2315 
in section 101 of title 17, United States Code) produced 
and recorded in the United States.’’. 
(f) TERMINATION.—Section 181(h) (as redesignated 
by subsection (e)) is amended by striking ‘‘qualified film 
or television production or any qualified live theatrical pro-
duction’’ and inserting ‘‘qualified film or television produc-
tion, any qualified live theatrical production, or any quali-
fied sound recording production’’. 
(g) BONUS DEPRECIATION.— 
(1) QUALIFIED
SOUND
RECORDING
PRODUC-
TION
AS
QUALIFIED
PROPERTY.—Section 
168(k)(2)(A)(i) is amended— 
(A) by striking ‘‘or’’ at the end of sub-
clause (IV), by adding ‘‘or’’ at the end of sub-
clause (V), and by inserting after subclause (V) 
the following: 
‘‘(VI) which is a qualified sound 
recording production (as defined in 
subsection (f) of section 181) for 
which a deduction would have been al-
lowable under section 181 without re-
gard to subsections (a)(2) and (h) of 
such section or this subsection,’’, and 
(B) in subclauses (IV) and (V) (as amend-
ed) by striking ‘‘without regard to subsections 
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(a)(2) and (g)’’ both places it appears and in-
serting ‘‘without regard to subsections (a)(2) 
and (h)’’. 
(2) PRODUCTION PLACED IN SERVICE.—Section 
168(k)(2)(H) is amended by striking ‘‘and’’ at the 
end of clause (i), by striking the period at the end 
of clause (ii) and inserting ‘‘, and’’, and by adding 
after clause (ii) the following: 
‘‘(iii) a qualified sound recording pro-
duction shall be considered to be placed in 
service at the time of initial release or 
broadcast.’’. 
(h) CONFORMING AMENDMENTS.— 
(1) The heading for section 181 is amended to 
read as follows: ‘‘TREATMENT
OF
CERTAIN 
QUALIFIED PRODUCTIONS.’’. 
(2) The table of sections for part VI of sub-
chapter B of chapter 1 is amended by striking the 
item relating to section 181 and inserting the fol-
lowing new item: 
‘‘Sec. 181. Treatment of certain qualified productions.’’. 
(i) EFFECTIVE DATE.—The amendments made by 
this section shall apply to productions commencing in tax-
able years ending after the date of the enactment of this 
Act. 
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SEC. 138511. PAYMENT TO CERTAIN INDIVIDUALS WHO DYE 
FUEL. 
(a) IN GENERAL.—Subchapter B of chapter 65 is 
amended by adding at the end the following new sub-
section: 
‘‘SEC. 6433. DYED FUEL. 
‘‘(a) IN GENERAL.—If a person establishes to the 
satisfaction of the Secretary that such person meets the 
requirements of subsection (b) with respect to diesel fuel 
or kerosene, then the Secretary shall pay to such person 
an amount (without interest) equal to the tax described 
in subsection (b)(2)(A) with respect to such diesel fuel or 
kerosene. 
‘‘(b) REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—A person meets the re-
quirements of this subsection with respect to diesel 
fuel or kerosene if such person removes from a ter-
minal eligible indelibly dyed diesel fuel or kerosene. 
‘‘(2) ELIGIBLE INDELIBLY DYED DIESEL FUEL 
OR KEROSENE DEFINED.—The term ‘eligible indeli-
bly dyed diesel fuel or kerosene’ means diesel fuel or 
kerosene— 
‘‘(A) with respect to which a tax under sec-
tion 4081 was previously paid (and not credited 
or refunded), and 
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‘‘(B) which is exempt from taxation under 
section 4082(a). 
‘‘(c) CROSS REFERENCE.—For civil penalty for ex-
cessive claims under this section, see section 6675.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6206 is amended— 
(A) by striking ‘‘or 6427’’ each place it ap-
pears and inserting ‘‘6427, or 6433’’, and 
(B) by striking ‘‘6420 and 6421’’ and in-
serting ‘‘6420, 6421, and 6433’’. 
(2) Section 6430 is amended— 
(A) by striking ‘‘or’’ at the end of para-
graph (2), by striking the period at the end of 
paragraph (3) and inserting ‘‘or’’, and by add-
ing at the end the following new paragraph: 
‘‘(4) which are removed as eligible indelibly 
dyed diesel fuel or kerosene under section 6433.’’. 
(3) Section 6675 is amended— 
(A) in subsection (a), by striking ‘‘or 6427 
(relating to fuels not used for taxable pur-
poses)’’ and inserting ‘‘6427 (relating to fuels 
not used for taxable purposes), or 6433 (relat-
ing to eligible indelibly dyed fuel)’’, and 
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(B) in subsection (b)(1), by striking 
‘‘6421, or 6427,’’ and inserting ‘‘6421, 6427, 
or 6433’’. 
(4) The table of sections for subchapter B of 
chapter 65 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 6433. Dyed fuel.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to eligible indelibly dyed diesel fuel 
or kerosene removed on or after the date that is 180 days 
after the date of the enactment of this section. 
SEC. 138512. EXTENSION OF CREDIT FOR PORTION OF EM-
PLOYER SOCIAL SECURITY TAXES PAID WITH 
RESPECT TO EMPLOYEE TIPS TO BEAUTY 
SERVICE ESTABLISHMENTS. 
(a) EXTENSION OF TIP CREDIT TO BEAUTY SERVICE 
BUSINESS.— 
(1) IN GENERAL.—Section 45B(b)(2) is amend-
ed to read as follows: 
‘‘(2) APPLICATION ONLY TO CERTAIN LINES OF 
BUSINESS.—In applying paragraph (1), there shall 
be taken into account only tips received from cus-
tomers or clients in connection with the following 
services: 
‘‘(A) The providing, delivering, or serving 
of food or beverages for consumption, if the tip-
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ping of employees delivering or serving food or 
beverages by customers is customary. 
‘‘(B) The providing of beauty services to a 
customer or client if the tipping of employees 
providing such services is customary.’’. 
(2) BEAUTY SERVICE DEFINED.—Section 45B 
is amended by adding at the end the following new 
subsection: 
‘‘(e) BEAUTY SERVICE.—For purposes of this sec-
tion, the term ‘beauty service’ means any of the following: 
‘‘(1) Barbering and hair care. 
‘‘(2) Nail care. 
‘‘(3) Esthetics. 
‘‘(4) Body and spa treatments.’’. 
(b) CREDIT DETERMINED WITH RESPECT TO MIN-
IMUM
WAGE
IN
EFFECT.—Section 45B(b)(1)(B) is 
amended— 
(1) by striking ‘‘as in effect on January 1, 
2007, and’’, and 
(2) by inserting ‘‘, and in the case of food or 
beverage establishments, as in effect on January 1, 
2007’’ after ‘‘without regard to section 3(m) of such 
Act’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 138513. ENHANCEMENT OF WORK OPPORTUNITY 
CREDIT DURING COVID–19 RECOVERY PE-
RIOD. 
(a) IN GENERAL.—Section 51 is amended by adding 
at the end the following new subsection: 
‘‘(l) ADJUSTMENT TO CREDIT DURING COVID–19 
RECOVERY PERIOD.—In the case of individuals (other 
than any individual who is a qualified summer youth em-
ployee) hired after the date of the enactment of this sub-
section and before January 1, 2023— 
‘‘(1) INCREASED
AMOUNT
OF
CREDIT.—Sub-
section (a) shall be applied by substituting ‘50 per-
cent’ for ‘40 percent’. 
‘‘(2) AVAILABILITY
OF
CREDIT
IN
SECOND 
YEAR OF EMPLOYMENT.— 
‘‘(A) IN
GENERAL.—Subsection (a) shall 
be applied by inserting ‘or qualified second-year 
wages’ after ‘wages’. 
