MODIFICATION OF ORPHAN DRUG CREDIT.

SEC. 13401. MODIFICATION OF ORPHAN DRUG CREDIT.(a) Credit Rate.—Subsection (a) of section 45C is amended by striking “50 percent” and inserting “25 percent”.(b) Election of Reduced Credit.—Subsection (b) of section 280C is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:“(3) Election of reduced credit.—“(A) In general.—In the case of any taxable year for which an election is made under this paragraph—“(i) paragraphs (1) and (2) shall not apply, and“(ii) the amount of the credit under section 45C(a) shall be the amount determined under subparagraph (B).“(B) Amount of reduced credit.—The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—“(i) the amount of credit determined under section 45C(a) without regard to this paragraph, over“(ii) the product of—“(I) the amount described in clause (i), and“(II) the maximum rate of tax under section 11(b).131 STAT. 2134“(C) Election.—An election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary shall prescribe. Such an election, once made, shall be irrevocable.”.(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2017.