House Report 105-490 - AUTHORIZING MAJOR MEDICAL CONSTRUCTION PROJECTS AND MAJOR MEDICAL FACILITY LEASES FOR THE DEPARTMENT OF VETERANS AFFAIRS FOR FISCAL YEAR 1999, AND FOR OTHER PURPOSES

[House Report 105-490]
[From the U.S. Government Publishing Office]

105th Congress Report
HOUSE OF REPRESENTATIVES

2nd Session 105-490
_______________________________________________________________________

AUTHORIZING MAJOR MEDICAL CONSTRUCTION PROJECTS AND MAJOR MEDICAL
FACILITY LEASES FOR THE DEPARTMENT OF VETERANS AFFAIRS FOR FISCAL YEAR
1999, AND FOR OTHER PURPOSES

_______________________________________________________________________

April 22, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Stump, from the Committee on Veterans' Affairs, submitted the
following

R E P O R T

[To accompany H.R. 3603]

[Including cost estimate of the Congressional Budget Office]

The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 3603), to authorize major medical facility
projects and major medical facility leases for the Department
of Veterans Affairs for fiscal year 1999, and for other
purposes, having considered the same reports favorably thereon
without amendment and recommends that the bill do pass.

Introduction

On February 4, 1998, the Committee received testimony on
the fiscal year 1999 Department of Veterans Affairs (VA)
budget, including major construction plans. The Honorable Togo
D. West, Jr., Acting Secretary of Veterans Affairs, testified
for the VA. Among those accompanying Mr. West were Dr. Kenneth
W. Kizer, Under Secretary for Health, and Mr. Mark Catlett,
Acting Assistant Secretary for Management.
A second hearing on the FY 1999 Department of Veterans
Affairs budget was conducted on February 12, 1998. Those
testifying included Mr. Gordon Mansfield, Executive Director of
the Paralyzed Veterans of America; Mr. David Gorman, Executive
Director of the Disabled American Veterans; Mr. Chuck Burns,
National Service Director for AMVETS; Mr. Kenneth Steadman,
Executive Director for the Veterans of Foreign Wars; Mr.
Carroll Williams, Director of the National Veterans Affairs and
Rehabilitation Commission of The American Legion; and Mr. Larry
Rhea, Deputy Director of Legislative Affairs, Non Commissioned
Officers Association.
The Subcommittee on Health met on March 19, 1998 and
ordered draft construction legislation reported favorably to
the full Committee by unanimous voice vote.
H.R. 3603 was introduced on March 31, 1998.
The full Committee met on April 1, 1998 and ordered H.R
3603 reported favorably to the House by unanimous voice vote.

Summary of the Reported Bill

H.R. 3603 would:

1) LAuthorize the following major medical facility
projects:

a) Lclinical consolidation and seismic corrections at
the Long Beach, California VA Medical Center;

b) Lseismic corrections at the San Juan, Puerto Rico
VA medical Center;

c) Loutpatient clinic expansion at the Washington, DC
VA Medical Center;

d) Lconstruction and seismic corrections at the Palo
Alto (Menlo Park), California VA Medical Center;

e) Lambulatory care improvements at the Cleveland
(Wade Park), Ohio VA Medical Center;

f) Lambulatory care addition at the Tucson, Arizona
VA Medical Center;

g) Lpsychiatric care addition at the Dallas, Texas VA
Medical Center;

h) Loutpatient clinic projects at Auburn and Merced,
California, as part of the Northern California
Healthcare System; and

i) La parking structure at the Denver, Colorado VA
Medical Center.

2) LAuthorize major medical facility leases in Baton Rouge,
Louisiana; Daytona Beach, Florida; and Oakland Park, Florida.

3) LAuthorize appropriations of $205.3 million in the
Construction, Major Projects account and $8.5 million in the
Medical Care account for the leases.

4) LIncrease the threshold for treatment of a parking
facility project as a major medical facility project from $3
million to $4 million.

