[House Report 118-524]
[From the U.S. Government Publishing Office]


118th Congress }                                             { Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                             { 118-524

======================================================================



 
                PUBLIC HEALTH EMERGENCY MEDICAL SUPPLIES 
                        ENHANCEMENT ACT OF 2023

                                _______
                                

  May 23, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

          Mr. McHenry, from the Committee on Financial Services,  
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1166]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1166) to enhance authorities under the Defense 
Production Act of 1950 to respond to the public health 
emergencies, to provide additional oversight of such 
authorities, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Public Health Emergency Medical 
Supplies Enhancement Act of 2023''.

SEC. 2. PUBLIC HEALTH EMERGENCIES.

  (a) Future Preparedness for Health Emergencies.--Section 702(14) of 
the Defense Production Act of 1950 is amended by striking ``and 
critical infrastructure protection and restoration'' and inserting ``, 
critical infrastructure protection and restoration, and public health 
emergency preparedness and response activities''.
  (b) Public Health Emergency.--The Defense Production Act of 1950 (50 
U.S.C. 4501 et seq.) is amended by inserting after section 711 the 
following:

``SEC. 712. PUBLIC HEALTH EMERGENCIES.

  ``(a) Scarce and Critical Materials.--During a public health 
emergency, any medical equipment or supplies determined by the 
Secretary of Health and Human Services or the Secretary of Homeland 
Security to be scarce and critical materials essential to the national 
defense for purposes of section 101 may be deemed by the President to 
be a scarce and critical material essential to the national defense for 
purposes of section 101 and otherwise meet the requirements of section 
101(b), and funds available to implement this Act may be used for the 
purchase, production (including the construction, repair, and 
retrofitting of government-owned facilities as necessary), or 
distribution of such medical equipment or supplies.
  ``(b) Exercise of Title I Authorities in Relation to Contracts by 
State, Local, or Tribal Governments.--In exercising authorities under 
title I during a public health emergency, the President (and any 
officer or employee of the United States to which authorities under 
such title I have been delegated)--
          ``(1) may exercise the prioritization or allocation authority 
        provided in such title I to exclude any materials or supplies 
        described in subsection (a) ordered by a State, local, or 
        Tribal government that are scheduled to be delivered within 15 
        days of the time at which--
                  ``(A) the purchase order or contract by the Federal 
                Government for such materials or supplies is made; or
                  ``(B) the materials or supplies are otherwise 
                allocated by the Federal Government under the 
                authorities contained in this Act; and
          ``(2) shall, within 24 hours of any exercise of the 
        prioritization or allocation authority provided in such title 
        I--
                  ``(A) to the extent practicable notify any State, 
                local, or Tribal government if the President determines 
                that the exercise of such authorities would delay the 
                receipt of such materials or supplies ordered by such 
                government; and
                  ``(B) take such steps as may be necessary, and as 
                authorized by law, to ensure that such materials or 
                supplies ordered by such government are delivered in 
                the shortest possible period, consistent with the 
                purposes of this Act.
  ``(c) Engagement With the Private Sector.--
          ``(1) Outreach representative.--Consistent with the 
        authorities in this title VII, the Administrator of the Federal 
        Emergency Management Agency, in consultation with the Secretary 
        of Health and Human Services, may designate or appoint, 
        pursuant to section 703, an individual to be known as the 
        `Outreach Representative' for any public health emergency. Such 
        individual shall--
                  ``(A) be appointed from among individuals with 
                substantial experience in the production or 
                distribution of medical supplies or equipment; and
                  ``(B) act as the Government-wide single point of 
                contact during the public health emergency for outreach 
                to manufacturing companies and their suppliers who may 
                be interested in producing medical supplies or 
                equipment, including the materials described under 
                subsection (a).
          ``(2) Encouraging partnerships.--During a public health 
        emergency, the Outreach Representative shall seek to develop 
        partnerships between companies, in coordination with any 
        overall coordinator appointed by the President to oversee the 
        response to the public health emergency, including through the 
        exercise of the authorities delegated by the President under 
        section 708.
  ``(d) Enhancement of Supply Chain Production.--In exercising 
authority under title III during a public health emergency with respect 
to materials described in subsection (a), the President shall seek to 
ensure that support is provided to companies that comprise the supply 
chains for reagents, components, raw materials, and other materials and 
items necessary to produce or use the materials described in subsection 
(a), if applicable, to the extent necessary for the national defense 
during the public health emergency.
  ``(e) Enhanced Reporting During a Public Health Emergency.--
          ``(1) In general.--Not later than 90 days after the use of 
        authorities under this Act with respect to a public health 
        emergency, and every 120 days thereafter until the termination 
        of such public health emergency, the President, in consultation 
        with the Administrator of the Federal Emergency Management 
        Agency, the Secretary of Defense, and the Secretary of Health 
        and Human Services, shall submit to the appropriate 
        congressional committees a report on the exercise of 
        authorities under titles I, III, and VII with respect to the 
        public health emergency.
          ``(2) Contents.--Each report required under paragraph (1) 
        shall include the following:
                  ``(A) In general.--With respect to each exercise of 
                such authority--
                          ``(i) an explanation of the purpose of the 
                        applicable contract, purchase order, or other 
                        exercise of authority (including an allocation 
                        of materials, services, and facilities under 
                        section 101(a)(2));
                          ``(ii) the cost of such exercise of 
                        authority; and
                          ``(iii) if applicable--
                                  ``(I) the amount of goods that were 
                                purchased or allocated;
                                  ``(II) an identification of the 
                                entity awarded a contract or purchase 
                                order or that was the subject of the 
                                exercise of authority; and
                                  ``(III) an identification of any 
                                entity that had shipments delayed by 
                                the exercise of any authority under 
                                this Act.
                  ``(B) Consultations.--A description of any 
                consultations conducted with relevant stakeholders on 
                the needs addressed by the exercise of the authorities 
                described in paragraph (1).
          ``(3) Update.--The President shall provide an additional 
        briefing to the appropriate congressional committees on the 
        matters described under paragraph (2) no later than four months 
        after the submission of each report.
  ``(f) Definitions.--In this section:
          ``(1) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means the Committees on 
        Appropriations, Armed Services, Energy and Commerce, Financial 
        Services, and Homeland Security of the House of Representatives 
        and the Committees on Appropriations, Armed Services, Banking, 
        Housing, and Urban Affairs, Health, Education, Labor, and 
        Pensions, Homeland Security and Governmental Affairs, and 
        Veterans' Affairs of the Senate.
          ``(2) Public health emergency.--The term `public health 
        emergency' means a public health emergency determined pursuant 
        to section 319 of the Public Health Service Act (42 U.S.C. 
        247d).
          ``(3) Relevant stakeholder.--The term `relevant stakeholder' 
        means--
                  ``(A) representative private sector entities;
                  ``(B) representatives of the nonprofit sector;
                  ``(C) representatives of primary and secondary school 
                systems; and
                  ``(D) representatives of organizations representing 
                workers, including health workers, manufacturers, 
                teachers, other public sector employees, and service 
                sector workers.
          ``(4) State.--The term `State' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, and any territory or possession of the United States.''.
  (c) Update to Federal Regulations.--
          (1) DPAS.--Not later than 30 days after the date of enactment 
        of this Act, the Defense Property Accountability System 
        regulations (15 C.F.R. part 700) shall be revised to reflect 
        the requirements of section 712(b) of the Defense Production 
        Act of 1950.
          (2) FAR.--Not later than 30 days after the revisions required 
        by paragraph (1) are made, the Federal Acquisition Regulation 
        shall be revised to reflect the requirements of section 712(b) 
        of the Defense Production Act of 1950, consistent with the 
        revisions made pursuant to paragraph (1).

