Prioritization and Allocation of Certain Scarce or Threatened Health and Medical Resources for Domestic Use, 20195-20200 [2020-07659]

Agencies

• Federal Emergency Management Agency
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 85, Number 70 (Friday, April 10, 2020)]
[Rules and Regulations]
[Pages 20195-20200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07659]


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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 328

[Docket ID FEMA-2020-0018]
RIN 1660-AB01


Prioritization and Allocation of Certain Scarce or Threatened 
Health and Medical Resources for Domestic Use

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Federal Emergency Management Agency (FEMA) is issuing a 
temporary rule to allocate certain scarce or threatened materials for 
domestic use, so that these materials may not be exported from the 
United States without explicit approval by FEMA. The rule covers five 
types of personal protective equipment (PPE), outlined below. While 
this rule remains in effect, and subject to certain exemptions stated 
below, no shipments of such designated materials may leave the United 
States without explicit approval by FEMA.

DATES: Effective date: This rule is effective from April 7, 2020 until 
August 10, 2020.

ADDRESSES: You may review the docket by searching for Docket ID FEMA-
2020-0018, via the Federal eRulemaking Portal: https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Daniel McMasters, Office of Policy and 
Program Analysis, 202-709-0661, [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. The Current COVID-19 Pandemic

    COVID-19 is a communicable disease caused by severe acute 
respiratory syndrome coronavirus 2 (SARS-CoV-2), that was first 
identified as the cause of an outbreak of respiratory illness that 
began in Wuhan, Hubei Province, People's Republic of China. The virus 
is thought to be transmitted primarily by person-to-person contact 
through respiratory droplets produced when an infected person coughs, 
sneezes, or talks. Some recent studies have suggested that COVID-19 may 
be spread by people who are not showing symptoms. It also may be 
possible that a person can get COVID-19 by touching a surface or object 
that has the virus on it and then touching their own mouth, nose, or 
possibly their eyes. Older adults and people of all ages with 
underlying medical conditions, particularly if not well controlled, are 
at higher risk for more serious COVID-19 illness.\1\
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    \1\ Information obtained from https://www.coronavirus.gov 
(accessed April 2, 2020).
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    On January 30, 2020, the Director-General of the World Health 
Organization (WHO) declared that the outbreak of COVID-19 is a Public 
Health Emergency of International Concern under the International 
Health Regulations.\2\ The following day, the Secretary of Health and 
Human Services (HHS) declared COVID-19 a public health emergency under 
Section 319 of the Public Health Service (PHS) Act.\3\ On March 11, 
2020, the WHO declared COVID-19 a pandemic. On March 13, 2020, the 
President issued a Proclamation on Declaring a National Emergency 
Concerning the Novel Coronavirus Disease (COVID-19) Outbreak under 
sections 201 and 301 of the National Emergencies Act, 50 U.S.C. 1601 et 
seq., and consistent with section 1135 of the Social Security Act, 42 
U.S.C. 1320b-5.\4\ On March 13, 2020, the President declared a 
nationwide emergency under section 501(b) of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act, authorizing FEMA to 
provide assistance for emergency protective measures to respond to the 
COVID-19 pandemic.\5\
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    \2\ Statement on the second meeting of the International Health 
Regulations (2005) Emergency Committee regarding the outbreak of 
novel coronavirus (2019-nCoV) (January 30, 2020), available at 
https://www.who.int/news-room/detail/30-01-2020-statement-on-the-second-meeting-of-the-international-health-regulations-(2005)-
emergency-committee-regarding-the-outbreak-of-novel-coronavirus-
(2019-ncov).
    \3\ HHS, ``Determination that a Public Health Emergency 
Exists,'' available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx (Jan. 31, 2020).
    \4\ ``Proclamation on Declaring a National Emergency Concerning 
the Novel Coronavirus Disease (COVID-19) Outbreak,'' March 13, 2020, 
available at https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/.
    \5\ COVID-19 Emergency Declaration available at https://www.fema.gov/news-release/2020/03/13/covid-19-emergency-declaration 
(accessed April 6, 2020).
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    As of April 7, 2020, there were over 333,000 cases of COVID-19 in 
the United States, resulting in over 9,500 deaths due to the disease, 
with new cases being reported daily. Worldwide, there have been over 
1.28 million confirmed cases, resulting in over 72,600 deaths.\6\ At 
this time, there is no vaccine that can prevent infection with COVID-
19, nor is there currently any FDA-approved post-exposure

