The Department of Health and Human Services (HHS) has designated 8 of its 11 operating divisions (agencies) as components of the U.S. Public Health Service (PHS). The PHS agencies are (1) the Agency for Healthcare Research and Quality (AHRQ), (2) the Agency for Toxic Substances and Disease Registry (ATSDR), (3) the Centers for Disease Control and Prevention (CDC), (4) the Food and Drug Administration (FDA), (5) the Health Resources and Services Administration (HRSA), (6) the Indian Health Service (IHS), (7) the National Institutes of Health (NIH), and (8) the Substance Abuse and Mental Health Services Administration (SAMHSA). The PHS agencies all provide and support essential public health services; however, their specific missions vary. With the exception of FDA, the agencies have limited regulatory responsibilities. Two of them—NIH and AHRQ—are primarily research agencies. NIH conducts and supports basic, clinical, and translational medical research. AHRQ conducts and supports research on the quality and effectiveness of health care services and systems. Three of the agencies—IHS, HRSA, and SAMHSA—provide health care services or help support systems that deliver such services. IHS supports a health care delivery system for American Indians and Alaska Natives. Health services are provided directly by the IHS, as well as through tribally contracted and operated health programs, and through services purchased from private providers. HRSA funds programs and systems to improve access to health care among low-income populations, pregnant women and children, persons living with Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS), rural and frontier populations, and others who are medically underserved. SAMHSA funds community-based mental health and substance abuse prevention and treatment services. CDC is a public health agency that develops and supports community-based and population-wide programs and systems to promote quality of life and prevent the leading causes of disease, injury, disability, and death. ATSDR, which is headed by the CDC director and included in the CDC section of this report, is tasked with identifying potential public health effects from exposure to hazardous substances. Finally, FDA is primarily a regulatory agency, whose mission is to ensure the safety of foods, dietary supplements, and cosmetics, and the safety and effectiveness of drugs, vaccines, medical devices, and other health products. In addition, FDA has authority to regulate the manufacture, marketing, and distribution of tobacco products in order to protect public health. The programs and activities of five of the PHS agencies—AHRQ, CDC, HRSA, NIH, and SAMHSA—are mostly authorized under the Public Health Service Act (PHSA). While some of FDA's regulatory activities are also authorized under the PHSA, the agency and its programs derive most of their statutory authority from the Federal Food, Drug, and Cosmetic Act (FFDCA). HRSA's maternal and child health programs are authorized by the Social Security Act (SSA), and many of the IHS programs and services are authorized by the Indian Health Care Improvement Act. ATSDR was created by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA, the "Superfund" law). The primary source of funding for each PHS agency is the discretionary budget authority it receives through the annual appropriations process. AHRQ, CDC, HRSA, NIH, and SAMHSA are funded by the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations act. Funding for ATSDR and IHS is provided by the Department of the Interior, Environment, and Related Agencies (Interior/Environment) appropriations act. FDA gets its funding through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Agriculture) appropriations act. The annual LHHS appropriations act gives the HHS Secretary limited authority to transfer funds from one budget account to another within the department. The Secretary may transfer up to 1% of the funds in any given account. However, a recipient account may not be increased by more than 3%. Congressional appropriators must be notified in advance of any transfer. The HHS Secretary used this transfer authority in FY2013 and again in FY2014 as part of a broader effort to provide the Centers for Medicare & Medicaid Services (CMS) with additional funding to implement the Affordable Care Act (ACA). In FY2013, for example, NIH was the primary source of transfers both to CMS for ACA implementation and to CDC and SAMHSA to help offset a loss of funding for those two agencies from the ACA's Prevention and Public Health Fund (PPHF, discussed below). That year, a significant portion of the PPHF funds originally allocated to CDC and SAMHSA were instead redirected to CMS, also for ACA implementation. In FY2014, NIH was again the primary