[Senate Report 105-23]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-23
_______________________________________________________________________


 
 LEGISLATIVE AND OVERSIGHT ACTIVITIES DURING THE 104TH CONGRESS BY THE 
                 SENATE COMMITTEE ON VETERANS' AFFAIRS

                               __________

                       S P E C I A L  R E P O R T

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS

                          UNITED STATES SENATE

                          COMMITTEE ACTIVITIES





                  June 9, 1997.--Ordered to be printed


                            [104th Congress]
                     COMMITTEE ON VETERANS' AFFAIRS

                   ALAN K. SIMPSON, Wyoming, Chairman
STROM THURMOND, South Carolina       JOHN D. ROCKEFELLER IV, West 
FRANK H. MURKOWSKI, Alaska               Virginia
ARLEN SPECTER, Pennsylvania          BOB GRAHAM, Florida
JAMES M. JEFFORDS, Vermont           DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    PAUL WELLSTONE, Minnesota
LARRY E. CRAIG, Idaho                PATTY MURRAY, Washington
             Thomas E. Harvey, Chief Counsel/Staff Director
          Jim Gottlieb, Minority Chief Counsel/Staff Director
                                 ------                                

                            [105th Congress]
                     COMMITTEE ON VETERANS' AFFAIRS

                 ARLEN SPECTER, Pennsylvania, Chairman
STROM THURMOND, South Carolina       JOHN D. ROCKEFELLER IV, West 
FRANK H. MURKOWSKI, Alaska               Virginia
JAMES M. JEFFORDS, Vermont           BOB GRAHAM, Florida
BEN NIGHTHORSE CAMPBELL, Colorado    DANIEL K. AKAKA, Hawaii
LARRY E. CRAIG, Idaho                PAUL WELLSTONE, Minnesota
Y. TIM HUTCHINSON, Arkansas          PATTY MURRAY, Washington
                    Charles Battaglia, Staff Director
          Jim Gottlieb, Minority Chief Counsel/Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Introduction.....................................................1
      Hearings...................................................     1
          A. First session.......................................     1
          B. Second session......................................     1
      Legislation................................................     2
          A. First session.......................................     2
          B. Second session......................................     2
      Nominations................................................     2
          A. First session.......................................     2
          B. Second session......................................     3
 II. Budget on veterans programs......................................3
      A. First session...........................................     3
      B. Second session..........................................     5
III. Service-connected compensation and related programs..............6
      A. Overview................................................     6
      B. First session...........................................     7
          1. Gardner decision....................................     7
          2. Compensation cost-of-living adjustment..............     7
          3. Other compensation issues...........................     8
      C. Second session..........................................     8
          1. Compensation cost-of-living adjustment..............     8
          2. Other compensation issues...........................     8
          3. Monetary allowances for Vietnam veterans' children 
              born with spina bifida.............................     9
          4. The offsetting of separation pay from VA 
              compensation.......................................    10
              Background.........................................    10
               National Defense Authorization Act for Fiscal Year 
                  1997...........................................    10
 IV. Pension programs................................................11
      A. Overview................................................    11
      B. First session...........................................    11
      C. Second session..........................................    11
  V. Health care.....................................................12
      A. Overview................................................    12
      B. First session...........................................    13
          1. Oversight hearings..................................    13
          2. Legislation to extend expiring legal authorities....    13
          3. Other health care legislation.......................    14
          4. Construction authorization..........................    15
      C. Second session..........................................    16
          1. Legislation to extend expiring legal authorities....    16
          2. Eligibility reform..................................    16
          3. Vietnam veterans' eligibility for medical care 
              services...........................................    18
          4. Health care benefits for Vietnam veterans' children 
              born with spina bifida.............................    19
          5. Other medical care and medical administration 
              matters............................................    19
          6. Construction authorization and property management..    21
 VI. Readjustment, educational assistance, and vocational 
     rehabilitation benefits.........................................22
      A. Overview................................................    22
      B. First session...........................................    23
          1. Oversight...........................................    23
          2. Proposed legislation................................    23
      C. Second session..........................................    24
          1. Vocational rehabilitation program...................    24
          2. Educational assistance benefits.....................    24
          3. Administration of educational assistance benefits 
              programs...........................................    25
          4. Vocational training and job placement benefits for 
              Vietnam veterans' children born with spina bifida..    25
          5. Commission on service members and veterans 
              transition assistance..............................    26
VII. Employment......................................................26
      A. Overview................................................    26
      B. First session...........................................    27
      C. Second session..........................................    27
          1. USERRA amendments and VETS organizational issues....    27
          2. Commission on service members and veterans 
              transition assistance..............................    29
VIII.Home loan guaranty program......................................29

      A. Overview................................................    29
      B. First session...........................................    29
          1. Legislation to extend expiring legal authorities....    29
          2. Other legislation...................................    30
      C. Second session..........................................    30
          1. Legislation to extend expiring legal authorities....    30
          2. Other legislation...................................    31
 IX. Claims adjudication and judicial review.........................31
      A. Overview................................................    31
      B. First session...........................................    32
      C. Second session..........................................    32
  X. Burial benefits and memorial affairs............................33
      A. Overview................................................    33
      B. First session...........................................    34
      C. Second session..........................................    34
 XI. Insurance.......................................................34
      A. Overview................................................    34
      B. First session...........................................    35
      C. Second session..........................................    35
XII. Homeless veterans...............................................35
      A. Overview................................................    35
      B. First session...........................................    35
      C. Second session..........................................    36
XIII.Miscellaneous...................................................37

      A. First session...........................................    37
      B. Second session..........................................    39


105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-23
_______________________________________________________________________


 LEGISLATIVE AND OVERSIGHT ACTIVITIES DURING THE 104TH CONGRESS BY THE 
                 SENATE COMMITTEE ON VETERANS' AFFAIRS

                                _______
                                

                  June 9, 1997.--Ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

    Pursuant to paragraph 8 of rule XXVI of the Standing Rules 
of the Senate, the Committee on Veterans' Affairs (Committee) 
submits its report on legislative and oversight activities 
during the 104th Congress.

                            I. Introduction

                                Hearings

                            A. FIRST SESSION

    During the First Session of the 104th Congress, the 
Committee held ten days of hearings on legislative and 
oversight matters, on a nomination to the Department of 
Veterans Affairs (VA), and on the legislative recommendations 
of veterans service organizations (VSOs). Among those were two 
days of hearings on VA health care programs and related 
matters; one day of hearings on VA compensation, pension, and 
vocational rehabilitation programs and related matters; two 
days of hearings on the Administration-proposed budget for 
veterans programs for fiscal year 1996 and options for 
implementing budget reconciliation instructions; and five days 
of hearings on the legislative recommendations of the veterans 
service organizations.

                           B. SECOND SESSION

    During the Second Session of the 104th Congress, the 
Committee held ten days of hearings on legislative and 
oversight matters, and on VSOs' legislative recommendations. 
Among those were two days of hearings on proposals to reform 
standards for eligibility for health care services provided by 
VA; one day of hearings on compensation issues related to 
Vietnam veterans' exposures to Agent Orange; one day of 
hearings (held jointly with the Select Committee on 
Intelligence) on illnesses suffered by Persian Gulf War 
veterans; one day of hearings on the Administration-proposed 
budget for veterans programs for fiscal year 1997; one day of 
hearings on pending legislation relating to both VA health care 
and benefits programs; and five days of hearings on VSOs' 
legislative recommendations.

                              Legislation

                            A. FIRST SESSION

    During the First Session of the 104th Congress, the 
Committee met in open session one time to consider legislation, 
and reported three bills to the Senate. One of those reported 
bills, with modifications, was enacted during the First 
Session. That public law was:
    The ``Veterans' Compensation Cost-of-Living Act of 1995'' 
(Public Law 104-57), signed November 22, 1995.
    Provisions derived from one other bill reported by the 
Committee during the First Session were enacted into one public 
law (Public Law 104-110, below) during the Second Session.

                           B. SECOND SESSION

    During the Second Session, one public law was enacted which 
incorporated provisions derived from a bill which was reported 
during the First Session. That public law was:
    An act to amend title 38, United States Code, to extend 
certain expiring authorities of the Department of Veterans 
Affairs relating to delivery of health and medical care, and 
for other purposes (Public Law 104-110), signed February 13, 
1996.
    In addition, the Committee met in open session one time to 
consider legislation, and reported five bills, which 
incorporated original provisions and provisions derived from 21 
bills, to the Senate. These five reported bills, with 
modifications, were consolidated into three bills and enacted 
into four public laws during the Second Session. These four 
public laws were:
    1. An act to rename the VA medical center in Jackson, 
Mississippi, the ``G.V. (Sonny) Montgomery Department of 
Veterans Affairs Medical Center'' (Public Law 104-202), signed 
September 24, 1996;
    2. The ``Veterans' Health Care Eligibility Reform Act of 
1996'' (Public Law 104-262), signed October 9, 1996;
    3. The ``Veterans' Compensation Cost-of-Living Adjustment 
Act of 1996'' (Public Law 104-263), signed October 9, 1996; and
    4. The ``Veterans' Benefits Improvements Act of 1996'' 
(Public Law 104-275), signed October 9, 1996.

                              Nominations

                            A. FIRST SESSION

    During the First Session of the 104th Congress, the 
Committee met in open session one time to consider a 
nomination, and reported one nomination to the Senate. The 
following table portrays the Committee's and the Senate's 
actions regarding this nomination.

                                   DEPARTMENT OF VETERANS AFFAIRS NOMINATIONS                                   
----------------------------------------------------------------------------------------------------------------
        Name and Position         Date of Nomination    Date of Hearing      Date Reported      Date Confirmed  
----------------------------------------------------------------------------------------------------------------
Dennis M. Duffy, Assistant        January 5, 1995...  March 9, 1995.....  April 6, 1995.....  April 7, 1995     
 Secretary for Policy and                                                                                       
 Planning.                                                                                                      
----------------------------------------------------------------------------------------------------------------

                           B. SECOND SESSION

    During the Second Session of the 104th Congress, no 
nominations were referred to the Committee.