Background and Discussion

Major Construction Projects

The Administration's major construction budget for fiscal
year 1999 seeks funds for only two medical construction
projects. These two projects aim to remedy seismic problems,
and to provide modern settings for furnishing care, at two
tertiary hospitals. These two proposals are among a series of
pending construction projects to which VA has assigned a high
priority under the prioritization scoring methodology that it
employs. But the budget submission ignores many other equally
high-ranking projects.
While the two requested projects are important, VA's
construction budget for fiscal year 1999 fails to support
priorities reflected in its medical care budget. Specifically,
in limiting its request to two projects that focus on inpatient
care needs, the construction budget ignores the high priority
VA is otherwise giving to outpatient care in its medical care
budget. The medical care budget, for example, envisions
closures of additional hospital wards in FY 1999 and further
expansion in the numbers of episodes of outpatient treatment.
Notwithstanding the limited amounts actually requested for
construction funding, VA planners have certainly seen the need
to renovate, or add ambulatory additions to, decades-old
hospital buildings. Many of these institutions simply lack
adequate capacity to furnish outpatient care efficiently.
Accordingly, while wholly silent on the matter in its major
construction budget submission, VA, in reporting to Congress on
its strategic plans, has identified several ambulatory care
projects among its highest priority construction projects.
With constrained major construction budgets, many
ambulatory care and other high priority projects have been ``on
hold'' for some time; they have undergone repeated scrutiny and
reassessment. Given the very limited impact the
Administration's major construction budget would have on VA's
infrastructure needs, the Committee believes it is essential
that Congress look beyond the Administration's budget proposal.
The reported bill provides a foundation for such action.
At the same time, while confident that the projects which
the Committee has recommended represent long overdue
infrastructure needs, the Committee is concerned about one
aspect of the Department's prioritization process. The
Committee learned that in developing its budget recommendations
for fiscal year 1999 and identifying its highest priority major
construction needs (in accordance with the requirements of
section 8107(d) of title 38, United States Code), the
Department conveyed to its network directors that it would
largely limit the pool of projects it would consider to a
single project from each of VHA's 22 networks. While that
approach may in general be seen as fostering regional parity,
it does not ensure that from a national perspective the
Department's highest priorities are actually identified. By way
of illustration, the Committee in 1989 and again in 1992
recommended that funds be appropriated for a new spinal cord
injury center at the Tampa, Florida VA Medical Center. While
Congress appropriated funds for the first phase of that project
(for working drawings and the construction of a new energy
plant), the Tampa project was not among those included in VA's
list, submitted in accordance with section 8107. Department
officials have acknowledged, however, that while the Tampa
project remains a high priority, the Director of the particular
network identified a construction need at another hospital in
the network as his highest priority. Accordingly, under its
prioritization process, VA did not even consider the Tampa
project in identifying its ``highest needs''. Such a policy
places the Congress at a disadvantage in its consideration of
construction needs.
Of the construction projects that are included on VA's list
of highest priorities, the Committee would authorize the
following projects.
The Committee proposes the authorization of clinical
consolidations and seismic corrections at the Long Beach VA
Medical Center for an amount not to exceed $23.2 million. One
seismically and structurally unsound building will be
demolished and services performed there will be consolidated
into other buildings that will undergo needed renovations. This
move will improve the health care environment for veterans
using the facility and increase treatment efficiencies.
The Committee would also authorize a seismic correction
project at the San Juan VA Medical Center for an amount up to
$50 million. The top six stories of the main hospital building,
built in the 1950s and well below the recommended seismic
safety standards, would be taken down and a new two story
medical and surgical building would be constructed. The
remaining floors of the original building would undergo seismic
strengthening.
As mentioned earlier, the Committee is mindful of the
current backlog of VA construction projects and has added a
number of projects that it believes to be well justified. This
legislation would authorize an outpatient clinic expansion at
the Washington, D.C. VA Medical Center for up to $29.7 million.
The project would provide a building addition for the expansion
of a number of specialties such as primary care services and
outpatient radiology. The main building of the facility was
built thirty years ago with an emphasis on inpatient care. As
health care delivery has changed, so has the need to renovate
the facility to adapt to the shift to ambulatory care.
The Committee proposes an ambulatory care addition and
renovation project at the Cleveland (Wade Park) VA Medical
Center for an amount not to exceed $28.3 million, of which $7.5
million would come from previously appropriated funds. This
project would include the construction of an ambulatory care
addition and renovation of existing space for ambulatory care,
which is housed in a 40-year old building and is not well-
designed to handle the increasing numbers of outpatient visits.
Overcrowding has resulted in the need to locate outpatient
clinics on virtually every floor of the facility.
An ambulatory care addition at the Tucson VA Medical Center
would be authorized under this legislation for an amount up to
$35 million. This project was previously authorized--but funds
were never appropriated--in Public Law 104-262. The project
would add two stories to an already-existing ambulatory care
building at the facility. Currently, outpatient care is
dispersed among several buildings, some of which are almost 70
years old. The main ambulatory care building, built 20 years
ago, was intended to provide services for 105,000 outpatient
visits. In fiscal year 1996, Tucson provided more than 223,000
visits.
In 1996, Congress authorized a seismic correction project
at the Palo Alto (Menlo Park) VA Medical Center. Monies for
that project, however, were not appropriated. There remains a
need to carry out this project, which would involve demolition
of a seismically deficient building and construction of a one-
story, 120-bed psychogeriatric nursing home care building.
The legislation would authorize construction of a new
multi-level mental health addition on top of an already-
existing ambulatory care building at the Dallas VA Medical
Center in an amount not to exceed $24.2 million. The current
mental health program at the facility is dispersed across the
campus; the VAMC's primary mental health structure was built in
1939 and has major deficiencies that render it virtually
obsolete. This construction project would consolidate the
outpatient and inpatient mental health units into space that
meets VA criteria and improves health care delivery for mental
health patients.
The reported bill would also authorize construction of a
parking facility at the Denver VA Medical Center. Limited
parking capacity at the facility limits ready access of
patients and staff to the building. The proposed multi-level
parking structure would provide 700 parking spaces and would
include a horizontal connection to the medical center.
Pursuant to a Congressional directive during the 105th
Congress, VA undertook a study of the Northern California VA
health care system to determine how best to provide care to
veterans in that region. Among its findings, the study
identified a need for outpatient improvements at Mare Island
and Martinez, California and four additional community-based
outpatient clinics. Last year, the Committee initiated
legislation eventually signed into law to authorize the Mare
Island and Martinez projects. Also last year, the VA determined
that the least costly means of establishing the remaining
clinics was to lease two of them--in Eureka and Chico--and
purchase and renovate clinics at Auburn and Merced. The
Committee thus recommends the authorization of the Auburn and
Merced clinics.

