[Congressional Record Volume 154, Number 68 (Monday, April 28, 2008)]
[Senate]
[Pages S3445-S3446]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 2926. A bill to amend title 38, United States Code, to modify and 
update provisions of law relating to nonprofit research and education 
corporations, and for other purposes; to the Committee on Veterans' 
Affairs.
  Mr. AKAKA. Mr. President, I am introducing legislation concerning the 
nonprofit research and education corporations--NPCs--that serve the 
Department of Veterans Affairs. These organizations provide essential 
support to research and education at VA facilities around the country. 
My legislation will amend the law which authorizes NPCs so as to better 
reflect their mission and the needs of VA, as well as strengthen 
control and oversight of these entities.
  The legislation which authorizes NPCs was enacted in 1988 to allow 
the establishment of these entities as flexible funding mechanisms for 
the conduct of research and education at VA medical centers. In 2006, 
85 NPCs expended $227 million in support of over 5,000 VA research and 
education programs. NPCs give VA the opportunity to access and manage 
research funds from sources outside of VA, while maintaining VA 
oversight.
  Twenty years have passed since the inception of NPCs, and it is time 
to update the law governing their operation. VA's research needs have 
shifted and the function of NPCs has evolved. I will highlight a few of 
the corrections this legislation would make.
  NPCs are nonprofit 501(c)(3) organizations that are entirely 
dedicated to serving VA research. They efficiently administer VA 
research funds, and provide access to some funds that VA would 
otherwise be unable to access. Unfortunately, given their close 
affiliation with VA, and due in part to various state laws, NPC 
nonprofit status is in some situations unclear. My legislation would 
explicitly identify the nonprofit status of NPCs under IRS code. It 
would also make clear that NPCs are not owned or controlled by the U.S. 
Government, and are not agencies or instrumentalities of the U.S.
  As the utility and appeal of NPCs have grown, their numbers have 
expanded. While this growth is positive, it is not always efficient or 
feasible for a medical center to establish and manage its own NPC. The 
legislation would

[[Page S3446]]

create authority for multi-medical center NPCs to be shared among a 
number of medical centers. Condensing numerous NPCs into one would 
retain the local affiliations that make them valuable and effective, 
but would achieve greater efficiency and economy of scale by combining 
administrative resources.
  The legislation would make additional adjustments in other areas. It 
would expand VA's oversight capability. It would clarify existing 
authority for NPCs to transfer funds among medical centers, and it 
would clarify reimbursement processes. It would also modify the 
required composition of NPC governance boards, to allow individuals 
with a wider range of expertise to serve.
  I believe these proposed changes would facilitate better working 
relationships between NPCs and VA, thereby achieving better support of 
VA research and education. I am confident that these provisions will 
make an effective source of support for VA even stronger.

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