spect 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 re-
search unless such research is pursuant to a re-
search 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 regula-
tions 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 sec-
tion.
‘‘(4) ELECTION.—This section (other than sub-
section (e)) shall apply to any taxpayer for any tax-
able 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 be allowed
under subpart C.
‘‘(2) ELECTING
QUALIFIED
TAXPAYER.—For
purposes of this subsection, the term ‘electing quali-
fied taxpayer’ means, with respect to any taxable
year, any domestic C corporation if—
‘‘(A) the aggregate gross assets of such
corporation throughout such taxable year are
$500,000,000 or less,
‘‘(B) the net income tax (as defined in sec-
tion 38(c)) of such corporation is zero for such
taxable year and the 2 preceding taxable year,
‘‘(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)), and
‘‘(D) the corporation elects the application
of this subsection for such taxable year.
‘‘(3) AGGREGATE
GROSS
ASSETS.—Aggregate
gross assets shall be determined under section
1202(d).
‘‘(4) CONTROLLED
GROUPS.—A corporation
shall be treated as meeting the requirement of para-
graph (2)(B) only if each person who is treated with
such corporation as a single employer under sub-
sections (a) and (b) of section 52 also meets such re-
quirement.’’
(b) INCLUSION IN GENERAL BUSINESS CREDIT.—
(1) IN GENERAL.—Section 38(b) of such Code
is amended by striking ‘‘plus’’ at the end of para-
graph (12), by striking the period at the end of
paragraph (13) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph:
‘‘(14) the vaccine research credit determined
under section 45E.’’.
(2) TRANSITION RULE.—Section 39(d) of such
Code is amended by adding at the end the following
new paragraph:
‘‘(10) NO CARRYBACK OF SECTION 45E CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the vaccine research credit determined
under section 45E may be carried back to a taxable
year ending before the date of the enactment of sec-
tion 45E.’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code is amended by adding at the end the following
new subsection:
‘‘(d) CREDIT FOR QUALIFIED VACCINE RESEARCH
EXPENSES.—
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified vaccine re-
search expenses (as defined in section 45E(b)) oth-
erwise allowable as a deduction for the taxable year
which is equal to the amount of the credit deter-
mined for such taxable year under section 45E(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 such Code (defining qualified busi-
ness credits) is amended by striking ‘‘and’’ at the end of
paragraph (8), by striking the period at the end of para-
graph (9) and inserting ‘‘, and’’, and by adding at the
end the following new paragraph:
‘‘(10) the vaccine research credit determined
under section 45E(a) (other than such credit deter-
mined under the rules of section 280C(d)(2)).’’.
(e) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 45E. Credit for medical research related to developing vac-
cines against widespread diseases.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
(g) STUDY.—The Institute of Medicine shall conduct
a study of the degree to which the credit under section
45E of the Internal Revenue Code of 1986 has stimulated
vaccine research. Not later than the date which is 5 years
after the date of the enactment of this Act, the Institute
of Medicine shall submit to the Congress the results of
such study together with any recommendations it may
have to improve the effectiveness of such credit has stimu-
lated vaccine research.
SEC. 3. CREDIT FOR CERTAIN SALES OF LIFESAVING VAC-
CINES.
(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:
‘‘SEC. 45F. 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 tax-
payer 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 pur-
poses 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 De-
velopment).
‘‘(3) QUALIFIED VACCINE.—The term ‘qualified
vaccine’ means any vaccine and microbicide—
‘‘(A) 
which 
is 
described 
in 
section
45E(b)(3)(C), and
‘‘(B) which is approved as a new drug
after the date of the enactment of this para-
graph by—
‘‘(i) the Food and Drug Administra-
tion,
‘‘(ii) the World Health Organization,
or
‘‘(iii) the appropriate authority of a
county 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 limita-
tion amount allocated under subsection (d) with respect
to such sale.