Major Medical Facility Leases

H.R. 3603 would authorize the VA to enter into three major
medical leases and authorizes funding for sums representing the
estimated annual rent and one-time cost of converting space for
medical use. Specifically, this legislation would authorize
funds for the lease of satellite outpatient clinics in Baton
Rouge, Louisiana in an amount up to $1.8 million; Daytona
Beach, Florida in an amount up to $2.6 million; and Oakland
Park, Florida in an amount up to $4.1 million. There is special
urgency associated with leasing space for clinic operations at
Daytona Beach in that it would be an emergency acquisition to
replace an existing clinic that has exhibited a number of
deficiencies, including problems with heating, ventilation, and
architecture.

Authorization of Appropriations

H.R. 3603 would authorize the appropriation of $205.3
million from the Construction, Major Projects account for the
major medical facility projects.
The bill would also authorize appropriations in the amount
of $8.5 from the Medical Care account for the major medical
facility leases.
Funds for the California outpatient clinics were
appropriated last year in the fiscal year 1998 Appropriations
bill. Likewise, the money to build the parking structure in
Denver would come from current unobligated balances and parking
receipts available in the parking revolving fund, and not
through newly authorized appropriations.

Parking Facility Project Threshold

The Committee recognizes that costs of VA construction
projects have risen with inflation over the years, and that
many projects, which in the past would have been considered
minor in scope, could no longer be accomplished within the
then-applicable minor project threshold of $3 million. Such
projects, therefore, would be deemed major construction--and in
need of authorization--because of rising costs. Public Law 104-
262 included a provision that raised the threshold of a major
medical construction project from $3 million to $4 million.
Through an oversight, however, that law did not amend section
8109 (i)(2) of title 38, United States Code, which set the
threshold for treatment of a parking facility project as a
major medical facility project at $3 million. H.R. 3603 would
increase that threshold from $3 million to $4 million.

Section-By-Section Analysis

Section 1(a)(1) would authorize clinical consolidation and
seismic corrections at the Long Beach VA Medical Center in an
amount not to exceed $23.2 million.