                    II. Budget on Veterans Programs

                            A. FIRST SESSION

    On March 9, 1995, the Committee held a hearing on the 
Administration's proposed budget for veterans' programs for 
fiscal year 1996. Testimony was received from the Secretary of 
Veterans Affairs and other VA officials, the Chief Judge, 
United States Court of Veterans Appeals (CVA), the Assistant 
Secretary of Labor for Veterans' Employment and Training, and 
various VSOs.
    On April 3, 1995, pursuant to the requirements of section 
301(d) of the Congressional Budget Act of 1974, and with the 
approval of all of the members of the Committee, the Committee 
submitted a letter reflecting its views and estimates on the 
proposed fiscal year 1996 veterans' programs budget to the 
Budget Committee. The Committee's report expressed reservations 
on VA's proposed allocations of discretionary funding, 
questioning particularly VA's request for authorization to 
build two new inpatient hospitals. The report did not, however, 
recommend reductions in requested funding for discretionary 
spending. Nor did it recommend that such funding be increased 
over requested levels.
    With respect to proposed mandatory account spending, the 
Committee noted the existence of Federal deficits, and 
bipartisan consensus that unrestrained entitlements spending is 
a major factor in such deficits. The report emphasized, 
however, that growth in veterans' entitlements spending is not 
a cause of deficits, noting that entitlements spending on 
veterans' programs was expected to grow at a rate of less than 
one-half of one percent. Nonetheless, the Committee reported 
veterans' support of certain measures to contribute to deficit 
reduction, and suggested that careful consideration would be 
given to statutory amendments to modify statutes construed in 
the U.S. Supreme Court's decision in Gardner v. Brown, infra, 
discussed in section III, below.
    On June 26, 1995, the Senate and House Committees on the 
Budget issued a conference report (H. Rept. 104-159) approving 
a budget resolution (H. Con. Res. 67) which included targets 
for savings on veterans' programs. On June 29, 1995, the Senate 
adopted the concurrent resolution. Section 105 of the 
resolution directed the Committee to report changes in laws 
within the Committee's jurisdiction sufficient to reduce 
outlays for veterans' programs by $274 million in fiscal year 
1996, $3.614 billion in fiscals years 1996 through 2000, and 
$6.392 billion in fiscal years 1996 through 2002.
    On July 11, 1995, the Committee held a hearing on options 
for meeting the outlay-reduction targets specified in the 
concurrent resolution. Testimony was received from the 
Secretary of Veterans Affairs and other VA officials, the 
Department of Defense, and various VSOs.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, measures for complying with the 
outlay-reduction targets specified in the concurrent 
resolution. By unanimous vote, the Committee approved measures 
that would:
    1. Extend through fiscal year 2002 certain cost-saving 
provisions which had been approved in previously enacted budget 
reconciliation acts and which were scheduled to expire on 
September 30, 1998;
    2. Limit cost-of-living adjustments (COLAs) to 
compensation, dependency and indemnity compensation (DIC), and 
other veterans' benefits during fiscal years 1996 through 2002 
by requiring that the adjusted dollar amounts paid monthly be 
rounded down to the nearest dollar in all cases;
    3. Limit the cost-of-living adjustment in educational 
assistance benefits paid under 30 U.S.C. Chapter 30 to one-half 
of the COLA made to compensation, DIC, and other veterans 
benefits;
    4. For fiscal year 1996, increase from $100 per month for 
12 months to $133.34 per month for 12 months the monthly 
reduction in pay contributed by service personnel as a 
condition to eligibility for educational assistance benefits 
under 38 U.S.C. Chapter 30; and for fiscal years 1997 through 
2002, increase that monthly reduction in pay by the same cost-
of-living adjustment percentage that educational assistance 
benefits are increased; and
    5. Amend 38 U.S.C. Sec. 1151, the statute construed in 
Gardner v. Brown, infra, to require prospectively that 
compensation would be paid for disabilities or deaths occurring 
during VA medical treatment only if the disability or death 
resulted from VA negligence or fault.
    On October 5, 1995, measures approved by the Committee were 
submitted to the Committee on the Budget. That filing included 
proposed legislative language reflecting the Committee's 
reconciliation recommendations; proposed report language 
outlining the Committee's recommendations; and a cost estimate 
prepared by the Congressional Budget Office (CBO) indicating 
that the Committee's recommendations, if enacted, would result 
in outlay savings of $150 million in fiscal year 1996, $3.750 
billion in fiscal years 1996 through 2000, and $6.659 billion 
in fiscal years 1996 through 2002.
    On September 28, 1995, the House Committee on Veterans' 
Affairs approved a series of budget reconciliation measures 
which differed from those approved by the Committee. Conferees 
were appointed on November 13, 1995, to reconcile the 
differences, and on November 14, 1995, the conferees reached an 
agreement. Under that agreement, the following provisions of 
the Committee-reported recommendations were approved: extension 
through September 30, 2002, of previously approved 
reconciliation measures scheduled to expire on September 30, 
1998; the cost-of-living adjustment round-down provision; and 
the provision requiring a finding of VA fault before 
compensation will be paid under 38 U.S.C. Sec. 1151. In lieu, 
however, of Committee-approved measures relating to educational 
assistance benefits under 38 U.S.C. Chapter 30, the conferees 
agreed to:
    1. Increase copayments paid by veterans receiving 
prescription drugs in connection with treatment for non-
service-connected disabilities from $2 per prescription per 30-
day supply to $4, and repeal VA's authority to waive the 
copayment requirement;
    2. Equalize the dollar amount of cost-of-living adjustments 
to be received by all recipients of dependency and indemnity 
compensation;
    3. Authorize the withholding from Federal salaries and tax 
refunds debts owed to VA by veterans who had defaulted on VA-
guaranteed mortgage loans;
    4. Extend through fiscal year 2002 a measure due to expire 
in fiscal year 1997 granting VA flexibility in disposing of a 
property when a home financed by a VA-guaranteed mortgage loan 
goes into foreclosure; and
    5. Extend through fiscal year 2002 expired authority for VA 
to guarantee the timely payment of principal and interest to 
purchasers of real estate mortgage investment conduits 
(REMICs), securities by which VA markets ``bundled'' VA direct 
loan notes from purchasers of VA-acquired real estate, in order 
to enhance the value of REMIC securities.
    According to CBO, these recommendations, if enacted, would 
have resulted in outlay savings of $275 million in fiscal year 
1996, $3.846 billion in fiscal years 1996 through 2000, and 
$6.673 billion in fiscal years 1996 through 2002.
    The Senate-House compromise was included as Title X, 
``Veterans and Related Provisions,'' of the conference report 
on H.R. 2491 (H. Rept. 104-350). The House agreed to the 
conference report on November 17, 1995, and on that date, the 
Senate concurred with a further amendment. On November 20, 
1995, the House agreed to the Senate amendment, clearing the 
measure for the President. On November 30, 1995, H.R. 2491, the 
``Balanced Budget Act of 1995'' was presented to the President. 
On December 6, 1995, the President vetoed H.R. 2491.
    No further action was taken on provisions contained in 
Title X of the ``Balanced Budget Act of 1995'' in the First 
Session.

                           B. SECOND SESSION

    On April 24, 1996, the Committee held a hearing on the 
budget for veterans' programs for fiscal year 1997. Testimony 
was received from the Secretary of Veterans Affairs and other 
VA officials, a representative of the United States Court of 
Veterans Appeals, the Assistant Secretary of Labor for 
Veterans' Employment and Training, and various VSOs.
    On May 7, 1996, pursuant to the requirements of section 
301(d) of the Congressional Budget Act of 1974 and with the 
approval of all of the members of the Committee on Veterans' 
Affairs, the Committee submitted a letter reflecting its budget 
views and estimates on the proposed fiscal year 1997 budget for 
veterans' programs to the Budget Committee. The Committee's 
report noted that the Administration had proposed decreases in 
VA medical care spending beyond fiscal year 1997, but that it 
had submitted no plan indicating how necessary medical care 
would be provided during the out years under such a funding 
plan. The Committee's report, therefore, expressed no support 
for the Administration's out-year spending proposal, and stated 
that the proposed cuts in medical care spending were not 
necessary to achieve the goal of a balanced Federal budget.
    On the issue of proposed VA construction spending, the 
Committee noted that 83 per cent of VA's proposed construction 
budget had been earmarked for inpatient facility construction. 
The report questioned that priority.
    With respect to mandatory spending on veterans' programs, 
the Committee repeated a theme expressed in its 1995 report: 
that unrestrained growth in entitlements spending is the cause 
of the deficit, and that mandatory spending for veterans' 
programs is not unrestrained and is not, therefore, a 
significant contributing factor to Federal deficits. The report 
noted further, however, that the Administration's budget 
proposal recommended enactment of all but two of the deficit-
reduction measures approved by the Committee as Title X of the 
``Balanced Budget Act of 1995.''

        III. Service-Connected Compensation and Related Programs

                              A. OVERVIEW

    VA's disability compensation program provides monthly 
payments to veterans who have impairments to earning capacity 
because of service-connected disabilities. The amount paid 
depends on the nature of the veteran's disability or 
combination of disabilities, and the extent to which earning 
capacity is deemed to have been impaired. Compensation is paid 
for so long as the service-connected disability persists and 
the veteran is alive; when a veteran receiving compensation 
dies, VA discontinues payments effective on the last day of the 
month before death. As of the end of calendar year 1996, an 
estimated 2.253 million veterans were receiving compensation 
benefits.
    VA pays dependency and indemnity compensation (DIC) 
benefits to surviving spouses, children, and dependent parents 
of veterans who die during active duty or as a result of a 
service-connected condition. This benefit is intended to 
compensate for the loss of family income. At the end of 
calendar year 1996, an estimated 330,531 survivors were 
receiving benefits under the DIC program.
    Congress also has established programs to meet certain 
specific needs of service-connected veterans, including grants 
for specially adapted housing, grants for adaptive automotive 
equipment, and clothing allowances for service-connected 
veterans who use prosthetic or orthopedic appliances which wear 
or tear clothing, or medications which irreparably damage outer 
garments.
    The Committee is concerned that benefits be adjusted 
appropriately to keep pace with inflation. The Committee is 
also concerned that compensation be paid in all cases in which 
the veteran's death or disability was, in fact, incurred or 
aggravated during the veteran's service, and that the system 
for adjudicating claims for compensation benefits be both fair 
and efficient.

