The DPA Modernization Act of 2026: An Overview

Congressional research reportAug 13, 2026

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The DPA Modernization Act of 2026: An

Overview

August 13, 2026

Congressional Research Service

https://crsreports.congress.gov

R49178

SUMMARY

The DPA Modernization Act of 2026: An

Overview

The Defense Production Act (DPA) of 1950 (P.L. 81-774, 50 U.S.C. §§4501 et seq.), as

amended, gives the President a broad set of authorities to influence domestic industry in the

interest of national defense. These authorities are currently provided in three titles:

•

Title I: Priorities and Allocations allows the President to require persons, businesses,

and corporations to prioritize and accept federal contracts for materials and services as

necessary to promote national defense.

•

Title III: Expansion of Productive Capacity and Supply allows the President to

provide various financial incentives to the domestic industrial base to expand the

production and supply of materials and goods critical for national defense.

•

R49178

August 13, 2026

Adam G. Levin,

Coordinator

Analyst in Economic

Development Policy

Cameron M. Keys

Analyst in Defense

Logistics and Resource

Management Policy

Alexandra G. Neenan

Analyst in U.S. Defense

Policy

Title VII: General Provisions includes key definitions for the DPA and other

miscellaneous authorities, including the authority to establish voluntary agreements with

private industry and the authority to establish a volunteer pool of industry executives

who could be called to government service in the interest of national defense.

Recent Administrations have used the DPA in several notable scenarios. Both the first Trump and

Biden Administrations invoked DPA authorities in response to the COVID-19 pandemic. The Biden Administration also

invoked the DPA to respond to the 2022 Russian/Ukrainian war and for other policies it deemed important to national

defense, such as investing in clean energy technologies. The second Trump Administration has invoked the DPA for multiple

goals—for example, increasing domestic mineral and energy production.

Most of the DPA’s authorities are subject to a sunset clause, currently set to September 30, 2026. The DPA Modernization

Act of 2026 (H.R. 7688, 119th Congress) would extend the sunset date by five years and proposes a series of changes to DPA

provisions, including the following:

•

Adding specific conditions for the President to invoke the priorities and allocations authority in Title 1,

potentially limiting when Title I may be invoked.

•

Amending language in Title III (which would be redesignated as Title II) on the processes and personnel

involved when DPA financial incentives are provided, including authorizing certain entities and officials

other than the President (who under current statute has such authority) to make the determinations

necessary for granting Title III assistance. The bill would also increase the statutory cap on annual

unobligated funds available for Title III assistance, place parameters around the use of the DPA for equity

investments, and allow the DPA to be used to increase critical materials and mineral production.

•

Expanding the DPA’s definition of national defense in Title VII (which would be redesignated as Title III)

to emphasize public health events, among other additions.

•

Broadening the authority in Titles III and VII for entities and officials other than the President, including

the Defense Production Act Committee and Defense Production Act Fund manager, to collect information

on, among other things, executive agency strategies for DPA use.

The DPA Modernization Act of 2026 was reported by the House Committee on Financial Services on April 15, 2026, in a 410 vote.

H.R. 7688 also contains provisions pertaining to the Committee on Foreign Investment in the United States (CFIUS).

However, CFIUS is generally considered separate and distinct from the DPA, and this report does not cover those provisions.

For more information on CFIUS, see CRS In Focus IF10177, Committee on Foreign Investment in the United States

(CFIUS).

Congressional Research Service

The DPA Modernization Act of 2026: An Overview

Contents

Introduction ..................................................................................................................................... 1

Context ...................................................................................................................................... 2

Overview of the DPA Modernization Act of 2026 .......................................................................... 4

Changes to Title I ...................................................................................................................... 4

Prioritization Authorities ..................................................................................................... 4

Defense Production Act Committee (DPAC) Authorities ................................................... 5

Changes to Title III (H.R. 7688 Title II) ................................................................................... 5

Loan Guarantee Authorities ................................................................................................ 5

Loan Authorities ................................................................................................................. 7

Section 303 Authorities ....................................................................................................... 8

Provisions on Equity Investments ....................................................................................... 9

Critical Minerals Resilience Initiative .............................................................................. 10

Waivers for Regulations and Permits Related to Critical Minerals and Materials ............. 11

Workforce Provisions......................................................................................................... 11

Defense Production Act Fund (DPA Fund) ....................................................................... 12

DPA Reporting Requirements ........................................................................................... 13

Restrictions on Incentives ................................................................................................. 14

Changes to Title VII ................................................................................................................ 14

Definition of National Defense ......................................................................................... 14

Public Health Emergency Outreach Representative ......................................................... 15

Collection of Information and Penalties ........................................................................... 16

Authorizations of Appropriations ..................................................................................... 16

National Defense Executive Reserve ................................................................................ 16

Sunset Provision ............................................................................................................... 17

Defense Production Act Committee (DPAC) .................................................................... 17

Eliminating Annual Report on Impact of Offsets ............................................................. 19

Other Required Studies and Reports ....................................................................................... 19

Concluding Observations .............................................................................................................. 20

Tables

Table A-1. H.R. 7688’s Proposed Administrative Changes to DPA Statutes ................................. 21

Appendixes

Appendix. H.R. 7688’s Proposed Administrative Changes to DPA Statutes ................................. 21

Contacts

Author Information........................................................................................................................ 22

Congressional Research Service

The DPA Modernization Act of 2026: An Overview

Introduction

The Defense Production Act (DPA) of 1950 (P.L. 81-774; 50 U.S.C. §§4501 et seq.), as amended,

authorizes the President (and, in some cases, designated executive agencies) to take a broad set of

actions to shape the domestic industrial base so that when called upon, industry is capable of

providing essential materials and goods needed for national defense.1 The DPA is currently

divided into three titles: Titles I, III, and VII. Broadly, Title I allows the President to require

persons, businesses, and corporations to prioritize and accept federal contracts for materials and

services as necessary to promote the national defense. Title III allows the President to provide

loans, loan guarantees, purchases, purchase commitments, and subsidies aimed at incentivizing

the domestic industrial base to expand the production and supply of critical materials and goods.

Title VII contains general provisions, including key definitions for the DPA and several other

distinct authorities related to governance and private industry. Title VII also contains the DPA’s

sunset clause, with the majority of DPA authorities currently set to expire on September 30,

2026.2

The DPA establishes roles and processes to facilitate its implementation, with the President

currently playing the central role. For instance, prior to invoking aspects of the DPA (particularly

Title III), the President is generally required to issue a determination that certain conditions have

been met. As an example, President Trump issued a statutorily required presidential determination

in April 2026 stating that natural gas transmission, processing, and storage and liquefied natural

gas capacity were essential to national defense and invoked Title III to increase supply.3

To pay for the financial incentives provided in Title III, Congress established a Defense

Production Act Fund (DPA Fund) in the Treasury.4 The DPA gives the President the authority to

designate a DPA Fund manager,5 currently the Secretary of Defense. The DPA Fund manager is

responsible for the financial accounting of the DPA Fund but does not necessarily have

decisionmaking authority over the use of the DPA Fund or other aspects of DPA operations.

DPA statutory text also provides for the creation of a Defense Production Act Committee

(DPAC).6 The DPAC—established in Section 11 of P.L. 111-67—was originally intended to serve

as an interagency advisory body for the President on government-wide DPA use. In current

practice, the DPAC’s primary statutory role—which Congress has changed since the DPAC’s

establishment—is mainly reporting on Title I activity.7

1 The DPA defines national defense as “programs for military and energy production or construction, military or

critical infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and any directly related

activity. Such term includes emergency preparedness activities conducted pursuant to title VI of The Robert T. Stafford

Disaster Relief and Emergency Assistance Act [42 U.S.C. 5195 et seq.] and critical infrastructure protection and

restoration.” 50 U.S.C. §4552(14). For more details on the DPA, see CRS Report R43767, The Defense Production Act

of 1950: History, Authorities, and Considerations for Congress.

2 50 U.S.C. §4564(a). The DPA provisions not subject to expiry are found at 50 U.S.C. §§4514, 4557, 4558, and 4565.

