To strengthen and protect America in the war on terror.

January 24, 2005

Mr. GREGG (for himself, Mr. FRIST, Mr. SESSIONS, Mr. DEWINE, Mr. ALLEN, Mr. SANTORUM, Mr. MCCONNELL, and Mr. DEMINT) introduced the following bill; which was read twice and referred to the Committee on Finance

To strengthen and protect America in the war on terror.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

(a) SHORT TITLE- This Act may be cited as the `Protecting America in the War on Terror Act of 2005'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title.

TITLE I--BIOPREPAREDNESS

Sec. 101. Short title.

Subtitle A--Product Development

Chapter 1--Partnering With the Private Sector

Sec. 111. Expansion of countermeasures covered by BioShield.

Sec. 112. Enhancing availability of private and international sector financing.

Sec. 113. Restoration of patent term.

Sec. 114. International harmonization of regulations.

Sec. 115. Development of additional animal models.

Sec. 116. Collaboration and coordination.

Chapter 2--Ensuring Regulatory Efficiency

Sec. 121. Commission on Countermeasure and Vaccine Regulation.

Sec. 122. Technical assistance.

Sec. 123. Requirement to fully inform.

Sec. 125. Accelerated approval of countermeasures or vaccines.

Sec. 126. National uniformity for approved products.

Subtitle B--Litigation Reform

Chapter 1--Protection for Countermeasures and Products Protecting Against Pandemics, Epidemics, and Bioterrorism

Sec. 131. Liability protections for pandemics, epidemics, and countermeasures.

Chapter 2--Vaccine Injury Compensation Program

Sec. 141. Vaccine injury compensation and vaccine litigation reform.

Sec. 142. Modifications to vaccines for children program.

Chapter 3--Encouraging Vaccine and Countermeasure Production Capacity

Sec. 151. Incentives for the construction of vaccine and countermeasure manufacturing facilities.

Sec. 152. Credit for medical research related to developing vaccines or countermeasures.

Sec. 153. Grants to construct and improve research and development and manufacturing of countermeasures or vaccines.

Sec. 154. Revenue recognition for adult and pediatric vaccines and other countermeasures against potential acts of terrorism.

Subtitle C--Public Health Preparedness

Chapter 1--Capacity To Respond

Sec. 171. Pandemic influenza preparedness and response plan.

Sec. 172. National Notifiable Disease Surveillance Program.

Sec. 173. Enhancing critical capacity for illness detection.

Sec. 174. Evaluation of public health capacity outcomes.

Sec. 175. Nonimmigrant health screening.

Sec. 176. Inspection, screening, and quarantining of live animals.

Sec. 177. Authority to procure aircraft.

Chapter 2--Public Health Workforce

Sec. 181. Public health workforce scholarship and loan repayment program.

Chapter 3--Preparedness Updates

Sec. 191. Report on preparedness.

Sec. 192. Enhancing global response capabilities.

TITLE II--INCREASED BENEFITS FOR FAMILIES OF DECEASED MEMBERS OF THE ARMED FORCES.

Sec. 201. Increase in death gratuity payable with respect to deaths of members of the armed forces from combat-related causes or from service in operation Enduring Freedom or Iraqi Freedom.

Sec. 202. Increase in automatic maximum coverage under servicemembers' group life insurance and veterans' group life insurance.

Sec. 203. Increased period of continued Tricare coverage of children of members of the uniformed services who die while serving on active duty for a period of more than 30 days.

TITLE III--HOMELAND SECURITY TECHNOLOGY IMPROVEMENT

Sec. 301. Short title.

Sec. 302. Homeland security transfer program.

TITLE IV--ANTITERRORISM IMPROVEMENTS

Subtitle A--Denial of Federal Benefits to Convicted Terrorists

Sec. 401. Denial of Federal benefits to convicted terrorists.

Subtitle B--Streamlined Information Sharing

Sec. 411. Uniform standards for information sharing across Federal agencies.

Sec. 412. Authorization to share national-security information with State and local governments.

Subtitle C--Protecting Critical Infrastructure

Sec. 421. Attacks against railroad carriers, passenger vessels, and mass transportation systems.

Sec. 422. Entry by false pretenses to any seaport.

Sec. 423. Criminal sanctions for failure to heave to, obstruction of boarding, or providing false information.

Sec. 424. Criminal sanctions for violence against maritime navigation, placement of destructive devices, and malicious dumping.

Sec. 425. Transportation of dangerous materials and terrorists.

Sec. 426. Destruction or interference with vessels or maritime facilities.

Sec. 427. Theft of interstate or foreign shipments or vessels.

Sec. 428. Increased penalties for noncompliance with manifest requirements.

Sec. 429. Stowaways on vessels or aircraft.

Sec. 430. Bribery affecting port security.

TITLE I--BIOPREPAREDNESS

SEC. 101. SHORT TITLE.

This title may be cited as the `Biopreparedness Act of 2005'.

Subtitle A--Product Development

CHAPTER 1--PARTNERING WITH THE PRIVATE SECTOR

SEC. 111. EXPANSION OF COUNTERMEASURES COVERED BY BIOSHIELD.

Section 319F-1(a) of the Public Health Service Act (42 U.S.C. 247d-6a(a))is amended by striking paragraph (2) and inserting the following:

`(2) DEFINITIONS- In this section:

`(A) QUALIFIED COUNTERMEASURE- The term `qualified countermeasure' means a drug (as that term is defined by section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1))), biological product (as that term is defined by section 351(i) of this Act (42 U.S.C. 262(i))), device (as that term is defined by section 201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))), detection technology, or research tool that the Secretary determines to be a priority (consistent with sections 302(2) and 304(a) of the Homeland Security Act of 2002) to--

`(i) treat, identify, detect or prevent harm from any biological (including an infectious disease), chemical, radiological, or nuclear agent that may cause a public health emergency affecting national security; or

`(ii) treat, identify, detect or prevent harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, device, detection technology or research tool that is used as described in this subparagraph.

`(B) DETECTION TECHNOLOGY- The term `detection technology' means a technology device and its use for the detection of the presence, concentration, or characteristics of a biological (including an infectious disease), chemical, or radiological agent in environmental or field samples.

`(C) RESEARCH TOOL- The term `research tool' includes the full range of tools that scientists may use in the laboratory to enable the rapid and effective development of countermeasures, including diagnostics, vaccines, and drugs.

`(D) INFECTIOUS DISEASE-

`(i) IN GENERAL- The term `infectious disease' means a disease in humans caused by a pathogenic organism (including a bacteria, virus, fungus, or parasite) that is acquired by a person and that reproduces in that person.

(ii) CLARIFICATION- The term `infectious disease' includes a pathogenic organism whether or not such pathogenic organism is acquired by an individual through human-to-human contact or if the individual is initially symptomatic of the disease.'.

SEC. 112. ENHANCING AVAILABILITY OF PRIVATE AND INTERNATIONAL SECTOR FINANCING.

Not later than 12 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to the appropriate committees of Congress recommendations concerning the necessity and feasibility of establishing mechanisms through which the United States may accept contributions or guarantees from private organizations, international health agencies, and non-governmental organizations to enhance the procurement or development of qualified countermeasures (as such term is defined in section 319F-1 of the Public Health Service Act (42 U.S.C. 247d-6a(a)).

SEC. 113. RESTORATION OF PATENT TERM.

(a) PURPOSE- The purpose of this section is to provide patent incentives to certain entities to protect inventions from expropriation by competitors and to provide an incentive for capital formation to fund countermeasures and vaccine research.

(b) LIMITATION- A private entity may utilize the patent term protection and exclusive marketing provisions described in this title for countermeasures if such private entity is an entity certified under section 1812(d) of the Homeland Security Act of 2002.

(c) RESTORATION OF PATENT TERMS RELATING TO COUNTERMEASURES AND VACCINES-

(1) IN GENERAL- Chapter 14 of title 35, United States Code, is amended by inserting after section 156 the following:

`Sec. 156a. Restoration of patent terms relating to countermeasures and vaccines

`(a) DEFINITIONS- In this section, the term--

`(1) `countermeasure product' means a countermeasure, as that term is defined in section 319F-1 of the Public Health Service Act, that is also a new drug, antibiotic drug, human biological product or medical device, as those terms are used in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and the Public Health Service Act (42 U.S.C. 201 et seq.));

`(2) `regulatory review period' means the period of time that--

`(A) starts on the date that is the later of--

`(i) the date that an eligible patent sought to be extended under this section is issued;

`(ii) the date that an exemption under section 505(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(i)) became effective for the product; or

`(iii) the date on which an investigational device exemption is approved pursuant to section 501 of the Federal Food, Drug and Cosmetic Act;

`(B) ends on the date that is--

`(i) in the case of a drug or antibiotic drug, the date on which an application submitted for such drug or antibiotic under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)) is approved;

`(ii) in the case of a biologic, the date on which an application submitted under section 351 of the Public Health Service Act (42 U.S.C. 262) is approved; or

`(iii) in the case of a medical device, the date on which an application submitted for such device under section 513 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360c) is approved; and

`(3) `eligible patent' means a patent that--

`(A)(i) claims a countermeasure product that has been successfully developed as specified by section 1812(e) of the Homeland Security Act of 2002, or claims an active ingredient of such countermeasure product, or a process of making or using the countermeasure product or an active ingredient of such countermeasure product, and

`(ii) is owned by or licensed to an entity that has successfully developed the countermeasure and has been certified under section 1812(d) of the Homeland Security Act of 2002, or

`(B) claims a vaccine that has been successfully developed.

