19–006

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 108–56

DEFENSE PRODUCTION ACT REAUTHORIZATION OF 2003

APRIL 2, 2003.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. OXLEY, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 1280] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1280) to reauthorize the Defense Production Act of 1950, 

and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as 

amended do pass.

CONTENTS 

Page 

Amendment .............................................................................................................. 1

Purpose and Summary ............................................................................................ 2

Background and Need for Legislation .................................................................... 2

Hearings ................................................................................................................... 3

Committee Consideration ........................................................................................ 4

Committee Votes ...................................................................................................... 4

Committee Oversight Findings ............................................................................... 6

Performance Goals and Objectives ......................................................................... 6

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 7

Committee Cost Estimate ....................................................................................... 7

Congressional Budget Office Cost Estimate .......................................................... 7

Federal Mandates Statement ................................................................................. 8

Advisory Committee Statement .............................................................................. 9

Constitutional Authority Statement ...................................................................... 9

Applicability to Legislative Branch ........................................................................ 9

Section-by-Section Analysis .................................................................................... 9

Changes in Existing Law Made by the Bill, as Reported ..................................... 10

Dissenting Views ..................................................................................................... 12

The amendment is as follows: 

2

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Defense Production Act Reauthorization of 2003’’. 

SEC. 2. REAUTHORIZATION OF DEFENSE PRODUCTION ACT OF 1950. 

(a) IN GENERAL.—The 1st sentence of section 717(a) of the Defense Production Act 

of 1950 (50 U.S.C. App. 2166(a)) is amended—

(1) by striking ‘‘sections 708’’ and inserting ‘‘sections 707, 708,’’; and 

(2) by striking ‘‘September 30, 2003’’ and inserting ‘‘September 30, 2007’’. 

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 711(b) of the Defense Production 

Act of 1950 (50 U.S.C. App. 2161(b)) is amended by striking ‘‘1996 through 2003’’

and inserting ‘‘2004 through 2007’’. 

SEC. 3. RESOURCE SHORTFALL FOR RADIATION-HARDENED ELECTRONICS. 

Notwithstanding the limitation contained in section 303(a)(6)(C) of the Defense 

Production Act of 1950 (50 U.S.C. App. 2093(a)(6)(C)), the President is authorized 

to take actions under section 303 of the Defense Production Act of 1950 to correct 

the industrial resource shortfall for radiation-hardened electronics, to the extent 

that such Presidential actions do not cause the aggregate outstanding amount of all 

such actions to exceed $200,000,000. 

SEC. 4. CLARIFICATION OF PRESIDENTIAL AUTHORITY. 

Subsection (a) of section 705 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2155(a)) is amended by inserting after the end of the 1st sentence the following 

new sentence: ‘‘The authority of the President under this section includes the authority to obtain information in order to perform industry studies assessing the capabilities of the United States industrial base to support the national defense.’’. 

SEC. 5. REPORT ON CONTRACTING WITH MINORITY- AND WOMEN-OWNED BUSINESSES. 

(a) REPORT REQUIRED.—Before the end of the 1-year period beginning on the date 

of the enactment of this Act, the Secretary of Defense shall submit a report to the 

Committee on Financial Services of the House of Representatives on the extent to 

which contracts entered into during the fiscal year ending before the end of such 

1-year period under the Defense Production Act of 1950 have been contracts with 

minority- and women-owned businesses. 

(b) CONTENTS OF REPORTS.—The report submitted under subsection (a) shall include the following: 

(1) The types of goods and services obtained under contracts with minorityand women-owned businesses under the Defense Production Act of 1950 in the 

fiscal year covered in the report. 

(2) The dollar amounts of such contracts. 

(3) The ethnicity of the majority owners of such minority- and women-owned 

businesses. 

(4) A description of the types of barriers in the contracting process, such as 

requirements for security clearances, that limit contracting opportunities for 

minority- and women-owned businesses, together with such recommendations 

for legislative or administrative action as the Secretary of Defense may determine to be appropriate for increasing opportunities for contracting with 

minority- and women-owned businesses and removing barriers to such increased participation. 

(c) DEFINITIONS.—For purposes of this section, the terms ‘‘women-owned business’’

and ‘‘minority-owned business’’ have the meanings given such terms in section 

21A(r) of the Federal Home Loan Bank Act, and the term ‘‘minority’’ has the meaning given such term in section 1204(c)(3) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

PURPOSE AND SUMMARY 

H.R. 1280, the Defense Production Act Reauthorization of 2003, 

reauthorizes the Defense Production Act of 1950 for 4 years, until 

September 30, 2007, and makes 3 minor technical amendments to 

the underlying legislation. 