Section 1(a)(2) would authorize construction and seismic
work at the San Juan VA Medical Center in an amount not to
exceed $50 million.

Section 1(a)(3) would authorize clinic expansion at the
Washington (D.C.) VA Medical Center in an amount not to exceed
$29.7 million.

Section 1(a)(4) would authorize construction of a
psychogeriatric care building and seismic corrections at the
Palo Alto (Menlo Park) VA Medical Center in an amount not to
exceed $22.4 million.

Section 1(a)(5) would authorize improvements in the
ambulatory care department at the Cleveland (Wade Park) VA
Medical Center in an amount not to exceed $28.3 million, of
which $7.5 million would come from previously appropriated
funds.

Section 1(a)(6) would authorize an ambulatory care addition
at the Tucson VA Medical Center in an amount not to exceed $35
million.

Section 1(a)(7) would authorize a psychiatric care addition
at the Dallas VA Medical Center in an amount not to exceed
$24.2 million.

Section 1(a)(8) would authorize outpatient clinic projects
at Auburn and Merced, California in an amount not to exceed $3
million in previously appropriated funds.

Section 1(b) would authorize a parking structure at the
Denver VA Medical Center in an amount not to exceed $13
million, of which $11.9 million would come from funds already
in the Parking Revolving Fund.

Section 2(1) would authorize the lease of a satellite
outpatient clinic in Baton Rouge, Louisiana in an amount not to
exceed $1.8 million.

Section 2(2) would authorize the lease of a satellite
outpatient clinic in Daytona Beach, Florida in an amount not to
exceed $2.6 million.

Section 2(3) would authorize the lease of a satellite
outpatient clinic in Oakland Park, Florida in an amount not to
exceed $4.1 million.

Section 3(a)(1) would authorize $205.3 million in the
Construction, Major Projects account for the major medical
facility projects.

Section 3(a)(2) would authorize $8.5 million in the Medical
Care account for the major medical facility leases.

Section 3(b)(1) would specify that the projects authorized
in section 1(a) may only be carried out using funds
appropriated in section 1(a); already appropriated, non-
obligated Construction, Major Projects funds; and unspecified
pre-fiscal year 1999 Construction, Major Projects funds.

Section 3(b)(2) would specify that the parking structure
project at the Denver VA Medical Center may only be carried out
using pre-fiscal year 1999 funds from the Parking Revolving
Funds and unspecified Construction, Major Projects funds.

Section 4 would increase the threshold for treatment of a
parking facility project as a major medical facility project
from $3 million to $4 million.

Oversight Findings

No oversight findings have been submitted to the Committee
by the Committee on Government Reform and Oversight.

Congressional Budget Office Cost Estimate

The following letter was received from the Congressional
Budget Office concerning the cost of the reported bill:

U.S. Congress,
Congressional Budget Office,
Washington, DC, April 2, 1998.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.

Dear Mr. Chairman: The Congressional Budget Office (CBO)
has prepared the enclosed cost estimate for H.R. 3603, a bill
to authorize major medical facility projects and major medical
facility leases for the Department of Veterans Affairs for
fiscal year 1999, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them.
The CBO staff contact is Shawn Bishop, who can be reached
at 226-2840.
Sincerely,
June E. O'Neill,
Director

Enclosure

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 3603--A bill to authorize major medical facility projects and
major medical facility leases for the Department of Veterans Affairs
for fiscal year 1999, and for other purposes

As ordered reported by the House Committee on Veterans '
Affairs on April 1, 1998

Summary. --H.R. 3603 would authorize appropriations for
construction projects and leases at medical facilities of the
Department of Veterans Affairs (VA). CBO estimates that
enacting the bill would result in outlays of about $9 million
in 1999 and $203 million over the 1999-2003 period, assuming
appropriation of the authorized amounts. Because the bill would
not affect direct spending or receipts, pay-as-you-go
procedures would not apply. The bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act of 1995 (UMRA) and would not
affect the budgets of state, local, or tribal governments.

Estimated cost to the Federal Government. --The bill would
authorize appropriations of $205.3 million to complete several
projects that are specifed in the bill. The bill would also
authorize appropriations of $8.5 million for leasing agreements
for three satellite outpatient clinics. The following table
shows CBO's estimate of the budgetary impact of the bill over
the 1999-2003 period, assuming appropriation of the authorized
amounts. The costs of this legislation would fall within budget
function 700 (veterans affairs).