                            B. FIRST SESSION

1. Gardner Decision

    On June 8, 1995, the Committee held an oversight hearing 
on, among other things, a U.S. Supreme Court decision, Gardner 
v. Brown, 115 S. Ct. 552 (1994), upholding a Court of Veterans 
Appeals ruling that persons who suffer negative medical 
outcomes while being treated in VA medical facilities are 
entitled to VA compensation without a showing of VA fault. The 
Committee inquired into the effect that Gardner was having on 
care provided at VA medical facilities, and on VA efforts to 
uncover similar areas of potential legal exposure. Testimony 
was received from VA's General Counsel.
    As is discussed in section II.A., above, the Committee 
approved, as part of the ``Balanced Budget Act of 1995,'' a 
provision to modify the statute, 38 U.S.C. Sec. 1151, that 
Gardner construed in order to impose a requirement of VA fault 
before compensation could be awarded. The ``Balanced Budget Act 
of 1995'' was vetoed by the President on December6, 1995. No 
further action was taken on the issue during the First Session.

2. Compensation Cost-of-Living Adjustment

    On June 29, 1995, Senator Alan K. Simpson, the Committee's 
Chairman, introduced S. 992, the proposed ``Veterans' 
Compensation Cost-of-Living Adjustment Act of 1995.'' S. 992 
would have increased the rates of compensation for veterans 
with service-connected disabilities and the rates of DIC for 
survivors of certain deceased disabled veterans. Prior to the 
introduction of that bill, on March 9, 1995, the Committee held 
a hearing on, among other issues, VA's proposed budget for 
fiscal year 1996 and, during that hearing, the Committee 
considered projected cost-of-living adjustments to compensation 
and DIC for 1996. The Committee received testimony from VA and 
various veterans service organizations at the March 9 hearing. 
In addition, the Committee held a hearing on July 11, 1995, to 
consider options for complying with reconciliation 
instructions, as discussed above. During the course of that 
hearing, the Committee considered adjustments to projected 
cost-of-living increases for 1996. The Committee received 
testimony from VA and various veterans service organizations at 
the July 11 hearing.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, S. 992. On that date, the 
Committee voted to report S. 992 favorably to the Senate 
without written report. On October 10, 1995, the House passed a 
companion bill, H.R. 2394.
    On November 9, 1995, the Senate took up H.R. 2394, and 
approved an amendment in the nature of a substitute. The 
substitute incorporated the text of S. 992 into H.R. 2394. The 
Senate then passed H.R. 2394, as amended, by voice vote. On 
November 10, 1995, the House agreed to the Senate amendment. On 
November 22, 1995, the President signed H.R. 2394 into law as 
Public Law 104-57, the ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 1995.''

3. Other Compensation Issues

    On November 15, 1995, Senator Kay Bailey Hutchison 
introduced S. 1414, a bill to assure the payment during fiscal 
year 1996 of veterans' benefits, including compensation and DIC 
benefits, notwithstanding any Federal government ``shutdown.'' 
As introduced, S. 1414 would have authorized such payments and 
appropriated funds for the purpose of making such payments. The 
bill was referred to the Committee on November 15, 1995. No 
action was taken on the bill during the 104th Congress.

                           C. SECOND SESSION

1. Compensation Cost-of-Living Adjustment

    On May 22, 1996, Chairman Simpson introduced S. 1791, the 
proposed ``Veterans' Compensation Cost-of-Living Adjustment Act 
of 1996.'' S. 1791 would have increased the rates of 
compensation for veterans with service-connected disabilities 
and the rates of DIC for survivors of certain deceased disabled 
veterans. On May 23, 1996, the Committee held a hearing on S. 
1791 and other pending legislation. The Committee received 
testimony from VA and various veterans service organizations on 
S. 1791 at the May 23 hearing. On July 24, 1996, the Committee 
met in open session to consider, among other things, S. 1791. 
On that date, the Committee voted to report S. 1791 favorably 
to the Senate, and on September 9, 1996, the bill was reported 
(S. Rept. 104-367).
    On July 16, 1996, the House passed a companion measure, 
H.R. 3458, and referred that bill to the Senate. On September 
26, 1996, the Senate took up H.R. 3458 and amended it to 
substitute the text of S. 1791. The Senate then passed H.R. 
3458, as so amended, by voice vote. On September 28, 1996, the 
House agreed to the Senate amendment. On October 9, 1996, the 
President signed H.R. 3458 into law as Public Law 104-263, the 
``Veterans' Compensation Cost-of-Living Adjustment Act of 
1996.''

2. Other Compensation Issues

    On June 29, 1995, Chairman Simpson introduced S. 995, at 
VA's request, the proposed ``Veterans Benefits Reform Act of 
1995.'' As introduced, S. 995 would have, among other things, 
eliminated the clothing allowance paid to otherwise-eligible 
veterans who had been incarcerated. On May 23, 1996, the 
Committee held a hearing on S. 995 and other pending 
legislation. The Committee received testimony from VA and 
various veterans service organizations on S. 995 at the May 23 
hearing.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in detail in section VI.C.5, below), which 
incorporated provisions derived from S. 995 relating to the 
clothing allowance. The Committee voted to report S. 1711, as 
amended, favorably to the Senate, and on September 24, 1996, S. 
1711 was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to the clothing allowance. The substitute also 
incorporated a provision derived from H.R. 3674, passed by the 
House on July 16, 1996. As passed by the House, H.R. 3674 would 
have amended the provision of law which discontinues 
compensation effective the last day of the month preceding the 
veteran's death in order to permit the surviving spouse of a 
deceased veteran to retain the last month's compensation 
payment prorated to the date of death. As modified in the 
substitute, the H.R. 3674-derived provision allowed the 
surviving spouse to retain the entirety of the last month's 
compensation payment. The Senate then passed S. 1711, as 
amended. On September 28, 1996, the House passed S. 1711, and 
on October 9, 1996, the President signed S. 1711, the 
``Veterans' Benefits Improvements Act of 1996,'' into law as 
Public Law 104-275.
    On September 19, 1996, the Committee held an oversight 
hearing on VA compensation to Vietnam veterans. The hearing 
focused particularly on compensation for diseases presumed to 
be caused by a Vietnam veteran's presumed exposure to 
defoliants in Vietnam. The Committee received testimony from 
the Secretary of Veterans Affairs and other VA officials and 
from two panels of distinguished scientists.
    On September 26, 1996, the Committee and the Select 
Committee on Intelligence held a joint oversight hearing on 
reports of releases ofchemical warfare agents in Iraq during 
the Persian Gulf War and the possible connection between such releases 
and undiagnosed illnesses suffered by some Persian Gulf War veterans. 
The Committee received testimony from officials from the Central 
Intelligence Agency, the Department of Defense, and VA.

3. Monetary Allowances for Vietnam Veterans' Children Born with Spina 
        Bifida

    On July 31, 1996, Senate Minority Leader Thomas A. Daschle 
introduced S. 2008, the proposed ``Agent Orange Benefits Act of 
1996.'' S. 2008 would have provided the following benefits to 
children of Vietnam veterans who are born with spina bifida:
    1. Payment of a monthly monetary allowance, varying by 
degree of disability suffered by the child;
    2. Health care for any disability associated with the 
person's spina bifida; and
    3. Vocational training, job placement and post-job-
placement services.
    On September 5, 1996, Senator Daschle offered an amendment 
to H.R. 3666, a bill to make fiscal year 1997 appropriations 
for VA and other agencies. Senator Daschle's amendment 
contained the provisions of S. 2008 providing monetary 
allowances, and health care and vocational training services to 
children of Vietnam veterans stricken with spina bifida and, in 
addition, contained a provision to modify 38 U.S.C. Sec. 1151, 
the statute which had been construed by the Gardner court. The 
amendment's provision to modify section 1151 of title 38 was 
the same provision which, as discussed in sections II.A. and 
III.B.1., above, the Committee had approved on September 20, 
1995, as part of the vetoed ``Balanced Budget Act of 1995.'' 
Senator Christopher S. Bond, Chairman of the Appropriations 
Committee, raised a point of order with respect to the 
amendment, contending that it was not germane to the bill. By 
roll call vote, the Senate determined that the amendment was 
germane and, by voice vote, the Senate approved the amendment 
on September 5, 1996.
    On September 5, 1996, the Senate insisted on its amendments 
to H.R. 3666, requested a conference, and appointed conferees. 
On September 11, 1996, the House disagreed to Senate 
amendments, agreed to a conference, and appointed conferees. On 
September 20, 1996, the conferees issued a report (H. Rept. 
104-812) which included the Daschle amendment. On September 24, 
1996, the House agreed to the conference report, and on 
September 25, 1996, the Senate agreed to the conference report, 
clearing the measure for the President. On September 26, 1996, 
the President signed H.R. 3666 into law as Public Law 104-204.
    On September 27, 1996, Chairman Simpson introduced S. 2152, 
at VA's request. S. 2152 contained the same provisions 
contained in the Daschle amendment approved by the Senate on 
September 5, 1996, and contained in Public Law 104-204.