SEC. 3. REPORT ON ACTIVITIES INVOLVING SMALL BUSINESS.

  The report required by section 304(f)(3) of the Defense Production 
Act of 1950 (50 U.S.C. 4534(f)(3)) with respect to fiscal years 2023 
and 2024 shall include the percentage of contracts awarded using funds 
to carry out the Defense Production Act of 1950 for each of the fiscal 
years 2023 and 2024, respectively, to small business concerns (as 
defined under section 702 of such Act).

                          PURPOSE AND SUMMARY

    Introduced on February 24, 2023, by Representative Juan 
Vargas, H.R. 1166, the Public Health Emergency Medical Supplies 
Enhancement Act of 2023, amends sections of the Defense 
Production Act (DPA) (50 U.S.C. Sec. 4501-4568) to, among other 
things, identify certain materials as scarce and critical 
during a public health emergency period. The bill would also 
authorize the prioritization of materials for the federal 
government to exclude state, local, or tribal purchases and 
creates an outreach representative position to work with the 
private sector. Finally, the bill would direct the President to 
issue a report on the authorities exercised and to provide 
briefings four months after the submission of the report.

                  BACKGROUND AND NEED FOR LEGISLATION

    The DPA allows the President to require companies to 
prioritize and accept contracts to meet national defense 
requirements. The DPA also allows for the President to 
incentivize production through loans, loan guarantees, and 
purchase commitments. The COVID-19 pandemic underscored the 
potential for infectious disease to undermine U.S. national 
security interests. Together with Operation Warp Speed, the 
Trump Administration used the DPA 18 times to accelerate the 
delivery of COVID-19 therapeutics and related equipment. H.R. 
1166 is designed to ensure that materials essential for 
national defense are covered by the DPA during a public health 
emergency. The bill also provides clarity when federal 
purchases may appear to conflict with certain state, local, or 
tribal deliveries.

                                HEARING

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 1166: The Committee on 
Financial Services held a hearing on February 7, 2023, titled 
``Combatting the Economic Threat from China.''