‘‘(B) QUALIFIED SECOND-YEAR WAGES.— 
For the purposes of this paragraph, the term 
‘qualified second-year wages’ means qualified 
wages which are attributable to service rendered 
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2322 
during the 1-year period beginning on the day 
after the last day of the 1-year period with re-
spect to the recipient determined under sub-
section (b)(2). 
‘‘(3) INCREASE
IN
LIMITATION
ON
WAGES 
TAKEN INTO ACCOUNT.—Subsection (b)(3) shall be 
applied by substituting ‘$10,000’ for ‘$6,000’. 
‘‘(4) ELIGIBILITY OF REHIRES.— 
‘‘(A) IN GENERAL.—Subsection (i)(2) shall 
not apply. 
‘‘(B) REGULATIONS.—The Secretary shall 
issue such regulations as the Secretary deter-
mines appropriate to ensure a reasonable appli-
cation of subparagraph (A), including prohib-
iting attempts to claim the benefit of this sec-
tion through the termination and rehiring of an 
employee.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after the 
date of enactment of this Act. 
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SEC. 138514. ALLOWANCE OF DEDUCTION FOR CERTAIN EX-
PENSES OF THE TRADE OR BUSINESS OF 
BEING AN EMPLOYEE. 
(a) ABOVE-THE-LINE
DEDUCTION
FOR
UNION 
DUES.—Section 62(a)(2) is amended by adding at the end 
the following new subparagraph: 
‘‘(F) UNION DUES.—The deductions allowed by 
section 162 which are both— 
‘‘(A) not in excess of $250, and 
‘‘(B) attributable to a trade or business 
consisting of the performance of services by the 
taxpayer as an employee if such deductions are 
for dues paid to a labor organization described 
in section 501(c)(5) and with respect to which 
such taxpayer remained a member through the 
end of the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 138515. COVER OVER OF CERTAIN DISTILLED SPIRITS 
TAXES. 
(a) REPEAL OF LIMITATION ON COVER OVER OF 
DISTILLED SPIRITS TAXES TO PUERTO RICO AND VIRGIN 
ISLANDS.— 
(1) IN GENERAL.—Section 7652 is amended by 
striking subsection (f) and by redesignating sub-
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2324 
sections (g) and (h) as subsections (f) and (g), re-
spectively. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to distilled spirits 
brought into the United States after December 31, 
2021. 
(b) REQUIRED TRANSFER TO PUERTO RICO CON-
SERVATION TRUST FUND OF PORTION OF PUERTO RICO 
RUM COVER OVER.— 
(1) IN GENERAL.—Section 7652(a) is amended 
by adding at the end the following new paragraph: 
‘‘(4) REQUIRED
TRANSFER
TO
PUERTO
RICO 
CONSERVATION TRUST FUND OF PORTION OF RUM 
TAXES COVERED OVER.— 
‘‘(A) IN GENERAL.—From any taxes col-
lected on rum transported to the United States 
that are covered into the treasury of Puerto 
Rico under paragraph (3) at a rate equal to or 
greater than $10.50 per proof gallon, Puerto 
Rico shall transfer to the Puerto Rico Con-
servation Trust Fund an amount per proof gal-
lon equal to or greater than 1⁄6 of the difference 
between $10.50 and the rate, not to exceed 
$13.25, at which such taxes are covered into 
such treasury. Puerto Rico’s obligations under 
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this paragraph shall not modify or impair pay-
ment priorities established under Puerto Rico 
law and in effect on May 21, 2021. 
‘‘(B) PUERTO RICO CONSERVATION TRUST 
FUND.—For purposes of this section, the term 
‘Puerto Rico Conservation Trust Fund’ means 
the fund established pursuant to a Memo-
randum of Understanding between the United 
States Department of the Interior and the 
Commonwealth of Puerto Rico, dated December 
24, 1968.’’. 
(2) COVER OVER DETERMINED WITHOUT RE-
GARD
TO
CERTAIN
RATE
REDUCTIONS.—Section 
7652(h), as amended by subsections (a) and (c), is 
amended by inserting ‘‘(a)(4),’’ after ‘‘(a)(3),’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to distilled spirits 
brought into the United States after December 31, 
2021. 
(c) COVER OVER DETERMINED WITHOUT REGARD 
TO CERTAIN RATE REDUCTIONS.— 
(1) IN GENERAL.—Section 7652, as amended 
by subsection (a), is amended by inserting after sub-
section (g) the following new subsection: 
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2327 
SEC. 138516. RESEARCH AND EXPERIMENTAL EXPENDI-
TURES. 
(a) IN GENERAL.—Section 13206 of Public Law 
115–97 is amended— 
(1) in subsection (b)(3), by striking ‘‘2021’’ 
and inserting ‘‘2025’’, and 
(2) in subsection (e), by striking ‘‘2021’’ and 
inserting ‘‘2025’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 138517. PAYROLL CREDIT FOR COMPENSATION OF 
LOCAL NEWS JOURNALISTS. 
(a) IN GENERAL.—In the case of an eligible local 
newspaper publisher, there shall be allowed as a credit 
against applicable employment taxes for each calendar 
quarter an amount equal to the applicable percentage of 
wages paid by such publisher to local news journalists for 
such calendar quarter. 
(b) LIMITATIONS AND REFUNDABILITY.— 
(1) 
WAGES
TAKEN
INTO
ACCOUNT.—The 
amount of wages paid with respect to any individual 
which may be taken into account under subsection 
(a) during any calendar quarter by the eligible local 
newspaper publisher shall not exceed $12,500. 
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(2) 
CREDIT
LIMITED
TO
EMPLOYMENT 
TAXES.—The credit allowed by subsection (a) with 
respect to any calendar quarter shall not exceed the 
applicable employment taxes (reduced by any credits 
allowed under sections 3131, 3132, 3134, and 6432 
of the Internal Revenue Code of 1986) on the wages 
paid with respect to the employment of all the em-
ployees of the eligible local newspaper publisher for 
such calendar quarter. 
(3) REFUNDABILITY OF EXCESS CREDIT.— 
(A) IN GENERAL.—If the amount of the 
credit under subsection (a) exceeds the limita-
tion of paragraph (2) for any calendar quarter, 
such excess shall be treated as an overpayment 
that shall be refunded under sections 6402(a) 
and 6413(b) of the Internal Revenue Code of 
1986. 
(B) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, any amounts due to the employer under 
this paragraph shall be treated in the same 
manner as a refund due from a credit provision 
referred to in subsection (b)(2) of such section. 
(c) DEFINITIONS.—For purposes of this section— 
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(1) APPLICABLE PERCENTAGE.—The term ‘‘ap-
plicable percentage’’ means— 
(A) in the case of each of the first 4 cal-
endar quarters to which this section applies, 50 
percent, and 
(B) in the case of each calendar quarter 
thereafter, 30 percent. 
(2) APPLICABLE
EMPLOYMENT
TAXES.—The 
term ‘‘applicable employment taxes’’ means the taxes 
imposed under section 3111(b) of the Internal Rev-
enue Code of 1986. 
(3) 
ELIGIBLE
LOCAL
NEWSPAPER
PUB-
LISHER.—The term ‘‘eligible local newspaper pub-
lisher’’ means, with respect to any calendar quarter, 
any employer if substantially all of the gross receipts 
of such employer for such calendar quarter are de-
rived in the trade or business of publishing a local 
newspaper. 
(4) LOCAL
NEWSPAPER.—The term ‘‘local 
newspaper’’ means any print or digital publication 
if— 
(A) the primary content of such publica-
tion is original content derived from primary 
sources and relating to news and current 
events, 
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(B) such publication primarily serves the 
needs of a regional or local community, 
(C) the publisher of such publication em-
ploys at least one local news journalist who re-
sides in such regional or local community, and 
(D) the publisher of such publication em-
ploys no more than 750 employees during the 
calendar quarter with respect to which a credit 
is allowed under this section. 