4. The Offsetting of Separation Pay from VA Compensation

            Background
    Members of the armed services who are involuntarily 
discharged or released, like other veterans, are entitled to VA 
disability compensation. However, section 1174(h)(2) of title 
10, United States Code, specifies that in cases where the 
former service member has received separation, severance, or 
readjustment pay, the full amount of such pay will be deducted 
from VA compensation. Separation, severance, or readjustment 
pay are subject to income taxation; VA compensation is not.
    Legislation relating to the ``offset'' of separation pay 
from VA compensation is within the jurisdiction of the Armed 
Services Committee. Accordingly, no legislation on the issue 
was referred to the Committee in the 104th Congress. Since, 
however, changes in the law relating to the offsetting of such 
pay (or military retirement pay, which is also offset against 
VA compensation) directly affect VA expenditures for 
compensation benefits, the Committee monitors such legislation 
closely.
            National Defense Authorization Act for Fiscal Year 1997
    On May 15, 1996, the House passed H.R. 3230, a bill to 
authorize appropriations for the national defense for fiscal 
year 1997. As passed by the House, H.R. 3230 contained no 
provision relating to the offset issue.
    On July 10, 1996, the Senate took up H.R. 3230 and approved 
an amendment in the nature of a substitute. The substitute 
contained a provision to amend 10 U.S.C. Sec. 1174(h)(2) to 
specify that the amount of VA compensation offset would equal 
the full amount of separation, severance, or readjustment pay 
less the amount of Federal income tax withheld from such pay. 
On July 10, 1996, Senate conferees were appointed, and on July 
17, 1996, House conferees were appointed. The Conference Report 
(H. Rept. 104-724) adopted the Senate-approved provision on the 
offsetting of separation, severance, or readjustment pay from 
VA compensation, and the House and Senate agreed to the 
conference report on August 1, 1996, and September 9, 1996, 
respectively, clearing the measure for the President. The 
President signed H.R. 3230 into law as Public Law 104-201 on 
September 23, 1996.

                          IV. Pension Programs

                              A. OVERVIEW

    VA pension programs provide needs-based income security 
benefits to wartime veterans who are totally and permanently 
disabled from non- service-connected causes or who have become 
unemployable, and to the needy surviving spouses and children 
of wartime veterans. When a veteran receiving pension dies, 
pension benefits to the veteran are discontinued effective the 
last day of the month before the death occurs.
    As of the end of calendar year 1996, an estimated 415,592 
veterans, 307,421 surviving spouses, and 33,697 surviving 
children were in receipt of VA pension.

                            B. FIRST SESSION

    On January 26, 1995, Senator Alfonse M. D'Amato introduced 
S. 281. S. 281 would have changed the beginning date of the 
Vietnam era from August 5, 1964, to December 22, 1961, and thus 
would have expanded the period of qualifying Vietnam 
``wartime'' service for purposes of eligibility for VA pension.
    On June 29, 1995, Chairman Simpson introduced S. 995, the 
proposed ``Veterans Benefits Reform Act of 1995,'' at VA's 
request. S. 995 would have, among other things, amended the 
definition of ``permanently and totally disabled'' for purposes 
of VA pension to include veterans who are 65 years of age or 
older and are patients in nursing homes.
    As discussed above, on November 15, 1995, Senator Hutchison 
introduced S. 1414, a bill to assure the payment during fiscal 
year 1996 of veterans' benefits, including pension benefits, 
notwithstanding any Federal government ``shutdown.''
    No action was taken on S. 281 or S. 995 during the First 
Session. No action was taken on S. 1414 during the 104th 
Congress.

                           C. SECOND SESSION

    On May 23, 1996, the Committee held a hearing on S. 281, S. 
995 and other pending legislation. The Committee received 
testimony from VA and various VSOs.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in detail in section VI.C.5., below). The Committee 
Print incorporated various bills, including S. 281, as amended 
to (1) modify the time frame, as introduced, of the redefined 
``Vietnam era,'' and (2) to limit the applicability of the 
proposed new definition to veterans who actually served in the 
Vietnam theater during the proposed time period. The Committee 
Print also incorporated provisions derived from S. 995 relating 
to the definition of ``permanently and totally disabled.'' The 
Committee voted to report S. 1711, as amended, favorably to the 
Senate. On September 24, 1996, S. 1711 was reported (S. Rept. 
104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to the definitions of ``Vietnam era'' and 
``permanently and totally disabled.'' In addition, the 
substitute incorporated, among other things, a provision 
derived from H.R. 3674, as passed by the House on July 16, 
1996. As passed by the House, H.R. 3674 would have permitted 
the surviving spouse of a deceased veteran who had been 
receiving VA pension at the time of death to retain the last 
month's pension payment prorated to the day of the death 
(rather than discontinuing pension effective the last day of 
the month preceding death). As modified in the substitute, the 
H.R. 3674-derived provision would have allowed the surviving 
spouse to retain the entirety of the last month's pension 
payment. The Senate then passed S. 1711, as amended. On 
September 28, 1996, the House passed S. 1711, and on October 9, 
1996, the President signed S. 1711, the ``Veterans' Benefits 
Improvements Act of 1996,'' into law as Public Law 104-275.

                             V. Health Care

                              A. OVERVIEW

    VA administers a national health care network which 
provides complete medical, hospital, and rehabilitative 
services for the care and treatment of eligible veterans. The 
VA health care system is a national system of teaching 
hospitals, general and specialty clinics, research centers, 
nursing homes, readjustment counseling centers, and other 
facilities, providing a broad range of inpatient and outpatient 
health care services to eligible veterans.
    In fiscal year 1996, VA provided health care through 173 
hospitals, 398 outpatient clinics, 133 nursing home units, and 
40 domiciliary care facilities. As part of its national health 
care network, the VA health care system also provides mental 
health services to eligible veterans through 206 readjustment 
counseling centers (Vet Centers). In fiscal year 1996, VA 
provided inpatient care to 960,524 patients, and conducted 
30.055 million outpatient visits, in VA and contract 
facilities.
    In addition, CHAMPVA--the Civilian Health and Medical 
Program of the Department of Veterans Affairs--provided 
reimbursements for the cost of health care services, or 
furnished such care, to spouses and dependent children of 
veterans who have permanent and total service-connected 
disabilities and to the survivors of veterans who either died 
as a result of service-connected disabilities or at the time of 
death had a permanent and total service-connected disability. 
In fiscal year 1996, VA provided inpatient care to 150 persons, 
and 822,637 outpatient visits, under CHAMPVA.
    Finally, section 8104(a)(2) of title 38, United States 
Code, provides that no funds may be appropriated for any fiscal 
year, and the Secretary of Veterans Affairs may not obligate or 
expend funds (other than for advance planning or design), for 
any major medical facility project or any major medical 
facility lease, unless funds for that project or lease have 
been specifically authorized by law.

                            B. FIRST SESSION

1. Oversight Hearings

    On May 11, 1995, the Committee held an oversight hearing on 
a VA administrative proposal to reorganize its medical centers, 
clinics, and other health care-related facilities into 22 
Veterans Integrated Service Networks (``VISNs''), and VA's 
views on provisions of 38 U.S.C. Sec. 510(b) which allow VA to 
proceed with certain ``administrative reorganizations'' only 
after a statutory ``notice and wait'' period has elapsed. 
Testimony was received from VA's Under Secretary for Health and 
other VA officials.
    As outlined in section III.B., above, the Committee held an 
oversight hearing on June 8, 1995, on, among other things, the 
U.S. Supreme Court's decision in Gardner v. Brown, supra. 
Testimony was received from VA's General Counsel and other VA 
officials on a number of topics, among them the effect that 
Gardner was having on medical care provided at VA facilities. 
As outlined in section II, above, the Committee approved 
legislation to amend the statute construed by the Gardner court 
on September 20, 1995, but the ``Balanced Budget Act of 1995,'' 
which incorporated that legislation, was vetoed by the 
President on December 6, 1995.

2. Legislation to Extend Expiring Legal Authorities

    On February 2, 1995, Senator Daschle introduced S. 338, a 
bill which would have (1) extended the period of eligibility 
for inpatient care for veterans exposed to toxic substances, 
radiation, or environmental hazards; (2) extended the period of 
eligibility for outpatient care for veterans exposed to such 
substances or hazards during service in the Persian Gulf; and 
(3) expanded the eligibility of veterans exposed to toxic 
substances or radiation for outpatient care.
    On April 25, 1995, the Committee's Ranking Minority Member, 
Senator John D. Rockefeller IV, introduced S. 725, the proposed 
``Veterans Community-Based Care Act of 1995.'' As introduced, 
S. 725 would have, among other things, extended until December 
31, 2000, VA's authority under 38 U.S.C. Sec. 1720A(e) to 
provide drug and alcohol abuse and dependence treatment and 
rehabilitation services, and would have extended until December 
31, 2000, VA's authority under 38 U.S.C. Sec. 1720C(a) to 
provide non-institutional alternatives to nursing home care.
    On June 29, 1995, Chairman Simpson introduced, at VA's 
request, S. 991. S. 991, as introduced, contained provisions 
which would have:
    1. Extended until December 31, 1996, VA's authority under 
38 U.S.C. Sec. 1710(e)(3) to provide priority health care 
services based on a veteran's service in the Republic of 
Vietnam and presumed exposure to defoliants there;
    2. Extended until September 30, 1997, VA's authority under 
38 U.S.C. Sec. 1710(e)(3) to provide priority health care 
services based on a veteran's service in the Southwest Asia 
theater of operations during the Persian Gulf War and presumed 
exposure to toxic substances or environmental hazards there;
    3. Extended until September 10, 1997, VA's authority under 
38 U.S.C. Sec. 1712(a)(1)(D) to provide outpatient health care 
services to Persian Gulf veterans;
    4. Extended until December 31, 1997, VA's authority under 
38 U.S.C. Sec. 1720A(e) to provide drug and alcohol abuse and 
dependence treatment and rehabilitation services;
    5. Extended until September 30, 1996, VA's authority under 
38 U.S.C. Sec. 1720C(a) to provide, on a pilot program basis, 
non-institutional alternatives to nursing home care;
    6. Extended until December 31, 1999, VA's authority under 
38 U.S.C. Sec. 7451(d)(3)(C)(iii) to refer to labor-market area 
data to determine compensation for certain registered nurse 
anesthetists;
    7. Extended until December 31, 1999, VA's authority under 
38 U.S.C. Sec. 7618 to operate a health professional 
scholarship program; and
    8. Authorized the major medical construction projects and 
facility leases requested in the President's proposed budget 
for fiscal year 1996, and authorized appropriations of 
$224,800,000 for major medical construction and $2,790,000 for 
major medical facility leases.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, a Committee Print of S. 991, as 
amended. In amended form, S. 991 contained provisions which 
would have:
    1. Extended until December 31, 1996, VA's authority under 
38 U.S.C. Sec. 1710(e)(3) to provide priority health care 
services based on exposures to defoliants in the Republic of 
Vietnam, based on exposures to ionizing radiation during the 
occupation of Japan after World War II or due to nuclear device 
testing, and based on exposures to toxic substances or 
environmental hazards in the Southwest Asia theater of 
operations during the Persian Gulf War;
    2. Extended until December 31, 1996, VA's authority under 
38 U.S.C. Sec. 1712(a)(1)(D) to provide outpatient health care 
services;
    3. Extended until December 31, 1997, VA's authority under 
38 U.S.C. Sec. 1720A(e) to provide drug and alcohol abuse and 
dependence treatment and rehabilitation services;
    4. Extended until December 31, 1996, VA's authority under 
38 U.S.C. Sec. 1720C(a) to provide, on a pilot program basis, 
non-institutional alternatives to nursing home care;
    5. Extended until December 31, 1999, VA's authority under 
38 U.S.C. Sec. 7451(d)(3)(C)(iii) to refer to labor-market area 
data to determine compensation for certain registered nurse 
anesthetists; and
    6. Extended until December 31, 1996 VA's authority under 38 
U.S.C. Sec. 7618 to operate a health professional scholarship 
program.
    The Committee voted to report S. 991, as amended, favorably 
to the Senate without written report. On December 12, 1995, S. 
991 was reported. There was no further action on this 
legislation during the First Session.