`(b) PATENT TERM EXTENSION- The term of an eligible patent shall be extended by a period equal to the number of days in the regulatory review period if:

`(1) An application in conformance with the requirements of section (c) is submitted to the Director by either the owner of record of the patent or its agent on or before the date specified in subsection (c)(3), or within 45 days from the date of issuance of the patent, whichever date is later.

`(2) The patent that is the basis of the application has not been previously extended under this section, or under sections 156 or 158 of this title.

`(3) The term of the patent that is the basis of the application has not expired before the date that the application is submitted under section (c).

`(4) The regulatory review period for the countermeasure product or vaccine has not been relied upon to support an application to extend the term of another patent under this section or under section 156 of this title.

`(c) ADMINISTRATIVE PROVISIONS-

`(1) IN GENERAL- To obtain an extension of the term of a patent under this section, the assigner of record and licensee of record of the patent or the agent of the assigner of record and licensee shall submit an application to the Director.

`(2) CONTENT- The application shall contain--

`(A) a description of the approved countermeasure product or vaccine and the Federal statute under which regulatory review occurred;

`(B) the identity of the patent for which an extension is sought under this section; and

`(C) such other information as the Director may require including to establish that the applicant meets the requirements of this section.

`(3) SUBMISSION OF APPLICATION FOR A COUNTERMEASURE- An application for a countermeasure under this section shall be submitted to the Director within the 60-day period beginning on the date the product became eligible for purchase under a contract for procurement under section 319F-1 or 319F-2 of the Public Health Service Act.

`(4) IRREVOCABLE ELECTION- The submission of an application under this section is an irrevocable election of the application of this section to the patent that is the basis of the application. A patent that has been the basis of an application made under this section may not be the subject of an application made under sections 156 or 158 of this title.

`(5) RULE OF CONSTRUCTION- Nothing in this section shall be construed to prohibit an extension of the term of a patent relating to a countermeasure product that, before the effective date of this section was approved for commercial marketing for non-countermeasure uses.

`(d) LIMITATION- A patent may not be extended under this section where--

`(1) the regulatory review period for the countermeasure product was concluded before the date of enactment of the Biological, Chemical, and Radiological Weapons Countermeasures Research Act; or

`(2) the patent that is the basis of the application under this section expired before the date of enactment of the Biological, Chemical, and Radiological Weapons Countermeasures Research Act.'.

(2) TECHNICAL AND CONFORMING AMENDMENT- The table of sections for chapter 14 of title 35, United States Code, is amended by inserting after the item relating to section 156 the following:

`156a. Restoration of patent terms relating to countermeasures for certain biological or chemical agents or toxins.'.

(d) GENERAL EXTENSION OF CERTAIN PATENT TERMS FOR PATENTS HELD BY ENTITIES THAT HAVE SUCCESSFULLY DEVELOPED COUNTERMEASURES-

(1) IN GENERAL- Chapter 14 of title 35, United States Code, is amended by adding at the end the following:

`Sec. 158. Patent term for patents held by entities with certain research certifications

`(a) DEFINITIONS- In this section, the term--

`(1) `countermeasure product' means a countermeasure, as that term is defined in section 319F-1 of the Public Health Service Act, that is also a new drug, antibiotic drug, human biological product or medical device, as those terms are used in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and the Public Health Service Act (42 U.S.C. 201 et seq.);

`(2) `eligible patent' means an issued patent that, at least 1 year before the date on which an eligible entity was certified under section 1812(d) of the Homeland Security Act of 2002, was owned by or licensed to that eligible entity; and

`(3) `eligible entity' means a natural or legal person that has--

`(A) alone or with others, successfully developed a countermeasure product;

`(B) been certified under section 1812(d) of the Homeland Security Act of 2002;

`(C) entered into a contract for the sale of the countermeasure product under section 319F-1 or section 319F-2 of the Public Health Service Act;

`(4) `Research Act' means the Biological, Chemical, and Radiological Weapons Countermeasures Research Act.

`(b) SPECIAL PATENT TERM EXTENSION- The term of a eligible patent shall be extended for a period as specified by regulations to be promulgated by the Secretary of Health and Human Services, in addition to the term which would otherwise apply except for this section, if:

`(1) An application in conformance with the requirements of subsection (c) is submitted to the Director by either the owner of record of the patent or its agent on or before the date specified in subsection (c)(3).

`(2) The patent that is the basis of the application has not been previously extended under this section, or under sections 156 or 156a of this title.

`(3) The term of the patent that is the basis of the application has not expired before the date that the application is submitted under subsection (c).

`(4) The term of no other patent has been extended based on the certification under section 1812(d) of the Homeland Security Act of 2002 of the eligible entity.

`(c) ADMINISTRATIVE PROVISIONS-

`(1) IN GENERAL- To obtain an extension of the term of a patent under this section, the owner of record of the patent or the agent of the owner shall submit an application to the Director.

`(2) CONTENT- An application under this section shall contain--

`(A) a description of the approved countermeasure product and the Federal statute under which regulatory review occurred;

`(B) the identity of the patent for which an extension is sought under this section;

`(C) the identity of the eligible entity and the applicant; and

`(D) such other information as the Director may require including to establish that the applicant meets the requirements of this section.

`(3) SUBMISSION OF APPLICATION- An application under this section shall be submitted to the Director within the 60-day period beginning on the date the countermeasure product became eligible for purchase under a contract for procurement under section 319F-1 or 3199F-2 of the Public Health Service Act.

`(d) LIMITATIONS AND CONDITIONS-

`(1) PERIOD OF EXTENSION- The Secretary of Health and Human Services shall promulgate regulations specifying the duration of extensions to be granted under the authority of this section. The extension to be granted to an application shall be that specified by such regulations in effect on the date that an application for certification under section 1812(d) of the Homeland Security Act of 2005 is made by the eligible entity. In no case, shall any extension granted under this section exceed 2 years, or be less than 6 months.

`(2) CRITERIA FOR EXTENSION- The Secretary of Health and Human Services, in determining the period of extensions to be granted under the authority of this section, shall consider--

`(A) the nature of the threat to be countered and the importance of developing countermeasures to respond to such threat;

`(B) the difficulty, risk, and expense likely to be associated with the development of such countermeasure; and

`(C) the impact of the patent extension on consumers and healthcare providers.

`(3) LIMITATION- No patent may be extended under the authority of this subsection more than once.

`(4) IRREVOCABLE ELECTION- The submission of an application under this section is an irrevocable election of the application of this section to the patent that is the basis of the application. A patent that has been the basis of an application made under this section may not be the subject of an application made under sections 156 or 156a of this title.'

(2) TECHNICAL AND CONFORMING AMENDMENT- The table of sections for chapter 14 of title 35, United States Code, is amended by adding at the end the following:

`158. Patent term for patents held by entities with certain research certifications.'.

(e) LICENSING-

(1) DISCRETION TO WAIVE MARCH-IN RIGHTS- Notwithstanding sections 200, 203, and 209 of title 35, United States Code, an entity that holds a certification under section 1812(d) of the Homeland Security Act of 2002 with respect to a product that is a countermeasure, detection equipment, diagnostic, research tool, or drug intended to prevent or treat an infectious disease may license such patented product.

(2) FEDERALLY OWNED INVENTIONS- Section 209 of title 35, United States Code, is amended--

(A) by redesignating subsections (e) and (f) as subsections (f) and (g), respectively; and

(B) by inserting after subsection (d) the following:

`(e) TERMS AND CONDITIONS OF LICENSE- Each license granted under section 207(a)(2) shall include a provision that, at the discretion of the licensee, the licensee may act as the agent for the licensor with respect to any patent for the licensed invention for purposes of extending a patent under section 156a or 158.'.

(3) COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS- Section 12(b) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(b)) is amended by adding at the end the following:

`(7) Each license for a patent granted under an agreement entered into under subsection (a)(1) shall include a provision that, at the discretion of the licensee, the licensee may act as the agent for the licensor with respect to that patent for purposes of extending a patent under section 156a or 158 of title 35, United States Code.'.

(4) APPLICABLE LICENSES- The amendments made by paragraphs (2) and (3) shall apply only to licenses granted on or after 60 days after the date of enactment of this Act.

