credit for the taxable year in which the transfer oc-
curred. Any unused amounts of such credit may be 
carried back or forward to other taxable years in ac-
cordance with section 39. 
‘‘(3) DEFINITION
OF
QUALIFIED
PHARMA-
CEUTICAL RESEARCH TAXPAYER.—For purposes of 
this section, the term ‘qualified pharmaceutical re-
search taxpayer’ means any domestic corporation the 
primary mission of which is pharmaceutical research 
or development.’’. 
(b) MADE PART
OF BUSINESS CREDIT.—Section 
38(b) of such Code is amended by striking ‘‘plus’’ at the 
end of paragraph (35), by striking the period at the end 
of paragraph (36) and inserting ‘‘, plus’’, and by adding 
at the end the following new paragraph: 
‘‘(37) the qualified infectious disease product 
credit determined under section 45S(a).’’. 
(c) CLERICAL AMENDMENTS.—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: 
‘‘45S. Clinical testing expenses for qualified infectious disease products.’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
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SEC. 3. CLINICAL TESTING EXPENSES FOR RAPID INFEC-
TIOUS DISEASES DIAGNOSTIC TESTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986, as amended by section 2, is amended by adding at 
the end the following new section: 
‘‘SEC. 45T. CLINICAL TESTING EXPENSES FOR RAPID IN-
FECTIOUS DISEASES DIAGNOSTIC TESTS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the credit determined under this section for the taxable 
year is an amount equal to 50 percent of the qualified 
clinical testing expenses for the taxable year. 
‘‘(b) QUALIFIED CLINICAL TESTING EXPENSES.— 
For purposes of this section— 
‘‘(1) 
QUALIFIED
CLINICAL
TESTING
EX-
PENSES.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, the term ‘qualified 
clinical testing expenses’ means the amounts 
which are paid or incurred by the taxpayer dur-
ing the taxable year which would be described 
in subsection (b) of section 41 if such sub-
section were applied with the modifications set 
forth in subparagraph (B). 
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‘‘(B) MODIFICATIONS.—For purposes of 
subparagraph (A), subsection (b) of section 41 
shall be applied— 
‘‘(i) by substituting ‘clinical testing’ 
for ‘qualified research’ each place it ap-
pears in paragraphs (2) and (3) of such 
subsection, and 
‘‘(ii) by substituting ‘100 percent’ for 
‘65 percent’ in paragraph (3)(A) of such 
subsection. 
‘‘(C) EXCLUSION FOR AMOUNTS FUNDED 
BY GRANTS, ETC.—The term ‘qualified clinical 
testing expenses’ shall not include any amount 
to the extent such amount is funded by any 
grant, contract, or otherwise by another person 
(or any governmental entity). 
‘‘(D) SPECIAL
RULE.—For purposes of 
this paragraph, section 41 shall be deemed to 
remain in effect for periods after enactment of 
this section. 
‘‘(2) CLINICAL TESTING.— 
‘‘(A) IN
GENERAL.—The term ‘clinical 
testing’ means any human clinical testing— 
‘‘(i) which is carried out under an ex-
emption for a device being tested under 
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section 520(g) of the Federal Food, Drug, 
and Cosmetic Act (or regulations issued 
under such section), 
‘‘(ii) which is related only to such use 
as a qualified rapid infectious diseases di-
agnostic test, 
‘‘(iii) which occurs before the date on 
which an application with respect to such 
device receives premarket approval, if re-
quired, under section 515 of such Act, or 
receives clearance, if required, under sec-
tion 510(k) of such Act, and 
‘‘(iv) which is conducted by or on be-
half of the taxpayer to whom the exemp-
tion under section 520(g) of such Act was 
granted. 
‘‘(c) COORDINATION WITH CREDIT FOR INCREASING 
RESEARCH EXPENDITURES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any qualified clinical testing expenses for 
a taxable year to which an election under this sec-
tion applies shall not be taken into account for pur-
poses of determining the credit allowable under sec-
tion 41 for such taxable year. 
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‘‘(2) EXPENSES
INCLUDED
IN
DETERMINING 
BASE PERIOD RESEARCH EXPENSES.—Any qualified 
clinical testing expenses for any taxable year which 
are qualified research expenses (within the meaning 
of section 41(b)) shall be taken into account in de-
termining base period research expenses for pur-
poses of applying section 41 to subsequent taxable 
years. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) QUALIFIED RAPID INFECTIOUS DISEASES 
DIAGNOSTIC
TEST.—For purposes of this section, 
the term ‘qualified rapid infectious diseases diag-
nostic test’ means an in-vitro diagnostic (IVD) de-
vice that provides results in less than four hours and 
that is used to identify or detect the presence, con-
centration, or characteristics of a serious or life- 
threatening infection, including those caused by (1) 
an antibacterial or antifungal resistant pathogen, in-
cluding novel or emerging infectious pathogens or 
(2) qualifying pathogens listed by the Secretary of 
Health and Human Services under Chapter V (21 
U.S.C. 351 et seq.) section 505E(f). 
‘‘(2) SPECIAL LIMITATION ON FOREIGN TEST-
ING.— 
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‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section with respect to any 
clinical testing conducted outside the United 
States unless— 
‘‘(i) such testing is conducted outside 
the United States because there is an in-
sufficient testing population in the United 
States, and 
‘‘(ii) such testing is conducted by a 
United States person or by any other per-
son who is not related to the taxpayer to 
whom the exemption under section 520(g) 
of Federal Food, Drug, and Cosmetic Act 
was granted. 
‘‘(B) 
INSUFFICIENT
TESTING
POPU-
LATION.—For purposes of this section, the test-
ing population in the United States is insuffi-
cient if there are not within the United States 
the number of available and appropriate human 
subjects needed to produce reliable and timely 
data from the clinical investigation. 
‘‘(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. 
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payer’ means any domestic corporation that de-
rives— 
‘‘(A) any gross income from research or 
development on diagnostic tests used to identify 
or detect the presence, concentration or charac-
teristics of a serious or life-threatening infec-
tious disease or pathogen; or 
‘‘(B) any gross income from research or 
development on qualified infectious disease 
products within the meaning given to such term 
in section 505E(g) of the Federal, Food, Drug, 
and Cosmetic Act; or 
‘‘(C) more than 50 percent of its gross in-
come from activities related to health care.’’. 
(b) MADE PART
OF BUSINESS CREDIT.—Section 
38(b) of such Code, as amended by section 2, is amended 
by striking ‘‘plus’’ at the end of paragraph (36), by strik-
ing the period at the end of paragraph (37) and inserting 
‘‘, plus’’, and by adding at the end the following new para-
graph: 
‘‘(38) the credit determined under section 
45T(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
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of such Code, as amended by section 2, is amended by 
adding at the end the following new item: 
‘‘Sec. 45T. Clinical testing expenses for rapid infectious diseases diagnostic 
tests.’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
Æ 
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