[[Page 20196]]

prophylaxis for people who may have been exposed to COVID-19. Treatment 
is currently limited to supportive (or palliative) care for patients 
who need it. Clinical management for hospitalized patients with COVID-
19 is focused on supportive care for complications, including 
supplemental oxygen and advanced organ support for respiratory failure, 
septic shock, and multi-organ failure.\7\
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    \6\ Information obtained from https://www.who.int/ (accessed 
April 7, 2020).
    \7\ Information obtained from https://www.coronavirus.gov 
(accessed April 7, 2020).
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    Within the United States, widespread transmission of COVID-19 has 
occurred. Widespread transmission of COVID-19 has resulted and will 
continue to result in large numbers of people needing medical care at 
the same time. Public health and healthcare systems may become 
overloaded, with elevated rates of hospitalizations and deaths, as well 
as elevated demand for PPE, including the PPE covered by this rule.

B. Legal Authorities

    FEMA is issuing this temporary rule as part of its response to the 
COVID-19 pandemic. The rule is issued pursuant to the following 
authorities, among others:
     The Defense Production Act of 1950, as amended (``DPA'' or 
``the Act''), and specifically sections 101 and 704 of the Act, 50 
U.S.C. 4511, 4554;
     Executive Order 13909, 85 FR 16227 (Mar. 23, 2020);
     Executive Order 13910, 85 FR 17001 (Mar. 26, 2020);
     Executive Order 13911, 85 FR 18403 (Apr. 1, 2020);
     DHS Delegation Number 09052 Rev. 00.1, ``Delegation of 
Defense Production Act Authority to the Administrator of the Federal 
Emergency Management Agency'' (Apr. 1, 2020); and
     The Presidential Memorandum on Allocating Certain Scarce 
or Threatened Health and Medical Resources to Domestic Use (April 3, 
2020).\8\
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    \8\ See Memorandum on Allocating Certain Scarce or Threatened 
Health and Medical Resources to Domestic Use for the Secretary of 
Health and Human Services, the Secretary of Homeland Security, and 
the Administrator of the Federal Emergency Management Agency (Apr. 
3, 2020), https://www.whitehouse.gov/presidential-actions/memorandum-allocating-certain-scarce-threatened-health-medical-resources-domestic-use/ (last visited Apr. 5, 2020).
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    FEMA describes each authority in turn. The President has broadly 
delegated authority to make determinations and take action with respect 
to health and medical resources for COVID-19 response under Section 101 
of the DPA to the Secretary of Homeland Security in Executive Order 
13911. This authority has in turn been delegated to the FEMA 
Administrator in DHS Delegation 09052, Rev. 00.1 (Apr. 1, 2020).
    First, under subsection 101(a) of the Act, 50 U.S.C. 4511(a), the 
President may (1) require that performance under contracts or orders 
(other than contracts of employment) which he deems necessary or 
appropriate to promote the national defense shall take priority over 
performance under any other contract or order, and, for the purpose of 
assuring such priority, require acceptance and performance of such 
contracts or orders in preference to other contracts or orders by any 
person he finds to be capable of their performance. The President may 
also (2) allocate materials, services, and facilities in such manner, 
upon such conditions, and to such extent as he shall deem necessary or 
appropriate to promote the national defense. FEMA refers to these 
authorities as relating to ``priority ratings'' and ``allocation,'' 
respectively.
    Under subsection 101(b) of the Act, 50 U.S.C. 4511(b), the 
President may not use the aforementioned authorities to control the 
general distribution of any material in the civilian market unless the 
President finds (1) that such material is a scarce and critical 
material essential to the national defense, and (2) 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.
    Under subsection 101(d) of the Act, 50 U.S.C. 4511(d), the head of 
each Federal agency to which the President delegates authority under 