BACKGROUND AND NEED FOR LEGISLATION 

The Defense Production Act of 1950 allows the Government to 

prioritize deliveries of materials needed for national defense or in 

3

the case of natural or man-made disaster, and allows the use of financial incentives to create defense-related production capacity 

where none exists. Unlike most defense-related legislation, the authorities under this legislation address the means of production 

and manufacturing, a great power with dire consequences for the 

economy if it is misused. For the same reason, the Act is not a permanent authority but requires regular re-authorization. This legislation reauthorizes the underlying Act for a period of four years; 

the Committee intends to study whether any changes need to be 

made to the underlying Act, to modernize it, outside of the authorization cycle. 

The most regular users of the Act, however, asked that three 

minor changes be made to the Act to improve its usefulness immediately: The act imposes a per-project cap of $50 million for efforts 

to create defense production capacity, and a project to develop such 

capacity for radiation-hardened electronics—already authorized to 

about $100 million by previous act of Congress—will likely run to 

$167, according to the Defense Department, which has asked for a 

$200 million cap in case that amount is somewhat low. Separately, 

section 708 of the Act indemnifies persons for acts they take in 

complying with the Act’s authorities. The Defense Department requested that this section be made permanent, pointing to a period 

during the Gulf War a decade ago in which the Act temporarily expired. In that instance, commercial airlines were providing troop 

transportation on commercial aircraft, displacing previous contracts 

for performance. The airlines could have incurred liability during 

the period in which the Act was unauthorized as its powers provided the backing for the airlines’ actions. 

Finally, while section 705 of the Act provides that the President’s 

investigatory authority—delegated to the Department of Commerce—may be exercised where ‘‘necessary or appropriate to the 

enforcement or administration of the [DPA] and the regulations or 

orders issued thereunder,’’ the provision does not specifically reference studies conducted pursuant to section 401(4) of Executive 

Order 12656. However, Executive Order 12656 specifically authorizes the Secretary of Commerce to perform industry analyses to assess capabilities of the commercial industrial base to support the 

national defense under the authority of the DPA. This legislation 

clarifies the President’s investigative authority in this instance. 

HEARINGS 

The Subcommittee on Domestic and International Monetary Policy, Trade and Technology held a hearing on March 19, 2003, on 

H.R. 1280, the Defense Production Act Reauthorization of 2003. 

The following witnesses testified: Ms. Suzanne D. Patrick, Deputy 

Undersecretary for Defense and Industrial Policy, Department of 

Defense; Dr. Ronald M. Sega, Director of Defense Research and Engineering, Department of Defense; Ms. Karan K. Bhatia, Deputy 

Under Secretary for Industry and Security, Department of Commerce; and Mr. R. David Poulison, Director of the Preparedness Division, Department of Homeland Security. 

4

COMMITTEE CONSIDERATION 

The Subcommittee on Domestic and International Monetary Policy met in open session on March 19, 2003, and approved H.R. 1280 

for full Committee consideration, as amended. 

The Committee on Financial Services met in open session on 

March 26, 2003, and ordered H.R. 1280 reported to the House with 

a favorable recommendation, with an amendment. 

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 motion 

to report legislation and amendments thereto. A motion by Mr. 

Oxley to report the bill to the House with a favorable recommendation was agreed to by a voice vote. The following amendments were 

considered by record votes:

An amendment by Ms. Waters, no. 2, preventing conflicts of interest for contracts under the Defense Production Act, was not agreed to by a record vote of 14 yeas and 

41 nays (Record vote no. FC–5).

Record vote no. FC–5

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Oxley ............................... ........... X ............. Mr. Frank (MA) ..................... X ........... .............

Mr. Leach .............................. ........... X ............. Mr. Kanjorski ........................ ........... ........... .............

Mr. Bereuter .......................... ........... ........... ............. Ms. Waters ........................... X ........... .............

Mr. Baker .............................. ........... X ............. Mr. Sanders* ........................ X ........... .............

Mr. Bachus ........................... ........... X ............. Mrs. Maloney ........................ ........... X .............

Mr. Castle ............................. ........... ........... ............. Mr. Gutierrez ........................ ........... ........... .............