3 Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense Production Act

of 1950, as Amended, on Natural Gas Transmission, Processing, Storage, and Liquefied Natural Gas Capacity,” 91

Federal Register 21935, April 23, 2026.

4 50 U.S.C. §4534(a).

5 50 U.S.C. §4534(f).

6 50 U.S.C. §4567(a). For more information, see CRS In Focus IF11767, The Defense Production Act Committee

(DPAC): A Primer.

7 50 U.S.C. §4567(a) and (d).

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The DPA Modernization Act of 2026: An Overview

The DPA Modernization Act of 2026 (H.R. 7688), introduced in the 119th Congress, would

address these and other aspects of the DPA. In some cases, the bill would seek to alter how the

DPA is structured and functions. For example, some provisions of the bill would vest the

authority to make the determinations necessary for Title III activities in a combination of

executive agency officials—as well as the DPAC executive director and the DPA Fund

manager—rather than solely with the President. The bill would also expand the roles of the DPAC

and the DPA Fund manager, including through increased information collection and reporting

requirements. For example, the bill would require agencies with delegated DPA authority to

produce new reports on their strategies for DPA use and require agencies to submit those reports

to the DPAC executive director and DPA Fund manager.

H.R. 7688 would also alter certain financial aspects of the DPA. For example, statute currently

caps the annual unobligated DPA Fund balance at $750 million. The bill proposes to increase that

amount to $2 billion. Additional financial changes include placing parameters around the use of

the DPA for equity investments and adding provisions that may place an increased focus on

public health events and the production of critical materials and minerals. In addition, H.R. 7688

would extend the DPA’s expiring provisions through September 30, 2031.

Context

As stated in H.R. 7688’s committee report, “Recent years have seen a renewed interest in the DPA

as its authorities have been increasingly deployed to address high-profile issues.”8 Both the first

Trump and Biden Administrations invoked the DPA to respond to the COVID-19 pandemic. This

included prioritizing vaccine-related contracts and providing financial incentives to producers of

certain medical supplies.9 The American Rescue Plan Act of 2021 (P.L. 117-2) provided $10

billion for DPA use for the pandemic.10 The Biden Administration later used Title III authorities to

respond to the 2022 Russian/Ukrainian war, providing assistance to munitions and

strategic/critical materials producers while also taking other DPA actions it deemed important to

national defense, such as investing in clean energy technologies.11 In March 2025, President

Trump issued an executive order intended to strengthen national security by increasing domestic

mineral production that, among other actions, invoked Title III authorities.12 In April 2026, the

Trump Administration issued a series of presidential determinations invoking Title III for use on

various energy-related initiatives.13

8 U.S. Congress, House Financial Services Committee, DPA Modernization Act of 2026, Report together with minority

views to accompany H.R. 7688, 119th Cong., 2nd sess., H.Rept. 119-611, p. 16.

9 U.S. Government Accountability Office, COVID-19: Agencies Are Taking Steps to Improve Future Use of Defense

Production Act Authorities, GAO-22-105380, December 16, 2021, https://www.gao.gov/products/gao-22-105380.

10 135 Stat. 53-54. Funds were to remain available until September 30, 2025.

11 U.S. Department of Defense, “Ukraine Security Assistance,” https://media.defense.gov/2024/Sep/06/2003538814/-1/

-1/1/UKRAINE-INFOGRAPHIC-08AUG2024.PDF; and U.S. Department of Energy, “President Biden Invokes

Defense Production Act to Accelerate Domestic Manufacturing of Clean Energy,” press release, June 6, 2022,

https://www.energy.gov/articles/president-biden-invokes-defense-production-act-accelerate-domestic-manufacturingclean.

12 Executive Order 14241, “Immediate Measures to Increase American Mineral Production,” 90 Federal Register

13673, March 25, 2025.

13 Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense Production

Act of 1950, as Amended, on Coal Supply Chains and Baseload Power Generation Capacity,” 91 Federal Register

21927, April 23, 2026; Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the

Defense Production Act of 1950, as Amended, on Development, Manufacturing, and Deployment of Large-Scale

Energy and Energy Related Infrastructure,” 91 Federal Register 21929, April 23, 2026; Executive Office of the

(continued...)

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The DPA Modernization Act of 2026: An Overview

Congress has also appropriated at least $13.1 billion for DPA activities since FY2020 through

discretionary, supplemental, and mandatory appropriations. In addition to the $10 billion in P.L.

117-2 referenced above, these include the FY2025 reconciliation law (P.L. 119-21; $1 billion); the

CARES Act (P.L. 116-136; $1 billion); the Additional Ukraine Supplemental Appropriations Act,

2022 (P.L. 117-128; $600 million); and the Inflation Reduction Act of 2022 (P.L. 117-169; $500

million), as well as funding in annual defense appropriations acts.

The Department of Defense’s (DOD’s) FY2027 budget request included approximately $30.4

billion in DPA total funding.14 The request states that the funds would “modernize infrastructure

and expand capacity to provide military capabilities at the speed and scale necessary for the U.S.

to prevail,” including, among other things, $6.8 billion for the critical chemicals supply chain,

$6.4 billion for strategic and critical materials, and $5.6 billion for missile and munitions

production.15

In recent years, Members of Congress, executive branch agencies, and outside commentators

have expressed ideas about how the DPA can, has been, and should be used. Congress has

generally supported DPA use, although some Members have at times critiqued how the law was

used and interpreted. For example, some Members of Congress opposed the Biden

Administration’s use of Title III authorities to expand production of clean energy technologies,16

while others urged the Trump Administration to invoke the DPA more quickly during the

COVID-19 pandemic.17 Executive branch suggestions to modify the DPA have included a 2024

DOD proposal to increase the annual carryover limit for the DPA Fund from $750 million to $1

billion.18

Some analysts have described the DPA as an important tool for bolstering the domestic industrial

base,19 arguing for its centrality to the capacity and supply outcomes they see as necessary for

President, “Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as Amended, on

Grid Infrastructure, Equipment, and Supply Chain Capacity,” 91 Federal Register 21931, April 23, 2026; Executive

Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as

Amended, on Domestic Petroleum Production, Refining, and Logistics Capacity,” 91 Federal Register 21933, April 23,

2026; Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense

Production Act of 1950, as Amended, on Natural Gas Transmission, Processing, Storage, and Liquefied Natural Gas

Capacity,” 91 Federal Register 21935, April 23, 2026.

14 DOD, Department of War Budget Fiscal Year 2027, Procurement Programs (P-1), April 2026, p. 4,

https://comptroller.war.gov/Portals/45/Documents/defbudget/FY2027/FY2027_p1.pdf.

15 DOD, Department of War Fiscal Year (FY) 2027 Budget Estimates, April 2026, pp. xix-xx,

https://comptroller.war.gov/Portals/45/Documents/defbudget/FY2027/budget_justification/pdfs/02_Procurement/

PROC_DPAP_PB_2027.pdf.

16 For example, see Andres Picon, “The Next Big Energy Fight: Defense Production Act Renewal,” E&E News, April

30, 2024, https://www.eenews.net/articles/the-next-big-energy-fight-defense-production-act-renewal/.

17 See H.Res. 906 in the 116th Congress.

18 DOD, Office of General Counsel, Sec_. Amendments to the John S. McCain Strategic Defense Fellows Program, p.

12, https://ogc.osd.mil/Portals/99/OLC%20Proposals/FY%202025/05Apr2024Proposals.pdf?ver=

lNIOS1MHQXbODayjVmS61A%3d%3d.

19 The DPA defines domestic industrial base as “domestic sources which are providing, or which would be reasonably

expected to provide, materials or services to meet national defense requirements during peacetime, national emergency,

or war.” 50 U.S.C. §4552(6).

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The DPA Modernization Act of 2026: An Overview

national security.20 Others, broadly, have argued that DPA activities unnecessarily distort market

forces.21

Overview of the DPA Modernization Act of 2026

Members of the Subcommittee on National Security, Illicit Finance, and International Financial

Institutions of the House Committee on Financial Services introduced the DPA Modernization

Act of 2026 (H.R. 7688) in the 119th Congress.22 (The House Committee on Financial Services

and Senate Committee on Banking, Housing, and Urban Affairs are the DPA committees of

jurisdiction.) On April 15, 2026, the House Committee on Financial Services voted 41-0 to report

H.R. 7688. As of the date of this report, companion legislation has not been introduced in the

Senate.