3. Other Health Care Legislation

    On January 30, 1995, Senator Kent Conrad introduced S. 293, 
a bill to authorize the payment to States of per diem for 
veterans receiving adult day health care in State facilities.
    On February 14, 1995, Committee member Daniel K. Akaka 
introduced S. 403, the proposed ``Readjustment Counseling 
Service Amendments of 1995.'' S. 403 would have modified 
authorities relating to the organization and administration of 
VA's Readjustment Counseling Service, and would have modified 
eligibility for readjustment counseling services.
    On February 15, 1995, Ranking Minority Member Rockefeller 
introduced S. 425, a bill to require the establishment in VA of 
mental illness research, education, and clinical centers.
    On March 14, 1995, Ranking Minority Member Rockefeller 
introduced S. 548, a bill to require VA to adopt quality 
standards for mammography services provided by VA.
    On March 24, 1995, Ranking Minority Member Rockefeller 
introduced S. 612, the proposed ``Veterans' Hospice Care 
Services Act of 1995.'' As introduced, S. 612 would have 
established in VA a pilot program to provide hospice care 
services to terminally ill veterans.
    On March 29, 1995, Committee member Ben Nighthorse Campbell 
introduced S. 644, a bill to reinstate expired authority for 
the establishment of research corporations at VA medical 
centers.
    On October 19, 1995, Chairman Simpson introduced S. 1345, 
the proposed ``Department of Veterans Affairs Improvement and 
Reinvention Act of 1995,'' at VA's request. S. 1345 would have, 
among other things: reformed standards for eligibility for VA 
health care benefits; modified VA standards for determining 
priority eligibility for health care services based on a 
veteran's inability to defray the expenses of necessary care; 
and authorized VA to retain 25 per cent of funds collected over 
a baseline amount from health insurance carriers and other 
third-party payers.
    On October 24, 1995, Chairman Simpson introduced S. 1359, 
the proposed ``Veterans Health Care Management and Contracting 
Flexibility Act of 1995.'' S. 1359 would have revised 
authorities relating to VA health care management and 
contracting (1) to allow VA to reorganize operations after the 
expiration of a shortened notice and wait period, and (2) to 
contract out certain health care functions. The bill also would 
have expanded VA's authority to share health care resources 
with community providers and to purchase such health care and 
other resources from community providers.
    On October 25, 1995, the Committee held a hearing on 
pending legislation including S. 293, S. 403, S. 425, S. 548, 
S. 612, S. 644, and S. 1359. The Committee received testimony 
from VA's Under Secretary for Health and other VA officials, 
and various VSOs. No further action was taken with respect to 
these bills during the First Session.

4. Construction Authorization

    On March 9, 1995, the Committee held a hearing on VA's 
proposed budget, including its construction priorities, for 
fiscal year 1996. On May 11, 1995, the Committee held a hearing 
on, among other topics, VA's proposal to reorganize its medical 
centers, clinics, and other health care-related facilities into 
22 Veterans Integrated Service Networks. In the course of that 
hearing, the Committee focused extensively on how the proposed 
VISN structure would affect VA construction planning. No 
further action was taken on the issue of VA's construction 
authorization during the First Session.

                           C. SECOND SESSION

1. Legislation to Extend Expiring Legal Authorities

    On January 5, 1996, the Senate took up S. 991 and approved 
an amendment in the nature of a substitute and an amendment to 
the title. The substitute left unchanged Committee-reported 
provisions relating to: (1) the provision of health care 
services based on exposures to defoliants in Vietnam, ionizing 
radiation in Japan or elsewhere, and toxic substances or 
environmental hazards in the Persian Gulf; (2) the provision of 
outpatient health care services; and (3) the provision of drug 
and alcohol abuse and dependence treatment and rehabilitation 
services. It modified, however, the Committee-reported 
extension of VA's authority under 38 U.S.C. Sec. 1720C(a) to 
provide, on a pilot basis, non-institutional alternatives to 
nursing home care, extending it until December 31, 1997, rather 
than through 1999 as specified in the reported bill. The 
substitute also modified provisions of the reported bill 
extending VA authority under 38 U.S.C. Sec. 7451(d)(3)(C)(iii) 
to refer to labor-market area data to determine compensation 
for certain registered nurse anesthetists, and VA's authority 
under 38 U.S.C. Sec. 7618 to operate a health professional 
scholarship program. In both cases, the substitute extended 
these authorities through December 31, 1997, rather than 
through December 31, 1999, and December 31, 1996 respectively, 
as specified in the reported bill.
    The Senate then took up H.R. 2353 and substituted the text 
of S. 991, as amended, into H.R. 2353, and passed H.R. 2353 by 
voice vote. On January 25, 1996, the House amended H.R. 2353, 
as amended by the Senate on January 5, 1996, to require, among 
other things, (1) VA reports on the potential consolidation of 
drug and alcohol treatment and rehabilitation programs 
authorized under section 38 U.S.C. Sec. 1720A; (2) VA reports 
on VA's program for community-based residential care to 
homeless chronically mentally ill veterans under section 115 of 
the Veterans' Benefits and Services Act of 1988 (38 U.S.C. 
Sec. 1712 note); and (3) VA reports on VA's demonstration 
program for compensated work therapy and therapeutic 
transitional housing under section 7 of Public Law 102-54 (38 
U.S.C. Sec. 1718 note). On January 30, 1996, the Senate agreed 
to the House amendments to H.R. 2353, as amended. On February 
13, 1996, the President signed H.R. 2353, as amended, into law 
as Public Law 104-110.