Mr. King ................................ ........... X ............. Ms. Vela ́zquez ...................... X ........... .............

Mr. Royce .............................. ........... X ............. Mr. Watt ............................... X ........... .............

Mr. Lucas (OK) ...................... ........... X ............. Mr. Ackerman ....................... ........... X .............

Mr. Ney .................................. ........... ........... ............. Ms. Hooley (OR) ................... X ........... .............

Mrs. Kelly .............................. ........... X ............. Ms. Carson (IN) .................... X ........... .............

Mr. Paul ................................ X ........... ............. Mr. Sherman ........................ ........... X .............

Mr. Gillmor ............................ ........... X ............. Mr. Meeks (NY) .................... X ........... .............

Mr. Ryun (KS) ....................... ........... ........... ............. Ms. Lee ................................. X ........... .............

Mr. LaTourette ....................... ........... X ............. Mr. Inslee ............................. ........... ........... .............

Mr. Manzullo ......................... ........... X ............. Mr. Moore ............................. ........... X .............

Mr. Jones (NC) ...................... ........... X ............. Mr. Gonzalez ......................... ........... X .............

Mr. Ose ................................. ........... X ............. Mr. Capuano ........................ ........... X .............

Mrs. Biggert .......................... ........... ........... ............. Mr. Ford ................................ ........... X .............

Mr. Green (WI) ...................... ........... ........... ............. Mr. Hinojosa ......................... ........... ........... .............

Mr. Toomey ............................ ........... X ............. Mr. Lucas (KY) ..................... ........... X .............

Mr. Shays .............................. ........... X ............. Mr. Crowley .......................... ........... X .............

Mr. Shadegg ......................... ........... ........... ............. Mr. Clay ................................ ........... ........... .............

Mr. Fossella .......................... ........... X ............. Mr. Israel .............................. ........... X .............

Mr. Gary G. Miller (CA) ......... ........... ........... ............. Mr. Ross ............................... ........... X .............

Ms. Hart ................................ ........... X ............. Mrs. McCarthy (NY) .............. ........... X .............

Mrs. Capito ........................... ........... X ............. Mr. Baca .............................. X ........... .............

Mr. Tiberi .............................. ........... X ............. Mr. Matheson ....................... ........... X .............

Mr. Kennedy (MN) ................. ........... X ............. Mr. Lynch ............................. ........... ........... .............

Mr. Feeney ............................. ........... X ............. Mr. Miller (NC) ..................... ........... X .............

Mr. Hensarling ...................... ........... X ............. Mr. Emanuel ......................... X ........... .............

Mr. Garrett (NJ) ..................... ........... X ............. Mr. Scott (GA) ...................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. Davis (AL) ...................... X ........... .............

Ms. Ginny Brown-Waite (FL) ........... X ............. .............................................. ........... ........... .............

Mr. Barrett (SC) .................... ........... X ............. .............................................. ........... ........... .............

Ms. Harris ............................. ........... ........... ............. .............................................. ........... ........... .............

Mr. Renzi ............................... ........... X ............. .............................................. ........... ........... .............

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus. 

5

An amendment by Ms. Waters (as modified by unanimous consent), no. 4, requiring certain officials to recuse 

themselves, was not agreed to by a record vote of 32 yeas 

and 35 nays (Record vote no. FC–6).

Record vote no. FC–6

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Oxley ............................... ........... X ............. Mr. Frank (MA) ..................... X ........... .............

Mr. Leach .............................. ........... X ............. Mr. Kanjorski ........................ X ........... .............

Mr. Bereuter .......................... ........... X ............. Ms. Waters ........................... X ........... .............

Mr. Baker .............................. ........... X ............. Mr. Sanders* ........................ X ........... .............

Mr. Bachus ........................... ........... X ............. Mrs. Maloney ........................ X ........... .............

Mr. Castle ............................. ........... X ............. Mr. Gutierrez ........................ ........... ........... .............

Mr. King ................................ ........... X ............. Ms. Vela ́zquez ...................... X ........... .............

Mr. Royce .............................. ........... X ............. Mr. Watt ............................... X ........... .............

Mr. Lucas (OK) ...................... ........... X ............. Mr. Ackerman ....................... X ........... .............

Mr. Ney .................................. ........... X ............. Ms. Hooley (OR) ................... X ........... .............

Mrs. Kelly .............................. ........... X ............. Ms. Carson (IN) .................... X ........... .............