(5) LOCAL
NEWS
JOURNALIST.—The term 
‘‘local news journalist’’ means, with respect to any 
eligible local newspaper publisher for any calendar 
quarter, an individual who provides at least 100 
hours of service during such calendar quarter to 
such eligible local newspaper publisher, during which 
time such individual regularly gathers, collects, pho-
tographs, records, writes, or reports news or infor-
mation that concerns local events or other matters 
of local public interest. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury or the Secretary’s del-
egate. 
(7) WAGES.—The term ‘‘wages’’ means wages 
(as defined in section 3121(a) of the Internal Rev-
enue Code of 1986). 
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(8) OTHER TERMS.—Any term used in this sec-
tion which is also used in chapter 21 or chapter 22 
of the Internal Revenue Code of 1986 shall have the 
same meaning as when used in such chapter. 
(d) AGGREGATION RULE.— 
(1) IN GENERAL.—All persons treated as a sin-
gle employer under subsection (a) or (b) of section 
52 of the Internal Revenue Code of 1986, or sub-
section (m) or (o) of section 414 of such Code, shall 
be treated as one employer for purposes of this sec-
tion. 
(2) EXCEPTION.—Paragraph (1) shall not 
apply unless such persons are involved in the pro-
duction of the same print or digital publication. 
(e) CERTAIN RULES TO APPLY.—For purposes of 
this section, rules similar to the rules of sections 51(i)(1) 
and 280C(a) of the Internal Revenue Code of 1986 shall 
apply. 
(f) CERTAIN GOVERNMENTAL EMPLOYERS.—This 
credit shall not apply to the Government of the United 
States, the government of any State or political subdivi-
sion thereof, or any agency or instrumentality of any of 
the foregoing. 
(g) ELECTION TO HAVE SECTION NOT APPLY.— 
This section shall not apply with respect to any eligible 
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local newspaper publisher for any calendar quarter if such 
person elects (at such time and in such manner as the 
Secretary may prescribe) not to have this section apply. 
(h) SPECIAL RULES.— 
(1) EMPLOYEE
NOT
TAKEN
INTO
ACCOUNT 
MORE THAN ONCE.—An employee shall not be in-
cluded for purposes of this section for any period 
with respect to any employer if such employer is al-
lowed a credit under section 51 of the Internal Rev-
enue Code of 1986 with respect to such employee for 
such period. 
(2) DENIAL OF DOUBLE BENEFIT.—Any wages 
taken into account in determining the credit allowed 
under this section shall not be taken into account for 
purposes of determining the credits allowed under 
section 41, 45A, 45P, 45S, 51, 1396, 3131, 3132, 
3134, and 6432 of such Code. 
(3) THIRD-PARTY PAYORS.—Any credit allowed 
under this section shall be treated as a credit de-
scribed in section 3511(d)(2) of such Code. 
(i) TREATMENT OF DEPOSITS.—The Secretary shall 
waive any penalty under section 6656 of the Internal Rev-
enue Code of 1986 for any failure to make a deposit of 
any applicable employment taxes if the Secretary deter-
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mines that such failure was due to the reasonable anticipa-
tion of the credit allowed under this section. 
(j) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such forms, instructions, regulations, and guid-
ance as are necessary to implement the purposes of this 
section, including with respect to the application of the 
credit under subsection (a) to third-party payors (includ-
ing professional employer organizations, certified profes-
sional employer organizations, or agents under section 
3504 of the Internal Revenue Code of 1986), including 
regulations or guidance allowing such payors to submit 
documentation necessary to substantiate the eligible em-
ployer status of employers that use such payors. 
(k) APPLICATION.—This section shall only apply to 
calendar quarters during the first 5 calendar years begin-
ning after the date of the enactment of this Act. 
SEC. 138518. TREATMENT OF FINANCIAL GUARANTY INSUR-
ANCE COMPANIES AS QUALIFYING INSUR-
ANCE CORPORATIONS UNDER PASSIVE FOR-
EIGN INVESTMENT COMPANY RULES. 
(a) IN GENERAL.—Section 1297(f)(3) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) SPECIAL
RULES
FOR
FINANCIAL 
GUARANTY INSURANCE COMPANIES.— 
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‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A)(ii) and (B), the applica-
ble insurance liabilities of a financial guar-
anty insurance company shall include its 
unearned premium reserves if— 
‘‘(I) such company is prohibited 
under generally accepted accounting 
principles from reporting on its appli-
cable financial statements reserves for 
losses and loss adjustment expenses 
with respect to a financial guaranty 
insurance or reinsurance contract ex-
cept to the extent that losses and loss 
adjustment expenses are expected to 
exceed the unearned premium reserves 
on the contract, 
‘‘(II) the applicable financial 
statement of such company reports fi-
nancial guaranty exposure of at least 
15-to-1 or State or local bond expo-
sure of at least 9-to-1 (8-to-1 in the 
case of a taxable year of such com-
pany which ends on or before Decem-
ber 31, 2018), and 
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‘‘(III) such company includes in 
its insurance liabilities only its un-
earned premium reserves relating to 
insurance written or assumed that is 
within the single risk limits set forth 
in subsection (D) of section 4 of the 
Financial Guaranty Insurance Guide-
line (modified by using total share-
holder’s equity as reported on the ap-
plicable financial statement of the 
company rather than aggregate of the 
surplus to policyholders and contin-
gency reserves). 
‘‘(ii) APPLICATION
OF
ALTERNATIVE 
FACTS AND CIRCUMSTANCES TEST.—A fi-
nancial guaranty insurance company shall 
be treated as satisfying the requirements 
of paragraph (2)(B). 
‘‘(iii) FINANCIAL
GUARANTY
INSUR-
ANCE
COMPANY.—For purposes of this 
subparagraph, the term ‘financial guaranty 
insurance company’ means any insurance 
company the sole business of which is writ-
ing or reinsuring financial guaranty insur-
ance (as defined in subsection (A) of sec-
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tion 1 of the Financial Guaranty Insurance 
Guideline) which is permitted under sub-
section (B) of section 4 of such Guideline. 
‘‘(iv) FINANCIAL
GUARANTY
EXPO-
SURE.—For purposes of this subpara-
graph, the term ‘financial guaranty expo-
sure’ means the ratio of— 
‘‘(I) the net debt service out-
standing insured or reinsured by the 
company that is within the single risk 
limits set forth in the Financial Guar-
anty Insurance Guideline (as reported 
on such company’s applicable financial 
statement), to 
‘‘(II) the company’s total assets 
(as so reported). 
‘‘(v) STATE OR LOCAL BOND EXPO-
SURE.—For purposes of this subpara-
graph, the term ‘State or local bond expo-
sure’ means the ratio of— 
‘‘(I) the net unpaid principal of 
State or local bonds (as defined in 
section 103(c)(1)) insured or rein-
sured by the company that is within 
the single risk limits set forth in the 
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Financial Guaranty Insurance Guide-
line (as reported on such company’s 
applicable financial statement), to 
‘‘(II) the company’s total assets 
(as so reported).’’ 
‘‘(vi) FINANCIAL
GUARANTY
INSUR-
ANCE
GUIDELINE.—For purposes of this 
subparagraph— 
‘‘(I) IN
GENERAL.—The term 
‘Financial Guaranty Insurance Guide-
line’ means the October 2008 model 
regulation that was adopted by the 
National Association of Insurance 
Commissioners on December 4, 2007. 
‘‘(II) DETERMINATIONS MADE BY 
SECRETARY.—The determination of 
whether any provision of the Financial 
Guaranty Insurance Guideline has 
been satisfied shall be made by the 
Secretary.’’. 