H.R. 7688 also contains provisions pertaining to the Committee on Foreign Investment in the

United States (CFIUS).23 While CFIUS-related authorities are included in the DPA, CFIUS

conducts business separately and distinctly from DPA oversight committees. This report does not

discuss CFIUS-related provisions.

This report summarizes each title of H.R. 7688 that pertains to DPA activities. It is organized by

the existing DPA titles (Titles I, III, and VII) rather than those redesignated in the bill (Title III as

Title II, and Title VII as Title III).24

Changes to Title I

Title I of the DPA authorizes the federal government to require that contractors prioritize certain

government work when “necessary or appropriate to promote the national defense.”25 H.R. 7688

would amend existing statute to potentially narrow the scope of Title I prioritization authorities,

and it would amend certain DPAC authorities.

Prioritization Authorities

Several of H.R. 7688’s proposed changes could potentially narrow the scope of Title I’s

prioritization authorities. Currently, the President is authorized to use Title I authorities in

circumstances that he or she “deems necessary or appropriate to promote the national defense.”26

In addition, the President may not use Title I authorities unless he or she finds that the material in

question “is a scarce and critical material essential to the national defense” and that “the

requirements of the national defense for such material cannot otherwise be met without creating a

significant dislocation of the normal distribution of such material in the civilian market to such a

degree as to create appreciable hardship.”27

20 Jerry McGinn, “How to Further Strengthen the Defense Production Act,” Defense News, May 7, 2024,

https://www.defensenews.com/opinion/2024/05/07/how-to-further-strengthen-the-defense-production-act/.

21 Philip Rossetti, “Can We Please Stop with the DPA Already?,” R Street Institute, April 5, 2022,

https://www.rstreet.org/commentary/can-we-please-stop-with-the-dpa-already/.

22 This report analyzes the version of H.R. 7688 ordered to be reported.

23 For more information on CFIUS, see CRS In Focus IF10177, Committee on Foreign Investment in the United States

(CFIUS).

24 H.R. 7688, §§4(1) and 5(1).

25 50 U.S.C. §4511(a).

26 50 U.S.C. §4511(a).

27 50 U.S.C. §4511(b).

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H.R. 7688 would place additional conditions on the use of prioritization authorities. In addition to

the previously mentioned requirements, the President would be able to invoke Title I only to

address either a “national emergency declared by the President,” a “natural disaster declared by

the President pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act,”

or “a public health emergency, as determined by the Secretary of Health and Human Services

pursuant to section 319 of the Public Health Service Act.”28 If enacted, these changes could

restrict executive use of Title I authorities, requiring them to be invoked pursuant to the specific

circumstances rather than at the President’s discretion.

Defense Production Act Committee (DPAC) Authorities

H.R. 7688 would amend the DPAC to authorize the DPAC executive director—rather than the

President (as authorized under current law)—to assure “the coordinated administration of Title I

prioritization authorities.”29 The bill would also require that executive agency heads consult with

the DPAC on standards and procedures associated with DPA prioritization authorities, as well as

develop a “consistent and unified Federal priorities and allocations system.”30 Both of these

changes would potentially increase the Title I–related authorities and responsibilities of the DPAC

executive director, whose authorities would be further amended by other portions of H.R. 7688

(see section below, “Defense Production Act Committee (DPAC)”), and potentially alter the

structure of DPA decisionmaking.

Changes to Title III (H.R. 7688 Title II)

H.R. 7688 would change certain DPA Title III authorities to adjust support for production

capacity for critical components, technology items, materials, and industrial resources essential

for national defense. Some of the proposed changes would shift certain authorities from the

President to other entities. For example, the bill would designate a combination of executive

agency officials, DPAC members, and the DPA Fund manager—rather than the President and/or

his or her specified designees, as currently stipulated in statute—as the entities authorized to

make the determinations necessary to invoke Title III.31

H.R. 7688’s other changes to Title III include, among other things, creating new DPA strategy

reports; increasing the dollar cap for the DPA Fund; setting parameters on the use of the DPA for

equity investments; and establishing a new Critical Minerals Resilience Initiative, under which a

member of the DPAC, after consulting with the DPAC executive director and DPA Fund manager,

would be authorized to make grants, purchases, and purchase commitments to certain entities that

would increase U.S. control of critical minerals and materials.32

Loan Guarantee Authorities

As currently written, Section 301 of the DPA gives the President the authority to

authorize a guaranteeing agency to provide guarantees of loans by private institutions for

the purpose of financing any contractor, subcontractor, provider of critical infrastructure,

28 H.R. 7688, §3. For more information on the Robert T. Stafford Disaster Relief and Emergency Assistance Act and

the Public Health Service Act, see CRS Report R46379, Emergency Authorities Under the National Emergencies Act,

Stafford Act, and Public Health Service Act.

29 H.R. 7688, §3(2). 50 U.S.C. §4511.

30 H.R. 7688, §3(2). 50 U.S.C. §4511.

31 For example, H.R. 7688, §4(3)(B)(ii)(III).

32 H.R. 7688, §§4(8)(C), 4(7)(D), 4(5)(B)(iv), and 4(5)(D).

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The DPA Modernization Act of 2026: An Overview

or other person in support of production capabilities or supplies that are deemed by the

guaranteeing agency to be necessary to create, maintain, expedite, expand, protect, or

restore production and deliveries or services essential to the national defense. 33

H.R. 7688 would amend several aspects of these loan guarantee authorities, including:

•

•

•

requiring the guaranteeing executive agency to obtain the concurrence of the

DPA Fund manager to make loan guarantees, which is not required under current

law34;

authorizing the DPA Fund manager—rather than the President, as currently

specified in statute—to designate any agency or any Federal Reserve bank to act

as a fiscal agent of the United States on behalf of the guaranteeing executive

agency35; and

authorizing the DPA Fund manager—rather than the President, as currently

specified in statute—to prescribe regulations, loan guarantee interest rates, fees,

and other charges for such loans.36

Under current law, the DPA requires the President (or, pursuant to Executive Order [E.O.] 13603,

the delegated head of an executive agency) to issue a determination that certain conditions are

met prior to making Title III loans guarantees.37 H.R. 7688 would assign this requirement to the

guaranteeing executive agency, rather than the President, and instructs the DPA Fund manager

and “relevant members” of the DPAC to coordinate when making such determinations.38

Statute currently requires the President to provide written notification to congressional

committees of jurisdiction before guaranteeing loans that cumulatively amount to more than $50

million.39 H.R. 7688 would:

•

•

increase the notification threshold from $50 million to $100 million40; and

require the DPA Fund manager—not the President, as currently stipulated in

law—to notify the committees of jurisdiction in writing.41

Currently, the DPA allows the President to waive these notification requirements during a period

of national emergency declared by the President or Congress or if the President determines that a

specific loan guarantee is necessary to avert shortfalls of an industrial resource or critical

technology item that would severely impair national defense.42 H.R. 7688 would remove this

waiver authority.43

33 50 U.S.C. §4531(a)(1).

34 H.R. 7688, §4(3)(B)(i)

35 H.R. 7688, §4(3)(C).

36 H.R. 7688, §4(3)(D).

37 50 U.S.C. §§4531(a)(2) and 4532(b). Executive Order 13603, issued in 2012, stipulated that the President may

delegate much of the DPA’s Title III authorities to heads of certain executive agencies. Executive Order 13603,

“National Defense Resources Preparedness,” 77 Federal Register 16651, March 22, 2012. For more information, see

CRS Report R43767, The Defense Production Act of 1950: History, Authorities, and Considerations for Congress.

38 H.R. 7688, §4(3)(B)(ii)(III).

39 50 U.S.C. §4531(d)(1)(A).

40 H.R. 7688, §4(3)(E)(i)(II).

41 H.R. 7688, §4(3)(E)(i)(III).

42 50 U.S.C. §4531(d)(1)(B).