‘‘(d) NATIONAL LIMITATION ON AMOUNT OF CRED-
ITS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3), there is a lifesaving vaccine sale credit for
each calendar year equal to—
‘‘(A) $100,000,000 for each of years 2002
through 2006, and
‘‘(B) $125,000,000 for each of years 2007
through 2010.
‘‘(2) ALLOCATION OF LIMITATION.—The limita-
tion amount under paragraph (1) shall be allocated
for any calendar year by the Administrator of the
United States Agency for International Development
among organizations with an application approved
by the Administrator. The Administrator shall pre-
scribe the procedures for applications for an alloca-
tion 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 pre-
scribe and shall include a detailed plan for distribu-
tion of the vaccine.
‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If
the limitation amount under paragraph (1) for any
calendar year exceeds the aggregate amount allo-
cated 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 2020.
‘‘(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.—
(1) IN GENERAL.—Section 38(b) of such Code
(relating to current year business credit) is amended
by striking ‘‘plus’’ at the end of paragraph (13), by
striking the period at the end of paragraph (14) and
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph:
‘‘(15) the lifesaving vaccine sale credit deter-
mined under section 45F.’’.
(2) TRANSITION RULE.—Section 39(d) of such
Code (relating to transitional rules) is amended by
adding at the end the following new paragraph:
‘‘(11) NO CARRYBACK OF SECTION 45F CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the lifesaving vaccine sale credit deter-
mined under section 45F may be carried back to a
taxable year ending before the date of the enactment
of section 45F.’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 45F. 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, 2001, in taxable years ending after such date.
SEC. 4. LIFESAVING VACCINE PURCHASE FUND.
(a) PURPOSE.—It is the purpose of this section to—
(1) create incentives for private sector research
into vaccines for HIV, malaria, tuberculosis, and
other major infectious diseases; and
(2) ensure that vaccines for major infectious
diseases are affordable and widely distributed.
(b) DEFINITIONS.—In this section:
(1) DEVELOPING COUNTRY.—The term ‘‘devel-
oping country’’ means a country which the Inter-
national Bank for Reconstruction and Development
(commonly referred to as the ‘World Bank’) deter-
mines to be a country with a lower middle income
or less.
(2) ELIGIBLE
VACCINE.—The term ‘‘eligible
vaccine’’ has the meaning given the term ‘‘qualified
vaccine’’ in section 45F(b)(3) of the Internal Rev-
enue Code of 1986.
(c) ESTABLISHMENT OF FUND.—As of the date that
the Secretary of the Treasury (in this section referred to
as the ‘‘Secretary’’) determines that any eligible vaccine
is available for purchase, there is established in the Treas-
ury of the United States a fund to be known as the ‘‘Life-
saving Vaccine Purchase Fund’’ (in this section referred
to as the ‘‘Fund’’) consisting of amounts appropriated
under subsection (f).
(d) INVESTMENT OF FUND.—Amounts in the 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.
(e) USE OF FUND.—
(1) IN GENERAL.—The Secretary is authorized
to expend amounts in the Fund for purchases of eli-
gible vaccines. Such vaccines shall be distributed to
developing countries.
(2) PURCHASE
AND
DISTRIBUTION
OF
VAC-
CINES.—
(1) PURCHASE
PRICES, ETC.—Vaccines pur-
chased by the Fund—
(A) shall be made at prices which take into
account the seller’s research and development
and manufacturing costs and the desirability of
the vaccine purchased, and
(B) shall be made under a funding formula
establishing a minimum price per dose and min-
imum technical requirements and a market test
requirement for the eligible vaccine.
(3) 
DISTRIBUTION.—Eligible 
vaccines 
pur-
chased by the Fund shall be distributed to devel-
oping countries under agreements between the
United States Agency for International Development
and international organizations or recipient devel-
oping countries that provide for—
(A) consideration of the prevalence of the
disease treated by the eligible vaccine in the re-
cipient developing country;
(B) consideration of the ability of the re-
cipient country to effectively and safely deliver
the vaccines; and
(C) a required matching payment by the
recipient developing country based on the per
capita income of the country, in an amount not
in excess of 25 percent of the purchase price
paid for such vaccine.