source of transfers to CMS to support ACA implementation. In addition to the transfer authority provided in the annual LHHS appropriations act, Section 241 of the PHSA authorizes the HHS Secretary, with the approval of congressional appropriators, to use a portion of the funds appropriated for programs authorized by the PHSA to evaluate their implementation and effectiveness. This long-standing transfer authority is known as the Public Health Service Evaluation Set-Aside (set-aside), or PHS budget "tap." Under this authority, the appropriations of numerous HHS programs are subject to an assessment. Although the PHSA limits the set-aside to no more than 1% of program appropriations, in recent years the annual LHHS appropriations act has specified a higher amount. The FY2017 LHHS appropriations act capped the set-aside at 2.5%, the same percentage that has been in place since FY2010. Following passage of the annual LHHS appropriations act, the HHS Budget Office calculates the assessment on each of the donor agencies and offices. These funds are then transferred to various recipient agencies and offices within the department for evaluation and other specified purposes, based on the amounts provided in the appropriations act. Table 1 shows the total assessments and transfers for FY2013, by HHS agency and office, and indicates whether the entity was a net donor or recipient of set-aside funds that year. These figures are broadly representative of the distribution of set-aside funds that occurred each fiscal year over a period of several years prior to FY2015, when the appropriators decided to make major changes to the allocation of such funds. NIH, whose annual discretionary appropriation exceeds that of all the other PHS agencies combined, is subject to the largest assessment of set-aside funds. NIH contributed almost $710 million (69%) of the $1.026 billion in set-aside funds in FY2013. However, the agency received $8 million in set-aside funding, making it a significant net donor of set-aside funds. Similarly, HRSA contributed more set-aside funds than it received in FY2013. On the other hand, AHRQ, CDC, and SAMHSA were net recipients of set-aside funding in FY2013. While not PHS agencies, the Administration for Children and Families (ACF) and various offices within the Office of the Secretary (OS) also received set-aside funds. Table 1 also shows the set-aside assessments and transfers for FY2016. These figures reflect the significant changes that the appropriators first made in FY2015 by returning most of the set-aside funding to NIH and eliminating any transfers to AHRQ, CDC, and HRSA. As a result, NIH has gone from being by far the largest net donor of set-aside funds to a net recipient of such funding. Meanwhile, AHRQ and CDC have experienced a significant loss of set-aside funding and are now both net donors of these funds. The situation with AHRQ is of particular interest. From FY2003 through FY2014, AHRQ did not receive a regular annual discretionary appropriation. The agency was supported by set-aside funds and, in recent years, by amounts from other sources. Since FY2015, however, AHRQ has received a discretionary appropriation in lieu of any set-aside funding. Enacted in December 2016, the 21 st Century Cures Act (Division A of P.L. 114-255 ) established three new accounts and authorizes annual transfers to the accounts to help support PHS agency programs and activities. The availability of funds each year in the accounts—described in more detail below—is controlled through the annual appropriations process. In other words, the funds in the accounts are not available until appropriated. Moreover, these appropriations are to be subtracted from any cost estimates provided for purposes of budget controls. Thus, these appropriations are not to be counted against any spending limits, such as the statutory discretionary spending limits. Amounts appropriated from the accounts are considered outside those limits. NIH Innovation Account. The 21 st Century Cures Act authorizes annual transfers to this account over the 10-year period FY2017-FY2026 totaling $4.796 billion. These funds are available for appropriation to NIH to help support the Precision Medicine Initiative, the BRAIN initiative, cancer research, and the use of adult stem cells in regenerative medicine (see line "NIH Innovation Account" in Table 9 ; individual amounts for each of the four activities are not listed in the table). FDA Innovation Account. The 21 st Century Cures Act authorizes annual transfers to this account over the nine-year period FY2017-FY2025 totaling $500 million. These funds are available for appropriation to FDA to help support the agency's new regulatory authorities under the act (see line "FDA Innovation Account" in Table 6 ).