Mr. Paul ................................ X ........... ............. Mr. Sherman ........................ X ........... .............

Mr. Gillmor ............................ ........... X ............. Mr. Meeks (NY) .................... X ........... .............

Mr. Ryun (KS) ....................... ........... X ............. Ms. Lee ................................. X ........... .............

Mr. LaTourette ....................... ........... X ............. Mr. Inslee ............................. X ........... .............

Mr. Manzullo ......................... ........... X ............. Mr. Moore ............................. X ........... .............

Mr. Jones (NC) ...................... ........... X ............. Mr. Gonzalez ......................... X ........... .............

Mr. Ose ................................. ........... X ............. Mr. Capuano ........................ X ........... .............

Mrs. Biggert .......................... ........... X ............. Mr. Ford ................................ X ........... .............

Mr. Green (WI) ...................... ........... X ............. Mr. Hinojosa ......................... X ........... .............

Mr. Toomey ............................ ........... X ............. Mr. Lucas (KY) ..................... ........... X .............

Mr. Shays .............................. ........... X ............. Mr. Crowley .......................... X ........... .............

Mr. Shadegg ......................... ........... X ............. Mr. Clay ................................ X ........... .............

Mr. Fossella .......................... ........... X ............. Mr. Israel .............................. X ........... .............

Mr. Gary G. Miller (CA) ......... ........... X ............. Mr. Ross ............................... X ........... .............

Ms. Hart ................................ ........... X ............. Mrs. McCarthy (NY) .............. X ........... .............

Mrs. Capito ........................... ........... X ............. Mr. Baca .............................. X ........... .............

Mr. Tiberi .............................. ........... X ............. Mr. Matheson ....................... X ........... .............

Mr. Kennedy (MN) ................. ........... X ............. Mr. Lynch ............................. ........... ........... .............

Mr. Feeney ............................. ........... X ............. Mr. Miller (NC) ..................... X ........... .............

Mr. Hensarling ...................... ........... X ............. Mr. Emanuel ......................... X ........... .............

Mr. Garrett (NJ) ..................... ........... X ............. Mr. Scott (GA) ...................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. Davis (AL) ...................... X ........... .............

Ms. Ginny Brown-Waite (FL) X ........... ............. .............................................. ........... ........... .............

Mr. Barrett (SC) .................... ........... X ............. .............................................. ........... ........... .............

Ms. Harris ............................. ........... ........... ............. .............................................. ........... ........... .............

Mr. Renzi ............................... ........... X ............. .............................................. ........... ........... .............

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus. 

An amendment by Ms. Waters (as modified by unanimous consent), no. 7, prohibiting the use of contracting authority under the Defense Production Act for the production of chemical and biological weapons, was NOT 

AGREED TO by a record vote of 23 yeas and 43 nays 

(Record vote no. FC–7).

Record vote no. FC-7

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Oxley ............................... ........... X ............. Mr. Frank (MA) ..................... X ........... .............

Mr. Leach .............................. ........... X ............. Mr. Kanjorski ........................ X ........... .............

Mr. Bereuter .......................... ........... X ............. Ms. Waters ........................... X ........... .............

Mr. Baker .............................. ........... X ............. Mr. Sanders* ........................ X ........... .............

Mr. Bachus ........................... ........... X ............. Mrs. Maloney ........................ X ........... .............

Mr. Castle ............................. ........... X ............. Mr. Gutierrez ........................ ........... ........... .............

Mr. King ................................ ........... X ............. Ms. Vela ́zquez ...................... X ........... .............

6

Record vote no. FC-7—Continued

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Royce .............................. ........... X ............. Mr. Watt ............................... X ........... .............

Mr. Lucas (OK) ...................... ........... X ............. Mr. Ackerman ....................... X ........... .............

Mr. Ney .................................. ........... X ............. Ms. Hooley (OR) ................... ........... X .............

Mrs. Kelly .............................. ........... X ............. Ms. Carson (IN) .................... X ........... .............

Mr. Paul ................................ ........... X ............. Mr. Sherman ........................ ........... ........... .............

Mr. Gillmor ............................ ........... X ............. Mr. Meeks (NY) .................... X ........... .............

Mr. Ryun (KS) ....................... ........... X ............. Ms. Lee ................................. X ........... .............

Mr. LaTourette ....................... ........... X ............. Mr. Inslee ............................. X ........... .............

Mr. Manzullo ......................... ........... X ............. Mr. Moore ............................. X ........... .............