(f) ADDITIONAL INTELLECTUAL PROPERTY PROTECTIONS- Not later than 12 months after the date of enactment of this Act, the Secretary of Commerce in consultation with the Secretary of Health and Human Services shall submit to the appropriate committees of Congress recommendations concerning additional intellectual property incentives and protections that may be necessary to accelerate efforts to develop or enhance qualified countermeasures (as defined in section 319F-1 of the Public Health Service Act (42 U.S.C. 247d-6a(a)) or preparedness pools.

SEC. 114. INTERNATIONAL HARMONIZATION OF REGULATIONS.

The Secretary of Health and Human Services shall provide an annual report to the appropriate committees of Congress describing the activities undertaken, progress made, and barriers to the implementation by the Department of Health and Human Services with respect to the international harmonization of regulations, including the International Conference on Harmonization, the Global Harmonization Task Force, and efforts to establish international standards for data exclusivity.

SEC. 115. DEVELOPMENT OF ADDITIONAL ANIMAL MODELS.

Part B of title III of the Public Health Service Act (42 U.S.C. 243 et seq.) is amended by inserting after section 319J the following:

`SEC. 319K. ANIMAL MODELS FOR CERTAIN DISEASES.

`(a) IN GENERAL- The Secretary, in coordination with the Director of the National Institute on Allergy and Infectious Diseases and the Director of the Centers for Disease Control and Prevention, shall establish and award grants under this section to eligible entities to study the physiological responses of certain animal species to bioterrorism agents and other infectious agents.

`(b) ELIGIBILITY- To be eligible to receive a grant under this section, an entity shall--

`(1) provide assurances to the Secretary that the entity has access to a biosafety level 3 or 4 facility;

`(2) submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require; and

`(3) agree to submit the results of the research funded under the grant to the Director of the National Institute on Allergy and Infectious Diseases.'.

SEC. 116. COLLABORATION AND COORDINATION.

Section 2 of the Clayton Act (15 U.S.C. 13) is amended by adding at the end the following:

`(g) LIMITED ANTITRUST EXEMPTION-

`(1) COUNTERMEASURES DEVELOPMENT MEETINGS AND CONSULTATIONS-

`(A) COUNTERMEASURES DEVELOPMENT MEETING AND CONSULTATIONS- The Secretary may conduct meetings and consultations with parties involved in the development of priority countermeasures for the purpose of the development, manufacture, distribution, purchase, or sale of priority countermeasures consistent with the purposes of this title. The Secretary shall give notice of such meetings and consultations to the Attorney General and the Chairperson of the Federal Trade Commission (referred to in this subsection as the `Chairperson').

`(B) MEETING AND CONSULTATION CONDITIONS- A meeting or consultation conducted under subparagraph (A) shall--

`(i) be chaired or, in the case of a consultation, facilitated by the Secretary;

`(ii) be open to parties involved in the development, manufacture, distribution, purchase, or sale of priority countermeasures, as determined by the Secretary;

`(iii) be open to the Attorney General and the Chairperson;

`(iv) be limited to discussions involving the development, manufacture, distribution, or sale of priority countermeasures, consistent with the purposes of this title; and

`(v) be conducted in such manner as to ensure that national security, confidential, and proprietary information is not disclosed outside the meeting or consultation.

`(C) MINUTES- The Secretary shall maintain minutes of meetings and consultations under this subsection, which shall not be disclosed under section 552 of title 5, United States Code.

`(D) EXEMPTION- The antitrust laws shall not apply to meetings and consultations under this paragraph, except that any agreement or conduct that results from a meeting or consultation and that does not receive an exemption pursuant to this subsection shall be subject to the antitrust laws.

`(2) WRITTEN AGREEMENTS- The Secretary shall file a written agreement regarding covered activities, made pursuant to meetings or consultations conducted under paragraph (1) and that is consistent with this paragraph, with the Attorney General and the Chairperson for a determination of the compliance of such agreement with antitrust laws. In addition to the proposed agreement itself, any such filing shall include--

`(A) an explanation of the intended purpose of the agreement;

`(B) a specific statement of the substance of the agreement;

`(C) a description of the methods that will be utilized to achieve the objectives of the agreement;

`(D) an explanation of the necessity of a cooperative effort among the particular participating parties to achieve the objectives of the agreement; and

`(E) any other relevant information determined necessary by the Secretary in consultation with the Attorney General and the Chairperson.

`(3) DETERMINATION- The Attorney General, in consultation with the Chairperson, shall determine whether an agreement regarding covered activities referred to in paragraph (2) would likely--

`(A) be in compliance with the antitrust laws, and so inform the Secretary and the participating parties; or

`(B) violate the antitrust laws, in which case, the filing shall be deemed to be a request for an exemption from the antitrust laws, limited to the performance of the agreement consistent with the purposes of this title.

`(4) ACTION ON REQUEST FOR EXEMPTION-

`(A) IN GENERAL- The Attorney General, in consultation with the Chairperson, shall grant, deny, grant in part and deny in part, or propose modifications to a request for exemption from the antitrust laws under paragraph (3) within 15 days of the receipt of such request.

`(B) EXTENSION- The Attorney General may extend the 15-day period referred to in subparagraph (A) for an additional period of not to exceed 10 days. Such additional period may be further extended only by the United States district court, upon an application by the Attorney General after notice to the Secretary and the parties involved.

`(C) DETERMINATION- In granting an exemption under this paragraph, the Attorney General, in consultation with the Chairperson and the Secretary--

`(i) must find--

`(I) that the agreement involved is necessary to ensure the availability of priority countermeasures;

`(II) that the exemption from the antitrust laws would promote the public interest; and

`(III) that there is no substantial competitive impact to areas not directly related to the purposes of the agreement; and

`(ii) may consider any other factors determined relevant by the Attorney General and the Chairperson.

`(5) LIMITATION ON AND RENEWAL OF EXEMPTIONS- An exemption granted under paragraph (4) shall be limited to covered activities, and shall expire on the date that is 3 years after the date on which the exemption becomes effective (and at 3 year intervals thereafter, if renewed) unless the Attorney General in consultation with the Chairperson determines that the exemption should be renewed (with modifications, as appropriate) considering the factors described in paragraph (4).

`(6) LIMITATION ON PARTIES- The use of any information acquired under an exempted agreement by the parties to such an agreement for any purposes other than those specified in the antitrust exemption granted by the Attorney General shall be subject to the antitrust laws and any other applicable laws.

`(7) GUIDELINES- The Attorney General and the Chairperson may develop and issue guidelines to implement this subsection.

`(8) REPORT- Not later than 1 year after the date of enactment of the Biopreparedness Act of 2005, and annually thereafter, the Attorney General and the Chairperson shall report to Congress on the use and continuing need for the exemption from the antitrust laws provided by this subsection.

`(9) SUNSET- The authority of the Attorney General to grant or renew a limited antitrust exemption under this subsection shall expire at the end of the 6-year period that begins on the date of enactment of the Biopreparedness Act of 2005.

`(h) DEFINITIONS- In this section and title XXVIII of the Public Health Service Act:

`(1) ANTITRUST LAWS- The term `antitrust laws'--

`(A) has the meaning given such term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes the Act of June 19, 1936 (15 U.S.C. 13 et seq.) commonly known as the Robinson-Patman Act), and section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section 5 applies to unfair methods of competition; and

`(B) includes any State law similar to the laws referred to in subparagraph (A).

`(2) COVERED ACTIVITIES-

`(A) IN GENERAL- Except as provided in subparagraph (B), the term `covered activities' means any group of activities or conduct, including attempting to make, making, or performing a contract or agreement or engaging in other conduct, for the purpose of--

`(i) theoretical analysis, experimentation, or the systematic study of phenomena or observable facts necessary to the development of priority countermeasures;

`(ii) the development or testing of basic engineering techniques necessary to the development of priority countermeasures;

`(iii) the extension of investigative findings or theory of a scientific or technical nature into practical application for experimental and demonstration purposes, including the experimental production and testing of models, prototypes, equipment, materials, and processes necessary to the development of priority countermeasures;

`(iv) the production, distribution, or marketing of a product, process, or service that is a priority countermeasures;

`(v) the testing in connection with the production of a product, process, or services necessary to the development of priority countermeasures;

`(vi) the collection, exchange, and analysis of research or production information necessary to the development of priority countermeasures; or

`(vii) any combination of the purposes described in clauses (i) through (vi);

and such term may include the establishment and operation of facilities for the conduct of covered activities described in clauses (i) through (vi), the conduct of such covered activities on a protracted and proprietary basis, and the processing of applications for patents and the granting of licenses for the results of such covered activities.

`(B) EXCEPTION- The term `covered activities' shall not include the following activities involving 2 or more persons:

`(i) Exchanging information among competitors relating to costs, sales, profitability, prices, marketing, or distribution of any product, process, or service if such information is not reasonably necessary to carry out the purposes of covered activities.

