I 
117TH CONGRESS 
1ST SESSION H. R. 3437 
To require the Secretary of Health and Human Services to guarantee 
BioBonds in order to provide funding for loans to eligible biomedical 
companies and universities to carry out clinical trials approved by the 
Food and Drug Administration, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 20, 2021 
Mr. RUSH (for himself, Mr. FITZPATRICK, Mr. BISHOP of Georgia, Mr. CAR-
SON, Mr. COHEN, Mr. COOPER, Mr. DANNY K. DAVIS of Illinois, Mr. 
GRIJALVA, Mr. LEVIN of California, Mr. SCHNEIDER, Ms. SEWELL, and 
Mr. THOMPSON of Mississippi) introduced the following bill; which was 
referred to the Committee on Energy and Commerce 
A BILL 
To require the Secretary of Health and Human Services 
to guarantee BioBonds in order to provide funding for 
loans to eligible biomedical companies and universities 
to carry out clinical trials approved by the Food and 
Drug Administration, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Long-term Opportuni-
ties for Advancing New Studies for Biomedical Research 
Act’’ or the ‘‘LOANS for Biomedical Research Act’’. 
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SEC. 2. BIOBONDS PROGRAM. 
(a) IN GENERAL.—Not later than 180 days after the 
date of enactment of this Act, the Secretary of Health and 
Human Services, in consultation with the Secretary of the 
Treasury, shall establish a program, to be known as the 
‘‘Biobonds Program’’, to increase innovative biomedical 
research into therapies to address unmet medical needs, 
under which biomedical researchers seeking to conduct 
clinical trials with respect to a drug or device, but who 
cannot secure appropriate funding to conduct such trials 
(as determined by the Secretary of the Treasury), receive 
financial assistance through— 
(1) the purchasing of loans by fiscal agents 
under section 3; and 
(2) the sale and guarantee of Biobonds com-
prised of these loans under section 4. 
(b) BIOMEDICAL RESEARCHERS ELIGIBLE FOR FI-
NANCIAL ASSISTANCE.— 
(1) IN GENERAL.—A person shall be eligible to 
receive a loan under the Biobonds Program if such 
person is conducting or seeking to conduct research 
with respect to a drug or device that is— 
(A) intended for use to meet an unmet 
medical need (as determined by the Secretary of 
Health and Human Services); and 
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(B) under investigation in a controlled 
clinical trial under— 
(i) an investigational drug application 
in effect under section 505(i) of the Fed-
eral Food, Drug, and Cosmetic Act (21 
U.S.C. 355(i)) or section 351(a)(3) of the 
Public Health Service Act (42 U.S.C. 
262(a)(3)) (as applicable); or 
(ii) an investigational device exemp-
tion in effect under section 520(g) of the 
Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 360j(g)). 
(2) RULEMAKING.—The Secretary of Health 
and Human Services, in consultation with the Sec-
retary of the Treasury, shall issue rules to carry out 
this subsection. 
SEC. 3. PURCHASE OF LOANS BY FISCAL AGENTS. 
(a) IN GENERAL.—Fiscal agents shall purchase 
loans— 
(1) made to an eligible recipient for the purpose 
of conducting the applicable clinical trial; and 
(2) with respect to which the fiscal agent deter-
mines that the borrower has the ability to repay the 
loan, based on collateral and financial capabilities 
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and not on the prospects for success of the clinical 
trial. 
(b) PRIORITY FOR LOANS.—The Secretary of Health 
and Human Services shall issue rules to require fiscal 
agents, in purchasing loans under this section, to— 
(1) purchase loans with respect to a diverse 
range of biomedical projects and not to favor one 
disease or disability, but with priority given to loans 
with potential to address unmet public health needs 
across the spectrum of diseases and disabilities; 
(2) consider as an important criterion for pur-
chasing loans with respect to clinical trials that they 
are being conducted by women researchers or re-
searchers who are members of a racial and ethnic 
minority group or disabled; and 
(3) prioritize purchasing loans with respect to 
clinical trials that include, where appropriate, rep-
resentative levels of women, members of a racial and 
ethnic minority groups, disabled individuals, and 
other diverse participants, as specified in guidance 
issued under section 505(b) of the Federal Food, 
Drug, and Cosmetic Act. 