43 H.R. 7688, §4(3)(E)(i)(VI).

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Loan Authorities

As currently written, Section 302 of the DPA gives the President the authority to

make provision for loans to private business enterprises (including nonprofit research

corporations and providers of critical infrastructure) for the creation, maintenance,

expansion, protection, or restoration of capacity, the development of technological

processes, or the production of essential materials, including the exploration, development,

and mining of strategic and critical metals and minerals. 44

H.R. 7688 would amend several aspects of these loan authorities. Proposed changes include the

following:

•

•

Allowing the President to authorize an executive agency, with the concurrence of

the DPA Fund manager and “relevant members” of the DPAC, to make

provisions for Title III loans.45 Currently, this authority belongs exclusively to the

President and does not require action by the DPAC or DPA Fund manager.

Creating new collateral requirements for loans, including mandating that, as

required by the DPA Fund manager, any loan be secured by a first-priority lien on

collateral and that the lien be senior to any other liens.46

Other proposed changes would align other aspects of the DPA with those proposed for the loan

guarantee authorities described above. For instance, current law states that the President is to

determine that certain conditions exist prior to making loans under Title III during periods of

national emergency declared by Congress or the President.47 Pursuant to E.O. 13603, the head of

a delegated executive agency may also make such a determination. H.R. 7688 would require the

lending executive agency, in consultation with the DPA Fund manager and “relevant members” of

the DPAC (rather than the President), to make such a determination.48

Statute also currently requires the President to notify the committees of jurisdiction in writing

prior to making DPA loans that cumulatively amount to more than $50 million.49 H.R. 7688

would:

•

•

increase the notification threshold from $50 million to $100 million50; and

require the DPA Fund manager—not the President, as currently stipulated in

law—to notify the committees of jurisdiction in writing.51

The DPA currently allows the President to waive these notification requirements during a period

of national emergency declared by the President or Congress or if the President determines that a

specific loan is necessary to avert the shortfall of an industrial resource or critical technology item

that would severely impair national defense.52 H.R. 7688 would remove this waiver authority.53

44 50 U.S.C. §4532(a).

45 H.R. 7688, §4(4)(A).

46 H.R. 7688, §4(4)(B)(ii)(II)(iii).

47 50 U.S.C. §4532(b)(2).

48 H.R. 7688, §4(4)(B)(ii)(I).

49 50 U.S.C. §4532(d).

50 H.R. 7688, §4(4)(C)(ii).

51 H.R. 7688, §4(4)(C)(iii).

52 50 U.S.C. §4532(d)(2).

53 H.R. 7688, §4(4)(C)(vi).

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Section 303 Authorities

As currently written, DPA Section 303 authorizes the President to “make provision” for a variety

of financial incentives to private businesses when essential for national defense.54 These

incentives may include purchases, purchase commitments, and subsidies. H.R. 7688 would

change several aspects of Section 303 authorities. Pursuant to E.O. 13603, the head of a delegated

executive agency may also make such a provision.

H.R. 7688 would remove the authority to make provision of Section 303 incentives from the

President and vest it with a member of the DPAC, in consultation with the DPAC executive

director. The bill does not specify a particular DPAC member.55 Current law also requires the

President, on a non-delegable basis, to issue a determination stating that certain conditions exist

prior to providing Section 303 incentives.56 H.R. 7688 would remove that authority from the

President and give it to the same member of the DPAC identified to make provision for Section

303 activities, on a non-delegable basis, in consultation with the DPAC executive director.57

As with DPA loan guarantees and loans, current law includes congressional notification

requirements for Section 303 activities. The President (or, pursuant to E.O. 13603, the head of a

delegated executive agency) is to notify DPA congressional committees of jurisdiction in writing

of domestic industrial base shortfalls before using Section 303 to address those shortfalls.58 The

committees of jurisdiction are also to be notified in writing when there are Section 303 activities

that cumulatively amount to more than $50 million to address an industrial base shortfall.59 (The

current statute is silent on precisely who is required to make that notification.) Finally, unlike

with DPA loan guarantees and loans, Section 303 activities exceeding the $50 million threshold

require an act of Congress.60

Regarding these provisions, H.R. 7688 would:

•

•

•

•

increase the notification threshold from $50 million to $100 million61;

require that the DPAC member identified above—and not the President or

delegated entity—provide written notice of a domestic industrial base shortfall to

the DPA committees of jurisdiction62;

specify that the DPA Fund manager—rather than the President or delegated

official, as under current law—provide written notice to the committees of

jurisdiction of Section 303 activities over the notification threshold63; and

remove the requirement for an act of Congress for Section 303 exceeding the

notification threshold.64

54 50 U.S.C. §4533(a)(1).

55 H.R. 7688, §4(5)(B)(i).

56 50 U.S.C. §4533(5).

57 H.R. 7688, §4(5)(B)(ii)(III).

58 50 U.S.C. §4533(6)(A).

59 50 U.S.C. §§4531(d)(1)(A), 4532(d)(1)(A), and 4533(a)(6)(B).

60 This requirement exceeds that for DPA loan guarantees and loans, which require only congressional notification. 50

U.S.C. §4533(a)(6)(C).

61 H.R. 7688, §4(5)(B)(iii)(II)(aa).

62 H.R. 7688, §4(5)(B)(ii)(II).

63 H.R. 7688, §4(5)(B)(iii)(II)(cc).

64 H.R. 7688, §4(5)(B)(iv).

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As currently written, the DPA permits certain requirements for Section 303 activities—including

the requirements for presidential determinations and acts of Congress for activities over the

notification threshold—to be waived during times of national emergency or if the President

determines that action is necessary to avert an industrial resource or critical technology item

shortfall that would severely impair national defense.65 Presidents have invoked this waiver

authority with some regularity. For example, in April 2026, President Trump issued a series of

presidential determinations invoking Section 303 authorities for a variety of purposes related to

energy production, each of which invoked the waiver authority.66 President Biden similarly

invoked the waiver authority in February 2023 with regard to certain supply chain capabilities.67

H.R. 7688 would remove this waiver authority.68

Provisions on Equity Investments

The recent, novel invocations of the DPA for equity investments in private companies have

attracted attention, including from Members of Congress.69 In July 2025, MP Materials, a U.S.based company that mines rare earth elements, announced that DOD would purchase $400

million of MP Materials preferred stock, positioning DOD to become the company’s largest

shareholder.70 According to documents that MP Materials filed with the U.S. Securities and

Exchange Commission, DOD made the investment pursuant to Section 303 authorities.71

Members of Congress have commented on the DOD–MP Materials transaction, some to express

tentative support and some to solicit more information about the investment’s legal basis.72

65 50 U.S.C. §4533(7).

66 Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense Production

Act of 1950, as Amended, on Coal Supply Chains and Baseload Power Generation Capacity,” 91 Federal Register

21927, April 23, 2026; Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the

Defense Production Act of 1950, as Amended, on Development, Manufacturing, and Deployment of Large-Scale

Energy and Energy Related Infrastructure,” 91 Federal Register 21929, April 23, 2026; Executive Office of the

President, “Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as Amended, on

Grid Infrastructure, Equipment, and Supply Chain Capacity,” 91 Federal Register 21931, April 23, 2026; Executive

Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as

Amended, on Domestic Petroleum Production, Refining, and Logistics Capacity,” 91 Federal Register 21933, April 23,

2026; Executive Office of the President, “Presidential Determination Pursuant to Section 303 of the Defense

Production Act of 1950, as Amended, on Natural Gas Transmission, Processing, Storage, and Liquefied Natural Gas

Capacity,” 91 Federal Register 21935, April 23, 2026.

67 Executive Office of the President, “Presidential Waiver of Statutory Requirements Pursuant to Section 303 of the

Defense Production Act of 1950, as Amended, on Department of Defense Supply Chains Resilience—Memorandum

for the Secretary of Defense,” 88 Federal Register 13015, February 27, 2023.