`(ii) Entering into any agreement or engaging in any other conduct--

`(I) to restrict or require the sale, licensing, or sharing of inventions, developments, products, processes, or services not developed through, produced by, or distributed or sold through such covered activities; or

`(II) to restrict or require participation by any person who is a party to such covered activities in other research and development activities, that is not reasonably necessary to prevent the misappropriation of proprietary information contributed by any person who is a party to such covered activities or of the results of such covered activities.

`(iii) Entering into any agreement or engaging in any other conduct allocating a market with a competitor that is not expressly exempted from the antitrust laws by a determination under subsection (i)(4).

`(iv) Exchanging information among competitors relating to production (other than production by such covered activities) of a product, process, or service if such information is not reasonably necessary to carry out the purpose of such covered activities.

`(v) Entering into any agreement or engaging in any other conduct restricting, requiring, or otherwise involving the production of a product, process, or service that is not so expressly exempted from the antitrust laws by a determination under subsection (i)(4).

`(vi) Except as otherwise provided in this subsection, entering into any agreement or engaging in any other conduct to restrict or require participation by any person who is a party to such activities, in any unilateral or joint activity that is not reasonably necessary to carry out the purpose of such covered activities.

`(3) DEVELOPMENT- The term `development' includes the identification of suitable compounds or biological materials, the conduct of preclinical and clinical studies, the preparation of an application for marketing approval, and any other actions related to preparation of a countermeasure.

`(4) PERSON- The term `person' has the meaning given such term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)).

`(5) PRIORITY COUNTERMEASURES- The term `priority countermeasure' means a countermeasure, including a drug, medical device, biological product, or diagnostic test to treat, identify, or prevent infection by a biological agent or toxin on the list developed under section 351A(a)(1) of the Public Health Service Act and prioritized under subsection (a)(1).'.

CHAPTER 2--ENSURING REGULATORY EFFICIENCY

SEC. 121. COMMISSION ON COUNTERMEASURE AND VACCINE REGULATION.

(a) ESTABLISHMENT- There shall be established a commission to be known as the Commission on Countermeasure and Vaccine Regulation (referred to in this section referred to as the `Commission').

(b) MEMBERSHIP-

(1) COMPOSITION- The Commission shall be composed of 7 members to be appointed by the Secretary of Health and Human Services in accordance with this subsection.

(2) EXPERTISE REQUIREMENT- The members of the Commission shall consist of individuals with expertise and experience in the manufacture, regulation, distribution, and use of vaccines, of which--

(A) at least 2 members of the Commission shall have experience qualified by training and experience to inspect vaccine manufacturing facilities and may be employees of the Department of Health and Human Services;

(B) at least 2 members of the Commission shall represent manufacturers of vaccine products; and

(C) at least 1 member of the Commission shall be a representative of vaccine consumers.

(3) CHAIRPERSON- The Secretary shall appoint an individual to serve as the Chairperson of the Commission. Such individual shall not be an employee of the Department of Health and Human Services.

(c) FUNCTIONS- The Commission shall conduct a study of the statutes, regulations, guidelines, and compliance, inspection, and enforcement practices and policies of the Department of Health and Human Services and of the Food and Drug Administration that are applicable to vaccines intended for human use that are in periodic short supply in the United States.

(d) REQUIREMENTS- The study under subsection (c) shall include a review of the regulatory requirements, guidelines, practices, and policies--

(1) for the development and licensing of vaccines and the licensing of vaccine manufacturing facilities;

(2) for inspections and other activities for maintaining compliance and enforcement of the requirements applicable to such vaccines and facilities: and

(3) that may have contributed to temporary or long-term shortages of vaccines.

(e) REPORT AND RECOMMENDATIONS- Not later than 6 months after the date of enactment of this Act, the Commission shall submit to the Secretary of Health and Human Services, the Committee on Health, Education, Labor and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a report that contains--

(1) the results of the study conducted under subsection (a); and

(2) recommendations for modifications to the regulatory requirements, guidelines and practices, and policies described in subsection (b) to reduce waste, increase efficiency, and ensure the rapid availability of safe and effective products.

SEC. 122. TECHNICAL ASSISTANCE.

Subchapter E of chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb et seq.) is amended by adding at the end the following:

`SEC. 565. TECHNICAL ASSISTANCE.

`The Secretary, in consultation with the Commissioner of Food and Drugs, shall establish within the Food and Drug Administration a team of experts on manufacturing and regulatory activities (including compliance with current Good Manufacturing Practices) to provide both off-site and on-site technical assistance, at the request of the manufacturer, to the manufacturers of vaccines or other biological products regulated under this act or section 351 of the Public Health Service Act if the Secretary determines that a shortage or potential shortage may occur in the United States in the supply of such vaccines or products and that the provision of such assistance would be beneficial in helping alleviate or avert such shortage.'.

SEC. 123. REQUIREMENT TO FULLY INFORM.

(a) IN GENERAL- Subchapter E of Chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb et seq.), as amended by section 122, is further amended by adding at the end the following:

`SEC. 566. REQUIREMENT TO FULLY INFORM.

`Notwithstanding any other provision of law, a manufacturer of a drug that is subject to Food and Drug Administration regulation shall promptly submit to the Food and Drug Administration all communications between the manufacturer and the regulatory body of a foreign government if the content of such communications may impact the introduction of a drug into the interstate commerce of the United States.'.

(b) CONFORMING AMENDMENT- Section 301 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is amended by adding at the end the following:

`(hh) The knowing failure or refusal by a manufacturer of a drug or vaccine to provide any communication required by this chapter.'.

SEC. 125. ACCELERATED APPROVAL OF COUNTERMEASURES OR VACCINES.

(a) IN GENERAL- The Secretary of Health and Human Services may designate a countermeasure or vaccine as a fast-track product pursuant to section 506 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356). Such a designation may be made for countermeasures or vaccines that demonstrate the potential to improve upon countermeasures or vaccines available at the time of such declaration. Such a designation may be made prior to the submission of--

(1) a request for designation by the sponsor or applicant; or

(2) an application for the investigation of the drug under section 505(i) of such Act or section 351(a)(3) of the Public Health Service Act.

(b) RULE OF CONSTRUCTION- Nothing in this section shall be construed to prohibit a sponsor or applicant from declining a designation under subsection (a).

SEC. 126. NATIONAL UNIFORMITY FOR APPROVED PRODUCTS.

(b) OTHER PRODUCTS- Chapter VII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 371 et seq.) is amended by adding at the end the following:

`Subchapter H--National Uniformity for Approved Products

`SEC. 761. NATIONAL UNIFORMITY FOR DRUGS, VACCINES, AND OTHER BIOLOGICAL PRODUCTS.

`(a) IN GENERAL- Except as provided in section 763, no State, political subdivision of a State, or judicial system of a State may establish or continue in effect any requirement--

`(1) that relates to the regulation of a drug intended for use by humans (including a vaccine or other biological product); and

`(2) that is different from or in addition to, or that is otherwise not identical with, a requirement of this Act, section 351 of the Public Health Service Act (42 U.S.C. 262), the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.), and the administrative implementation of such Acts.

`(b) REQUIREMENT RELATING TO REGULATIONS- For purposes of this section, a requirement relating to the regulation of a drug, vaccine, or other biological product shall be deemed to include any requirement relating to the subject matter in any provision of this Act, section 351 of the Public Health Service Act (42 U.S.C. 262), or the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.), but shall not include any requirement relating to the practice of pharmacy or any requirement that a drug be dispensed only upon the prescription of a practitioner licensed by law to administer such drug.

`SEC. 762. WARNING UNIFORMITY.

`(a) IN GENERAL- Except as provided in this section, no State or political subdivision of a State may, directly or indirectly, establish or continue in effect under any authority any notification requirement for a drug, vaccine, or other biological product intended for use by humans that provides for a warning concerning the safety of the drug, vaccine, or biological product or any component or package thereof, unless such notification requirement has been prescribed under the authority of this Act and the State or political subdivision notification requirement is identical to the notification requirement prescribed under the authority of this Act.

`(b) DEFINITIONS- In this section:

`(1) NOTIFICATION REQUIREMENT- The term `notification requirement' includes any mandatory disclosure requirement relating to the dissemination of information about a drug, vaccine, or biological product in any manner, such as labels, labeling, posters, public notices, advertising, or any other means of communication.

`(2) WARNING- The term `warning' with respect to a drug, vaccine, or other biological product means any statement, vignette, or other representation which indicates, directly or by implication, that the drug, vaccine or biological product presents or may present a hazard to human health or safety.

`SEC. 763. EXEMPTIONS FROM UNIFORMITY.