(c) MAXIMUM LOAN AMOUNT.—A fiscal agent may 
not purchase loans in any one year with respect to a single 
recipient in an amount more than $25,000,000. 
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(d) LOAN TERMS AND CONDITIONS.—The Secretary 
of Health and Human Services, in consultation with the 
Secretary of the Treasury, shall issue rules to— 
(1) establish criteria for the terms for loans 
that are eligible for purchase under this section; 
(2) establish criteria for the interest rate for 
loans that are eligible for purchase under this sec-
tion, which shall be based on applicable rates for ob-
ligations of the Department of the Treasury of com-
parable maturity plus a rate to be determined by the 
Secretary of the Treasury to reflect— 
(A) prevailing market conditions; 
(B) taxpayer protection; and 
(C) the need to ensure ample funding for 
clinical trials described under section 2; and 
(3) permit the use of warrants and similar in-
struments with respect to loans that are eligible for 
purchase under this section, where necessary to pro-
tect taxpayer interests. 
SEC. 4. BIOBONDS. 
(a) ISSUANCE.—The fiscal agents shall issue bonds, 
to be known as ‘‘BioBonds’’, collateralized by loans pur-
chased under this Act, and sell the BioBonds to investors. 
(b) BIOBOND
GUARANTEE.—The Secretary of 
Health and Human Services shall provide a guarantee on 
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the payment of principal (but not the payment of interest) 
for each BioBond, on a bond-by-bond basis, in an amount 
to be determined by the Secretary, but in no case may 
the amount of such guarantee be more than 90 percent 
of the principal of the BioBond. 
(c) SIZE OF ISSUANCES.—The Secretary of Health 
and Human Services, in consultation with the Secretary 
of the Treasury, shall establish the size of each BioBond 
issuance, to ensure market acceptance, portfolio diver-
sification, and the protection of taxpayer interests. 
(d) AUCTIONS.—The Secretary of Health and 
Human Services may— 
(1) authorize fiscal agents to use an auction to 
select the purchasers of BioBonds; and 
(2) require such auction to include a process 
that minimizes the risk to the Government of the 
Federal guarantee involved by allowing bidders for a 
BioBond to compete against each other by bidding 
on the percentage of the Federal guarantee under 
subsection (b) with respect to the BioBond, with the 
bid for the lowest percentage winning the auction, 
taking into account other terms and conditions set 
by the issuer to ensure the lowest total cost to the 
Government. 
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(e) PORTFOLIO DIVERSITY.—With respect to an 
issuance of BioBonds and the loans collateralizing such 
issuance, no more than 15 percent of the principal amount 
of such issuance may relate to a group of related diseases 
or disabilities (as defined by the Secretary of Health and 
Human Services). 
(f) PRIORITIZATION OF TAXPAYER INTERESTS.—All 
BioBonds shall be structured to give first priority to pro-
tecting the interests of the United States by ensuring 
that— 
(1) all cash proceeds received from the repay-
ment of a BioBond are first used to reduce the 
amount of principal guaranteed by the Secretary of 
Health and Human Services; and 
(2) the Secretary of Health and Human Serv-
ices has a senior claim on all assets and collateral 
under a BioBond to the extent the guarantee pro-
vided by the Secretary is not extinguished. 
SEC. 5. FISCAL AGENTS. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall contract with institutions to carry out the duties of 
fiscal agents under this Act, under such criteria as the 
Secretary of Health and Human Services, in consultation 
with the Secretary of the Treasury, determines appro-
priate. 
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(b) SOUND UNDERWRITING PRACTICES.—The Sec-
retary of the Treasury shall issue rules to ensure that fis-
cal agents use sound underwriting practices that protect 
the interests of— 
(1) the United States; 
(2) BioBond investors; and 
(3) the long-term promotion of innovative bio-
medical research into therapies to address unmet 
medical needs. 