68 H.R. 7688, §4(5)(B)(iv).

69 House Committee on Natural Resources Democrats, “Ranking Members Huffman, Garcia, Heinrich Demand

Answers on Trump Administration’s Taxpayer-Funded Mining Spending Spree,” press release, February 2, 2026,

https://democrats-naturalresources.house.gov/media/press-releases/ranking-members-huffman-garcia-heinrich-demandanswers-on-trump-administrations-taxpayer-funded-mining-spending-spree.

70 MP Materials, “MP Materials Announces Transformational Public-Private Partnership with the Department of

Defense to Accelerate U.S. Rare Earth Magnet Independence,” press release, July 10, 2025, https://mpmaterials.com/

news/mp-materials-announces-transformational-public-private-partnership-with-the-department-of-defense-toaccelerate-u-s-rare-earth-magnet-independence/.

71 U.S. Securities and Exchange Commission, Form 8-K, MP Materials Corp., Current Report Pursuant to Section 13

or 15(d) of the Securities Exchange Act of 1934, July 9, 2025, p. 12, https://d18rn0p25nwr6d.cloudfront.net/CIK0001801368/6191cf7a-1cb7-4c45-a50a-72c98a0fbe86.pdf.

72 U.S. Congress, Senate Armed Services Committee, Hearing on Rebuilding American Critical Minerals Supply

Chains, 119th Cong., 2nd sess., February 24, 2026. See also Lauren C. Williams, “The Pentagon’s Investment Deals

Draw Congressional Scrutiny,” Defense One, March 6, 2026, https://www.defenseone.com/business/2026/03/

pentagons-investment-deals-draw-congressional-scrutiny/411937/.

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While DPA Section 303 broadly allows for the President to “make provision” for financial

incentives, it does not explicitly authorize equity investments as an available tool. H.R. 7688

would prevent the DPA from being used to acquire equity shares in an entity if the transaction

resulted in the federal government holding “15 percent or more” of the entity’s total equity

shares.73 The bill would also require the DPAC to include as part of its annual report to Congress:

•

•

a description of any equity held by the federal government under DPA

authorities; and

the rationale and valuation of such holdings, including the holdings’ expected

contribution to DPA objectives and the holdings’ estimated gain or loss since the

previous report.74

In addition, H.R. 7688 would stipulate that DPA equity investments may be made only if the DPA

Fund manager reports to congressional committees of jurisdiction that the entity cannot obtain

additional equity investments from private sources “on commercially reasonable terms.”75 The

bill would require that a member of the DPAC seek to sell and liquidate any equity investments

made using DPA authorities as soon as commercially feasible76 and that a member of the DPAC

provide copies of all relevant documents concerning any such investments—and a certification

that the investment advances DPA objectives—to the committees of jurisdiction not later than 10

days after the investment is made.77

Critical Minerals Resilience Initiative

There has been interest in some parts of the federal government in using the DPA to increase

critical mineral production. For example, in February 2021, then-President Biden ordered a

supply chain review from multiple executive branch departments.78 The resulting review included

chapters on “Review of Large Capacity Batteries” and “Review of Critical Minerals and

Materials.”79 Some recommendations included use of the DPA. More recently, in March 2025, the

Trump Administration issued E.O. 14241 to “facilitate domestic mineral production to the

maximum extent possible” to address national security concerns. Among other things, E.O. 14241

invoked DPA Titles III and VII.80

The DPA has typically been used with U.S.-based companies, and statute limits Title III financial

incentives to “domestic sources.”81 The DPA defines domestic sources as businesses located in the

United States or Canada and, in certain circumstances, Australia or the United Kingdom.82

73 H.R. 7688, §4(5)(B)(iv).

74 H.R. 7688, §4(5)(B)(iv).

75 H.R. 7688, §4(5)(B)(iv).

76 H.R. 7688, §4(5)(B)(iv).

77 H.R. 7688, §4(5)(B)(iv)

78 Executive Order 14017, “America’s Supply Chains,” 86 Federal Register 11849, February 24, 2021.

79 The White House, Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-

Based Growth, June 2021, https://bidenwhitehouse.archives.gov/wp-content/uploads/2021/06/100-day-supply-chainreview-report.pdf.

80 Executive Order 14241, “Immediate Measures to Increase American Mineral Production,” 90 Federal Register

13673, March 25, 2025. For more information, see CRS Insight IN12540, Trump Administration’s Invocation of the

Defense Production Act for Mineral Production.

81 50 U.S.C. §4517(a).

82 50 U.S.C. §4552(7)(B)(i)(1)(bb).

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With regard to critical minerals and materials, H.R. 7688 would authorize geographical areas in

which the DPA could be used to increase U.S. control of such resources. To do so, H.R. 7688

would establish a Critical Minerals Resilience Initiative (CMRI).83 Under the CMRI, a member of

the DPAC, after consulting the DPAC executive director and DPA Fund manager, would be

authorized to make grants, purchases, and purchase commitments to entities in the United States,

NATO member countries, and major non-NATO allies to:

•

•

ensure that the mining or processing of critical and strategic minerals and

materials is not dominated by a foreign adversary; and

provide for offtake agreements, price floors, or incentives to ensure the viability

of mines or processing facilities for critical and strategic minerals and materials

outside the control of a foreign adversary.84

H.R. 7688 would also direct the DPAC to develop a process to encourage cooperation among and

manage “potential conflicts” among domestic sources, the countries in which they are located,

and countries involved in the CMRI.85

Waivers for Regulations and Permits Related to Critical Minerals and

Materials

Executive agencies use procurement contracts to purchase goods and services from the private

market. This process is governed by a variety of statutes and regulations, including certain

permitting requirements. H.R. 7688 would give the President authorities to “waive or revise

relevant regulations for the purpose of expediting … the procurement of critical technologies, …

critical minerals [or] the permitting of critical infrastructure required to produce or refine the

critical technologies or critical minerals.”86 The bill does not specify or scope how the President

may define relevant, nor does it denote which permitting requirements the President may waive.

Workforce Provisions

Some observers have noted workforce gaps in certain defense industrial base sectors that could

potentially benefit from DPA activities. For example, a 2025 Government Accountability Office

(GAO) report noted that “infrastructure and workforce limitations worsen the Navy’s

shipbuilding challenges.”87 Some Members of Congress have cited similar concerns regarding

potential shortages of skilled workers in seeking to address workforce concerns through the

DPA.88

H.R. 7688 would require each executive agency with delegated authorities under the DPA to

identify any workforce or skills gaps that “affect the ability of the domestic industrial base to

83 H.R. 7688, §4(5)(D).

84 H.R. 7688, §4(5)(D).

85 H.R. 7688, §4(5)(D).

86 H.R. 7688, §4(5)(I).

87 GAO, Navy Shipbuilding: A Generational Imperative for Systemic Change, GAO-25-108136, March 11, 2025, p. 1,

https://www.gao.gov/products/gao-25-108136.

88 For example, see Rep. Sean Casten, “Casten Introduces Bill to Ensure American Workforce Meets National Defense

Needs,” press release, April 1, 2026, https://casten.house.gov/media/press-releases/casten-introduces-bill-to-ensureamerican-workforce-meets-national-defense-needs; and House Committee on Armed Services, “Rogers: Revitalizing

the Defense Industrial Base Is Our Top Priority This Year,” press release, March 4, 2026,

https://armedservices.house.gov/news/documentsingle.aspx?DocumentID=6411.