Mr. Jones (NC) ...................... ........... X ............. Mr. Gonzalez ......................... ........... X .............

Mr. Ose ................................. ........... X ............. Mr. Capuano ........................ X ........... .............

Mrs. Biggert .......................... ........... X ............. Mr. Ford ................................ X ........... .............

Mr. Green (WI) ...................... ........... X ............. Mr. Hinojosa ......................... ........... X .............

Mr. Toomey ............................ ........... X ............. Mr. Lucas (KY) ..................... ........... X .............

Mr. Shays .............................. ........... X ............. Mr. Crowley .......................... X ........... .............

Mr. Shadegg ......................... ........... X ............. Mr. Clay ................................ X ........... .............

Mr. Fossella .......................... ........... X ............. Mr. Israel .............................. X ........... .............

Mr. Gary G. Miller (CA) ......... ........... X ............. Mr. Ross ............................... ........... X .............

Ms. Hart ................................ ........... X ............. Mrs. McCarthy (NY) .............. X ........... .............

Mrs. Capito ........................... ........... X ............. Mr. Baca .............................. X ........... .............

Mr. Tiberi .............................. ........... X ............. Mr. Matheson ....................... ........... X .............

Mr. Kennedy (MN) ................. ........... X ............. Mr. Lynch ............................. ........... ........... .............

Mr. Feeney ............................. ........... X ............. Mr. Miller (NC) ..................... X ........... .............

Mr. Hensarling ...................... ........... X ............. Mr. Emanuel ......................... ........... X .............

Mr. Garrett (NJ) ..................... ........... X ............. Mr. Scott (GA) ...................... ........... X .............

Mr. Murphy ............................ ........... X ............. Mr. Davis (AL) ...................... X ........... .............

Ms. Ginny Brown-Waite (FL) ........... X ............. .............................................. ........... ........... .............

Mr. Barrett (SC) .................... ........... X ............. .............................................. ........... ........... .............

Ms. Harris ............................. ........... ........... ............. .............................................. ........... ........... .............

Mr. Renzi ............................... ........... X ............. .............................................. ........... ........... .............

*Mr. Sanders is an independent, but caucuses with the Democratic Caucus. 

The following amendments were also considered:

An amendment by Ms. Waters, no. 1, preventing conflict 

of interest for all contracts, was ruled nongermane by the 

Chair. 

An amendment by Mr. Paul, no. 3, restricting the use of 

title III authority only to military and military purposes, 

was not agreed to by a voice vote. 

An amendment by Mr. Meeks, no. 5, requiring the Secretary of Defense to submit a report to the Financial Services Committee on the extent to which contracts under the 

DPA have been with minority and women owned businesses, was agreed to by a voice vote. 

An amendment by Ms. Waters, no. 6, of chemical and biological weapons, was ruled nongermane by the Chair. 

COMMITTEE OVERSIGHT FINDINGS 

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee made findings that are reflected 

in this report. 

PERFORMANCE GOALS AND OBJECTIVES 

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

7

The Executive Branch agencies delegated authorities of the Act 

will exercise them judiciously, providing appropriate materials for 

national security at home and abroad while minimizing effects on 

the economy that might result from market distortions. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, 

AND TAX EXPENDITURES 

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of 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 1974. 

COMMITTEE COST ESTIMATE 

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE 

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:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 28, 2003. 

Hon. MICHAEL G. OXLEY, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1280, the Defense Production Act Reauthorization of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are David Newman (for 

federal costs) and Adam Talaber (for the private-sector impact). 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

Enclosure. 

H.R. 1280—Defense Production Act Reauthorization of 2003

H.R. 1280 would extend the authorities of the Defense Production Act of 1950 (DPA) for an additional four years through September 30, 2007, and would authorize all necessary appropriations 

for that period. The DPA provides the President the authority to 

require preferential performance on contracts and orders to meet 

approved national defense requirements; and to allocate materials, 

services and facilities as necessary to promote the national defense 

in a major national emergency (Title I); authorizes loan guarantees, 

direct loans, direct purchases, and purchase guarantees for those 

goods necessary for national defense (Title III); and allows the 

President to void international mergers that would adversely affect 

national security (Title VII). These authorities are set to expire on 

8

September 30, 2003. CBO estimates that implementing H.R. 1280 

would cost about $110 million over the 2004–2008 period, assuming 

appropriation of the necessary amounts. The bill would not affect 

direct spending or receipts. 