2. Eligibility Reform

    On February 7, 1996, Chairman Simpson and Ranking Minority 
Member Rockefeller introduced S. 1563, at the request of 
certain veterans service organizations. S. 1563 would have 
revised standards for eligibility for VA medical care and would 
have:
    1. Granted to all ``Category A'' veterans--veterans who 
have priority access to hospital, nursing home, and domiciliary 
care under 38 U.S.C. Sec. 1710--priority access to ambulatory 
or outpatient care services;
    2. Granted to ``Category A'' veterans priority access to 
nursing home care, domiciliary care, and long-term care;
    3. Modified the definition of ``Category A'' veterans to 
include catastrophically disabled veterans, and required VA to 
maintain its capacity to provide specialized treatment and 
rehabilitative services to certain categories of veterans;
    4. Included primary health care services and preventive 
health services among the ``medical services'' to which 
``Category A'' veterans would be granted priority access, and 
authorized VA to contract for such services;
    5. Authorized VA to provide hospital and nursing home care 
to a veteran's adult dependents, subject to payment for such 
care;
    6. Revised VA contracting authority with respect to 
prosthetic appliances;
    7. Authorized VA to retain all funds collected over a 
baseline amount from health insurance carriers and other third-
party payers; and
    8. Authorized VA to collect reimbursement from Medicare for 
services provided to Medicare-eligible veterans for non-
service-connected care and to Medicare-eligible non-veterans.
    On March 20, 1996, the Committee held a hearing on S. 1345, 
S. 1359, S. 1563, and other proposals relating to eligibility 
reform. The Committee received testimony from the General 
Accounting Office and various VSOs. On May 8, 1996, the 
Committee held a second hearing on S. 1345, S. 1359, S. 1563, 
and other proposals relating to the issue of eligibility 
reform. The Committee received testimony from VA's Under 
Secretary for Health and other VA officials, and the 
Congressional Budget Office.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, an original bill to amend the 
standards for eligibility for VA health care services. The 
original bill would have:
    1. Authorized VA, on a ``shall furnish'' basis, to furnish 
hospital care and medical services--both inpatient and 
outpatient care services--to service-connected veterans for 
their service-connected conditions, and to veterans with 
service-connected disabilities rated at 50% or above, former 
prisoners of war, and World War I and Mexican Border veterans, 
for all conditions;
    2. Authorized VA, on a ``shall furnish'' basis, to provide 
hospital care services to all veterans with compensable 
service-connected disabilities for their service-connected 
disabilities;
    3. Authorized VA to provide, as permitted by resource 
availability, outpatient care services to compensable service-
connected veterans for non-service-connected conditions;
    4. Authorized VA to provide, as permitted by resource 
availability, hospital care and medical services to other 
``Category A'' veterans for any condition;
    5. Established an enrollment system for eligibility for VA 
care; and
    6. Authorized appropriations for VA health care not 
exceeding certain limits, as specified.
    The Committee voted to report the original bill favorably 
to the Senate.
    On September 28, 1996, the Senate took up H.R. 3118, the 
``Veterans' Health Care Eligibility Reform Act of 1996,'' which 
had been approved by the House on July 30, 1996. The Senate 
approved an amendment to H.R. 3118 in the nature of a 
substitute. Title I of the substitute incorporated provisions 
related to eligibility reform, the ``Veterans Health Care 
Eligibility Reform Act of 1996,'' which:
    1. Authorized VA, on a ``shall furnish'' basis (but only to 
the extent of, and as provided in advance by, appropriations), 
to furnish hospital care and medical services to all service-
connected veterans for their service-connected conditions;
    2. Authorized VA, on a ``shall furnish'' basis (but only to 
the extent of, and as provided in advance by, appropriations), 
to furnish hospital care and medical services to veterans with 
service-connected disabilities rated at 50% or above for all 
conditions;
    3. Authorized VA, on a ``may furnish'' basis, to furnish 
nursing home care to all veterans for service-connected 
disabilities, and to veterans with service-connected 
disabilities rated at 50% or greater for any disability;
    4. Authorized VA, on a ``shall furnish'' basis (but only to 
the extent of, and as provided in advance by, appropriations), 
to furnish hospital care and medical services to: veterans with 
service-connected disabilities rated at less than 50%; to 
veterans whose discharge from service was due to compensable 
disability incurred or aggravated in the line of duty; to 
veterans receiving (or entitled to receive) compensation for 
disabilities incurred while receiving medical care from VA; to 
former prisoners of war; to veterans of the Mexican border 
period or World War I; to veterans exposed to toxic substances, 
radiation, or environmental hazards; and to veterans unable to 
defray the expenses of care as determined under 38 U.S.C. 
Sec. 1722(a);
    5. Authorized VA, on a ``may furnish'' basis, to furnish 
nursing home care to the veterans listed immediately above;
    6. Authorized VA to provide hospital care, medical 
services, and nursing home care to other veterans to the extent 
resources and facilities are available, and subject to the 
requirement that the veteran make payments as specified in 38 
U.S.C. Sec. 1710(f) and (g);
    7. Established an enrollment system for eligibility for VA 
care;
    8. Authorized appropriations for VA health care not to 
exceed $17.25 billion for fiscal year 1997, and $17.9 billion 
for fiscal year 1998; and
    9. Required VA to establish a system to assess the 
implementation and operation of reformed eligibility standards.
    The Senate then passed H.R. 3118, as amended. On September 
28, 1996, the House agreed to the Senate amendments to H.R. 
3118, as amended. On October 9, 1996, the President signed H.R. 
3118 into law as Public Law 104-262.

3. Vietnam Veterans' Eligibility for Medical Care Services

    As outlined in section III.2.C., above, the Senate and the 
House approved S. 1711 on September 28, 1996, and the President 
signed S. 1711, the ``Veterans' Benefits Improvements Act of 
1996,'' into law as Public Law 104-275. Public Law 104-275 
included, among other things, a provision which amends the 
definition of ``Vietnam era'' for various purposes, including 
for purposes of eligibility for medical care based on service 
in Vietnam and presumed exposure to dioxin and other defoliants 
there. Under Public Law 104-275, a ``Vietnam era'' veteran is 
eligible for medical care based on such service if he or she 
served in the Republic of Vietnam between January 9, 1962, and 
May 7, 1975.

4. Health Care Benefits for Vietnam Veterans' Children Born with Spina 
        Bifida

    As outlined in section III.C.3., above, on July 31, 1996, 
Senator Daschle introduced S. 2008, a bill to provide the 
following benefits for children of Vietnam veterans who are 
born with spina bifida:
    1. A monthly monetary allowance, varying by degree of 
disability suffered by the child;
    2. Health care for disabilities associated with the 
person's spina bifida; and
    3. Vocational training, and job placement and post-job-
placement services.
    The provisions of S. 2008, accompanied by amendments to 38 
U.S.C. Sec. 1151, were enacted as part of Public Law 104-204, 
fiscal year 1997 appropriations for VA and other agencies.

5. Other Medical Care and Medical Administration Matters

    On May 13, 1996, Chairman Simpson introduced S. 1748, at 
VA's request. S. 1748 would have facilitated the reorganization 
of the Veterans Health Administration's headquarters office by 
eliminating statutory mandates that certain offices be created, 
and eliminating certain qualifications for positions mandated 
by statute.
    On May 13, 1996, Chairman Simpson introduced S. 1750, at 
VA's request. S. 1750 would have modified authorities under 
which physicians-in-training who work at VA health care 
facilities are paid and under which responsibility for 
compensation is shared by VA and an affiliated medical school.
    On May 13, 1996, Chairman Simpson introduced S. 1752, at 
VA's request. S. 1752 would have exempted full-time registered 
nurses, physician assistants, and expanded-function dental 
auxiliaries from restrictions on remunerated outside 
professional activities.
    On May 13, 1996, Chairman Simpson introduced S. 1753, at 
VA's request. S. 1753 would have authorized VA to suspend the 
requirements of special pay agreements under which physicians 
and dentists are compensated in order to allow physicians and 
dentists to enter residency training programs without penalty.
    On May 23, 1996, the Committee held a hearing on, among 
other things, S. 1748, S. 1750, S. 1752, and S. 1753. Testimony 
on these bills was received from the Chairman, Board of 
Veterans' Appeals, and other VA officials, various VSOs, and 
other organizations.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1359, as 
amended. As amended, the Committee Print incorporated 
provisions derived from S. 293, S. 403, S. 425, S. 548, S. 612, 
S. 644, S. 1359, S. 1750, S. 1752, S. 1753, and two original 
provisions. The two original provisions would have extended 
until December 31, 1998, VA's authority, under 38 U.S.C. 
Sec. 8111 note, to provide medical care on a reimbursed basis 
to persons entitled to care from the Department of Defense, and 
would have extended until December 31, 1998, VA's authority 
under 38 U.S.C. Sec. 1117 note, to evaluate the medical status 
of the spouses and children of Persian Gulf War veterans. The 
Committee voted to report S. 1359, as amended, favorably to the 
Senate. On September 26, 1996, S. 1359, as amended, was 
reported (S. Rept. 104-372).
    On September 28, 1996, the Senate took up H.R. 3118, the 
``Veterans' Health Care Eligibility Reform Act of 1996'' which 
had been approved by the House on July 30, 1996, and approved 
an amendment to H.R. 3118 in the nature of a substitute. Title 
III of the substitute incorporated provisions derived from S. 
1359, as reported (including provisions originally derived from 
S. 293, S. 403, S. 425, S. 548, S. 612, S. 644, S. 1359, S. 
1748, S. 1750, S. 1752, and S. 1753) by including provisions 
which:
    1. Expanded VA authority to enter into sharing agreements;
    2. Extended VA authority to provide health care services, 
on a reimbursable basis, to persons entitled to care from the 
Department of Defense;
    3. Modified the waiting period specified in 38 U.S.C. 
Sec. 510 which must expire before VA may implement certain 
reorganizations;
    4. Repealed restrictions on contracting specified in 38 
U.S.C. Sec. 8110(c);
    5. Required VA to adopt standards for the provision of 
mammography services;
    6. Modified standards for eligibility to receive 
readjustment counseling service benefits;
    7. Required VA to establish mental illness research, 
education, and clinical centers;
    8. Required VA to undertake a study on the desirability of 
establishing a hospice care program;
    9. Authorized VA to make per diem payments to assist States 
in providing adult day health care services in State homes;
    10. Reinstated expired authority for the establishment of 
research corporations at VA medical centers;
    11. Expanded the authority of the Veterans Health 
Administration to reorganize its headquarters office;
    12. Modified authorities under which physicians-in-training 
who work at VA health care facilities are paid;
    13. Authorized VA to suspend physicians' and dentists' 
special pay agreements to facilitate residency training;
    14. Repealed restrictions on health care professionals' 
remunerated outside employment; and
    15. Extended VA authority to evaluate the health status of 
the spouses and children of Persian Gulf War veterans.
    The substitute also incorporated provisions derived from 
House- passed legislation which:
    1. Required VA to identify and report annually on 
deficiencies in VA facilities relating to the privacy concerns 
of women patients, and VA plans to resolve these concerns;
    2. Required VA to assess and report on care provided to 
women veterans;
    3. Required VA to establish a Committee on Care of 
Chronically Mentally Ill Veterans; and
    4. Required VA to report on health care needs of veterans 
in East Central Florida.
    The Senate then passed H.R. 3118, as amended. On September 
28, 1996, the House agreed to the Senate amendments to H.R. 
3118. On October 9, 1996, the President signed H.R. 3118 into 
law as Public Law 104-262.

