text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Reinvigorating Antibiotic and 
  Diagnostic Innovation Act of 2015''.
  
  SEC. 2. CLINICAL TESTING EXPENSES FOR QUALIFIED INFECTIOUS DISEASE 
                PRODUCTS.
  
      (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
  of the Internal Revenue Code of 1986 is amended by adding at the end 
  the following new section:
  
  ``SEC. 45S. CLINICAL TESTING EXPENSES FOR QUALIFIED INFECTIOUS DISEASE 
                PRODUCTS.
  
      ``(a) General Rule.--For purposes of section 38, the qualified 
  infectious disease product 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 expenses.--
                      ``(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 during the taxable year which would be 
                  described in subsection (b) of section 41 if such 
                  subsection were applied with the modifications set 
                  forth in subparagraph (B).
                      ``(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 appears 
                          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 
                          exemption for a drug being tested as an 
                          antibiotic or antifungal drug under section 
                          505(i) of the Federal Food, Drug, and Cosmetic 
                          Act (or regulations issued under such section),
                              ``(ii) which occurs before the date on 
                          which an application with respect to such drug 
                          is approved under section 505(b) of such Act 
                          or, if the drug is a biological product, before 
                          the date on which a license for such drug is 
                          issued under section 351 of the Public Health 
                          Service Act, and
                              ``(iii) which is conducted by or on behalf 
                          of the taxpayer to whom exemption under section 
                          505(i) of such Act is granted.
                      ``(B) Testing must be related to use as qualified 
                  infectious disease product.--Human clinical testing 
                  shall be taken into account under subparagraph (A) only 
                  to the extent such testing is related to the use of the 
                  drug as a qualified infectious disease product.
      ``(c) Coordination With Credit for Increasing Research 
  Expenditures.--
              ``(1) In general.--Except as provided in paragraph (2), any 
          qualified clinical testing expenses for a taxable year to which 
          an election under this section applies shall not be taken into 
          account for purposes of determining the credit allowable under 
          section 41 for such taxable year.
              ``(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 
          determining base period research expenses for purposes of 
          applying section 41 to subsequent taxable years.
      ``(d) Definitions and Special Rules.--
              ``(1) Qualified infectious disease product.--For purposes 
          of this section, the term `qualified infectious disease 
          product' means any drug or biological product for human use 
          that--
                      ``(A) is intended to treat a serious or life-
                  threatening infection, including those caused by--
                              ``(i) an antibacterial or antifungal 
                          resistant pathogen (including novel or emerging 
                          infectious pathogens), or
                              ``(ii) qualifying pathogens listed by the 
                          Secretary of Health and Human Services under 
                          section 505E(f) of the Federal Food, Drug, and 
                          Cosmetic Act (21 U.S.C. 351 et seq.), and
                      ``(B) is intended to treat an infection for which 
                  there is an unmet medical need as defined by the 
                  Secretary of Health and Human Services.
              ``(2) Special limitation on foreign testing.--
                      ``(A) In general.--No credit shall be allowed 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 insufficient 
                          testing population in the United States, and
                              ``(ii) such testing is conducted by a 
                          United States person or by any other person who 
                          is not related to the taxpayer to whom 
                          exemption under section 505(i) of the Federal 
                          Food, Drug, and Cosmetic Act is granted.
                      ``(B) Insufficient testing population.--For 
                  purposes of this section, the testing population in the 
                  United States is insufficient 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 section.
              ``(4) Election.--This section shall apply to any taxpayer 
          for any taxable year only if such taxpayer elects (at such time 
          and in such manner as the Secretary may by regulations 
          prescribe) to have this section apply for such taxable year.
      ``(e) Transferability.--
              ``(1) In general.--Any taxpayer holding a credit under this 
          section may transfer for valuable consideration unused but 
          otherwise allowable credit for use by a qualified 
          pharmaceutical research taxpayer. A taxpayer that transfers any 
          amount of credit under this section shall file a notification 
          of such transfer to the Secretary in accordance with procedures 
          and forms prescribed by the Secretary.
              ``(2) Use of transferred credit.--Any qualified 
          pharmaceutical research taxpayer that receives credit that has 
          been transferred shall use such credit for the taxable year in 
          which the transfer occurred. Any unused amounts of such credit 
          may be carried back or forward to other taxable years in 
          accordance with section 39.
              ``(3) Definition of qualified pharmaceutical research 
          taxpayer.--For purposes of this section, the term `qualified 
          pharmaceutical research 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 following 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.
  