Table 1. Budgetary Impact of H.R.3603 on Spending Subject to Appropriations
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------

Major Construction
Spending for Major Construction
Under Current Law
Budget authority ^{1.............................. 209 0 0 0 0 0
Estimated outlays............................... 328 287 209 121 51 8
Proposed Changes
Authorization level............................. 0 205 0 0 0 0
Estimated outlays............................... 0 1 33 64 60 37
Spending Under H.R. 3603
Authorization level ^{1........................... 209 205 0 0 0 0
Estimated outlays............................... 328 288 241 185 111 46

Leasing Agreements
Spending for Medical Care
Under Current Law
Budget authority ^{2.............................. 17,739 17,739 17,739 17,739 17,739 17,739
Estimated outlays............................... 17,615 18,122 17,763 17,739 17,739 17,739
Proposed Changes
Authorization level............................. 0 9 0 0 0 0
Estimated outlays............................... 0 8 1 0 0 0
Spending Under H.R. 3603
Authorization level ^{1........................... 17,739 17,748 17,739 17,739 17,739 17,739
Estimated outlays............................... 17,615 18,130 17,764 17,739 17,739 17,739

Total Proposed Changes
Authorization level............................. 0 214 0 0 0 0
Estimated outlays............................... 0 9 34 64 60 37
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: Details may not add to totals because of rounding.

^{1 The 1998 level is the amount appropriated for that year.
^{2 The current law amounts shovn here assume that appropriations remain at the 1998 level. If they are adjusted for inflation, the base amounts would
rise by about S600 nillion a year, but the estimated changes would remain as shovn.

In addition, the bill would authorize other projects that
would not require new appropriations. First, the bill would
authorize VA to spend $13 million to construct a parking
structure at the medical center in Denver, Colorado. For this
project, VA would be required to use $12 million from balances
in the Parking Revolving Fund and $1 million from certain
appropriations provided prior to 1999 for major construction
projects. Second, the bill would authorize VA to use $10.5
million in unobligated balances to build ambulatory care
facilities. The funding would be derived from amounts
appropriated for fiscal years beginning before 1999 and that
remain available for obligation. CBO estimates that these
authorizations would have no budgetary impact because the
annual spending for the newly authorized projects would not
differ significantly from spending for the projects that were
funded originally.

Pay-as-you-go considerations. --None.

Intergovernmental and private-sector impact. --The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of State,
Local, or Tribal governments.

Estimate prepared by:
Federal Costs: Shawn Bishop
Impact on State, Local, and Tribal Governments: Marc
Nicole
Impact on the Private Sector: Rachel Schmidt

Estimate approved by:
Robert A. Sunshine, Deputy Assistant Director for
Budget Analysis

Inflationary Impact Statement

The enactment of the reported bill would have no
inflationary impact.

Applicability to Legislative Branch

The reported bill would not be applicable to the
legislative branch under the Congressional Accountability Act,
Public Law 104-1, because it would apply only to certain
Department of Veterans Affairs programs and facilities.

Roll Call Votes

There were no roll call votes in connection with Committee
action on H.R. 3603.

Statement of Constitutional Authority

Pursuant to Article I, section 8 of the United States
Constitution, the reported bill would be authorized by
Congress' power to ``provide for the common Defence and general
Welfare of the United States.''

Statement of Federal Mandates

The reported bill would not establish a federal mandate
under the Unfunded Mandates Reform Act, Public Law 104-4.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3 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):

SECTION 8109 OF TITLE 38, UNITED STATES CODE

Sec. 8109. Parking facilities

(a) * * *

* * * * * * *

(i)(1) * * *
(2) For the purpose of section 8104(a)(2) of this title, a
bill, resolution, or amendment which provides that funds in the
revolving fund (including any funds proposed in such bill,
resolution, or amendment to be appropriated to the revolving
fund) may be expended for a project involving a total
expenditure of more than [$3,000,000] $4,000,000 for the
construction, alteration, or acquisition (including site
acquisition) of a parking facility or facilities at a medical
facility shall be considered to be a bill, resolution, or
amendment making an appropriation which may be expended for a
major medical facility project.}}}}}}