`Upon application of a State, the Secretary may by regulation, after notice and opportunity for written and oral presentation of views, exempt from section 761 or 762, under such conditions as the Secretary may impose, a State requirement that--

`(1) is justified by compelling and unique local conditions;

`(2) protects an important public interest that would otherwise be unprotected;

`(3) would not cause any drug, vaccine, or other biological product to be in violation of any applicable requirement or prohibition under Federal law; and

`(4) would not unduly burden interstate commerce.'.

Subtitle B--Litigation Reform

CHAPTER 1--PROTECTION FOR COUNTERMEASURES AND PRODUCTS PROTECTING AGAINST PANDEMICS, EPIDEMICS, AND BIOTERRORISM

SEC. 131. LIABILITY PROTECTIONS FOR PANDEMICS, EPIDEMICS, AND COUNTERMEASURES.

Part B of title III of the Public Health Service Act is amended by inserting after section 319F-2 (42 U.S.C. 247d-6b) the following:

`SEC. 319F-3. LIABILITY PROTECTIONS FOR PANDEMICS, EPIDEMICS, AND COUNTERMEASURES.

`(a) AUTHORITY- The Secretary shall be responsible for the administration of this section. This section shall apply with respect to both Federal and non-Federal sales and purchases of qualified countermeasures within the meaning of section 319F-1 of the Public Health Service Act, or qualified pandemic or epidemic technologies.

`(b) LITIGATION MANAGEMENT-

`(1) FEDERAL CAUSE OF ACTION-

`(A) IN GENERAL- There shall exist an exclusive Federal cause of action for claims arising out of, relating to, or resulting from the use of a qualified pandemic or epidemic technology or qualified countermeasure. The substantive law for decision in any such action shall be derived from the law, including choice of law principles, of the State in which such cases of pandemic occur, unless such law is inconsistent with or preempted by Federal law. Such Federal cause of action shall be brought only for claims for injuries that are proximately caused by manufacturers, distributors, or health care providers that provide qualified pandemic or epidemic technology or qualified countermeasure to Federal and non-Federal Government customers.

`(B) JURISDICTION- Such appropriate district court of the United States shall have original and exclusive jurisdiction over all actions for any claim for loss of property, personal injury, or death arising out of, relating to, or resulting from when a qualified pandemic technology has been deployed in defense against or response or recovery and such claims result or may result in loss to the manufacturer, distributor, or health care provider.

`(2) SPECIAL RULES- In an action brought under this section for damages the following provisions shall apply:

`(A) PUNITIVE DAMAGES- No punitive damages intended to punish or deter, exemplary damages, or other damages not intended to compensate a plaintiff for actual losses may be awarded, nor shall any party be liable for interest prior to the judgment.

`(B) NONECONOMIC DAMAGES-

`(i) IN GENERAL- Noneconomic damages may be awarded in an amount not to exceed $250,000 against a defendant only in an amount directly proportional to the percentage of responsibility of such defendant for the harm to the plaintiff, and no plaintiff may recover noneconomic damages unless the plaintiff suffered physical harm.

`(ii) DEFINITION- For purposes of clause (i), the term `noneconomic damages' means damages for losses for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium, hedonic damages, injury to reputation, and any other nonpecuniary losses.

`(3) COLLATERAL SOURCES- Any recovery by a plaintiff in an action under this section shall be reduced by the amount of collateral source compensation, if any, that the plaintiff has received or is entitled to receive that result or may result in loss to the manufacturer, distributor, or health care provider.

`(4) GOVERNMENT CONTRACTOR DEFENSE-

`(A) IN GENERAL- Should a product liability or other lawsuit be filed for claims arising out of, relating to, or resulting from the use of a qualified countermeasure, or qualified pandemic or epidemic technology in anticipation of and preparation for, in defense against or response or recovery and such claims result or may result in loss to the manufacturer, distributor, or health care provider there shall be a rebuttable presumption that the government contractor defense applies in such lawsuit. This presumption shall only be overcome by evidence showing that the manufacturer, distributor or health care provider acted fraudulently or with willful misconduct. This presumption of the government contractor defense shall apply regardless of whether the claim against the manufacturer, distributor or health care provider arises from a sale of the product to Federal Government or non-Federal Government customers.

`(B) PRODUCT APPROVAL- A defendant may assert the defense under subparagraph (A), if the qualified countermeasure or qualified pandemic or epidemic technology involved--

`(i) is approved or cleared under chapter V of the Federal Food, Drug, and Cosmetic Act or licensed under section 351 of this Act;

`(ii) is a countermeasure for which the Secretary determines that sufficient and satisfactory clinical experience or research data (including data, if available, from pre-clinical and clinical trials) support a reasonable conclusion that the countermeasure will qualify for approval or licensing within 8 years after the date of a determination under section 319F-2; or

`(iii) is authorized for emergency use under section 564 of the Federal Food, Drug, and Cosmetic Act.

`(c) DEFINITIONS- In this section:

`(1) QUALIFIED PANDEMIC OR EPIDEMIC TECHNOLOGY- The term `qualified pandemic or epidemic technology' means any product (including drugs, vaccines, and other biologics), equipment, service (including support services), device, or technology (including information technology) designed, developed, modified, or procured for the specific purpose of preventing, detecting, identifying, or preventing a pandemic or epidemic or limiting the harm such pandemic or epidemic might otherwise cause, that is designated as such by the Secretary after the Secretary declares a public health emergency as described in section 319.

`(2) HEALTH CARE PROVIDER- The term `health care provider' means a person who lawfully prescribes, administers, or provide a facility to administer a qualified countermeasure or a qualified pandemic or epidemic technology.

`(3) LOSS- The term `loss' means death, bodily injury, or loss of or damage to property, including business interruption loss.

`(4) NON-FEDERAL GOVERNMENT CUSTOMERS- The term `non-Federal Government customers' means any customer of a manufacturer that is not an agency or instrumentality of the United States Government with authority under Public Law 85-804 to provide for indemnification under certain circumstances for third-party claims against its contractors, including but not limited to State and local authorities and private entities.'.

CHAPTER 2--VACCINE INJURY COMPENSATION PROGRAM

SEC. 141. VACCINE INJURY COMPENSATION AND VACCINE LITIGATION REFORM.

(a) FINDINGS- Congress finds that--

(1) there are shortcomings in the Vaccine Injury Compensation Program and loopholes in that program that have been exploited in a manner that has contributed to a decline in the availability of vaccines generally in the United States and a decline in the number of manufacturers able to supply vaccines; and

(2) the condition described in paragraph (1) presents a barrier to the development of vaccines needed for bioterror countermeasures.

(b) RECOMMENDATIONS- After considering recent changes in the litigation environment with respect to vaccines as well as recent scientific evidence and reports by the Institute of Medicine and others with respect to the safety of vaccines and their components and ingredients, the Secretary of Health and Human Services and the Attorney General shall, not later than 6 months after the date of enactment of this Act, jointly submit recommendations to the appropriate committees of Congress concerning necessary modifications to the Vaccine Injury Compensation Program and Federal rules regarding litigation involving vaccines.

SEC. 142. MODIFICATIONS TO VACCINES FOR CHILDREN PROGRAM.

(a) EXPANSION OF DEFINITION OF FEDERALLY VACCINE-ELIGIBLE CHILD- Section 1928(b)(2)(A)(iii) of the Social Security Act (42 U.S.C.1396s(b)(2)(A)(iii)) is amended to read as follows:

`(iii) A child who (I) is administered a qualified pediatric vaccine by a federally-qualified health center (as defined in section 1905(l)(2)(B)), a rural health clinic (as defined in section 1905(l)(1)), or a State or local public health clinic, and (II) is not insured with respect to the vaccine.'.

(b) REPEAL OF PRICE CAP FOR PRE-1983 VACCINES-

(1) IN GENERAL- Section 1928(d)(3)(E) of such Act (42 U.S.C.1396s(d)(3)(B)) is repealed.

(2) CONFORMING AMENDMENT- Section 1928(d)(3) of such Act (42 U.S.C. 1396s(d)(3)) is amended by re-designating subparagraph (C) as subparagraph (B).

(c) SIMPLIFIED ADMINISTRATION OF VACCINE SUPPLY- Section 1928(d)(6) of such Act (42 U.S.C. 1396s(d)(6)) is amended by inserting before the last sentence the following: `The Secretary may sell such quantities of vaccines from such supply as the Secretary determines appropriate. Proceeds received from such sales shall be available to the Secretary only for the purposes of procuring pediatric vaccine stockpiles under this section and shall remain available until expended.'.

CHAPTER 3--ENCOURAGING VACCINE AND COUNTERMEASURE PRODUCTION CAPACITY

SEC. 151. INCENTIVES FOR THE CONSTRUCTION OF VACCINE AND COUNTERMEASURE MANUFACTURING FACILITIES.