6. Construction Authorization and Property Management

    On April 15, 1996, the Majority Leader of the Senate, 
Senator Trent Lott, introduced S. 1669, a bill to rename the VA 
medical center in Jackson, Mississippi, the ``G. V. (Sonny) 
Montgomery Department of Veterans Affairs Medical Center.''
    On May 13, 1996, Chairman Simpson introduced S. 1749, at 
VA's request. S. 1749 would have modified certain statutes 
relating to construction management by deleting statutory 
references to ``working drawings'' and ``preliminary plans'' 
and substituting the words ``construction documents'' and 
``design development'' respectively.
    As outlined in section II.B., above, on April 24, 1996, the 
Committee held a hearing on VA's proposed budget, including 
construction priorities, for fiscal year 1997. In addition, the 
Committee's hearings on March 3, 1996, and May 8, 1996, 
relating to eligibility reform, focused extensively on how 
modified standards for eligibility for VA health care services 
might affect VA construction planning. Finally, the Committee's 
hearing on May 23, 1996, included within its agenda S. 1749.
    As outlined in section V.C.1., above, on January 5, 1996, 
the Senate took up S. 991, approved an amendment in the nature 
of a substitute, then substituted S. 991, as amended, into H.R. 
2353 and passed H.R. 2353 by voice vote. On January 25, 1996, 
the House amended H.R. 2353, as amended by the Senate on 
January 5, 1996. Among the amendments added by the House was an 
amendment that (1) authorized VA's Audie L. Murphy Memorial 
Hospital in San Antonio, Texas, to enter into a contract with 
the local electric utility to allow the construction of a power 
plant on hospital property; (2) authorized VA capital 
contributions for construction; and (3) authorized the purchase 
of power by VA under contract not to exceed the term of 35 
years. On January 30, 1996, the Senate agreed to the House 
amendments to H.R. 2353, as amended. On February 13, 1996, the 
President signed H.R. 2353, as amended, into law as Public Law 
104-110.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, an original bill to authorize 
certain inpatient and outpatient facility construction, certain 
outpatient facility leases, and one parking facility lease. The 
original bill also incorporated language derived from S. 1669 
and S. 1749 and, in addition, incorporated original language 
authorizing the City of Cheyenne, Wyoming, to transfer land 
previously owned by VA, notwithstanding a covenant restricting 
its resale. The Committee voted to report the original bill 
favorably to the Senate.
    On September 10, 1996, S. 1669 was discharged from the 
Committee, and passed by the Senate by unanimous consent. On 
September 11, 1996, S. 1669 was called up by the House and 
approved, clearing the measure for the President. On September 
24, 1996, S. 1669 was signed into law by the President as 
Public Law 104-202.
    On September 28, 1996, the Senate took up H.R. 3118, the 
``Veterans' Health Care Eligibility Reform Act of 1996,'' which 
had been approved by the House on July 30, 1996, and approved 
an amendment to H.R. 3118 in the nature of a substitute. Title 
II of the substitute incorporated provisions related to 
construction and property management, including:
    1. The authorization of specified major medical facility 
construction and seismic correction projects;
    2. The authorization of certain environmental improvement 
projects;
    3. The authorization of major medical facility leases;
    4. Modifications to requirements imposed on VA with respect 
to strategic planning, prospectus preparation, and advance 
planning spending, and a modification to the definition of 
construction projects which require prior authorization; and
    5. Provisions derived from S. 1749 relating to construction 
documentation.
    In addition, Title III of the substitute included 
provisions derived from H.R. 3118, approved by the House on 
July 30, 1996, which renamed the VA medical center in Johnson 
City, Tennessee, the ``James H. Quillen Department of Veterans 
Affairs Medical Center''.
    Title III of the substitute also included a provision 
derived from the Committee-approved original bill authorizing 
the City of Cheyenne, Wyoming, to transfer land previously 
owned by VA, notwithstanding a covenant restricting its sale, 
and a similar provision authorizing the City of Milwaukee, 
Wisconsin, to transfer land previously owned by VA, 
notwithstanding a covenant restricting its sale. The Senate 
then passed H.R. 3118, as amended. On September 28, 1996, the 
House agreed to the Senate amendments to H.R. 3118. On October 
9, 1996, the President signed H.R. 3118 into law as Public Law 
104-262.

VI. Readjustment, Educational Assistance, and Vocational Rehabilitation 
                                Benefits

                              A. OVERVIEW

    VA readjustment benefits consist of various types of 
assistance for eligible veterans, dependents, and survivors. 
The main purposes of such assistance are to help the veteran 
readjust to civilian life in a productive capacity, to 
compensate for the loss of educational or vocational 
opportunities during the veteran's period of service, to 
provide incentives for military service, and to provide 
vocational rehabilitation opportunities to those whose ability 
to obtain employment has been impaired as a result of service-
connected disability.
    Vocational rehabilitation opportunities are provided under 
chapter 31 of title 38, United States Code, to service-
connected disabled veterans. Educational assistance is also 
provided by VA, under chapter 35 of title 38, to dependents of 
those veterans having permanent and total service-connected 
disabilities, and to the survivors of veterans whose deaths 
were service-connected. Such assistance is intended to 
compensate for service-connected impairment of the veteran's 
ability to bear the cost of education for his or her family 
members and, in the case of the veteran's death, to assist the 
surviving spouse in attaining economic self-sufficiency.
    Under chapter 30 of title 38, educational assistance is 
provided to members of the All-Volunteer Force who first 
entered active duty after June 30, 1985, and did not choose to 
decline to participate in this program. The rate of basic pay 
of those who participate in this program, commonly referred to 
as the Montgomery GI Bill, is reduced by $100 for each of the 
first 12 months of the service member's active-duty service. 
Post-Vietnam-era veterans (those who entered the service after 
December 31, 1986, and are otherwise eligible) are entitled to 
participate in the Veterans Education Assistance Program (VEAP) 
specified in chapter 32 of title 38. Under VEAP, participants 
contribute up to $2,300 to an education account, and these 
contributions are matched by the Department of Defense on a 
two-for-one basis when the veteran enrolls in an approved 
course of education. Until its expiration on December 31, 1989, 
educational assistance was provided under chapter 34 of title 
38 to eligible Vietnam-era veterans, and to other veterans and 
service members who served between February 1, 1955 and 
December 31, 1976, and who were otherwise eligible. Finally, VA 
administers a program for the educational assistance of members 
of the selected reserve under chapter 106 of title 10. That 
program is funded by the Departments of Defense and 
Transportation.
    In fiscal year 1996, approximately 280,520 All-Volunteer 
Force service members and veterans received benefits under 
chapter 30; 86,196 reservists received benefits under chapter 
106 of title 10; 51,721 service-connected disabled veterans 
enrolled in rehabilitation under chapter 31; 40,654 spouses, 
surviving spouses, and children received benefits under chapter 
35; and 12,092 post-Vietnam-era veterans and 1,910 service 
members participated in training under chapter 32.

                            B. FIRST SESSION

1. Oversight

    On June 8, 1995, the Committee held an oversight hearing 
on, among other things, a Court of Veterans Appeals ruling, 
Davenport v. Brown, 7 Vet. App. 476 (1995). Davenport held that 
persons who have a service-connected disability are, under the 
terms of statute, eligible for vocational rehabilitation 
benefits even if there is no nexus between the service-
connected disability and the veteran's employment handicap. 
Prior to the Davenport ruling, VA had required, by regulation, 
that there be a causal link between a veteran's service-
connected disability and the employment handicap to be overcome 
through the veteran's participation in the vocational 
rehabilitation program. Testimony was received from VA's 
General Counsel, accompanied by other VA officials.

2. Proposed Legislation

    On October 19, 1995, Chairman Simpson introduced S. 1345, 
the proposed ``Department of Veterans Affairs Improvement and 
Reinvention Act of 1995,'' at VA's request. Title II of S. 1345 
contained two provisions relating to education programs. The 
first would have authorized VA to recognize the validity of 
electronic signatures on documents submitted to VA by 
claimants, accreditors, and institutions. The second would have 
authorized VA to make educational assistance payments by 
electronic fund transfers.
    No action was taken on these measures during the 104th 
Congress.

                           C. SECOND SESSION

1. Vocational Rehabilitation Program

    Other than S. 2008 and S. 2152, relating to benefits to 
children of Vietnam veterans stricken with spina bifida, there 
were no bills introduced in the Senate during the 104th 
Congress pertaining directly to vocational rehabilitation 
benefits. However, as discussed above, the Committee voted on 
July 24, 1996, to report S. 1711, as amended, favorably to the 
Senate, and on September 24, 1996, S. 1711 was reported (S. 
Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute incorporated, among other things, a provision 
derived from H.R. 3674, as passed by the House on July 16, 
1996. The H.R. 3674-derived provision would have restored the 
requirement, previously in force by regulation but declared 
invalid by Davenport v. Brown, supra, that, as a condition to 
receipt of vocational rehabilitation benefits, there be a 
causal link between a veteran's service-connected disability 
and his or her employment handicap. The Senate then passed S. 
1711, as amended. On September 28, 1996, the House passed S. 
1711, and on October 9, 1996, the President signed S. 1711, the 
``Veterans' Benefits Improvements Act of 1996,'' into law as 
Public Law 104-275.

2. Educational Assistance Benefits

    Other than the two provisions of S. 1345 relating to 
electronic signatures and electronic fund transfers, there were 
no bills introduced in the Senate during the 104th Congress 
pertaining directly to educational assistance benefits. 
However, as discussed above, the Committee voted on July 24, 
1996, to report S. 1711 favorably to the Senate, as amended. As 
amended, S. 1711 included, among other things, an original 
provision extending from September 30, 1996 until December 31, 
1998, a pilot program authorizing VA to treat State-approved 
alternative teacher certification programs as educational 
institutions for purposes of a participant's eligibility for 
educational assistance benefits. On September 24, 1996, S. 1711 
was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute incorporated, among other things, a number of 
provisions relating to educational assistance benefits derived 
from H.R. 3673 and H.R. 3674, as passed by the House on July 
16, 1996. The provision in S. 1711, as reported, extending for 
two years VA's authority to treat State-approved alternative 
teacher certification programs as educational institutions 
would have been made permanent by H.R. 3674. Provisions derived 
from H.R. 3673 which were incorporated into the substitute 
amendment to S. 1711:
    1. Removed a restriction to receipt of educational 
assistance which had specified that, even with respect to 
degree-granting institutions and their branches, benefits could 
only be paid for a veteran's participation in a course of study 
after the institution/branch and course had been in operation 
for two years;
    2. Authorized VA to approve educational assistance benefits 
to veterans taking courses offered on or through military bases 
under contract with DOD;
    3. Clarified the requirements under which State Approving 
Agencies approve courses of study;
    4. Eliminated the requirement that, as a condition to 
receipt of educational assistance benefits for participation in 
open circuit television instruction, the veteran be 
concurrently enrolled in an in-residence course of instruction; 
and
    5. Authorized veterans enrolled in cooperative training 
programs--in-residence class work combined with work experience 
at a job site--to receive full monthly educational benefits 
(rather than 80 per cent of full benefits, as previously 
specified).
    In addition to the alterative teaching certification 
provision derived from H.R. 3674 discussed above, H.R. 3674-
derived provisions incorporated into the substitute amendment 
to S. 1711:
    1. Authorized service members who had contributed and had 
funds ``on account'' under VEAP to transfer to participation in 
the ``Montgomery GI Bill;'' and
    2. Authorized certain current and former active duty 
members of the Army and Air National Guard who had served 
between June 30, 1985, and November 29, 1989, who were not 
eligible for any educational assistance benefits, to 
participate in the ``Montgomery GI Bill.''
    The Senate then passed S. 1711, as amended. On September 
28, 1996, the House passed S. 1711, and on October 9, 1996, the 
President signed S. 1711, the ``Veterans' Benefits Improvements 
Act of 1996,'' into law as Public Law 104-275.