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supply the materials and services necessary to satisfy” the DPA’s objectives.89 The bill would

allow executive branch agencies to direct any funding provided under Title I or Title III to be

used to recruit, train, place, or retain workers in “defense-critical occupations directly related to

the activities funded by the assistance.”90 (The funding authority in H.R. 7688 is included under

the renumbered Title II.) The bill would also require such executive agencies to submit for the

DPAC’s annual report to Congress:

•

•

a summary of identified workforce gaps and directions to recipients of DPA

funding on how the funds are to be used to address those gaps, and

short- and long-term recommendations for administrative or legislative action to

reduce skills and/or workforce gaps identified by the agency.91

Defense Production Act Fund (DPA Fund)

H.R. 7688 would make several changes to the DPA Fund (50 U.S.C. §4534). Where the current

text of the DPA requires the President to designate a DPA Fund manager, H.R. 7688 would

designate the Secretary of the Treasury as the DPA Fund manager.92 (Currently, pursuant to

Section 309 of E.O 13603, the Secretary of Defense functions as DPA Fund manager “in

consultation with the agency heads having approved, and appropriated funds for, projects” under

DPA Title III.93) As such, the Secretary of the Treasury would become responsible for the

following tasks:

1. Determining DPA Fund liabilities94

2. Ensuring visibility and accountability of transactions affecting DPA Fund

balances95

3. Reporting annually to Congress and the DPAC regarding activities of the DPA

Fund during the previous fiscal year, “including an analysis of the effectiveness

of investments made during the previous fiscal year”96

4. “[D]esignating financial institutions as fiscal agents of the Federal Government,

as appropriate, for the purposes of this title [i.e., DPA Title III]”97

5. “[D]elegating authorities, as the Fund manager finds appropriate, to members of

the Defense Production Act Committee”98

6. “[I]ssuing rules and guidance regarding financing activities authorized by this

title”99

89 H.R. 7688, §4(5)(I).

90 H.R. 7688, §4(5)(I).

91 H.R. 7688, §4(5)(I).

92 H.R. 7688, §4(7)(G).

93 E.O. 13603, §309.

94 50 U.S.C. §4534(f)(1) and (g).

95 50 U.S.C. §4534(f)(2).

96 50 U.S.C. §4534(f)(3), if it were amended by H.R. 7688, §4(7)(G)(iv).

97 H.R. 7688, §4(7)(G)(v).

98 H.R. 7688, §4(7)(G)(v).

99 H.R. 7688, §4(7)(G)(v).

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H.R. 7688 would also add a subsection to 50 U.S.C. §4534, requiring the DPAC executive

director to “defer budget authority involving the Fund for an agency that has repeatedly failed to

submit complete reports” as part of the DPA Strategy (see “DPA Reporting Requirements”).100

Maximum Fiscal Year-End DPA Fund Balance

H.R. 7688 would increase the maximum allowable DPA Fund balance at the end of each fiscal

year from $750 million to $2 billion, “excluding any moneys appropriated to the Fund during that

fiscal year or obligated funds.”101 The text of 50 U.S.C. §4534(e) requiring that any eligible fund

balances exceeding the maximum fund balance at the close of a fiscal year “shall be paid into the

general fund of the Treasury” would remain unchanged.

The bill would allow the DPAC executive director to waive the maximum account balance ceiling

“for up to 1 year at a time upon notifying the Committee on Financial Services of the House of

Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate in

writing that the waiver is in the national security interests of the United States.”102

DPA Reporting Requirements

H.R. 7688 would require the head of each executive agency with delegated authorities under

current DPA Title I and Title III to submit an annual “DPA Strategy” report to the DPAC

executive director and DPA Fund manager, with the first such report due “not later than 180 days

after the effective date” of enactment.103 The required DPA Strategy would include, among other

features:

•

•

•

•

•

an assessment, “in consultation with [the DPAC] and … the private sector,” of

the executive agency’s highest priority industrial base needs104;

“a detailed strategy, timeline, and spending plan” for exercising Title I

authorities105;

the results of a “discussion-based simulation (commonly known as a ‘table-top

exercise’)” conducted by the DPAC to determine the resources needed for Title I

and Title III authorities106;

“a comprehensive list of actions” taken by the executive agency pursuant to Title

I and Title III authorities since the previous report107; and

a justification of the necessity of any Title I or III actions “involving a business

concern in Canada, the United Kingdom, or Australia.”108

H.R. 7688 would also require the first DPA Strategy report to include “a detailed plan” from

executive agency heads designated by the President to ensure the delivery of national defense

100 H.R. 7688, §4(7)(H). For more information on the process for deferring congressional appropriations, see 2 U.S.C.

Chapter 17B (“Impoundment Control”). See also “Delays in Using Appropriations: Impoundment and Programmatic

Delay” in CRS Legal Sidebar LSB11302, Congressional and Executive Roles in Spending: Legal Frameworks.

101 50 U.S.C. §4534(e) if it were modified by H.R. 7688, §4(7)(D).

102 H.R. 7688, §4(7)(F).

103 H.R. 7688, §4(8)(C).

104 H.R. 7688, §4(8)(C).

105 H.R. 7688, §4(8)(C).

106 H.R. 7688, §4(8)(C).

107 H.R. 7688, §4(8)(C).

108 H.R. 7688, §4(8)(C).

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supplies (such as medical materials, critical minerals, and naval shipbuilding materials) along

with an analysis of supply chain vulnerabilities potentially affecting those materials.109

Restrictions on Incentives

H.R. 7688 would prohibit covered entities and individuals from receiving Title III financial

incentives. A covered entity is one in which a covered individual directly or indirectly owns,

controls, or holds at least 20% of any class of equity interest. Covered individuals are the

President; the Vice President; a member of the DPAC; or the spouse, child, son-in-law, or

daughter-in-law of any of those individuals.110

Subsidies currently authorized under the DPA do not have restrictions on how frequently, or for

how long, they may be issued. H.R. 7688 would limit any given subsidy payment to one year.

However, the bill would allow for subsidy renewals of up to 180 days if the President submits a

report to the DPA congressional committees of jurisdiction that:

•

•

certifies that the subsidy is the most efficient means of ensuring the DPA’s

objectives and

explains why market conditions do not allow for the achievement of the DPA’s

objectives without the subsidy.111

Changes to Title VII

H.R. 7688proposes changes to several Title VII provisions. As with other sections of the bill,

some provisions would potentially expand the authority of entities such as the DPAC and DPA

Fund manager. For example, the bill would, for the first time, authorize annual appropriations for

both the DPAC executive director and DPA Fund manager from FY2026 through FY2031 ($5

million).112 The bill would also expand the DPAC’s purview to include both Titles I and III (the

latter to be redesignated as Title II under the bill) and establish a Subcommittee on Emerging

Technology under the DPAC, which would analyze the effects or potential effects of certain

technology on activities deemed essential to national defense.113

Among other things, the bill’s amendments to Title VII could potentially expand the DPA’s

applicability to public health events, including by expanding the law’s definition of national

defense, and would extend the DPA’s sunset clause until September 30, 2031.

Definition of National Defense

The DPA currently defines national defense as

programs for military and energy production or construction, military or critical

infrastructure assistance to any foreign nation, homeland security, stockpiling, space, and

any directly related activity. Such term includes emergency preparedness activities

conducted pursuant to title VI of The Robert T. Stafford Disaster Relief and Emergency

Assistance Act … and critical infrastructure protection and restoration.114

109 H.R. 7688, §4(8)(C).

110 H.R. 7688, §4(10).

111 H.R. 7688, §4(5)(F)(iii).

112 H.R. 7688, §5(17)(c).

113 H.R. 7688, §5(21).

114 50 U.S.C. §4552.

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H.R. 7688 would amend this definition to include emergency preparedness activities conducted

pursuant to Section 319 of the Public Health Service Act and to include “public health emergency

preparedness and response activities.”115 This would expand the definition of national defense

beyond a military, homeland security, or natural disaster context to include public health

emergencies.116 These amendments could widen the scope of allowable DPA activities. Congress

has previously expanded the DPA’s definition, for example adding critical infrastructure

protection and restoration in P.L. 108-195 and emergency preparedness activities under the

Robert T. Stafford Disaster Relief and Emergency Assistance Act in P.L. 103-337.

Public Health Emergency Outreach Representative

The first Trump and Biden Administrations invoked the DPA to respond to the COVID-19

pandemic. This included delegating some of the DPA’s authorities to the Federal Emergency

Management Agency (FEMA). FEMA administrators used the DPA to respond to pandemicrelated supply constraints in sometimes novel ways, including contracting for and allocating

scarce medical supplies, identifying anti-price-gouging and anti-hoarding actions, and entering

into agreements with medical supply manufacturers and distributors to coordinate informationsharing.117

Some of FEMA’s DPA use engendered critiques from certain observers. For example, some

Members of Congress expressed concern that FEMA was not equipped to use DPA authorities

independently or as an interagency coordinator for the use of DPA authorities during pandemic

response—a role it had been assigned, including in times other than the pandemic.118 FEMA itself

noted that it may not have had enough properly trained staff to manage DPA use with regard to

pandemic response, potentially contributing to confusion among executive agencies.119

H.R. 7688 would authorize the FEMA administrator, in consultation with the Secretary of Health

and Human Services, to designate an outreach representative during a public health emergency.