(a) VACCINE AND COUNTERMEASURES MANUFACTURING FACILITIES INVESTMENT TAX CREDIT-

(1) ALLOWANCE OF CREDIT- Section 46 of the Internal Revenue Code of 1986 (relating to amount of investment credit) is amended by striking `and' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting `, and', and by adding at the end the following new paragraph:

`(3) the vaccine and countermeasures manufacturing facilities investment credit.'.

(2) AMOUNT OF CREDIT- Section 48 of such Code is amended by adding at the end the following new subsection:

`(c) VACCINE AND COUNTERMEASURES MANUFACTURING FACILITIES INVESTMENT CREDIT-

`(1) IN GENERAL- For purposes of section 46, the vaccine and countermeasures manufacturing facilities investment credit for any taxable year is an amount equal to 20 percent of the qualified investment for such taxable year.

`(2) QUALIFIED INVESTMENT- For purposes of paragraph (1), the qualified investment for any taxable year is the basis of each vaccine manufacturing facilities property placed in service by the taxpayer during such taxable year.

`(3) VACCINE OR COUNTERMEASURES MANUFACTURING FACILITIES PROPERTY- For purposes of this subsection, the term `vaccine or countermeasures manufacturing facilities property' means real and tangible personal property--

`(A)(i) the original use of which commences with the taxpayer, or

`(ii) which is acquired through purchase (as defined by section 179(d)(2)),

`(B) which is depreciable under section 167,

`(C) which is used for the manufacture, distribution, or research and development of vaccines or qualified countermeasures (as such term is defined in section 319F-1 of the Public Health Service Act), and

`(D) which is in compliance with any standards and regulations which are promulgated by the Food and Drug Administration, the Occupational Safety and Health Administration, or the Environmental Protection Agency and which are applicable to such property.

`(4) CERTAIN PROGRESS EXPENDITURE RULES MADE APPLICABLE- Rules similar to rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this subsection.

`(5) TERMINATION- This subsection shall not apply to any property placed in service after December 31, 2009.'.

(b) TECHNICAL AMENDMENTS-

(1) Subparagraph (C) of section 49(a)(1) of such Code is amended by striking `and' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting `, and', and by adding at the end the following new clause:

`(iv) the basis of any vaccine or countermeasures manufacturing facilities property.'.

(2) Subparagraph (E) of section 50(a)(2) of such Code is amended by inserting `or 48(c)(4)' before the period.

(3)(A) The section heading for section 48 of such Code is amended to read as follows:

`SEC. 48. OTHER CREDITS.'.

(B) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 48 and inserting the following:

`Sec. 48. Other credits.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2004, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of enactment of the Revenue Reconciliation Act of 1990).

SEC. 152. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES OR COUNTERMEASURES.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits), as amended by this Act, is amended by adding at the end the following new section:

`SEC. 45L. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING VACCINES OR COUNTERMEASURES.

`(a) GENERAL RULE- For purposes of section 38, the vaccine research credit determined under this section for the taxable year is an amount equal to 35 percent of the qualified vaccine or countermeasures research expenses for the taxable year.

`(b) QUALIFIED VACCINE OR COUNTERMEASURES RESEARCH EXPENSES- For purposes of this section--

`(1) QUALIFIED VACCINE OR COUNTERMEASURES RESEARCH EXPENSES- Except as otherwise provided in this subsection, the term `qualified vaccine or countermeasures research expenses' means the amounts which are paid or incurred by the taxpayer during the taxable year with respect to any research and development of vaccines or qualified countermeasures (as such term is defined in section 319F-1 of the Public Health Service Act) which would be described in subsection (b) of section 41 if such subsection were applied with the modifications set forth in paragraph (2).

`(2) MODIFICATIONS; INCREASED INCENTIVE FOR CONTRACT RESEARCH PAYMENTS- For purposes of paragraph (1), subsection (b) of section 41 shall be applied--

`(A) by substituting `qualified vaccine research' for `qualified research' each place it appears in paragraphs (2) and (3) of such subsection,

`(B) by substituting `100 percent' for `65 percent' in paragraph (3)(A) of such subsection, and

`(C) in a manner so that qualified research and development expenses include expenses related to re-formulating existing vaccines.

`(3) EXCLUSION FOR AMOUNTS FUNDED BY GRANTS, ETC- The term `qualified vaccine research 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).

`(c) COORDINATION WITH CREDIT FOR INCREASING RESEARCH EXPENDITURES-

`(1) IN GENERAL- Except as provided in paragraph (2), any qualified vaccine or countermeasures research 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 vaccine or countermeasures research 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) SPECIAL RULES-

`(1) 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.

`(2) COORDINATION WITH CREDIT FOR CLINICAL TESTING EXPENSES FOR CERTAIN DRUGS FOR RARE DISEASES- Any qualified vaccine or countermeasures research expense for a taxable year shall not be taken into account for purposes of determining the credit allowable under section 45C for such taxable year.

`(3) COORDINATION WITH CREDIT FOR COUNTERMEASURES RESEARCH- Any qualified vaccine or countermeasures research expense for a taxable year shall not be taken into account for purposes of determining the credit allowable under section 45K for such taxable year.'.

(b) INCLUSION IN GENERAL BUSINESS CREDIT- Section 38(b) of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `plus' at the end of paragraph (21), by striking the period at the end of paragraph (22) and inserting `, plus', and by adding at the end the following new paragraph:

`(23) the vaccine or countermeasures research credit determined under section 45L.'.

(c) DENIAL OF DOUBLE BENEFIT- Section 280C of the Internal Revenue Code of 1986 (relating to certain expenses for which credits are allowable), as amended by this Act, is amended by adding at the end the following new subsection:

`(g) CREDIT FOR QUALIFIED VACCINE OR COUNTERMEASURES RESEARCH EXPENSES-

`(1) IN GENERAL- No deduction shall be allowed for that portion of the qualified vaccine or countermeasures research expenses (as defined in section 45L(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45L(a).

`(2) CERTAIN RULES TO APPLY- Rules similar to the rules of paragraphs (2), (3), and (4) of subsection (c) shall apply for purposes of this subsection.'.

(d) DEDUCTION FOR UNUSED PORTION OF CREDIT- Section 196(c) of the Internal Revenue Code of 1986 (defining qualified business credits), as amended by this Act, is amended by striking `and' at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting `, and', and by adding at the end the following new paragraph:

`(16) the vaccine or countermeasures research credit determined under section 45L(a) (other than such credit determined under the rules of section 280C(g)(2)).'.

(e) TECHNICAL AMENDMENT- The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new item:

`Sec. 45L. Credit for medical research related to developing vaccines or countermeasures.'.

(f) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

SEC. 153. GRANTS TO CONSTRUCT AND IMPROVE RESEARCH AND DEVELOPMENT AND MANUFACTURING OF COUNTERMEASURES OR VACCINES.

Part B of title III of the Public Health Service Act is amended by inserting after section 519K (as added by section 115) the following:

`SEC. 319L. GRANTS TO CONSTRUCT AND IMPROVE RESEARCH AND DEVELOPMENT AND MANUFACTURING OF COUNTERMEASURES OR VACCINES.

`(a) IN GENERAL- The Secretary may award grants to a manufacturer to purchase or improve real property and tangible personal property used in the research and development, manufacture, or distribution of a countermeasure or vaccine.

`(b) ELIGIBILITY- To be eligible to receive a grant under subsection (a), a manufacturer shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including--

`(1) a detailed description of the equipment, facility, or property involved;

`(2) a detailed description of the countermeasure or vaccine involved;

`(3) a detailed description of the research and development, manufacturer, or distribution involved;

`(4) a description of how such equipment, facility, or property is to be used;

`(5) a description of whether such equipment, facility, or property can be used for the research and development, manufacture, or distribution of a drug, biological product, vaccine, medical device or other countermeasure not described in paragraph (2); and

`(6) a certification that the equipment, facility, or property involved complies with all applicable Federal, State, and local laws.

`(c) RECAPTURE- If, at any time prior to the expiration of the 20-year period beginning on the date on which a grant is awarded under this section, the equipment, facility, or property involved shall cease to be used for the purposes for which the grant was awarded, the United States shall be entitled to recover from the manufacturer an amount bearing the same ratio to the current value of the facility (at the time of the determination) as the amount the grant bore to the total cost of the purchase or improvement involved. Such current value may be determined by agreement of the manufacturer and the Secretary or by order of the United States District Court for the district in which such facility is situated. The Secretary may not recapture the equipment, facility, or property, in accordance with regulations, if the Secretary determines there is good cause for the failure of proper use.

`(d) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated, such sums as may be necessary to carry out this section.'.

SEC. 154. REVENUE RECOGNITION FOR ADULT AND PEDIATRIC VACCINES AND OTHER COUNTERMEASURES AGAINST POTENTIAL ACTS OF TERRORISM.