(b) 
REPORTING
OF
CERTAIN
ITEMS.—Section 
1297(f)(4) is amended by adding at the end the following 
new subparagraph: 
‘‘(C) CLARIFICATION THAT CERTAIN ITEMS 
ON
APPLICABLE
FINANCIAL
STATEMENT
BE 
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SEPARATELY
REPORTED
WITH
RESPECT
TO 
CORPORATION.—An amount described in para-
graph (1)(B) or clause (i)(II), (i)(III), (iv)(I), 
(iv)(II), (v)(I), or (v)(II) of paragraph (3)(C) 
shall be treated as reported on an applicable fi-
nancial statement for purposes of this section 
if— 
‘‘(i) such amount is separately re-
ported on such statement with respect to 
the corporation referred to in paragraph 
(1), or 
‘‘(ii) such amount is separately deter-
mined for purposes of calculating an 
amount which is reported on such state-
ment. 
‘‘(D) AUTHORITY OF SECRETARY TO RE-
QUIRE REPORTING.— 
‘‘(i) 
IN
GENERAL.—Each 
United 
States person who owns an interest in a 
specified non-publicly traded foreign cor-
poration and who takes the position that 
such corporation is not a passive foreign 
investment company shall report to the 
Secretary such information with respect to 
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such corporation as the Secretary may re-
quire. 
‘‘(ii) SPECIFIED NON-PUBLICLY TRAD-
ED FOREIGN CORPORATION.—For purposes 
of this subparagraph, the term ‘specified 
non-publicly traded foreign corporation’ 
means any foreign corporation— 
‘‘(I) which would be a passive 
foreign investment company if sub-
section (b)(2)(B) did not apply, and 
‘‘(II) no interest in which is trad-
ed on an established securities mar-
ket.’’. 
(c) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall take effect as if included in section 
14501 of Public Law 115–97. 
(2) REPORTING.—The amendment made by 
subsection (b) shall apply to reports made after the 
date of the enactment of this Act. 
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SEC. 138519. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY 
FOR THE BLIND. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 36G the following new section: 
‘‘SEC. 36H. CREDIT FOR QUALIFIED ACCESS TECHNOLOGY 
FOR THE BLIND. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this subtitle 
an amount equal to amounts paid or incurred during the 
taxable year, not compensated for by insurance or other-
wise, by the taxpayer for qualified access technology for 
use by a qualified blind individual who is the taxpayer, 
the taxpayer’s spouse, or any dependent (as defined in sec-
tion 152) of the taxpayer. 
‘‘(b) LIMITATION.—The aggregate amount of the 
credit allowed under subsection (a) with respect to any 
qualified blind individual shall not exceed $2,000 in any 
3-consecutive-taxable-year period. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED BLIND INDIVIDUAL.—The term 
‘qualified blind individual’ means an individual who 
is blind within the meaning of section 63(f)(4). 
‘‘(2) QUALIFIED
ACCESS
TECHNOLOGY
DE-
FINED.—The term ‘qualified access technology’ 
means hardware, software, or other information 
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technology the primary function of which is to con-
vert or adapt information which is visually rep-
resented into forms or formats useable by blind indi-
viduals. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under subsection (a) for any expense for which 
a deduction or credit is allowed under any other provision 
of this chapter. 
‘‘(e) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of a taxable 
year beginning after 2022, the $2,000 amount in 
subsection (b) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 2021’ for 
‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If the amount as adjusted 
under subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lowest 
multiple of $100. 
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‘‘(f) TERMINATION.—This section shall not apply 
with respect to amounts paid or incurred in taxable years 
beginning after December 31, 2026.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘, 36H’’ after ‘‘36G’’. 
(2) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘, 36H’’ after 
‘‘, 36G’’. 
(3) The table of sections for subpart C of part 
IV of subchapter A is amended by inserting after 
the item relating to section 36G the following new 
item: 
‘‘Sec. 36H. Credit for qualified access technology for the blind.’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 138520. MODIFICATION OF REIT CONSTRUCTIVE OWN-
ERSHIP RULES. 
(a) IN GENERAL.—Section 856(d)(5) is amended by 
striking ‘‘and’’ at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and inserting 
‘‘, and’’, and by adding at the end the following: 
‘‘(C) except as otherwise provided by the 
Secretary, stock, assets, and net profits con-
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structively owned by a partnership, estate, 
trust, or corporation by reason of the applica-
tion of section 318(a)(3) (after application of 
subparagraphs (A) and (B)) shall not be con-
sidered as owned by it for purposes of again ap-
plying such section in order to make another 
person the constructive owner of such stock, as-
sets, or net profits. 
Subparagraph (C) shall not prevent any person from 
being the constructive owner of stock, assets, or net 
profits of any person as the result of any other ap-
plication of section 318(a) (as modified by this para-
graph).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
(c) NO INFERENCE.—Nothing in this section or the 
amendments made by this section shall be construed to 
create any inference with respect to the proper application 
of section 318 of the Internal Revenue Code of 1986 to 
cases other than cases to which such amendments apply. 
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Subtitle J—Drug Pricing 
PART 1—LOWERING PRICES THROUGH FAIR 
DRUG PRICE NEGOTIATION 
SEC. 139001. PROVIDING FOR LOWER PRICES FOR CERTAIN 
HIGH-PRICED SINGLE SOURCE DRUGS. 
(a) PROGRAM TO LOWER PRICES
FOR CERTAIN 
HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI of the 
Social Security Act (42 U.S.C. 1301 et seq.) is amended 
by adding at the end the following new part: 
‘‘PART E—FAIR PRICE NEGOTIATION PROGRAM 
TO LOWER PRICES FOR CERTAIN HIGH- 
PRICED SINGLE SOURCE DRUGS 
‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary shall establish a 
Fair Price Negotiation Program (in this part referred to 
as the ‘program’). Under the program, with respect to 
each price applicability period, the Secretary shall— 
‘‘(1) publish a list of selected drugs in accord-
ance with section 1192; 
‘‘(2) enter into agreements with manufacturers 
of selected drugs with respect to such period, in ac-
cordance with section 1193; 
‘‘(3) negotiate and, if applicable, renegotiate 
maximum fair prices for such selected drugs, in ac-
cordance with section 1194; and 
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‘‘(4) carry out the administrative duties de-
scribed in section 1196. 
‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur-
poses of this part: 
‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The 
term ‘initial price applicability year’ means a plan 
year (beginning with plan year 2025) or, if agreed 
to in an agreement under section 1193 by the Sec-
retary and manufacturer involved, a period of more 
than one plan year (beginning on or after January 
1, 2025). 
‘‘(2) PRICE APPLICABILITY PERIOD.—The term 
‘price applicability period’ means, with respect to a 
drug, the period beginning with the initial price ap-
plicability year with respect to which such drug is a 
selected drug and ending with the last plan year 
during which the drug is a selected drug. 
‘‘(3) SELECTED
DRUG
PUBLICATION
DATE.— 
The term ‘selected drug publication date’ means, 
with respect to each initial price applicability year, 
April 15 of the plan year that begins 2 years prior 
to such year. 
‘‘(4) VOLUNTARY NEGOTIATION PERIOD.—The 
term ‘voluntary negotiation period’ means, with re-
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spect to an initial price applicability year with re-
spect to a selected drug, the period— 
‘‘(A) beginning on the sooner of— 
‘‘(i) the date on which the manufac-
turer of the drug and the Secretary enter 
into an agreement under section 1193 with 
respect to such drug; or 
‘‘(ii) June 15 following the selected 
drug publication date with respect to such 
selected drug; and 
‘‘(B) ending on March 31 of the year that 
begins one year prior to the initial price appli-
cability year. 