The outreach representative would:

•

•

•

have substantial experience in the production or distribution of medical supplies

or equipment,

act as the federal-government-wide single coordinator during a public health

emergency for outreach to manufacturing companies and their suppliers, and

seek to develop partnerships with companies during a public health emergency.120

115 H.R. 7688, §5(9).

116 For more information on the Public Health Service Act, see CRS Report R46379, Emergency Authorities Under the

National Emergencies Act, Stafford Act, and Public Health Service Act.

117 For more information, see CRS Report R47048, FEMA’s Role in the COVID-19 Federal Pandemic Response.

118 For example, see Sen. Mark Warner, “Warner, Colleagues Urge Trump to Immediately Use DPA to Manufacture

PPE, COVID-19 Testing Supplies,” press release, May 7, 2020, https://www.warner.senate.gov/newsroom/pressreleases/warner-colleagues-urge-trump-to-immediately-use-dpa-to-manufacture-ppe-covid-19-testing-supplies/; and

U.S. Congress, House Homeland Security Committee, Examining the National Response to the Worsening Coronavirus

Pandemic: Part II, 116th Cong., 2nd sess., July 22, 2020 (GPO, 2021).

119 FEMA, Coronavirus Disease (COVID-19) Initial Assessment Report, January 2021, p. 74, https://www.fema.gov/

disaster/historic/coronavirus/data-resources/initial-assessment-report.

120 H.R. 7688, §5(10)(C).

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Collection of Information and Penalties

To effectively use DPA authorities, the President may require a detailed understanding of current

domestic industrial capabilities and therefore need to obtain extensive information from private

industries. As currently written, the DPA authorizes the President to obtain such information from

“any person as may be necessary or appropriate, in his discretion, to the enforcement or the

administration of” the DPA.121

The DPA includes penalties for individuals who do not comply with such requirements. H.R.

7688 would raise the maximum fine for noncompliance from $10,000 to $100,000.122 Current law

also requires information collected under these authorities to remain confidential in most cases.

H.R. 7688 would increase the maximum fine for noncompliance with this provision from $10,000

to $100,000.123 Lastly, H.R. 7688 would prohibit the President from using information collected

under these authorities to obtain sensitive personally identifiable information, defined as

information that, if lost, compromised, or disclosed without authorization, could result in

substantial harm, embarrassment, inconvenience, or unfairness.124

Authorizations of Appropriations

H.R. 7688 would update the DPA’s authorization of appropriations and add new authorizations of

appropriations. Statute currently provides an annual authorization of appropriations of $133

million.125 The bill would update that amount to $250 million beginning in FY2026.126 In

addition, the bill would provide a $5 million annual authorization of appropriations to the DPAC

executive director and DPA Fund manager from FY2026 through FY2031.127 (It is unclear if both

the DPAC executive director and the DPA Fund manager would receive $5 million or if the

amount would be cumulative for the two entities.)

National Defense Executive Reserve

H.R. 7688 would amend the National Defense Executive Reserve (“the Reserve”), a DPA entity,

to “improve the preparedness of the Federal Government for national defense emergencies.”128

The bill would allow “private persons with unique expertise” to volunteer, be trained, and

temporarily work for the federal government within Reserve units “that may be necessary during

periods of national defense emergency, as determined by the President.”129 The bill does not

define private persons with unique expertise.

H.R. 7688 would authorize Reserve unit activities related to:

•

“workforce and skills gaps”130;

121 50 U.S.C. §4555(a).

122 H.R. 7688, §5(12)(B).

123 H.R. 7688, §5(12)(C).

124 H.R. 7688, §5(12)(D).

125 50 U.S.C. §4561.

126 H.R. 7688, §5(17)(B).

127 H.R. 7688, §5(17)(C).

128 H.R. 7688, §5(18). Specifically, H.R. 7688 calls for the Departments of Commerce, Defense, Homeland Security,

and “such other agencies as the President determines appropriate” to establish Reserve units.

129 H.R. 7688, §5(18).

130 H.R. 7688, §5(18).

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•

•

•

“overall strategy,” including the exercise of DPA authorities131;

“the strategy on securing supply chains essential to national defense”; and

reporting to the Subcommittee on Emerging Technology (see section below on

“Defense Production Act Committee (DPAC),” including how certain

technologies “can be used” by government and industry “to improve efficiencies,

conserve resources, and address supply chain gaps, in support of national defense

priorities.”132

Sunset Provision

As noted, most of the DPA’s authorities are currently set to expire on September 30, 2026.133 H.R.

7688 would extend that expiration date until September 30, 2031.134 Under the bill, the DPA

provisions not subject to the sunset clause would remain in effect.

Since 1950, Congress has reauthorized DPA provisions on at least 53 separate occasions. Within

the past 40 years, there have been at least two lapses in authorization (October 2025 through

November 2025 and October 1990 through August 1991). Some laws have extended the DPA’s

sunset clause for multiple years (e.g., P.L. 113-172—five years), and others have provided shorter

extensions (e.g., P.L. 110-367—approximately one year).

Defense Production Act Committee (DPAC)

Congress authorized the DPAC in the Defense Production Action Reauthorization of 2009 (P.L.

111-67). The DPAC was intended to serve as an interagency mechanism for advising the

President and coordinating DPA activities across the government.135 However, the DPAC has not

fulfilled some of its original statutory responsibilities. For example, P.L. 111-67 directed the

President to appoint a DPAC executive director. To date, however, no President has yet to appoint

an executive director. P.L. 113-172 removed the statutory requirement for a DPAC executive

director. In addition, P.L. 111-67 instructed the DPAC to report annually to DPA congressional

committees of jurisdiction on all aspects of DPA usage. Later, in P.L. 113-172, Congress

narrowed the DPAC’s remit to reporting only on Title I.136

H.R. 7688 would address various aspects of the DPAC. This includes certain personnel actions,

such as:

•

•

•

adding the DPA Fund manager and OMB director to the DPAC,137

naming the assistant to the President for national security affairs (national

security advisor) as the non-voting DPAC chairperson,138 and

appointing the OMB director as DPAC executive director.139

131 H.R. 7688, §5(18).

132 H.R. 7688, §5(18).

133 50 U.S.C. §4564(a).

134 H.R. 7688, §5(19)(A)(ii).

135 For more information, see CRS In Focus IF11767, The Defense Production Act Committee (DPAC): A Primer.

136 See notes at 50 U.S.C. §4567.

137 H.R. 7688, §5(21)(B)(i)(III).

138 H.R. 7688, §5(21)(B)(i)(III)(ii).

139 H.R. 7688, §5(21)(B)(i)(III)(ii).

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The DPA Modernization Act of 2026: An Overview

Current law requires the DPAC to submit an annual report to the DPA congressional committees

of jurisdiction.140 H.R. 7688 would amend those requirements by requiring the DPAC chairperson

to submit:

•

•

•

•

the most recent DPA strategy reports (see “DPA Reporting Requirements”),

an evaluation of how executive agencies with delegated DPA authorities used

Title I and Title III (renumbered Title II) authorities to address needs identified in

the strategy reports,

a summary of actions taken to reduce fraud in DPA transactions and a fraud risk

assessment for DPA transactions, and

an overview of the activities of the reorganized Reserve (see “National Defense

Executive Reserve”).141

H.R. 7688 would give the DPAC executive director authority to establish DPAC subcommittees

to help with coordination among DPAC members.142 In addition, the bill would establish a

Subcommittee on Emerging Technology under the DPAC.143 The subcommittee would analyze

the effects or potential effects of covered technology on activities deemed essential to national

defense and how industry or executive agencies can use covered technology to “improve

efficiencies, encourage innovation, and address supply chain gaps.”144 The subcommittee would

be directed to define covered technology on its own and would consider the fields of:

•

•

•

•

•

•

artificial intelligence,

biotechnology,

cryptography and quantum computing,

materials science,

semiconductors, and

space.