Notwithstanding any other Federal or State law (including general accounting guidelines of the Securities and Exchange Commission), the revenue derived under a Federal Government contract from the stockpiling, holding, storing, rotating, or other management of an inventory of vaccines or countermeasures shall be deemed as income to the manufacturer or other legal entity at the time such manufacturer or entity receives such revenue, except for any revenue credited back or returned to such agency or for inventories subsequently sold by such manufacturer or entity to a third party.

Subtitle C--Public Health Preparedness

CHAPTER 1--CAPACITY TO RESPOND

SEC. 171. PANDEMIC INFLUENZA PREPAREDNESS AND RESPONSE PLAN.

(a) IN GENERAL- In implementing out the Pandemic Influenza Preparedness and Response Plan of the Centers for Disease Control and Prevention, the Secretary of Health and Human Services (referred to in this section as the `Secretary') shall ensure funding for the following activities:

(1) RESEARCH- The Secretary shall provide funding to carry out research to develop improved influenza vaccines.

(2) EDUCATION AND OUTREACH- The Secretary shall carry out activities to increase public awareness on the need to be vaccinated, particularly in priority or high-risk populations.

(3) SURVEILLANCE- The Secretary shall--

(A) carry out activities to improve international and State influenza surveillance capacity;

(B) conduct influenza vaccine safety and efficacy data collection; and

(C) provide for the conduct of epidemiological studies and research concerning novel influenza viruses.

(4) IMPROVE COMMUNICATION- In the case of a vaccine production delay or shortage or an influenza pandemic or epidemic, the Secretary shall--

(A) identify those priority sub-groups that should be vaccinated first;

(B) provide the information determined under subparagraph (A) to State and local health department; and

(C) identify which priority sub-group each State or local health department should have responsibility for vaccinating.

(b) DIRECT DISTRIBUTION- Notwithstanding any other provision of law, if the Secretary determines that an influence pandemic or epidemic has occurred, or is imminent, the Secretary shall have the authority to--

(1) determine which health care providers should receive priority in the allotment of influenza vaccine; and

(2) require manufactures or distributors of such vaccine to provide such vaccine to the providers identified under paragraph (1).

(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section, $100,000,000 for fiscal year 2006, and such sums as may be necessary for each of fiscal years 2007 through 2011.

SEC. 172. NATIONAL NOTIFIABLE DISEASE SURVEILLANCE PROGRAM.

Part B of title III of the Public Health Service Act (42 U.S.C. 243 et seq.) is amended--

(1) by striking section 314; and

(2) by inserting after section 311, the following:

`SEC. 311A. NATIONAL NOTIFIABLE DISEASE SURVEILLANCE PROGRAM.

`(a) IN GENERAL- The Secretary is authorized to develop a real-time surveillance program for collecting and reporting information on notifiable diseases and conditions.

`(b) NOTIFIABLE DISEASES- Not later than 180 days after the date of enactment of the Public Health Security Act of 2005, and annually thereafter, the Secretary, in consultation with State and local health authorities and appropriate private professional societies, shall certify a list of infectious diseases, environmental exposures or poisons, and other conditions, the real-time surveillance and control of which, in each State and territory of the United States, constitute a critical public health need. For purposes of this part, the term `notifiable disease' means a disease, exposures or poison, or other condition that appears on the list under this section.

`(c) FEDERAL INFORMATICS ACTIVITIES-

`(1) IN GENERAL- In order to meet the urgent need for critical electronic surveillance of notifiable diseases, the Director of the Centers for Disease Control and Prevention, in consultation with State and local health authorities, shall, not later than 1 year after the date of enactment of the Public Health Security Act of 2005, establish and maintain a national electronic surveillance program that includes the following components:

`(A) Procedures to provide for the collection (in a standardized form) and analysis of data on all notifiable diseases and on certain other conditions that States or regions elect to report to the program.

`(B) A procedure to enable all major public and private clinical laboratories to automatically report data, in compliance with the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996, to the program concerning notifiable diseases, antimicrobial resistance testing, and other data determined appropriate by the Director.

`(C) A procedure to provide for syndromic and disease-specific surveillance by monitoring, in compliance with the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996, of private sector health-related electronic data (such as pharmaceutical purchase data and health insurance claims data).

`(D) A procedure to enable States to report data on suspicious cases of conditions that are not on the notifiable disease list but that may warrant further investigation.

`(E) A procedure to enable the program to automatically identify certain trends and suspicious patterns with respect to data reported to the program.

`(F) A procedure to enable the program to provide regular reports to regional, State, and local government entities concerning disease trends, suspicious disease patterns, incidence and prevalence of diseases, laboratory data, and other information determined appropriate. Such information shall include data on comparative national disease trends.

`(G) A procedure to enable the program to collect and analyze data from certain seminal veterinary and environmental sources where appropriate.

`(H) A procedure to enable the program to export data in a form appropriate for aggregation, statistical analysis, and reporting.

`(I) A procedure to enable the program to receive and report data relating to non-notifiable diseases, including vital records, registries, chronic disease, and maternal and child health data.

`(2) TIMELINESS OF REPORTING- The procedures developed under paragraph (1) for the reporting of data shall ensure that such data are reported in a timely manner.

`(3) PRIVATE SECTOR RESOURCES- To meet the deadline described in paragraph (1), the Director of the Centers for Disease Control and Prevention may, on a temporary or permanent basis, implement systems or products developed by the private sector.

`(4) AUTHORITY FOR CONTRACTS- In carrying out this subsection, the Director of the Centers for Disease Control and Prevention may enter into contracts with public and private entities.

`(d) NATIONAL BIOINTELLIGENCE UNIT- The Director of the Centers for Disease Control and Prevention shall analyze data maintained by the national electronic surveillance program under subsection (b), and data from other sources, to report on the prevalence and incidence of notifiable diseases and conditions, trends and patterns in public health, emerging health problems, regional differences, and other analyses determined appropriate by the Director of the Centers for Disease Control and Prevention.

`(e) FEDERAL TECHNICAL ASSISTANCE, COMMUNICATION, AND COORDINATION-

`(1) IN GENERAL- In carrying out this section, the Secretary shall provide technical assistance to, and provide for appropriate communications to the public, scientific, public health and medical communities, and other key stakeholders, and to provide for the coordination of the activities of--

`(A) State and local health authorities to integrate State and local surveillance activities and systems with the national notifiable disease surveillance program developed under this section and to generally improve State and local notifiable disease reporting and communications; and

`(B) private corporations, professional associations, or other entities that may have sources of surveillance data or access to health care providers, health officials, or other individuals who would need to participate in a surveillance program.

`(2) FINANCIAL ASSISTANCE- Assistance provided under paragraph (1)(B) may include financial assistance for the purpose of formatting or translating data into a form that is most compatible and appropriate for use in the national notifiable disease surveillance program developed under this section.

`(3) HEALTH ALERT REGISTRATION AND INFORMATION-

`(A) REGISTRATION- Each health care provider and facility that receives funds under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) or that receives funds under a State program under title XIX of such Act (42 U.S.C. 1396 et seq.) shall annually submit to the Secretary a registration that contains the e-mail address or fax number of the provider or facility for purposes of enabling the Secretary to provide health alerts in the case of a public health emergency or other circumstance requiring active surveillance.

`(B) ESTABLISHMENT OF SYSTEM- The Secretary shall establish a system to maintain the information provided by providers and facilities under subparagraph (A). Such system shall be designed--

`(i) to enable providers and facilities--

`(I) to provide and update information contained in the system; and

`(II) to request information or to elect to receive additional types of non-emergency health alerts or communications; and

`(ii) to enable the Director of the Centers for Disease Control and Prevention to provide updated contact information for providers and facilities to State and local health authorities for the purpose of emergency health communications.

`(f) GRANTS TO STATES FOR DISEASE REPORTING-

`(1) GRANTS- The Secretary shall award grants to States to enable such States to conduct passive, active, and when appropriate syndromic surveillance, and timely reporting activities with respect to notifiable diseases.

`(2) ELIGIBILITY- To be eligible to receive a grant under paragraph (1), a State shall prepare and submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including--

`(A) a description of the manner in which grants funds will be used to enhance the timeliness and comprehensiveness of the State's effort to report notifiable diseases to the program under subsection (c); and

`(B) a plan for identifying and reporting to the Secretary the identity of health care providers and facilities that consistently fail to report to the State instances of notifiable diseases in a timely manner.

`(3) ENHANCED GRANT- In the case of a State that submits a plan, as part of the application under paragraph (2), to transition State and local reporting of notifiable diseases to an electronic system that is compatible with the program under subsection (c), the amount of the grant awarded to a State under paragraph (1) shall be increased by an amount determined by the Secretary to be necessary to complete such transition.

`(4) SUPPLEMENT NOT SUPPLANT FUNDS FOR ACTIVITIES- A State shall use amounts received under a grant under this subsection to supplement and not supplant other funds made available by the State for the conduct of reporting activities with respect to notifiable diseases.