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
February 28, 2023, and ordered H.R. 1166 to be reported 
favorably to the House as amended by a recorded vote of 30 ayes 
to 2 nays (Record vote no. FC-23), a quorum being present. 
Before the question was called to order the bill favorably 
reported, the Committee adopted an amendment in the nature of a 
substitute offered by Mr. Vargas by voice vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the order to report legislation and amendments thereto. H.R. 
1166 was ordered reported favorably to the House as amended by 
a recorded vote of 30 ayes to 2 nays (Record vote no. FC-23), a 
quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the goal of H.R. 1166 is to require 
the identification of certain materials as scarce and critical 
during a public health emergency period. The bill would also 
authorize the prioritization of materials for the federal 
government to exclude state, local, or tribal purchases and 
creates an outreach representative position to work with the 
private sector.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 


    During the coronavirus pandemic the Administration--through 
a series of executive orders--used authorities under the 
Defense Production Act of 1950 (DPA) to require businesses to 
prioritize performance and delivery on contracts and orders 
from the federal government.\1\ It also used the act's 
authorities to support manufacturing of medical supplies and 
vaccines, fund projects to expand domestic production of 
personal protective equipment (PPE), and partner with private 
companies to distribute PPE.
---------------------------------------------------------------------------
    \1\See, for example, ``America's Supply Chains,'' Executive Order 
14017, 86 Fed. Reg. 11849 (February 24, 2021), https://tinyurl.com/
bdhmc8kc; ``A Sustainable Public Health Supply Chain,'' Executive Order 
14001, 86 Fed. Reg. 7219 (January 21, 2021), https://tinyurl.com/
2pa3b7af; ``Combating Public Health Emergencies and Strengthening 
National Security by Ensuring Essential Medicines, Medical 
Countermeasures, and Critical Inputs Are Made in the United States,'' 
Executive Order 13944, 85 Fed. Reg. 49929 (August 6, 2020), https://
tinyurl.com/yupmducj; ``Delegating Additional Authority Under the 
Defense Production Act With Respect to Health and Medical Resources to 
Respond to the Spread of COVID-19,'' Executive Order 13911, 85 Fed. 
Reg. 18403 (March 27, 2020), https://tinyurl.com/mr2p7c56; and 
``Prioritizing and Allocating Health and Medical Resources to Respond 
to the Spread of COVID-19,'' Executive Order 13909, 85 Fed. Reg. 16227 
(March 18, 2020), https://tinyurl.com/bdehbd47.
---------------------------------------------------------------------------
    H.R. 1166 would amend the DPA to specifically incorporate 
some of the effects of those orders. The bill also would 
authorize the Federal Emergency Management Agency (FEMA) to 
appoint an outreach representative to work with industry during 
public health emergencies. FEMA and the Department of Health 
and Human Services established a position that fulfilled that 
requirement as part of the Supply Chain Stabilization Task 
Force, which manages critical shortages of PPE, ventilators, 
and pharmaceutical materials by coordinating with industry 
partners. Because H.R. 1166 would codify current practices, CBO 
estimates that implementing those provisions would not affect 
the federal budget.
    The bill also would require the Administration to report 
regularly to the Congress during public health emergencies, 
detailing its use of authorities under the DPA. On the basis of 
information about similar reports, CBO estimates that 
satisfying that requirement would cost less than $500,000 over 
the 2023-2028 period; any spending would be subject to the 
availability of appropriated funds.
    CBO has not reviewed H.R. 1166 for intergovernmental or 
private-sector mandates. Section 4 of the Unfunded Mandates 
Reform Act excludes from the application of that act any 
legislative provisions that are necessary for national 
security. CBO has determined that the provisions of the Defense 
Production Act of 1950, as amended by the bill, would fall 
under that exclusion.
    The CBO staff contacts for this estimate are Caroline 
Dorminey (for federal costs) and Brandon Lever (for mandates). 
The estimate was reviewed by Chad Chirico, Deputy Director of 
Budget Analysis.

                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

              NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY,
                          AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1973.

                       FEDERAL MANDATES STATEMENT

    Pursuant to section 423 of the Unfunded Mandates Reform Act 
of 1995, the Committee adopts as its own estimate the Federal 
mandates as prepared by the Director of the Congressional 
Budget Office.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    Pursuant to clause 9 of rule XXI of the Rules of the House 
of Representatives, the Committee has carefully reviewed the 
provisions of the bill and states that the provisions of the 
bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, including any program that was included in a 
report to Congress pursuant to section 21 of the Public Law 
111-139 or the most recent Catalog of Federal Domestic 
Assistance.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Sec. 1: Short title

    This Act may be cited as the ``Public Health Emergency 
Medical Supplies Enhancement Act of 2023.''

Sec. 2: Public health emergencies

    This section would amend the Defense Production Act (50 
U.S.C. Sec. 4501-4568) to identify certain materials as scarce 
and critical during an emergency period, as determined by 
Secretary of the Health and Human Services or the Secretary of 
Homeland Security. The bill also authorizes the prioritization 
of materials for the federal government to exclude state, 
local, or tribal purchases and creates an outreach 
representative position to work with the private sector.

Sec. 3: Report on activities involving small business

    This section directs the President to issue a report on the 
authorities exercised and to provide briefings four months 
after the submission of the report.

                                  [all]