(c) COMPENSATION.—A fiscal agent shall be com-
pensated for performing duties under this Act from the 
proceeds from the sale of Biobonds issued by the fiscal 
agent, at such rate and on such terms as the Secretary 
of the Treasury may provide. 
(d) RULEMAKING.—Not later than 180 days after the 
date of enactment of this Act, the Secretary of the Treas-
ury shall issue final rules to carry out this section. 
SEC. 6. REPORTS. 
(a) GAO STUDY
AND REPORTS
ON OTHER RE-
SEARCH PROJECTS.— 
(1) ONGOING
STUDY.—The Comptroller Gen-
eral of the United States shall carry out an ongoing 
study to consider whether a program similar to the 
BioBonds Program should be established for other 
biomedical research projects. 
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(2) REPORT.—The Comptroller General shall 
issue a report to the Congress, not less frequently 
than annually, on all findings and determinations 
made in carrying out the study required under para-
graph (1). 
(b) REPORTS ON THE BIOBONDS PROGRAM.—Not 
later than 2 years after the date on which BioBonds are 
first issued, and annually thereafter during the period 
ending on the date that is 4 years after the date on which 
BioBonds are first issued, the Comptroller General and 
the Secretary of Health and Human Services shall each 
issue a separate report to the Congress on— 
(1) the progress of the issuance of BioBonds; 
(2) the reasons for any problems achieving de-
sired volumes of BioBonds or the ability of the Pro-
gram to proceed at a faster pace; 
(3) an analysis of the risk to the Government 
in providing the Federal guarantee described under 
section 4(b); 
(4) any recommended improvements to the Pro-
gram; and 
(5) any other matter that the Comptroller Gen-
eral or the Secretary, respectively, determines is ap-
propriate. 
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SEC. 7. AUTHORIZATION OF APPROPRIATIONS. 
(a) IN GENERAL.—There is authorized to be appro-
priated to the Secretary of Health and Human Services 
to pay for the cost of guaranteeing BioBonds under this 
Act $10,000,000,000 for each of fiscal years 2022, 2023, 
and 2024. 
(b) PROGRAM FUNDING.— 
(1) ADMINISTRATIVE
EXPENSES
PAID
FROM 
BOND SALES.—Except as provided under paragraph 
(2), the cost of carrying out this Act, including the 
cost to the Secretary of Health and Human Services 
in administering the BioBond Program, shall be re-
covered from the proceeds from the sale of BioBonds 
or from fees as set forth in paragraph (3). 
(2) SPECIFIC
APPROPRIATION
OR
CONTRIBU-
TION.—No guarantee shall be made under this Act 
unless— 
(A) an appropriation for the full cost of 
the guarantee has been made; 
(B) the Secretary has received from the 
BioBond issuer a payment in full for the cost 
of the guarantee; or 
(C) a combination of an appropriation and 
the deposit of a payment from the bond issuer 
into the Treasury has been made in a sufficient 
amount to cover the full cost of the guarantee. 
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(3) COST OF GUARANTEES.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services shall charge and 
collect fees for guarantees under this Act in 
amounts the Secretary determines are sufficient 
to recover applicable administrative expenses. 
(B) AVAILABILITY.—Fees collected under 
this subsection— 
(i) shall be deposited by the Secretary 
into the Treasury; and 
(ii) are authorized to remain available 
until expended. 
SEC. 8. DEFINITIONS. 
In this Act: 
(1) COST.—The term ‘‘cost’’ has the meaning 
given to the term ‘‘cost of a loan guarantee’’ in sec-
tion 502(5)(C) of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661a(5)(C)). 
(2) ELIGIBLE RECIPIENT.—The term ‘‘eligible 
recipient’’ means a person described under section 
2(b). 
(3) FISCAL AGENT.—The term ‘‘fiscal agent’’ 
means a person selected as a fiscal agent under sec-
tion 5(a). 
Æ 
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