`(5) REDUCTION IN BLOCK GRANT FUNDING- For fiscal year beginning with fiscal year 2008, if the Secretary determines that a State is not reporting all notifiable diseases to the program established under subsection (c) in a timely manner through the use of an electronic system that is compatible with the program, the State shall not be eligible to receive a grant under part A of title XIX for such fiscal year.

`(6) FAILURE TO REPORT- A health care provider or facility shall not be eligible to receive funds under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) or under a State program under title XIX of such Act (42 U.S.C. 1396 et seq.) if the Secretary determines, based on a State notification received under the plan described in paragraph (2)(B), that such provider or facility has consistently failed to report, in a timely manner, instances of notifiable diseases to the State for submission to the program under subsection (c).

`(g) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as may be necessary to carry out this section.'.

SEC. 173. ENHANCING CRITICAL CAPACITY FOR ILLNESS DETECTION.

Section 319C(c) of the Public Health Service Act (42 U.S.C. 247d-3(c)) is amended--

(1) in paragraph (3), by striking `and' at the end;

(2) in paragraph (4), by striking the period and inserting `; and'; and

(3) by adding at the end the following:

`(5) develop benchmarks for meeting critical capacity for food or water borne disease detection and response.'.

SEC. 174. EVALUATION OF PUBLIC HEALTH CAPACITY OUTCOMES.

Section 319C-1(b) of the Public Health Service Act (42 U.S.C. 247d-3a(b)) is amended by adding at the end the following:

`(3) EVALUATION OF PUBLIC HEALTH CAPACITY OUTCOMES- The Director of the Centers for Disease Control and Prevention shall enter into contracts with independent entities for the periodic evaluation of the progress made by State and local governments in meeting the benchmarks established in the plan under paragraph (1)(A)(ii)(V).'.

SEC. 175. NONIMMIGRANT HEALTH SCREENING.

(a) PARITY IN SCREENING FOR NON-IMMIGRANTS- Section 212(a)(1) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(1)) is amended by adding at the end the following:

`(D) APPLICATION OF REGULATIONS- Determinations under subparagraph (A) shall be made based upon regulations promulgated by the Secretary of Health and Human Services under clause (i) of such subparagraph regardless of whether the alien involved is applying for permanent admission or for a visa for a stay of 6 months or longer (including aliens seeking a temporary work visa or student visa). The health-related requirements under such regulations shall be applied in the same manner to all such aliens.'.

(b) PANEL PHYSICIAN QUALITY CONTROL- Section 361 of the Public Health Service Act (42 U.S.C. 264) is amended by adding at the end the following:

`(f) Where the United States enters into agreements or contracts (or other arrangements) with physicians or other health care providers and laboratories in foreign nations for the purpose of conducting health screening of aliens seeking temporary or permanent residence in the United States, the Secretary shall evaluate each such physician or provider on an annual basis to determine (and certify) that the physician or provider adequately complies with applicable regulations governing the medical screening of applicants for entry into the United States.'.

SEC. 176. INSPECTION, SCREENING, AND QUARANTINING OF LIVE ANIMALS.

Section 362 of the Public Health Service Act (42 U.S.C. 265) is amended by adding at the end the following: The Secretary shall establish procedures for the appropriate inspection, screening, and quarantine of live animals entering the United States for commercial purposes, including procedures to protect domestic animal and human populations from diseases carried by imported live animals.'.

SEC. 177. AUTHORITY TO PROCURE AIRCRAFT.

Section 301 of the Public Health Service Act (42 U.S.C. 241 et seq.) is amended by adding at the end the following:

`(e) The Secretary may procure and maintain aircraft for the purpose of transporting personnel, equipment, biological or environmental specimens, or humans or animals requiring advanced biohazard protection in a timely fashion in the event of an outbreak of infectious disease or another public health emergency. In lieu of procuring an aircraft under the preceding sentence, the Secretary may enter into a contract for air transportation that achieves the purpose described in such sentence.'.

CHAPTER 2--PUBLIC HEALTH WORKFORCE

SEC. 181. PUBLIC HEALTH WORKFORCE SCHOLARSHIP AND LOAN REPAYMENT PROGRAM.

Part E of title VII of the Public Health Service Act (42 U.S.C. 294n et seq.) is amended by adding at the end the following:

`Subpart 3--Public Health Workforce Scholarship and Loan Repayment Program

`SEC. 780. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

`(a) ESTABLISHMENT- The Secretary shall establish the Public Health Workforce Loan Repayment Program (referred to in this section as the `Program') to assure an adequate supply of public health professionals to eliminate critical public health preparedness workforce shortages in Federal, State, local, and tribal public health agencies.

`(b) ELIGIBILITY- To be eligible to participate in the Program, an individual shall--

`(1)(A) be accepted for enrollment, or be enrolled, as a full-time or part-time student in an accredited academic educational institution in a State or territory in the final year of a course of study or program offered by that institution leading to a health professions or medical degree or certificate, which may include a degree (graduate, undergraduate, or associate) or certificate relating to public health, laboratory sciences, or epidemiology; or

`(B) have graduated, within 5 years, from an accredited educational institution in a State or territory and received a health professions or medical degree (graduate, undergraduate, or associate) or certificate, which may include a degree (graduate, undergraduate, or associate) or certificate relating, but not limited, to public health laboratory sciences, or epidemiology;

`(2)(A) in the case of an individual described in paragraph (1)(A)--

`(i) maintain satisfactory academic progress, as determined by the Secretary; and

`(ii) have accepted employment with the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, or a State, local, or tribal public health agency, in a priority service area, as recognized by the Secretary, to commence upon graduation; or

`(B) in the case of an individual described in paragraph (1)(B), be employed by, or have accepted employment with, the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, or a State, local, or tribal public health agency, as recognized by the Secretary;

`(3) be a United States citizen;

`(4) submit an application to the Secretary to participate in the Program; and

`(5) sign and submit to the Secretary, at the time of the submittal of such application, a written contract (described in subsection (d)) to serve for the applicable period of obligated service in the full-time employment of the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, or a State, local, or tribal public health agency.

`(c) DISSEMINATION OF INFORMATION-

`(1) APPLICATION AND CONTRACT FORMS- The Secretary shall disseminate application forms and contract forms to individuals desiring to participate in the Program. The Secretary shall include with such forms--

`(A) a summary of the rights and obligations of an individual whose application is approved (and whose contract is accepted) by the Secretary, including in the summary a clear explanation of the damages to which the United States is entitled to recover in the case of the individual's breach of the contract; and

`(B) information relating to the service obligation and such other information as may be necessary for the individual to understand the individual's prospective participation in the Program.

`(2) INFORMATION FOR SCHOOLS- The Secretary shall distribute to health professions and medical schools and the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, and relevant State, local, and tribal public health agencies, materials providing information on the Program and shall encourage such schools, and agencies to disseminate such materials to potentially eligible students.

`(d) CONTRACT- The written contract (referred to in this section) between the Secretary and an individual shall contain--

`(1) an agreement on the part of the Secretary that the Secretary will repay on behalf of the individual loans incurred by the individual in the pursuit of the relevant public health preparedness workforce educational degree or certificate in accordance with the terms of the contract;

`(2) an agreement on the part of the individual that the individual will serve, immediately upon graduation in the case of an individual described in subsection (b)(1)(A) service, or in the case of an individual described in subsection (b)(1)(B) continue to serve, in the full-time employment of the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, or a State, local, or tribal public health agency in a position related to the course of study or program for which the contract was awarded for a period of time (referred to in this section as the `period of obligated service') equal to the greater of--

`(i) 3 years; or

`(ii) such longer period of time as determined appropriate by the Secretary and the individual;

`(3) in the case of an individual described in subsection (b)(1)(A) who is in the final year of study and who has accepted employment with the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, or a State, local, or tribal public health agency upon graduation, an agreement on the part of the individual to complete the education or training, maintain a satisfactory acceptable level of academic standing (as determined by the Secretary), and agree to the period of obligated service;

`(4) a provision that any financial obligation of the United States arising out of a contract entered into under this section and any obligation of the individual that is conditioned thereon, is contingent on funds being appropriated for loan repayments under this section;

`(5) a statement of the damages to which the United States is entitled, under this section for the individual's breach of the contract; and

`(6) such other statements of the rights and obligations of the Secretary and of the individual, not inconsistent with this section.

`(e) PAYMENTS-

`(1) IN GENERAL- A loan repayment provided for an individual under a written contract under the Program shall consist of payment, in accordance with paragraph (2), on behalf of the individual of the principal, interest, and related expenses on government and commercial loans received by the individual regarding the undergraduate or graduate education of the individual (or both), which loans were made for--

`(A) tuition expenses; or

`(B) all other reasonable educational expenses, including fees, books, and laboratory expenses, incurred by the individual.

`(2) Payments for