  SEC. 3. CLINICAL TESTING EXPENSES FOR RAPID INFECTIOUS DISEASES 
                DIAGNOSTIC TESTS.
  
      (a) In General.--Subpart D of part IV of subchapter 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 INFECTIOUS 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 expenses.--
                      ``(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 during the taxable year which would be 
                  described in subsection (b) of section 41 if such 
                  subsection were applied with the modifications set 
                  forth in subparagraph (B).
                      ``(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 appears 
                          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 
                          exemption for a device being tested under 
                          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 
                          diagnostic test,
                              ``(iii) which occurs before the date on 
                          which an application with respect to such 
                          device receives premarket approval, if 
                          required, under section 515 of such Act, or 
                          receives clearance, if required, under section 
                          510(k) of such Act, and
                              ``(iv) which is conducted by or on behalf 
                          of the taxpayer to whom the exemption under 
                          section 520(g) of such Act was granted.
      ``(c) Coordination With Credit for Increasing Research 
  Expenditures.--
              ``(1) In general.--Except as provided in paragraph (2), any 
          qualified clinical testing expenses for a taxable year to which 
          an election under this section applies shall not be taken into 
          account for purposes of determining the credit allowable under 
          section 41 for such taxable year.
              ``(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 
          determining base period research expenses for purposes 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 diagnostic test' means an in-vitro 
          diagnostic (IVD) device that provides results in less than four 
          hours and that is used to identify or detect the presence, 
          concentration, or characteristics of a serious or life-
          threatening infection, including those caused by (1) an 
          antibacterial or antifungal resistant pathogen, including 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 testing.--
                      ``(A) In general.--No credit shall be allowed 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 insufficient 
                          testing population in the United States, and
                              ``(ii) such testing is conducted by a 
                          United States person or by any other person 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 population.--For 
                  purposes of this section, the testing population in the 
                  United States is insufficient 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 section.
              ``(4) Election.--This section shall apply to any taxpayer 
          for any taxable year only if such taxpayer elects (at such time 
          and in such manner as the Secretary may by regulations 
          prescribe) to have this section apply for such taxable year.
      ``(e) Transferability.--
              ``(1) In general.--Any taxpayer holding a credit under this 
          section may transfer for valuable consideration unused but 
          otherwise allowable credit for use by a qualified diagnostics 
          research taxpayer. A taxpayer that transfers any amount of 
          credit under this section shall file a notification of such 
          transfer to the Secretary in accordance with procedures and 
          forms prescribed by the Secretary.
              ``(2) Use of transferred credit.--Any qualified diagnostics 
          research taxpayer that receives credit that has been 
          transferred shall use such credit for the taxable year in which 
          the transfer occurred. Any unused amounts of such credit may be 
          carried back or forward to other taxable years in accordance 
          with section 39.
              ``(3) Definition of qualified diagnostics research 
          taxpayer.--For purposes of this section, the term `qualified 
          diagnostics research taxpayer' means any domestic corporation 
          that derives--
                      ``(A) any gross income from research or development 
                  on diagnostic tests used to identify or detect the 
                  presence, concentration or characteristics of a serious 
                  or life-threatening infectious 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 income 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 striking the period at the end of paragraph (37) and 
  inserting ``, plus'', and by adding at the end the following new 
  paragraph:
              ``(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 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.
target: Reinvigorating Antibiotic and Diagnostic Innovation Act of 2015 This bill amends the Internal Revenue Code to allow tax credits for 50% of the clinical testing expenses for: (1) infectious disease products that are intended to treat a serious or life-threatening infection, including one caused by an antibacterial or antifungal resistant pathogen or a qualifying pathogen listed by the Department of Health and Human Services as having the potential to pose a serious threat to public health; and (2) in-vitro diagnostic devices that identify in less than four hours the presence, concentration, or characteristics of a serious or life-threatening infection. 
feat_title: Reinvigorating Antibiotic and Diagnostic Innovation Act of 2015