H.R. 7688 also contains various other provisions related to the DPAC, including:

•

•

•

requiring the DPAC executive director or head of an executive agency delegated

DPA authorities to testify after DPAC annual reports are submitted145;

directing the DPAC executive director to develop a DPA dashboard that includes

all DPA actions taken by executive agencies146;

mandating the DPAC to create an online toolkit for executive agencies to post

DPA-related information, including solicitations and previous DPA awards147;

and

140 50 U.S.C. §4567(d).

141 H.R. 7688, §5(21)(D).

142 H.R. 7688, §5(21)(F).

143 H.R. 7688, §5(21)(F).

144 H.R. 7688, §5(21)(F).

145 H.R. 7688, §5(21)(F).

146 H.R. 7688, §5(21)(F).

147 H.R. 7688, §5(21)(F).

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The DPA Modernization Act of 2026: An Overview

•

requiring the DPAC to establish and implement procedures based on GAO’s

fraud risk framework with regards to DPA actions.148

Eliminating Annual Report on Impact of Offsets

Section 5 of H.R. 7688 would strike DPA Section 723 (currently 50 U.S.C. §4568), which

currently requires the President to submit an annual report on the impact of defense offsets

prepared by the Department of Commerce in consultation with the Secretary of Defense,

Secretary of the Treasury, and U.S. Trade Representative.149 Defense industry offsets are

direct or indirect side deals imposed by importers on exporters in arms deals, such as

building local factories for in-country production (direct) or unrelated projects like

supporting infrastructure or agriculture (indirect).150

Congress has actively overseen U.S. policy on defense offsets and amended related annual

reporting requirements since 1992 through P.L. 102-558 (Defense Production Act Amendments of

1992), Sections 123 and 124; P.L. 106-113, Title XII, Subtitle D (“Defense Offsets Disclosure”);

P.L. 108-195 (Defense Production Act Reauthorization of 2003), Section 7(c); and P.L. 111-67

(Defense Production Act Reauthorization of 2009), Section 12.

Congress may consider the extent to which eliminating this annual reporting requirement may

affect oversight of U.S. defense offset policy and the impacts of defense offsets on national

security and the national economy.

Other Required Studies and Reports

Section 7 of H.R. 7688 would require three DPA-related reports:

1. A GAO study on “the efficacy of the current methods used by DPA agencies to

address DPA-related long-lead items and related stockpiling challenges” within

one year of enactment of the bill151

2. A GAO report to the DPA congressional committees of jurisdiction within two

years of H.R. 7688 enactment that assesses the DPAC’s quality of coordination

and planning for DPA activities152

3. A report by DPAC’s Subcommittee on Emerging Technology (see “Defense

Production Act Committee (DPAC)”) to submit a report to Congress, within 18

months of H.R. 7688 enactment, evaluating the potential benefits and drawbacks

of establishing a strategic reserve of critical biomanufacturing materials essential

to national defense activities under the DPA153

148 H.R. 7688, §5(21)(F).

149 H.R. 7688, §5(2); 50 U.S.C. §4568.

150 Defense industry offsets are “negotiated benefits that exporters add to arms deals to satisfy importer desires for

something beyond a basic exchange. They are estimated at 30%–40% of the total value of the worldwide arms trade,

and while not commonly understood, offsets are so prevalent that most defense firms cannot compete internationally

without them.” See Brian Hobbs, “U.S. Defense Industry Offsets: The Presidential Exception for National Security,”

Routledge Advances in Defense Studies, March 2026, p. 1.

151 H.R. 7688, §7(a)(1).

152 H.R. 7688, §7(b).

153 H.R. 7688, §7(c).

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The DPA Modernization Act of 2026: An Overview

Concluding Observations

The DPA provides the President the authority to take a slate of actions related to private industry

in service of national defense. Many of these authorities are currently set to expire on September

30, 2026. Members of the 119th Congress have introduced a bill, H.R. 7688, to reauthorize the

DPA. The bill would extend the law’s sunset clause by five years and alter many of the DPA’s

other authorities, potentially changing how and when the law is invoked going forward.

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The DPA Modernization Act of 2026: An Overview

Appendix. H.R. 7688’s Proposed Administrative

Changes to DPA Statutes

While many proposals in H.R. 7688 would add or delete substantive provisions to or from the

DPA, the bill also includes a number of administrative, non-substantive amendments. These

changes are summarized in Table A-1.

Table A-1. H.R. 7688’s Proposed Administrative Changes to DPA Statutes

Affected U.S. Code Citation

Existing DPA Provision

Proposed Change in H.R. 7688

50 U.S.C. §§4501 et seq.

Throughout the entirety of DPA

statutes

Replace all references to the

President as “he” with “the

President”

50 U.S.C. §4517

Section 107 (incentives for

capability to produce domestic

sources of critical components,

critical technology items, materials,

and industrial resources essential

for national defense)

Redesignate and reorder Section

107 as Section 204

50 U.S.C. §4518

Section 108 (small business

provisions)

Redesignate and reorder Section

108 as Section 207

50 U.S.C. §§4531 et seq.

Title III (Expansion of Productive

Capacity and Supply)

Redesignate DPA Title III as Title II

50 U.S.C. §4531; 50 U.S.C. §4532;

50 U.S.C. §4533; 50 U.S.C. §4534;

50 U.S.C. §4535

Sections 301 (loan guarantee

authority), 302 (loan authority), 303

(other financial incentives

authority), 304 (DPA Fund), and

305 (reports)

Redesignate Sections 301, 302, 303,

and 304 as Sections 201, 202, 203,

and 205, respectively

50 U.S.C. §4531

Section 301 (loan guarantee

authority)

Change section title from

“Presidential Authorization for the

National Defense” to “Loan

Guarantees”

50 U.S.C. §4531(a)(2)

Section 301(a)(2) (presidential

determinations)

Change subsection title from

“Presidential determinations

required” to “Determinations

required”

50 U.S.C. §4533

Section 303 (other DPA financial

incentives)

Change section title from “Other

presidential action authorized” to

“Purchases, commitments to

purchase, and subsidy payments"

50 U.S.C. §4533(a)(5)

Section 303(a)(5) (presidential

determinations)

Change subsection title from

“Presidential determinations

required” to “Federal agency

determinations”

50 U.S.C. §4535

Section 305 (reports)

Change section title from “Reports

on exercise of authorities” to “DPA

strategy”

50 U.S.C. §§4551 et seq.

Title VI: General Provisions

Redesignate DPA Title VII as Title

III

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The DPA Modernization Act of 2026: An Overview

50 U.S.C. §4551 through 50 U.S.C.

§4561

Sections 701-711

Redesignate Sections 701-711 as

Sections 301-311, respectively

50 U.S.C. §4560(e)

Section 710(e) (Nucleus/National

Defense Executive Reserve)

Deletes existing provision

authorizing Nucleus/National

Defense Executive Reserve and

inserts new Section 314

50 U.S.C. §4562

Section 713 (territorial application

of DPA)

Redesignate Section 713 as Section

312

50 U.S.C. §4563

Section 715 (separability)

Redesignate Section 715 as Section

313

50 U.S.C. §4563

Section 717 (DPA expiration)

Redesignate Section 717 as Section

315 and extend expiration date

until September 30, 2031

50 U.S.C. §4567

Section 722 (DPAC)

Redesignate Section 722 as Section

317

Sources: U.S. Code and CRS analysis of H.R. 7688.

Author Information

Adam G. Levin, Coordinator

Analyst in Economic Development Policy

Alexandra G. Neenan

Analyst in U.S. Defense Policy

Cameron M. Keys

Analyst in Defense Logistics and Resource

Management Policy

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan

shared staff to congressional committees and Members of Congress. It operates solely at the behest of and

under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other

than public understanding of information that has been provided by CRS to Members of Congress in

connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not

subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in

its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or

material from a third party, you may need to obtain the permission of the copyright holder if you wish to

copy or otherwise use copyrighted material.

Congressional Research Service

R49178 · VERSION 1 · NEW

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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