section 101 of the Act (1) shall issue, and annually review and update 
whenever appropriate, final rules, in accordance with 5 U.S.C. 553, 
that establish standards and procedures by which the priorities and 
allocations authority under section 101 is used to promote the national 
defense, under both emergency and nonemergency conditions; and (2) as 
appropriate and to the extent practicable, consult with the heads of 
other Federal agencies to develop a consistent and unified Federal 
priorities and allocations system.\9\
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    \9\ FEMA has not yet issued comprehensive regulations on its 
implementation of section 101 of the Act. As noted below, FEMA was 
only recently delegated authority under section 101 of the Act. As 
described in greater detail below, this temporary final rule 
implements section 101(a) of the Act and related authority for a 
specific purpose and for a limited period of time. FEMA anticipates 
issuing comprehensive regulations under section 101 of the Act in 
the near future. In addition to section 101 of the Act, this rule 
implements FEMA's broad delegated authority under section 704 of the 
Act, 50 U.S.C. 4554, to prescribe such regulations and issue such 
orders as FEMA may determine appropriate to carry out its delegated 
authorities under the Act. The President has delegated this 
authority to the Secretary of Homeland Security under sections 2 and 
5 of Executive Order 13911, who in turn delegated it to the 
Administrator of FEMA in DHS Delegation 09052, Rev. 00.1 (Apr. 1, 
2020).
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    Second, on March 18, 2020, the President signed Executive Order 
13909, which delegated to the Secretary of HHS authority under the DPA 
for the prioritization and allocation of health and medical resources 
to respond to the spread of COVID-19. The President determined that to 
ensure that our healthcare system is able to surge capacity and 
capability to respond to the spread of COVID-19, it is critical that 
all health and medical resources needed to respond to the spread of 
COVID-19 are properly distributed to the Nation's healthcare system and 
others that need them most at this time. The President found that 
health and medical resources needed to respond to the spread of COVID-
19, including personal protective equipment and ventilators, meet the 
criteria specified in section 101(b) of the Act (50 U.S.C. 
4511(b)).\10\
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    \10\ The Executive Order delegates to the Secretary of Health 
and Human Services the President's authority under section 101 of 
the Act, 50 U.S.C. 4511, including the authority to identify 
additional specific health and medical resources that meet the 
criteria of section 101(b). The Executive Order allows the Secretary 
of Health and Human Services, using the delegated authority under 
section 101 of the Act, to determine, in consultation with the 
Secretary of Commerce and the heads of other executive departments 
and agencies as appropriate, the proper nationwide priorities and 
allocation of all health and medical resources needed to respond to 
the spread of COVID-19 within the United States.
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    Third, on March 23, 2020, the President signed Executive Order 
13910, in which the President delegated to the Secretary of HHS the 
authority under section 102 of the Act to prevent hoarding and price 
gouging with respect to health and medical resources necessary to 
respond to the spread of COVID-19. On March 25, 2020, the Secretary of 
Health and Human Services designated under section 102 of the Act 15 
categories of health and medical resources as scarce materials or 
materials the supply of which would be threatened by accumulation in 
excess of the reasonable demands of business, personal, or home 
consumption, or for the purpose of resale at prices in excess of 
prevailing market prices (``scarce or threatened materials''). See 85 
FR 17592 (Mar. 30, 2020). These designated items include certain PPE 
materials that are the subject of this rulemaking.
    Fourth, on March 27, 2020, the President signed Executive Order 
13911, which (among other things) delegated to