(4) REGULATIONS.—The Secretary shall pro-
mulgate such regulations as are necessary to carry
out the provisions of this subsection.
(5) CONSULTATION.—The Secretary shall pro-
mulgate regulations under paragraph (4) after ex-
tensive consultation with—
(A) the International Bank for Reconstruc-
tion and Development (commonly referred to as
the ‘‘World Bank’’);
(B) the World Health Organization;
(C) the Secretary of Health and Human
Services; and
(D) the Lifesaving Vaccine Advisory Com-
mission.
(f) APPROPRIATIONS.—
(1) IN GENERAL.—Subject to paragraph (2),
there are appropriated out of any funds in the
Treasury not otherwise appropriated such sums as
may be necessary to carry out the purposes of the
Fund for each of 10 fiscal years beginning with the
first fiscal year after the date that the Secretary de-
termines that any eligible vaccine is available for
purchase by the Fund.
(2) TRANSFER TO FUND.—The Secretary shall
transfer the amount appropriated under paragraph
(1) for a fiscal year to the Fund.
(3) 
AVAILABILITY.—Amounts 
appropriated
under this section shall remain available until ex-
pended.
SEC. 5. SENSES OF CONGRESS.
It is the sense of Congress that:
(1) MANUFACTURING
CAPACITY.—Delivery of
vaccines to developing country populations is often
delayed a decade or more after these products are li-
censed for use in industrialized nations. This delay
is due partly to inadequate manufacturing capacity
that limits supply of vaccines in the early years of
their distribution. The public sector has a role to
play in ensuring that manufacturing capacity for
vaccines for the priority diseases referred to in sec-
tion 45E(b)(2) of the Internal Revenue Code of
1986 (as added by this Act) is sufficient to secure
access to these vaccines simultaneously in industri-
alized and developing countries. It is appropriate for
the Federal government to consider a variety of
mechanisms in order to ensure adequate manufac-
turing capacity to meet this goal. These mechanisms
may include loan programs, accelerated depreciation,
revenue bonds, or infrastructure grants.
(2) DISTRIBUTION
OF
VACCINES
DEVELOPED
USING CREDIT.—Given the important goal of ensur-
ing that all those in need, in both industrialized and
developing countries, reap the benefits of any vac-
cine or microbicide that is developed for HIV, tuber-
culosis, or malaria, and acknowledging the impor-
tance of intellectual property rights and the right of
corporations and shareholders of corporations to set
prices, retain patent ownership, and maintain con-
fidentiality of privileged information, corporations
and shareholders of corporations who elect to take
the credit under section 45E of the Internal Revenue
Code of 1986 for research expenses incurred in the
development of a vaccine or microbicide shall certify
to the Secretary of the Treasury that, within 1 year
after that vaccine or microbicide is first licensed,
such corporation will establish a plan to maximize
distribution of such vaccine or microbicide in the de-
veloping world using such mechanisms as technology
transfer, differential pricing, and in-country produc-
tion where possible, or other mechanisms to maxi-
mize international access to high quality and afford-
able vaccines.
(3) CONTINUED
SUPPORT
OF
GLOBAL
EF-
FORTS.—The Federal government should continue
supporting the work of the Global Alliance for Vac-
cines and Immunizations and the Global Fund for
Children’s Vaccines as an appropriate and effective
vehicle to purchase and distribute these vaccines at
an affordable price once they are discovered in order
to distribute them to the developing world, as it does
with vaccines against hepatitis-B, haemophilus influ-
enza, and yellow fewer.
(4) TIERED PRICING.—Flexible or differential
pricing for vaccines, providing lowered prices for the
poorest countries, is one of several valid strategies to
accelerate the introduction of vaccines in developing
countries.
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