The bill would authorize the appropriation of such sums as necessary for purchases and purchase guarantees under title III to correct for shortfalls in domestic industrial capacity. Although the 

DPA gives the Department of Defense (DoD) the authority to make 

direct loans and loan guarantees, under an agreement with the Office of Management and Budget, DoD does not use those authorities. 

In recent years, DoD has used the authority to purchase equipment that it furnishes to contractors for manufacturing radiationhardened microprocessors. Section 3 of this bill would increase the 

limit on total obligations for this purpose from $50 million to $200 

million, permitting the expenditure of funds requested by the President for fiscal year 2004. A significant portion of spending for this 

purpose, however, will come from funds already appropriated for 

fiscal year 2003. Thus, the estimated costs for implementing H.R. 

1280 include only the additional outlays that would come from future appropriations. 

Appropriations for purchase and purchase guarantees under the DPA have averaged about $23 million a year over the 1992–2003 

period, ranging from $100 million in 1994 to $3 million in 2001. (A 

purchase guarantee is a commitment to buy a specified quantity of 

defense goods if the contractor cannot sell it elsewhere). No money 

was appropriated for this purpose in 1992, 1993, or over the 1996– 1999 period. More recently, the Congress appropriated $40 million 

in 2002 and $72 million in 2003 for these purposes. The Administration has requested an appropriation of $68 million for 2004. Because of the sharp variations in annual funding, specific yearly 

amounts for the indefinite authorization are difficult to project. 

Based on information from DoD and the historical average over 

the past 10 years, CBO estimates that extending the authorization 

would require about $140 million in appropriations for the fouryear period covered by the bill. Based on historical spending patterns, CBO estimates outlays from that funding would total $110 

million over the 2004–2008 period. 

To date, no funds have been appropriated for other provisions of 

the DPA. As a result, CBO has no basis for estimating any additional costs that could be triggered by extending its authorization 

for three more years. 

Section 4 of the Unfunded Mandates Reform Act excludes from 

the application of that act any legislative provisions that are necessary for the national security. CBO has determined that the provisions of the DPA would fall under that exclusion. 

The CBO staff contacts are David Newman (for federal costs) and 

Adam Talaber (for the private-sector impact). This estimate was 

approved by Peter H. Fontaine, Deputy Assistant Director for 

Budget Analysis.

FEDERAL MANDATES STATEMENT 

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

9

ADVISORY COMMITTEE STATEMENT 

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT 

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the defense and general welfare of the United States), and clause 3 (relating to the power to 

regulate foreign and interstate commerce). 

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. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section establishes the short title of the bill, the ‘‘Defense 

Production Act Reauthorization of 2003.’’

Section 2. Reauthorization of Defense Production Act of 1950 

This section extends authorization of the act for 4 years, to September 30, 2007. It also makes permanent section 708 of the Act 

which provides that no person shall be held liable for damages or 

penalties for any act or failure to act resulting directly or indirectly 

from compliance with a rule, regulation, or order issued pursuant 

to the DPA. 

Section 3. Resource shortfall for radiation-hardened electronics 

This section lifts the $50 million per-project cap for activities 

taken under section 303 of the Act, to $200 million for a single 

project, involving radiation-hardened electronics. 

Section 4. Clarification of Presidential authority 

This section amends section 705 of the Act to clarify Presidential 

authority to assess the capacity of the national defense industrial 

base. 

(10)

CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

DEFENSE PRODUCTION ACT OF 1950

* * * * * * *

TITLE VII—GENERAL PROVISIONS 

* * * * * * *

SEC. 705. (a) The President shall be entitled, while this Act is in 

effect and for a period of two years thereafter, by regulation, subpoena, or otherwise, to obtain such information from, require such 

reports and the keeping of such records by, make such inspection 

of the books, records, and other writings, premises or property of, 

and take the sworn testimony of, and administer oaths and affirmations to, any person as may be necessary or appropriate, in his 

discretion, to the enforcement or the administration of this Act and 

the regulations or orders issued thereunder. The authority of the 

President under this section includes the authority to obtain information in order to perform industry studies assessing the capabilities of the United States industrial base to support the national defense. The President shall issue regulations insuring that the authority of this subsection will be utilized only after the scope and 

purpose of the investigation, inspection, or inquiry to be made have 

been defined by competent authority, and it is assured that no adequate and authoritative data are available from any Federal or 

other responsible agency. In case of contumacy by, or refusal to 

obey a subpoena served upon, any person referred to in this subsection, the district court of the United States for any district in 

which such person is found or resides or transacts business, upon 

application by the President, shall have jurisdiction to issue an 

order requiring such person to appear and give testimony or to appear and produce documents or both; and any failure to obey such 

order of the court may be punished by such court as a contempt 

thereof. 