[[Page 20197]]

the Secretary of Homeland Security the President's authority under 
section 101 of the Act with respect to health and medical resources 
needed to respond to the spread of COVID-19 within the United States. 
The Executive Order provides that the Secretary of Homeland Security 
may use the authority under section 101 of the Act to determine, in 
consultation with the heads of other executive departments and agencies 
as appropriate, the proper nationwide priorities and allocation of 
health and medical resources, including by controlling the distribution 
of such materials (including applicable services) in the civilian 
market, for responding to the spread of COVID-19 within the United 
States.\11\ The Secretary of Homeland Security has delegated his 
authorities under Executive Order 13911 to FEMA. See DHS Delegation 
09052, Rev. 00.1 (Apr. 1, 2020).
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    \11\ The Executive Order also delegated to the Secretary of 
Homeland Security the authority under section 102 of the Act to 
prevent hoarding and price gouging with respect to such resources, 
and requires that before exercising the authority under section 102 
of the Act, the Secretary of Homeland Security shall consult with 
the Secretary of Health and Human Services.
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    Finally, on April 3, 2020, the President signed a Memorandum on 
Allocating Certain Scarce or Threatened Health and Medical Resources to 
Domestic Use. The Memorandum reaffirmed the delegations and findings 
contained in Executive Orders 13909, 13910, and 13911, including that 
health and medical resources needed to respond to the spread of COVID-
19, including personal protective equipment (PPE) and ventilators, meet 
the criteria specified in section 101(b) of the Act, i.e., that (1) 
such material is a scarce and critical material essential to the 
national defense, and (2) 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. 
The President further stated that to ensure that these scarce or 
threatened PPE materials remain in the United States for use in 
responding to the spread of COVID-19, it is the policy of the United 
States to prevent domestic brokers, distributors, and other 
intermediaries from diverting such material overseas.
    In furtherance of such policy, the President directed that the 
Secretary of Homeland Security, through the FEMA Administrator, and in 
consultation with the Secretary of HHS, shall use any and all authority 
available under section 101 of the Act to allocate to domestic use, as 
appropriate, the following scarce or threatened materials designated by 
the Secretary of HHS under Section 102 of the DPA:
     N95 Filtering Facepiece Respirators, including devices 
that are disposable half-face-piece non-powered air-purifying 
particulate respirators intended for use to cover the nose and mouth of 
the wearer to help reduce wearer exposure to pathogenic biological 
airborne particulates;
     Other Filtering Facepiece Respirators (e.g., those 
designated as N99, N100, R95, R99, R100, or P95, P99, P100), including 
single-use, disposable half-mask respiratory protective devices that 
cover the user's airway (nose and mouth) and offer protection from 
particulate materials at an N95 filtration efficiency level per 42 CFR 
84.181;
     Elastomeric, air-purifying respirators and appropriate 
particulate filters/cartridges;
     PPE surgical masks, including masks that cover the user's 
nose and mouth and provide a physical barrier to fluids and particulate 
materials; and
     PPE gloves or surgical gloves, including those defined at 
21 CFR 880.6250 (exam gloves) and 878.4460 (surgical gloves) and such 
gloves intended for the same purposes.
    Pursuant to this Memorandum, and with the authority delegated to 
the Secretary of Homeland Security in E.O. 13911 and re-delegated to 
the FEMA Administrator in DHS Delegation 09052 Rev. 00.1, FEMA now 
issues this allocation order as a temporary rule.

II. Provisions of the Temporary Final Rule

    Following consultation with the Secretary of HHS; pursuant to the 
President's direction; and as an exercise of the Administrator's 
priority order, allocation, and regulatory authorities under the Act, 
the Administrator has determined that the scarce or threatened 
materials identified in the April 3, 2020 Presidential Memorandum 
(``covered materials'') shall be allocated for domestic use, and may 
not be exported from the United States without explicit approval by 
FEMA. See new 44 CFR 328.102(a).
    The rule is necessary and appropriate to promote the national 
defense with respect to the covered materials because the domestic need 
for them exceeds the supply. Under this temporary rule, before any 
shipments of such covered materials may leave the United States, CBP 
will detain the shipment temporarily, during which time FEMA will 
determine whether to return for domestic use, issue a rated order for, 
or allow the export of part or all of the shipment under section 101(a) 
of the Act, 50 U.S.C. 4511(a). FEMA will make such a determination 
within a reasonable time of being notified of an intended shipment and 
will make all decisions consistent with promoting the national defense. 
See new 44 CFR 328.102(b). FEMA will work to review and make 
determinations quickly and will endeavor to minimize disruptions to the 
supply chain.
    In determining whether it is necessary or appropriate to promote 
the national defense to purchase covered materials, or allocate 
materials for domestic use, FEMA may consult other agencies and will 
consider the totality of the circumstances, including the following 
factors: (1) The need to ensure that scarce or threatened items are 
appropriately allocated for domestic use; (2) minimization of 
disruption to the supply chain, both domestically and abroad; (3) the 
circumstances surrounding the distribution of the materials and 
potential hoarding or price-gouging concerns; (4) the quantity and 
quality of the materials; (5) humanitarian considerations; and (6) 
international relations and diplomatic considerations.
    This rule contains an exemption that the Administrator has 
determined to be necessary or appropriate to promote the national 
defense. See new 44 CFR 328.102(c). Specifically, the Administrator has 
determined that FEMA will not purchase covered materials from shipments 
made by or on behalf of U.S. manufacturers with continuous export 
agreements with customers in other countries since at least January 1, 
2020, so long as at least 80 percent of such manufacturer's domestic 
production of covered materials, on a per item basis, was distributed 
in the United States in the preceding 12 months. The Administrator 
decided that this exemption is necessary or appropriate to promote the 
national defense because it would limit the impact of this order on 
pre-existing commercial relationships, in recognition of the importance 
of these commercial relationships to the international supply chain, 
and for humanitarian reasons, in consideration of the global nature of 
the COVID-19 pandemic. If FEMA determines that a shipment of covered 
materials falls within this exemption, such materials may be 
transferred out of the United States without further review by FEMA, 
provided that the Administrator may waive this exemption and fully 
review shipments of covered materials subject to this exemption for 
further action by FEMA, if the Administrator determines that doing so 
is necessary or appropriate