‘‘(c) OTHER DEFINITIONS.—For purposes of this 
part: 
‘‘(1) FAIR PRICE ELIGIBLE INDIVIDUAL.—The 
term ‘fair price eligible individual’ means, with re-
spect to a selected drug— 
‘‘(A) in the case such drug is furnished or 
dispensed to the individual at a pharmacy or by 
a mail order service— 
‘‘(i) an individual who is enrolled 
under a prescription drug plan under part 
D of title XVIII or an MA–PD plan under 
part C of such title if coverage is provided 
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under such plan for such selected drug; 
and 
‘‘(ii) an individual who is enrolled 
under a group health plan or health insur-
ance coverage offered in the group or indi-
vidual market (as such terms are defined 
in section 2791 of the Public Health Serv-
ice Act) with respect to which there is in 
effect an agreement with the Secretary 
under section 1197 with respect to such se-
lected drug as so furnished or dispensed; 
and 
‘‘(B) in the case such drug is furnished or 
administered to the individual by a hospital, 
physician, or other provider of services or sup-
plier— 
‘‘(i) an individual who is entitled to 
benefits under part A of title XVIII or en-
rolled under part B of such title if such se-
lected drug is covered under the respective 
part; and 
‘‘(ii) an individual who is enrolled 
under a group health plan or health insur-
ance coverage offered in the group or indi-
vidual market (as such terms are defined 
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in section 2791 of the Public Health Serv-
ice Act) with respect to which there is in 
effect an agreement with the Secretary 
under section 1197 with respect to such se-
lected drug as so furnished or adminis-
tered. 
‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max-
imum fair price’ means, with respect to a plan year 
during a price applicability period and with respect 
to a selected drug (as defined in section 1192(c)) 
with respect to such period, the price published pur-
suant to section 1195 in the Federal Register for 
such drug and year. 
‘‘(3) AVERAGE INTERNATIONAL MARKET PRICE 
DEFINED.— 
‘‘(A) IN
GENERAL.—The terms ‘average 
international market price’ and ‘AIM price’ 
mean, with respect to a drug, the average price 
(which shall be the net average price, if prac-
ticable, and volume-weighted, if practicable) for 
a unit (as defined in paragraph (4)) of the drug 
for sales of such drug (calculated across dif-
ferent dosage forms and strengths of the drug 
and not based on the specific formulation or 
package size or package type), as computed (as 
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of the date of publication of such drug as a se-
lected drug under section 1192(a)) in all coun-
tries described in clause (ii) of subparagraph 
(B) that are applicable countries (as described 
in clause (i) of such subparagraph) with respect 
to such drug. 
‘‘(B) APPLICABLE COUNTRIES.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A), a country described in 
clause (ii) is an applicable country de-
scribed in this clause with respect to a 
drug if there is available an average price 
for any unit for the drug for sales of such 
drug in such country. 
‘‘(ii) COUNTRIES
DESCRIBED.—For 
purposes of this paragraph, the following 
are countries described in this clause: 
‘‘(I) Australia. 
‘‘(II) Canada. 
‘‘(III) France. 
‘‘(IV) Germany. 
‘‘(V) Japan. 
‘‘(VI) The United Kingdom. 
‘‘(4) UNIT.—The term ‘unit’ means, with re-
spect to a drug, the lowest identifiable quantity 
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(such as a capsule or tablet, milligram of molecules, 
or grams) of the drug that is dispensed. 
‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS 
AS SELECTED DRUGS. 
‘‘(a) IN GENERAL.—Not later than the selected drug 
publication date with respect to an initial price applica-
bility year, subject to subsection (h), the Secretary shall 
select and publish in the Federal Register a list of— 
‘‘(1)(A) with respect to an initial price applica-
bility year during 2025, at least 25 negotiation-eligi-
ble drugs described in subparagraphs (A) and (B), 
but not subparagraph (C), of subsection (d)(1) (or, 
with respect to an initial price applicability year dur-
ing such period beginning after 2025, the maximum 
number (if such number is less than 25) of such ne-
gotiation-eligible drugs for the year) with respect to 
such year; and 
‘‘(B) with respect to an initial price applica-
bility year during 2026 or a subsequent year, at 
least 50 negotiation-eligible drugs described in sub-
paragraphs (A) and (B), but not subparagraph (C), 
of subsection (d)(1) (or, with respect to an initial 
price applicability year during such period, the max-
imum number (if such number is less than 50) of 
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such negotiation-eligible drugs for the year) with re-
spect to such year; 
‘‘(2) all negotiation-eligible drugs described in 
subparagraph (C) of such subsection with respect to 
such year; and 
‘‘(3) all new-entrant negotiation-eligible drugs 
(as defined in subsection (g)(1)) with respect to such 
year. 
Each drug published on the list pursuant to the previous 
sentence shall be subject to the negotiation process under 
section 1194 for the voluntary negotiation period with re-
spect to such initial price applicability year (and the re-
negotiation process under such section as applicable for 
any subsequent year during the applicable price applica-
bility period). In applying this subsection, any negotiation- 
eligible drug that is selected under this subsection for an 
initial price applicability year shall not count toward the 
required minimum amount of drugs to be selected under 
paragraph (1) for any subsequent year, including such a 
drug so selected that is subject to renegotiation under sec-
tion 1194. 
‘‘(b) SELECTION OF DRUGS.—In carrying out sub-
section (a)(1) the Secretary shall select for inclusion on 
the published list described in subsection (a) with respect 
to a price applicability period, the negotiation-eligible 
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drugs that the Secretary projects will result in the greatest 
savings to the Federal Government or fair price eligible 
individuals during the price applicability period. In making 
this projection of savings for drugs for which there is an 
AIM price for a price applicability period, the savings shall 
be projected across different dosage forms and strengths 
of the drugs and not based on the specific formulation or 
package size or package type of the drugs, taking into con-
sideration both the volume of drugs for which payment 
is made, to the extent such data is available, and the 
amount by which the net price for the drugs exceeds the 
AIM price for the drugs. 
‘‘(c) SELECTED DRUG.—For purposes of this part, 
each drug included on the list published under subsection 
(a) with respect to an initial price applicability year shall 
be referred to as a ‘selected drug’ with respect to such 
year and each subsequent plan year beginning before the 
first plan year beginning after the date on which the Sec-
retary determines two or more drug products— 
‘‘(1) are approved or licensed (as applicable)— 
‘‘(A) under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act using such drug 
as the listed drug; or 
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‘‘(B) under section 351(k) of the Public 
Health Service Act using such drug as the ref-
erence product; and 
‘‘(2) continue to be marketed. 
‘‘(d) NEGOTIATION-ELIGIBLE DRUG.— 
‘‘(1) IN GENERAL.—For purposes of this part, 
the term ‘negotiation-eligible drug’ means, with re-
spect to the selected drug publication date with re-
spect to an initial price applicability year, a quali-
fying single source drug, as defined in subsection 
(e), that meets any of the following criteria: 
‘‘(A) COVERED PART D DRUGS.—The drug 
is among the 125 covered part D drugs (as de-
fined in section 1860D–2(e)) for which there 
was an estimated greatest net spending under 
parts C and D of title XVIII, as determined by 
the Secretary, during the most recent plan year 
prior to such drug publication date for which 
data are available. 
‘‘(B) OTHER DRUGS.—The drug is among 
the 125 drugs for which there was an estimated 
greatest net spending in the United States (in-
cluding the 50 States, the District of Columbia, 
and the territories of the United States), as de-
termined by the Secretary, during the most re-
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cent plan year prior to such drug publication 
date for which data are available. 
‘‘(C) INSULIN.—The drug is a qualifying 
single source drug described in subsection 
(e)(3). 
‘‘(2) CLARIFICATION.—In determining whether 
a qualifying single source drug satisfies any of the 
criteria described in paragraph (1), the Secretary 
shall, to the extent practicable, use data that is ag-
gregated across dosage forms and strengths of the 
drug and not based on the specific formulation or 
package size or package type of the drug. 
‘‘(3) PUBLICATION.—Not later than the se-
lected drug publication date with respect to an ini-
tial price applicability year, the Secretary shall pub-
lish in the Federal Register a list of negotiation-eli-
gible drugs with respect to such selected drug publi-
cation date. 
‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—For pur-
poses of this part, the term ‘qualifying single source drug’ 
means any of the following: 
‘‘(1) DRUG PRODUCTS.—A drug that— 
‘‘(A) is approved under section 505(c) of 
the Federal Food, Drug, and Cosmetic Act and 
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continues to be marketed pursuant to such ap-
proval; and 
‘‘(B) is not the listed drug for any drug 
that is approved and continues to be marketed 
under section 505(j) of such Act. 
‘‘(2) BIOLOGICAL
PRODUCTS.—A biological 
product that— 
‘‘(A) is licensed under section 351(a) of 
the Public Health Service Act, including any 
product that has been deemed to be licensed 
under section 351 of such Act pursuant to sec-
tion 7002(e)(4) of the Biologics Price Competi-
tion and Innovation Act of 2009, and continues 
to be marketed under section 351 of such Act; 
and 
‘‘(B) is not the reference product for any 
biological product that is licensed and continues 
to be marketed under section 351(k) of such 
Act. 
‘‘(3) 
INSULIN
PRODUCT.—Notwithstanding 
paragraphs (1) and (2), any insulin product that is 
approved under subsection (c) or (j) of section 505 
of the Federal Food, Drug, and Cosmetic Act or li-
censed under subsection (a) or (k) of section 351 of 
the Public Health Service Act and continues to be 
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marketed under such section 505 or 351, including 
any insulin product that has been deemed to be li-
censed under section 351(a) of the Public Health 
Service Act pursuant to section 7002(e)(4) of the 
Biologics Price Competition and Innovation Act of 
2009 and continues to be marketed pursuant to such 
licensure. 
For purposes of applying paragraphs (1) and (2), a drug 
or biological product that is marketed by the same sponsor 
or manufacturer (or an affiliate thereof or a cross-licensed 
producer or distributor) as the listed drug or reference 
product described in such respective paragraph shall not 
be taken into consideration. 
‘‘(f) INFORMATION
ON
INTERNATIONAL
DRUG 
PRICES.—For purposes of determining which negotiation- 
eligible drugs to select under subsection (a) and, in the 
case of such drugs that are selected drugs, to determine 
the maximum fair price for such a drug and whether such 
maximum fair price should be renegotiated under section 
1194, the Secretary shall use data relating to the AIM 
price with respect to such drug as available or provided 
to the Secretary and shall on an ongoing basis request 
from manufacturers of selected drugs information on the 
AIM price of such a drug. 
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‘‘(g) 
NEW-ENTRANT
NEGOTIATION-ELIGIBLE 
DRUGS.— 
‘‘(1) IN GENERAL.—For purposes of this part, 
the term ‘new-entrant negotiation-eligible drug’ 
means, with respect to the selected drug publication 
date with respect to an initial price applicability 
year, a qualifying single source drug— 
‘‘(A) that is first approved or licensed, as 
described in paragraph (1), (2), or (3) of sub-
section (e), as applicable, during the year pre-
ceding such selected drug publication date; and 
‘‘(B) that the Secretary determines under 
paragraph (2) is likely to be included as a nego-
tiation-eligible drug with respect to the subse-
quent selected drug publication date. 
‘‘(2) DETERMINATION.—In the case of a quali-
fying single source drug that meets the criteria de-
scribed in subparagraph (A) of paragraph (1), with 
respect to an initial price applicability year, if the 
wholesale acquisition cost at which such drug is first 
marketed in the United States is equal to or greater 
than the median household income (as determined 
according to the most recent data collected by the 
United States Census Bureau), the Secretary shall 
determine before the selected drug publication date 
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with respect to the initial price applicability year, if 
the drug is likely to be included as a negotiation-eli-
gible drug with respect to the subsequent selected 
drug publication date, based on the projected spend-
ing under title XVIII or in the United States on 
such drug. For purposes of this paragraph the term 
‘United States’ includes the 50 States, the District 
of Columbia, and the territories of the United 
States. 
‘‘(h) CONFLICT OF INTEREST.— 
‘‘(1) IN GENERAL.—In the case the Inspector 
General of the Department of Health and Human 
Services determines the Secretary has a conflict, 
with respect to a matter described in paragraph (2), 
the individual described in paragraph (3) shall carry 
out the duties of the Secretary under this part, with 
respect to a negotiation-eligible drug, that would 
otherwise be such a conflict. 
‘‘(2) MATTER DESCRIBED.—A matter described 
in this paragraph is— 
‘‘(A) a financial interest (as described in 
section 2635.402 of title 5, Code of Federal 
Regulations, as in effect on the date of the en-
actment of this section, (except for an interest 
described in subsection (b)(2)(iv) of such sec-
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tion)) on the date of the selected drug publica-
tion date, with respect the price applicability 
year (as applicable); 
‘‘(B) a personal or business relationship 
(as described in section 2635.502 of such title) 
on the date of the selected drug publication 
date, with respect the price applicability year; 
‘‘(C) employment by a manufacturer of a 
negotiation-eligible drug during the preceding 
10-year period beginning on the date of the se-
lected drug publication date, with respect to 
each price applicability year; and 
‘‘(D) any other matter the General Counsel 
determines appropriate. 
‘‘(3) INDIVIDUAL
DESCRIBED.—An individual 
described in this paragraph is— 
‘‘(A) the highest-ranking officer or em-
ployee of the Department of Health and 
Human Services (as determined by the organi-
zational chart of the Department) that does not 
have a conflict under this subsection; and 
‘‘(B) is nominated by the President and 
confirmed by the Senate with respect to the po-
sition. 
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‘‘SEC. 1193. MANUFACTURER AGREEMENTS. 
‘‘(a) 
IN
GENERAL.—For 
purposes 
of 
section 
1191(a)(2), the Secretary shall enter into agreements with 
manufacturers of selected drugs with respect to a price 
applicability period, by not later than June 15 following 
the selected drug publication date with respect to such se-
lected drug, under which— 
‘‘(1) during the voluntary negotiation period for 
the initial price applicability year for the selected 
drug, the Secretary and manufacturer, in accordance 
with section 1194, negotiate to determine (and, by 
not later than the last date of such period and in ac-
cordance with subsection (c), agree to) a maximum 
fair price for such selected drug of the manufacturer 
in order to provide access to such price— 
‘‘(A) to fair price eligible individuals who 
with respect to such drug are described in sub-
paragraph (A) of section 1191(c)(1) and are 
furnished or dispensed such drug during, sub-
ject to subparagraph (2), the price applicability 
period; and 
‘‘(B) to hospitals, physicians, and other 
providers of services and suppliers with respect 
to fair price eligible individuals who with re-
spect to such drug are described in subpara-
graph (B) of such section and are furnished or 
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administered such drug during, subject to sub-
paragraph (2), the price applicability period; 
‘‘(2) the Secretary and the manufacturer shall, 
in accordance with a process and during a period 
specified by the Secretary pursuant to rulemaking, 
renegotiate (and, by not later than the last date of 
such period and in accordance with subsection (c), 
agree to) the maximum fair price for such drug if 
the Secretary determines that there is a material 
change in any of the factors described in section 
1194(d) relating to the drug, including changes in 
the AIM price for such drug, in order to provide ac-
cess to such maximum fair price (as so renegoti-
ated)— 
‘‘(A) to fair price eligible individuals who 
with respect to such drug are described in sub-
paragraph (A) of section 1191(c)(1) and are 
furnished or dispensed such drug during any 
year during the price applicability period (be-
ginning after such renegotiation) with respect 
to such selected drug; and 
‘‘(B) to hospitals, physicians, and other 
providers of services and suppliers with respect 
to fair price eligible individuals who with re-
spect to such drug are described in subpara-
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graph (B) of such section and are furnished or 
administered such drug during any year de-
scribed in subparagraph (A); 
‘‘(3) the maximum fair price (including as re-
negotiated pursuant to paragraph (2)), with respect 
to such a selected drug, shall be provided to fair 
price eligible individuals, who with respect to such 
drug are described in subparagraph (A) of section 
1191(c)(1), at the pharmacy or by a mail order serv-
ice at the point-of-sale of such drug; 
‘‘(4) the manufacturer, subject to subsection 
(d), submits to the Secretary, in a form and manner 
specified by the Secretary— 
‘‘(A) for the voluntary negotiation period 
for the price applicability period (and, if appli-
cable, before any period of renegotiation speci-
fied pursuant to paragraph (2)) with respect to 
such drug all information that the Secretary re-
quires to carry out the negotiation (or renegoti-
ation process) under this part, including infor-
mation described in section 1192(f) and section 
1194(d)(1); and 
‘‘(B) on an ongoing basis, information on 
changes in prices for such drug that would af-
fect the AIM price for such drug or otherwise 
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provide a basis for renegotiation of the max-
imum fair price for such drug pursuant to 
paragraph (2); 
‘‘(5) the manufacturer agrees that in the case 
the selected drug of a manufacturer is a drug de-
scribed in subsection (c), the manufacturer will, in 
accordance with such subsection, make any payment 
required under such subsection with respect to such 
drug; and 
‘‘(6) the manufacturer complies with require-
ments imposed by the Secretary for purposes of ad-
ministering the program, including with respect to 
the duties described in section 1196. 
‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO 
LONGER A SELECTED DRUG.—An agreement entered into 
under this section shall be effective, with respect to a drug, 
until such drug is no longer considered a selected drug 
under section 1192(c). 
‘‘(c) SPECIAL RULE FOR CERTAIN SELECTED DRUGS 
WITHOUT AIM PRICE.— 
‘‘(1) IN GENERAL.—In the case of a selected 
drug for which there is no AIM price available with 
respect to the initial price applicability year for such 
drug and for which an AIM price becomes available 
beginning with respect to a subsequent plan year 
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during the price applicability period for such drug, 
if the Secretary determines that the amount de-
scribed in paragraph (2)(A) for a unit of such drug 
is greater than the amount described in paragraph 
(2)(B) for a unit of such drug, then by not later 
than one year after the date of such determination, 
the manufacturer of such selected drug shall pay to 
the Treasury an amount equal to the product of— 
‘‘(A) the difference between such amount 
described in paragraph (2)(A) for a unit of 
such drug and such amount described in para-
graph (2)(B) for a unit of such drug; and 
‘‘(B) the number of units of such drug sold 
in the United States, including the 50 States, 
the District of Columbia, and the territories of 
the United States, during the period described 
in paragraph (2)(B). 
‘‘(2) AMOUNTS DESCRIBED.— 
‘‘(A) WEIGHTED AVERAGE PRICE BEFORE 
AIM PRICE AVAILABLE.—For purposes of para-
graph (1), the amount described in this sub-
paragraph for a selected drug described in such 
paragraph, is the amount equal to the weighted 
average manufacturer price (as defined in sec-
tion 1927(k)(1)) for such dosage strength and 
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form for the drug during the period beginning 
with the first plan year for which the drug is 
included on the list of negotiation-eligible drugs 
published under section 1192(d) and ending 
with the last plan year during the price applica-
bility period for such drug with respect to which 
there is no AIM price available for such drug. 
‘‘(B) AMOUNT
MULTIPLIER
AFTER
AIM 
PRICE AVAILABLE.—For purposes of paragraph 
(1), the amount described in this subparagraph 
for a selected drug described in such paragraph, 
is the amount equal to 200 percent of the AIM 
price for such drug with respect to the first 
plan year during the price applicability period 
for such drug with respect to which there is an 
AIM price available for such drug. 
‘‘(d) CONFIDENTIALITY
OF INFORMATION.—Infor-
mation submitted to the Secretary under this part by a 
manufacturer of a selected drug that is proprietary infor-
mation of such manufacturer (as determined by the Sec-
retary) may be used only by the Secretary or disclosed 
to and used by the Comptroller General of the United 
States or the Medicare Payment Advisory Commission for 
purposes of carrying out this part. 
‘‘(e) REGULATIONS.— 
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‘‘(1) IN GENERAL.—The Secretary shall, pursu-
ant to rulemaking, specify, in accordance with para-
graph (2), the information that must be submitted 
under subsection (a)(4). 
‘‘(2) INFORMATION
SPECIFIED.—Information 
described in paragraph (1), with respect to a se-
lected drug, shall include information on sales of the 
drug (by the manufacturer of the drug or by another 
entity under license or other agreement with the 
manufacturer, with respect to the sales of such drug, 
regardless of the name under which the drug is sold) 
in any foreign country that is part of the AIM price. 
The Secretary shall verify, to the extent practicable, 
such sales from appropriate officials of the govern-
ment of the foreign country involved. 
‘‘(f) COMPLIANCE WITH REQUIREMENTS FOR AD-
MINISTRATION OF PROGRAM.—Each manufacturer with 
an agreement in effect under this section shall comply with 
requirements imposed by the Secretary or a third party 
with a contract under section 1196(c)(1), as applicable, 
for purposes of administering the program. 
‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS. 
‘‘(a) IN GENERAL.—For purposes of this part, under 
an agreement under section 1193 between the Secretary 
and a manufacturer of a selected drug, with respect to 
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the period for which such agreement is in effect and in 
accordance with subsections (b) and (c), the Secretary and 
the manufacturer— 
‘‘(1) shall during the voluntary negotiation pe-
riod with respect to the initial price applicability 
year for such drug, in accordance with this section, 
negotiate a maximum fair price for such drug for 
the purpose described in section 1193(a)(1); and 
‘‘(2) 
as 
applicable 
pursuant 
to 
section 
1193(a)(2) and in accordance with the process speci-
fied pursuant to such section, renegotiate such max-
imum fair price for such drug for the purpose de-
scribed in such section. 
‘‘(b) NEGOTIATING
METHODOLOGY
AND
OBJEC-
TIVE.— 
‘‘(1) IN GENERAL.—The Secretary shall develop 
and use a consistent methodology for negotiations 
under subsection (a) that, in accordance with para-
graph (2) and subject to paragraph (3), achieves the 
lowest maximum fair price for each selected drug 
while appropriately rewarding innovation. 
‘‘(2) PRIORITIZING
FACTORS.—In considering 
the factors described in subsection (d) in negotiating 
(and, as applicable, renegotiating) the maximum fair 
price for a selected drug, the Secretary shall, to the 
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extent practicable, consider all of the available fac-
tors listed but shall prioritize the following factors: 
‘‘(A) 
RESEARCH
AND
DEVELOPMENT 
COSTS.—The factor described in paragraph 
(1)(A) of subsection (d). 
‘‘(B) MARKET
DATA.—The factor de-
scribed in paragraph (1)(B) of such subsection. 
‘‘(C) UNIT
COSTS
OF
PRODUCTION
AND 
DISTRIBUTION.—The factor described in para-
graph (1)(C) of such subsection. 
‘‘(D) COMPARISON
TO
EXISTING
THERA-
PEUTIC ALTERNATIVES.—The factor described 
in paragraph (2)(A) of such subsection. 
‘‘(3) REQUIREMENT.— 
‘‘(A) IN
GENERAL.—In negotiating the 
maximum fair price of a selected drug, with re-
spect to an initial price applicability year for 
the selected drug, and, as applicable, in renego-
tiating the maximum fair price for such drug, 
with respect to a subsequent year during the 
price applicability period for such drug, in the 
case that the manufacturer of the selected drug 
offers under the negotiation or renegotiation, as 
applicable, a price for such drug that is not 
more than the target price described in sub-
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paragraph (B) for such drug for the respective 
year, the Secretary shall agree under such ne-
gotiation or renegotiation, respectively, to such 
offered price as the maximum fair price. 
