectious disease products. 
‘‘(5) QUALIFIED
INFECTIOUS
DISEASE
PROD-
UCT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
infectious disease product’ means any antibiotic 
drug, antiviral, diagnostic test, biological prod-
uct, or vaccine that is developed for the purpose 
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of treating, detecting, preventing, or identifying 
a qualifying pathogen. 
‘‘(B) QUALIFYING ANTIBIOTIC DRUG AND 
ANTIVIRAL
FORMULATIONS.—To qualify as a 
qualified infectious disease product under sub-
paragraph (A), any antibiotic drug or antiviral 
shall be in a formulation for which the Sec-
retary of Health and Human Services, after 
consulting with infectious diseases clinicians 
and appropriate professional associations, has 
determined there is a significant medical need. 
‘‘(6) OTHER DEFINITIONS.— 
‘‘(A) ANTIBIOTIC DRUG.—The term ‘anti-
biotic drug’ has the meaning given to that term 
in section 201 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 321). 
‘‘(B) ANTIVIRAL.—The term ‘antiviral’ 
means a drug or biological product intended for 
human use that impedes the reproduction of a 
virus. 
‘‘(C) BIOLOGICAL
PRODUCT.—The term 
‘biological product’ has the meaning given to 
that term in section 351 of the Public Health 
Service Act (42 U.S.C. 262). 
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‘‘(D) DEVICE.—The term ‘device’ has the 
meaning given to that term in section 201 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321). 
‘‘(E) DIAGNOSTIC TEST.—The term ‘diag-
nostic test’ means a device or product used to 
detect the presence, concentration, or character-
istics of an infectious human disease. 
‘‘(F) DRUG.—The term ‘drug’ has the 
meaning given to that term in section 201 of 
the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321). 
‘‘(G) QUALIFYING PATHOGEN.—The term 
‘qualifying pathogen’ means— 
‘‘(i) 
methicillin-resistant 
staphy-
lococcus aureus, 
‘‘(ii) life-threatening gram negative 
bacteria, such as Escherichia coli (E. coli), 
Acinetobacter, 
Klebsiella 
species, 
and 
Pseudomonas aeruginosa, 
‘‘(iii) extensively drug resistant tuber-
culosis (XDR–TB), or 
‘‘(iv) any other infectious pathogen 
identified for purposes of this section by 
the Secretary of Health and Human Serv-
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ices, in concurrence with infectious disease 
clinicians and appropriate professional as-
sociations, as a significant threat to public 
health because of drug resistance or other 
factors (or likely to become such a threat). 
‘‘(H) VACCINE.—The term ‘vaccine’ means 
a vaccine intended for human use. 
‘‘(c) COORDINATION WITH CREDIT FOR INCREASING 
RESEARCH EXPENDITURES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any qualified infectious disease research 
expenses for a taxable year to which an election 
under this section applies shall not be taken into ac-
count for purposes of determining the credit allow-
able under section 41 for such taxable year. 
‘‘(2) EXPENSES
INCLUDED
IN
DETERMINING 
BASE PERIOD RESEARCH EXPENSES.—Any qualified 
infectious disease research expenses for any taxable 
year which are qualified research expenses (within 
the meaning of section 41(b)) shall be taken into ac-
count in determining base period research expenses 
for purposes of applying section 41 to subsequent 
taxable years. 
‘‘(d) SPECIAL RULES.— 
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‘‘(1) CERTAIN
RULES
MADE
APPLICABLE.— 
Rules similar to the rules of paragraphs (1) and (2) 
of section 41(f) shall apply for purposes of this sec-
tion. 
‘‘(2) COORDINATION WITH CREDIT FOR CLIN-
ICAL TESTING EXPENSES FOR CERTAIN DRUGS FOR 
RARE
DISEASES.—Any qualified infectious disease 
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 45C for such taxable year. 
‘‘(3) ELECTION.—This section shall apply to 
any taxpayer for any taxable year only if such tax-
payer elects (at such time and in such manner as 
the Secretary may by regulations prescribe) to have 
this section apply for such taxable year. 
‘‘(e) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2012.’’. 
(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 (30), 
by striking the period at the end of paragraph (31) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
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‘‘(32) the infectious disease research credit de-
termined under section 45O.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
the Internal Revenue Code of 1986 (relating to certain 
expenses for which credits are allowable) is amended by 
adding at the end the following new subsection: 
‘‘(f) CREDIT FOR QUALIFIED INFECTIOUS DISEASE 
RESEARCH EXPENSES.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified infectious dis-
ease research expenses (as defined in section 
45O(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 sec-
tion 45O(a). 
‘‘(2) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of paragraphs (2), (3), and (4) of sub-
section (c) shall apply for purposes of this sub-
section.’’. 
(d) DEDUCTION FOR UNUSED PORTION OF CRED-
IT.—Section 196(c) of the Internal Revenue Code of 1986 
(defining qualified business credits) is amended by strik-
ing ‘‘and’’ at the end of paragraph (12), by striking the 
period at the end of paragraph (13) and inserting ‘‘, and’’, 
and by adding at the end the following new paragraph: 
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‘‘(14) the infectious disease research credit de-
termined under section 45O(a) (other than such 
credit determined under the rules of section 
280C(e)(2)).’’. 
(e) TECHNICAL AMENDMENT.—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 add-
ing at the end the following new item: 
‘‘Sec. 45O. Credit for medical research related to developing qualified infectious 
disease products.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
Æ 
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