[[Page 20198]]

to promote the national defense. FEMA may develop additional guidance 
regarding which exports are covered by this exemption, and encourages 
manufacturers to contact FEMA with specific information regarding their 
status under this exemption.
    The Administrator may establish, in his discretion, additional 
exemptions that he determines are necessary or appropriate to promote 
the national defense and will announce any such exemptions by notice in 
the Federal Register.
    FEMA will implement this rule with the cooperation and assistance 
of other U.S. Government agencies, including CBP, and will work with 
manufacturers, brokers, distributors, exporters, and shippers to ensure 
that the applicable requirements are carried out. Any covered materials 
intended for export may be detained by CBP while FEMA conducts its 
review of the shipment. FEMA will review the shipment and provide 
notification as soon as possible regarding the disposition of the 
covered materials under this order, provided that any goods that have 
been detained by CBP and are subsequently made subject to a DPA-rated 
order will be consigned to FEMA pending further distribution or agency 
direction. FEMA may provide additional guidance regarding the 
application of any exemptions to this temporary rule, as appropriate.
    FEMA may conduct such investigations and issue such requests for 
information as may be necessary for the enforcement of the Act, 
including this rule. See new 44 CFR 328.104(a); see also section 705 of 
the Act, 50 U.S.C. 4555; Executive Order 13911, 85 FR 18403 (Apr. 1, 
2020). FEMA may seek an injunction or other order whenever, in the 
Administrator's judgment, a person has engaged or is about to engage in 
any acts or practices which constitute or will constitute a violation 
of the Act or any rule or order issued thereunder. See new 44 CFR 
328.104(b); see also section 706 of the Act, 50 U.S.C. 4556. In 
addition to an injunction, failure to comply fully with this rule is a 
crime punishable by a fine of not more than $10,000 or imprisonment for 
not more than one year, or both. See new 44 CFR 328.104(c); see also 
section 103 of the Act, 50 U.S.C. 4513. In addition, pursuant to 18 
U.S.C. 554, whoever fraudulently or knowingly exports or sends from the 
United States, or attempts to export or send from the United States, 
any merchandise, article, or object contrary to any U.S. law or 
regulation, or receives, conceals, buys, sells, or in any manner 
facilitates the transportation, concealment, or sale of such 
merchandise, article, or object, prior to exportation, knowing the same 
to be intended for exportation contrary to any U.S. law or regulation, 
faces up to 10 years' imprisonment, a fine, or both, if convicted.
    At any point in time, and to the extent consistent with United 
States policy, the FEMA Administrator may determine additional 
materials to be subject to this allocation order. Upon a determination 
under section 101(b) of the DPA that an additional material is a scarce 
and critical material essential for national defense, and that being 
allocated to domestic use under this allocation order is the only way 
to meet national defense requirements without significant disruption to 
the domestic markets, the Administrator will include these additional 
materials in this allocation order, and will provide notification of 
this decision through publication in the Federal Register.

III. Regulatory Procedure and Analyses

A. Temporary Rule With Immediate Effective Date

    Agency rulemaking is generally governed by the agency rulemaking 
provisions of the Administrative Procedure Act (APA). See 5 U.S.C. 553. 
Such provisions generally require that, unless the rule falls within 
one of a number of enumerated exceptions, or unless another statute 
exempts the rulemaking from the requirements of the APA, FEMA must 
publish a notice of proposed rulemaking in the Federal Register that 
provides interested persons an opportunity to submit written data, 
views, or arguments, prior to finalization of regulatory requirements. 
Section 553(b)(B) authorizes a department or agency to dispense with 
the prior notice and opportunity for public comment requirement when 
the agency, for ``good cause,'' finds that notice and public comment 
thereon are impracticable, unnecessary, or contrary to the public 
interest.
    This rule is exempt from the APA under section 709(a) of the Act, 
50 U.S.C. 4559(a). Instead, this rule is issued subject to the 
provisions of section 709(b). Pursuant to section 709(b)(2) of the Act, 
the Administrator has concluded, based on the facts related to the 
COVID-19 pandemic, which already have been summarized in this document, 
that, with respect to this temporary rule, urgent and compelling 
circumstances make compliance with the notice and comment requirements 
of section 709(b)(1) of the Act, 50 U.S.C. 4559(b)(1), impracticable. 
If final regulations become necessary, an opportunity for public 
comment will be provided for not less than 30 days before such 
regulations become final, pursuant to section 709(b)(2)(C) of the Act, 
50 U.S.C. 4559(b)(2)(C).
    Furthermore, the same facts that warrant waiver under section 
709(b)(2) of the Act would constitute good cause for FEMA to determine, 
under the APA, that notice and public comment thereon are impractical, 
unnecessary, or contrary to the public interest, and that the temporary 
rule should become effective upon display at the Federal Register.
    As the President has noted, although the Federal Government, along 
with State and local governments, have taken preventative and proactive 
measures to slow the spread of the virus SARS-CoV-2, and the disease it 
causes, COVID-19, and to treat those affected. The spread of COVID-19 
within the Nation's communities threatens to strain the Nation's 
healthcare systems. It is imperative that health and medical resources 
needed to respond to the spread of COVID-19, including the PPE affected 
by this rule, are allocated for domestic use as appropriate. This 
temporary rule is needed to appropriately allocate scarce or threatened 
items for domestic use.
    The measures described in this rule are being issued on a temporary 
basis. This temporary rule will cease to be in effect on August 10, 
2020.

B. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, and public 
health and safety effects; distributive impacts; and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a 
regulation (1) having an annual effect on the economy of $100 million 
or more in any one year, or adversely and materially affecting a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, or tribal governments or 
communities (also referred to as ``economically significant''); (2) 
creating a serious inconsistency or otherwise interfering with an 
action taken or planned by another agency; (3) materially altering

[[Page 20199]]

the budgetary impacts of entitlement grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raising novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    The Office of Management and Budget has designated this temporary 
rule as an economically significant regulatory action. Given that the 
temporary rule is a significant regulatory action, FEMA proceeds under 
the emergency provision of Executive Order 12866, section 6(a)(3)(D) 
based on the need for immediate action, as described above.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that when 
an agency issues a proposed rule, or a final rule that the agency 
issues under 5 U.S.C. 553 after being required by that section or any 
other law to publish a general notice of proposed rulemaking, the 
agency must prepare a regulatory flexibility analysis that meets the 
requirements of the RFA and publish such analysis in the Federal 
Register. 5 U.S.C. 603, 604.
    This is neither a proposed rule, nor a final rule that the agency 
has issued under 5 U.S.C. 553 of this title after being required by 
that section or any other law to publish a general notice of proposed 
rulemaking. This is a temporary rule issued without a prior proposed 
rule, under the separate authority of the Defense Production Act of 
1950. Accordingly, a regulatory flexibility analysis is not required.

D. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act), 2 U.S.C. 1532, requires that covered agencies prepare a 
budgetary impact statement before promulgating a rule that includes any 
Federal mandate that may result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million in 1995 dollars, updated annually for inflation. Currently, 
that threshold is approximately $172 million. If a budgetary impact 
statement is required, section 205 of the Unfunded Mandates Act also 
requires covered agencies to identify and consider a reasonable number 
of regulatory alternatives before promulgating a rule. DHS has 
determined that this rule is not expected to result in expenditures by 
State, local, and tribal governments, or by the private sector, of $172 
million or more in any one year. This rule imposes no requirements on 
State, local, and tribal governments and, therefore, cannot require 
them to expend any funds, let alone $172 million. To the extent that 
this rule affects the private sector, it only prohibits conduct, namely 
certain exports. It does not require any private sector expenditures 
within the meaning of the Unfunded Mandates Act. Further, the rule is 
excluded from the Unfunded Mandates Act under 2 U.S.C. 1503(4) and (5).

E. National Environmental Policy Act (NEPA)

    Under the National Environmental Policy Act of 1969 (NEPA), as 
amended, 42 U.S.C. 4321 et seq., an agency must prepare an 
environmental assessment or environmental impact statement for any 
rulemaking that significantly affects the quality of the human 
environment. FEMA has determined that this rulemaking does not 
significantly affect the quality of the human environment and 
consequently has not prepared an environmental assessment or 
environmental impact statement.
    Rulemaking is a major Federal action subject to NEPA. Categorical 
exclusion A3 included in the list of exclusion categories at Department 
of Homeland Security Instruction Manual 023-01-001-01, Revision 01, 
Implementation of the National Environmental Policy Act, Appendix A, 
issued November 6, 2014, covers the promulgation of rules, issuance of 
rulings or interpretations, and the development and publication of 
policies, orders, directives, notices, procedures, manuals, and 
advisory circulars if they meet certain criteria provided in A3(a-f). 
This interim final rule meets Categorical Exclusion A3(a), ``Those of a 
strictly administrative or procedural nature''.