‘‘(B) TARGET PRICE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the target price described in this sub-
paragraph for a selected drug with respect 
to a year, is the average price (which shall 
be the net average price, if practicable, and 
volume-weighted, if practicable) for a unit 
of such drug for sales of such drug, as 
computed (across different dosage forms 
and strengths of the drug and not based 
on the specific formulation or package size 
or package type of the drug) in the appli-
cable 
country 
described 
in 
section 
1191(c)(3)(B) with respect to such drug 
that, with respect to such year, has the 
lowest average price for such drug as com-
pared to the average prices (as so com-
puted) of such drug with respect to such 
year in the other applicable countries de-
scribed in such section with respect to such 
drug. 
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‘‘(ii) SELECTED DRUGS WITHOUT AIM 
PRICE.—In applying this paragraph in the 
case of negotiating the maximum fair price 
of a selected drug for which there is no 
AIM price available with respect to the ini-
tial price applicability year for such drug, 
or, as applicable, renegotiating the max-
imum fair price for such drug with respect 
to a subsequent year during the price ap-
plicability period for such drug before the 
first plan year for which there is an AIM 
price available for such drug, the target 
price described in this subparagraph for 
such drug and respective year is the 
amount that is 80 percent of the average 
manufacturer price (as defined in section 
1927(k)(1)) for such drug and year. 
‘‘(c) LIMITATION.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the maximum fair price negotiated (including as re-
negotiated) under this section for a selected drug, 
with respect to each plan year during a price appli-
cability period for such drug, shall not exceed 120 
percent of the AIM price applicable to such drug 
with respect to such year. 
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‘‘(2) SELECTED DRUGS WITHOUT AIM PRICE.— 
In the case of a selected drug for which there is no 
AIM price available with respect to the initial price 
applicability year for such drug, for each plan year 
during the price applicability period before the first 
plan year for which there is an AIM price available 
for such drug, the maximum fair price negotiated 
(including as renegotiated) under this section for the 
selected drug shall not exceed the amount equal to 
85 percent of the average manufacturer price for the 
drug with respect to such year. 
‘‘(d) CONSIDERATIONS.—For purposes of negotiating 
and, as applicable, renegotiating (including for purposes 
of determining whether to renegotiate) the maximum fair 
price of a selected drug under this part with the manufac-
turer of the drug, the Secretary, consistent with sub-
section (b)(2), shall take into consideration the factors de-
scribed in paragraphs (1), (2), (3), and (5), and may take 
into consideration the factor described in paragraph (4): 
‘‘(1) 
MANUFACTURER-SPECIFIC
INFORMA-
TION.—The following information, including as sub-
mitted by the manufacturer: 
‘‘(A) Research and development costs of 
the manufacturer for the drug and the extent to 
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which the manufacturer has recouped research 
and development costs. 
‘‘(B) Market data for the drug, including 
the distribution of sales across different pro-
grams and purchasers and projected future rev-
enues for the drug. 
‘‘(C) Unit costs of production and distribu-
tion of the drug. 
‘‘(D) Prior Federal financial support for 
novel therapeutic discovery and development 
with respect to the drug. 
‘‘(E) Data on patents and on existing and 
pending exclusivity for the drug. 
‘‘(F) National sales data for the drug. 
‘‘(G) Information on clinical trials for the 
drug in the United States or in applicable coun-
tries described in section 1191(c)(3)(B). 
‘‘(2) INFORMATION
ON
ALTERNATIVE
PROD-
UCTS.—The following information: 
‘‘(A) The extent to which the drug rep-
resents a therapeutic advance as compared to 
existing therapeutic alternatives and, to the ex-
tent such information is available, the costs of 
such existing therapeutic alternatives. 
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‘‘(B) Information on approval by the Food 
and Drug Administration of alternative drug 
products. 
‘‘(C) Information on comparative effective-
ness analysis for such products, taking into 
consideration the effects of such products on 
specific populations, such as individuals with 
disabilities, the elderly, terminally ill, children, 
and other patient populations. 
In considering information described in subpara-
graph (C), the Secretary shall not use evidence or 
findings from comparative clinical effectiveness re-
search in a manner that treats extending the life of 
an elderly, disabled, or terminally ill individual as of 
lower value than extending the life of an individual 
who is younger, nondisabled, or not terminally ill. 
Nothing in the previous sentence shall affect the ap-
plication or consideration of an AIM price for a se-
lected drug. 
‘‘(3) FOREIGN
SALES
INFORMATION.—To the 
extent available on a timely basis, including as pro-
vided by a manufacturer of the selected drug or oth-
erwise, information on sales of the selected drug in 
each 
of 
the 
countries 
described 
in 
section 
1191(c)(3)(B). 
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‘‘(4) VA DRUG PRICING INFORMATION.—Infor-
mation disclosed to the Secretary pursuant to sub-
section (f). 
‘‘(5) ADDITIONAL INFORMATION.—Information 
submitted to the Secretary, in accordance with a 
process specified by the Secretary, by other parties 
that are affected by the establishment of a maximum 
fair price for the selected drug. 
‘‘(e) REQUEST FOR INFORMATION.—For purposes of 
negotiating and, as applicable, renegotiating (including for 
purposes of determining whether to renegotiate) the max-
imum fair price of a selected drug under this part with 
the manufacturer of the drug, with respect to a price ap-
plicability period, and other relevant data for purposes of 
this section— 
‘‘(1) the Secretary shall, not later than the se-
lected drug publication date with respect to the ini-
tial price applicability year of such period, request 
drug pricing information from the manufacturer of 
such selected drug, including information described 
in subsection (d)(1); and 
‘‘(2) by not later than October 1 following the 
selected drug publication date, the manufacturer of 
such selected drug shall submit to the Secretary 
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such requested information in such form and man-
ner as the Secretary may require. 
The Secretary shall request, from the manufacturer or 
others, such additional information as may be needed to 
carry out the negotiation and renegotiation process under 
this section. 
‘‘(f) DISCLOSURE OF INFORMATION.—For purposes 
of this part, the Secretary of Veterans Affairs may disclose 
to the Secretary of Health and Human Services the price 
of any negotiation-eligible drug that is purchased pursuant 
to section 8126 of title 38, United States Code. 
‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES. 
‘‘(a) IN GENERAL.—With respect to an initial price 
applicability year and selected drug with respect to such 
year, not later than April 1 of the plan year prior to such 
initial price applicability year, the Secretary shall publish 
in the Federal Register the maximum fair price for such 
drug negotiated under this part with the manufacturer of 
such drug. 
‘‘(b) UPDATES.— 
‘‘(1) 
SUBSEQUENT
YEAR
MAXIMUM
FAIR 
PRICES.—For a selected drug, for each plan year 
subsequent to the initial price applicability year for 
such drug with respect to which an agreement for 
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such drug is in effect under section 1193, the Sec-
retary shall publish in the Federal Register— 
‘‘(A) subject to subparagraph (B), the 
amount equal to the maximum fair price pub-
lished for such drug for the previous year, in-
creased by the annual percentage increase in 
the consumer price index for all urban con-
sumers (all items; U.S. city average) as of Sep-
tember of such previous year; or 
‘‘(B) in the case the maximum fair price 
for such drug was renegotiated, for the first 
year for which such price as so renegotiated ap-
plies, such renegotiated maximum fair price. 
‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.— 
In the case of a selected drug with respect to an ini-
tial price applicability year for which the maximum 
fair price is determined under this part after the 
date of publication under this section, the Secretary 
shall publish such maximum fair price in the Fed-
eral Register by not later than 30 days after the 
date such maximum price is so determined. 
‘‘SEC. 1196. ADMINISTRATIVE DUTIES; COORDINATION PRO-
VISIONS. 
‘‘(a) ADMINISTRATIVE DUTIES.— 
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