* * * * * * *

SEC. 711. (a)***

(b) TITLE III AUTHORIZATION.—There are authorized to be appropriated for each of fiscal years ø1996 through 2003¿ 2004 through 

2007, such sums as may be necessary to carry out title III. 

* * * * * * *

11

SEC. 717. (a) Title I (except section 104), title III, and title VII 

(except sections ø708¿ 707, 708, and 721), and all authority conferred thereunder, shall terminate at the close of September 30, 

ø2003¿ 2007: Provided, That all authority hereby or hereafter extended under title III of this Act shall be effective for any fiscal 

year only to such extent or in such amounts as are provided in advance in appropriation Acts. Section 714 of this Act, and all authority conferred thereunder, shall terminate at the close of July 31, 

1953. Section 104, title II, and title VI of this Act, and all authority 

conferred thereunder shall terminate at the close of June 30, 1953. 

Title IV and V of this Act, and all authority conferred thereunder, 

shall terminate at the close of April 30, 1953. 

* * * * * * *

(12)

DISSENTING VIEWS 

No one questions the need for the Federal Government to obtain 

the necessary resources to fulfill its constitutional role of providing 

for the common defense. However, the Federal government must 

fulfill this duty in a manner that does not conflict in any way with 

the Constitution or endanger republican government. The Defense 

Production Reauthorization Act (DPA), which gives almost unchecked power to the executive to interfere in the economy in the 

name of ‘‘national security,’’ fails both of these standards. In fact, 

when I inquired at the sole hearing held on this bill as to which 

section of the Constitution authorized such sweeping grants of 

power to the Executive, I was greeted by silence from the ‘‘expert’’

witnesses! 

Under this bill, the President is given authority to void private 

contracts in order to ensure that federal defense priorities, as determined by the executive, are met. The only limitation on the 

President’s judgment is a requirement that he submit a series of 

‘‘findings’’ to Congress. The Executive also has what appears to be 

unchecked authority to use financial incentives such as loan guarantees, direct loans, and purchase guarantees to ensure production 

of items he determines are in the national interest. 

Congress appears to have no ability to perform any real oversight 

of a Presidential action under the DPA. In fact, my office has been 

informed by the Congressional Research Service that past Presidents may have invoked the DPA without even submitting the required findings to Congress! 

The wide grant of unchecked power to the Executive runs 

counter to the intent of the drafters of the Constitution. The 

Founders carefully limited the executive power because they recognized that an executive with unfettered power was a threat to liberty. 

In recent years we have seen administrations of both parties undermine the Constitutional separation of powers via enhanced reliance on executive orders and unilateral decision-making. The Defense Production Reauthorization Act provides Congressional blessing to this usurpation of power, and not just in areas clearly related to national defense. For example, the DPA has been used to 

justify Federal interference in the energy market. It is an open 

question what other exercise of federal power could be justified as 

related to defense. For example, federal education programs have 

been justified on the grounds that an educated population is vital 

to national defense, so perhaps a future president will use DPA to 

impose a national curriculum! At the least, it has been confirmed 

that the DPA will be invoked to reduce Congress’ role in overseeing 

the use of taxpayer dollars in the reconstruction of Iraq. 

I am also concerned that this bill violates the Fifth Amendment’s 

takings clause. In particular, DPA allows the government to seize 

13

private property by interfering with the performance of private contracts in order to give a greater priority to military production. 

This action reduces the value of the affected parties’ proprietary interests, and thus is a taking, requiring the government to provide 

just compensation to the affected party. The Fifth Amendment intends to assure that the government does not unfairly burden one 

group of citizens in carrying out its constitutional functions. By not 

providing for just compensation, DPA allows the executive to unfairly burden one group of citizens for costs that the Constitution 

requires be shared among the entire population. 

In conclusion, the Defense Production Act gives the executive unchecked power to meddle in the economy, flying the face of the 

original constitutional structure and endangering the very liberty 

it claims to protect. Therefore, I must oppose this bill. 

RON PAUL.

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