F. Executive Order 13132: Federalism

    This rule has been reviewed under Executive Order 13132, 
Federalism, 64 FR 43255 (August 4, 1999). That Executive Order imposes 
certain requirements on agencies formulating and implementing policies 
or regulations that preempt State law or that have federalism 
implications. DHS has determined that this temporary rule will not have 
a substantial direct effect on the States, on the relationship between 
the National Government and the States, or on the distribution of power 
and responsibilities among the various levels of Government. 
Furthermore, there are no provisions in this rule that impose direct 
compliance costs on State and local governments. Accordingly, DHS 
believes that the rule does not warrant additional analysis under 
Executive Order 13132.

G. Congressional Review Act

    Under the Congressional Review of Agency Rulemaking Act (CRA), 5 
U.S.C. 801-808, before a rule can take effect, the Federal agency 
promulgating the rule must: Submit to Congress and to the Government 
Accountability Office (GAO) a copy of the rule; a concise general 
statement relating to the rule, including whether it is a major rule; 
the proposed effective date of the rule; a copy of any cost-benefit 
analysis; descriptions of the agency's actions under the Regulatory 
Flexibility Act and the Unfunded Mandates Reform Act; and any other 
information or statements required by relevant executive orders.
    FEMA has sent this rule to the Congress and to GAO pursuant to the 
CRA. The Office of Information and Regulatory affairs has determined 
that this rule is a ``major rule'' within the meaning of the CRA. As 
this rule is being promulgated under the good cause exception to notice 
and comment under the Administrative Procedure Act, there is not a 
required delay in the effective date. See 5 U.S.C. 808.

List of Subjects in 44 CFR Part 328

    Administrative practice and procedure, Business and industry, 
Government contracts, Health or medical resource, Hoarding, 
Investigations, Materials, National defense, Scarce materials, 
Strategic and critical materials, Threatened materials.

    Accordingly, for the reasons set forth in the preamble, and 
effective from April 7, 2020 until August 10, 2020, chapter I of title 
44 of the Code of Federal Regulations is amended by adding part 328 to 
read as follows:

PART 328--COVID-19 ALLOCATION ORDERS AND PRIORITY ORDER REVIEW 
UNDER THE DEFENSE PRODUCTION ACT

Sec.
328.101 Basis and purpose.
328.102 Requirements.
328.103 Designation of covered materials.
328.104 Investigations and injunctions; penalties.

    Authority:  Sections 101 et seq. of the Defense Production Act 
of 1950, 50 U.S.C. 4511, et seq.; Executive Order 13909, 85 FR 16227 
(Mar. 23, 2020); Executive Order 13911, 85 FR 18403 (Apr. 1, 2020); 
DHS Delegation 09052, Rev. 00.1 (Apr. 1, 2020); Presidential 
Memorandum on Allocating Certain Scarce or Threatened Health and 
Medical Resources to Domestic Use (April 3, 2020).


Sec.  328.101   Basis and purpose.

    (a) Basis. These rules are issued pursuant to section 101 of the 
Defense Production Act of 1950, as amended, 50

[[Page 20200]]

U.S.C. 4511, and complementary authorities, including such authorities 
as are contained in subchapter III of chapter 55 of title 50, United 
States Code (50 U.S.C. 4554, 4555, 4556, and 4559), which have been 
delegated to FEMA.
    (b) Purpose. The purpose of these rules is to aid the response of 
the United States to the spread of COVID-19 by ensuring that scarce or 
threatened health and medical resources are appropriately allocated for 
domestic use.


Sec.  328.102   Requirements.

    (a) Allocation Order and Requirement for the Administrator's 
Approval. All shipments of covered materials, as designated in Sec.  
328.103, shall be allocated for domestic use, and may not be exported 
from the United States without explicit approval by FEMA.
    (b) Procedures. U.S. Customs and Border Protection (CBP), in 
coordination with such other officials as may be appropriate, will 
notify FEMA of an intended export of covered materials. CBP must 
temporarily detain any shipment of such covered materials, pending the 
Administrator's determination whether to return for domestic use or 
issue a rated order for part or all of the shipment, pursuant to the 
Administrator's delegated authorities. The Administrator will make such 
a determination within a reasonable timeframe after notification of an 
intended export.
    (c) Administrator's Determination. In making the determination 
described in paragraph (b) of this section, the Administrator may 
consult other agencies and will consider the totality of the 
circumstances, including the following factors:
    (1) The need to ensure that scarce or threatened items are 
appropriately allocated for domestic use;
    (2) minimization of disruption to the supply chain, both 
domestically and abroad;
    (3) the circumstances surrounding the distribution of the materials 
and potential hoarding or price-gouging concerns;
    (4) the quantity and quality of the materials;
    (5) humanitarian considerations; and
    (6) international relations and diplomatic considerations.
    (d) Exemption.
    (1) The Administrator has determined in the interest of promoting 
the national defense to generally allow the export of covered materials 
from shipments made by or on behalf of U.S. manufacturers with 
continuous export agreements with customers in other countries since at 
least January 1, 2020, so long as at least 80 percent of such 
manufacturer's domestic production of such covered materials, on a per 
item basis, was distributed in the United States in the preceding 12 
months. If FEMA determines that a shipment of covered materials falls 
within this exemption, such materials may be exported without further 
review by FEMA, provided that the Administrator may waive this 
exemption and fully review shipments of covered materials under 
paragraph (b) of this section, if the Administrator determines that 
doing so is necessary or appropriate to promote the national defense. 
FEMA will communicate to CBP regarding the application of this 
exemption to shipments identified by CBP.
    (2) The Administrator may establish, in his discretion, additional 
exemptions that he determines necessary or appropriate to promote the 
national defense and will announce any such exemptions by notice in the 
Federal Register.
    (e) Exportations prohibited. The exportation of covered materials 
other than in accordance with this section is prohibited.


Sec.  328.103   Designation of covered materials.

    (a) The Administrator has designated the following materials as 
``covered materials'' under this part:
    (1) N95 Filtering Facepiece Respirators, including devices that are 
disposable half-face-piece non-powered air-purifying particulate 
respirators intended for use to cover the nose and mouth of the wearer 
to help reduce wearer exposure to pathogenic biological airborne 
particulates;
    (2) Other Filtering Facepiece Respirators (e.g., those designated 
as N99, N100, R95, R99, R100, or P95, P99, P100), including single-use, 
disposable half-mask respiratory protective devices that cover the 
user's airway (nose and mouth) and offer protection from particulate 
materials at an N95 filtration efficiency level per 42 CFR 84.181;
    (3) Elastomeric, air-purifying respirators and appropriate 
particulate filters/cartridges;
    (4) PPE surgical masks, including masks that cover the user's nose 
and mouth and provide a physical barrier to fluids and particulate 
materials; and
    (5) PPE gloves or surgical gloves, including those defined at 21 
CFR 880.6250 (exam gloves) and 878.4460 (surgical gloves) and such 
gloves intended for the same purposes.
    (b) Upon determination that additional items are scarce and 
necessary for national defense, and that consideration under this 
allocation order is the only way to meet national defense requirements 
without significant disruption to the domestic markets, the 
Administrator may designate additional materials as ``covered 
materials'' in the list provided above. The Administrator will publish 
notice of these additional ``covered materials'' in the Federal 
Register.


Sec.  328.104   Investigations and injunctions; penalties.

    (a) To administer or enforce this subpart, the Administrator may 
exercise the authorities available under section 705 of the Defense 
Production Act of 1950, as amended, 50 U.S.C. 4555, including the 
conduct of investigations, requests for information or testimony, and 
inspections of records or premises. Before such authorities are 
utilized, the Administrator will determine the scope and purpose of the 
investigation, inspection, or inquiry, and be assured that no adequate 
and authoritative data are available from any Federal or other 
responsible agency.
    (b) Whenever, in the judgment of the Administrator, any person has 
engaged or is about to engage in any acts or practices that constitute 
or will constitute a violation of any provision of this subpart, or 
order issued thereunder, the Administrator may exercise the authorities 
available under section 706 of the Defense Production Act of 1950, as 
amended, 50 U.S.C. 4556, including applying for a preliminary, 
permanent, or temporary injunction, restraining order, or other order 
to enforce compliance with this subpart.
    (c) Any person who willfully engages in violations of this part is 
subject to penalties available under section 103 of the Defense 
Production Act of 1950, as amended, 50 U.S.C. 4513, or other available 
authority.

Pete Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-07659 Filed 4-8-20; 5:15 pm]
 BILLING CODE 9111-19-P