3. Administration of Educational Assistance Benefits Programs

    There were no bills introduced in the Senate during the 
104th Congress pertaining to the administration of educational 
assistance benefits. However, the Committee voted on July 24, 
1996, to report S. 1711, as amended, favorably to the Senate, 
and on September 24, 1996, S. 1711 was reported (S. Rept. 104-
371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute incorporated, among other things, a provision 
derived from H.R. 3673 which delayed until January 1, 1998, 
implementation of a VA proposal to move the offices of VA's 
Education Service from Washington, D.C. to St. Louis, Missouri. 
The Senate then passed S. 1711, as amended. On September 28, 
1996, the House passed S. 1711, and on October 9, 1996, the 
President signed S. 1711, the ``Veterans' Benefits Improvements 
Act of 1996,'' into law as Public Law 104-275.

4. Vocational Training and Job Placement Benefits for Vietnam Veterans' 
        Children Born with Spina Bifida

    As outlined in section III.C.3., above, on July 31, 1996, 
Senator Daschle introduced S. 2008, a bill to provide the 
following benefits for children of Vietnam veterans who are 
born with spina bifida:
    1. A monthly monetary allowance, varying by degree of 
disability suffered by the child;
    2. Health care for disabilities associated with the 
person's spina bifida; and
    3. Vocational training, and job placement and post-job-
placement services.
    The provisions of S. 2008, accompanied by amendments to 38 
U.S.C. Sec. 1151, were enacted as part of Public Law 104-204, 
fiscal year 1997 appropriations for VA and other agencies.

5. Commission on Service Members and Veterans Transition Assistance

    On April 29, 1996, Senate Majority Leader Robert Dole 
introduced S. 1711, a bill to establish a 12-member Commission 
on Service Members and Veterans Transition Assistance. S. 1711 
would have required the Commission to review the effectiveness 
and appropriateness of veterans' transition and assistance 
programs, and to make recommendations to Congress on ways to 
improve the programs and ensure their continued utility.
    On May 23, 1996, the Committee held a hearing on S. 1711 
and other pending legislation, and received testimony from VA 
and various veterans service organizations on S. 1711.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711. The 
Committee Print contained the provisions of S. 1711, with 
modifications, and also contained original provisions and 
provisions derived from S. 281, S. 749, S. 994, S. 995, S. 
1342, S. 1751, and Title III of H.R. 2289, passed by the House 
on December 12, 1995. The Committee voted to report S. 1711, as 
amended, favorably to the Senate. On September 24, 1996, S. 
1711, as amended, was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute, among other things, modified provisions of S. 1711, 
as reported, relating to the Commission on Service Members and 
Veterans Transition Assistance to clarify the duties of the 
Commission and to make other perfecting amendments. The Senate 
then passed S. 1711, as amended. On September 28, 1996, the 
House passed S. 1711. On October 9, 1996, the President signed 
S. 1711, the ``Veterans' Benefits Improvements Act of 1996,'' 
into law as Public Law 104-275.

                            VII. Employment

                              A. OVERVIEW

    The Department of Labor, Veterans' Employment and Training 
Service (VETS), has primary responsibility for the 
implementation of statutory provisions relating to veterans' 
employment. Section 4102 of title 38 states Congressional 
intent with respect to veterans' employment programs as 
follows: ``The Congress declares as its intent that there shall 
be an effective (1) job and job training counseling program, 
(2) employment placement service program, and (3) job training 
placement service program for eligible veterans and eligible 
persons. . . .''
    Chapter 42 of title 38 provides for the employment and 
training of disabled and Vietnam-era veterans. Section 4212 
requires that certain Federal contractors and subcontractors 
take affirmative action to employ and advance in employment 
qualified special disabled veterans and veterans of the Vietnam 
era. Section 4214 provides for Veterans' Readjustment 
Appointments (VRAs) within the Federal Government to assist 
Vietnam veterans, service-disabled Vietnam-era veterans, and 
veterans who served after the Vietnam era, by (1) making it 
possible for them to be hired into Federal service 
noncompetitively, and (2) helping them develop additional 
skills through a program combining education and training with 
a regular career appointment.
    Chapter 43 of title 38 provides reemployment protection to 
certain veterans and reservists. Chapter 43 was recodified in 
1994 as the ``Uniformed Services Employment and Reemployment 
Rights Act of 1994'' (USERRA), Public Law 103-353.
    The Office of Personnel Management is responsible for 
implementing policies to promote maximum employment and job 
advancement opportunities within Federal service for qualified 
disabled and Vietnam era veterans.

                            B. FIRST SESSION

    There were no bills introduced in the Senate, during the 
104th Congress, relating directly to employment programs. 
However, Title II of H.R. 2289, which was approved by the House 
on December 12, 1995, and referred to the Committee on December 
13, 1995, contained proposed provisions relating to the 
organization of VETS, and Title III of H.R. 2289 contained 
proposed technical and clarifying amendments to USERRA. No 
action was taken on the bill during the First Session.

                           C. SECOND SESSION

1. USERRA Amendments and VETS Organizational Issues

    On May 23, 1996, the Committee held a hearing on pending 
legislation, including the provisions of Titles II and III of 
H.R. 2289. The Committee received testimony from veterans 
service organizations on H.R. 2289 at the May 23 hearing. On 
July 24, 1996, the Committee met in open session to consider, 
among other things, a Committee Print of S. 1711 (discussed in 
section VI.C.5., above), which incorporated various provisions, 
including Title III of H.R. 2289 relating to USERRA, as 
amended. The Committee voted to report S. 1711, as amended, 
favorably to the Senate. On September 24, 1996, S. 1711 was 
reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to technical and clarifying amendments to USERRA, with 
amendments of a perfecting nature. Those provisions:
    1. Clarified the character of service that is a necessary 
prerequisite to the applicability of rights specified in 
USERRA;
    2. Clarified the definition of ``uniformed services'';
    3. Clarified the burden of proof applicable to alleged acts 
of reprisal and discrimination;
    4. Clarified that time away from employment subject to the 
protections of USERRA includes preparation and travel time 
prior to service;
    5. Clarified the status of persons ordered to, or retained 
on, active duty because of a war or a national emergency for 
purposes of USERRA's 5-year cumulative length of absence 
limitation;
    6. Clarified an employer's duty to rehire a person who 
occupied a position which was not for a brief, nonrecurrent 
period of time;
    7. Clarified that reemployed persons who are not qualified 
to reassume their prior positions, or are not qualified to 
assume the positions they would have occupied had their 
employment not been interrupted because of reasons other than 
for disability incurred while in service, shall be placed in 
positions that most nearly approximate such positions;
    8. Clarified that employers may not require a person whose 
employment is interrupted by service to use vacation, annual, 
or similar leave during such service;
    9. Clarified that the maximum time allowed for persons to 
make employee contributions to pension benefit plans shall be 5 
years;
    10. Made technical corrections relating to enforcement of 
employment or reemployment rights and the duty of the 
Department of Labor to attempt to resolve complaints of USERRA 
violations;
    11. Made a technical correction relating to notification 
requirements with respect to unresolved complaints against a 
Federal executive agency;
    12. Made technical corrections relating to enforcement of 
rights against a State or private employer, to remove 
superfluous language, and to correct an erroneous cross 
reference;
    13. Made a technical correction relating to referrals of 
complaints to the Office of Special Counsel;
    14. Made technical corrections to clarify enforcement 
rights against Federal agencies, to correct an erroneous cross 
reference, and to make other technical corrections;
    15. Clarified that the Department of Labor is not required 
to provide information to Federal employees concerning 
alternative Federal employment;
    16. Clarified that for purposes of enforcing USERRA, the 
Department of Labor shall have subpoena authority over persons 
as well as documents;
    17. Clarified transition rules; and
    18. Clarified certain effective dates.
    The substitute also incorporated certain provisions of 
Title II of H.R. 2289, relating to VETS organizational issues, 
which were not in the Committee-reported bill. The provisions 
included in the substitute authorized an expansion in the 
duties of certain clerical employees, and authorized a pilot 
program within VETS to test new methods of service delivery to 
veterans. The Senate then passed S. 1711, as amended. On 
September 28, 1996, the House passed S. 1711, and on October 9, 
1996, the President signed S. 1711, the ``Veterans' Benefits 
Improvements Act of 1996,'' into law as Public Law 104-275.

2. Commission on Service Members and Veterans Transition Assistance

    As outlined above, S. 1711 was introduced by Senator Dole 
on April 29, 1996, to establish a Commission on Service Members 
and Veterans Transition Assistance to review transition and 
assistance programs--including employment programs--to assist 
members of the Armed Services in adjusting to civilian life 
upon separation. S. 1711, as amended, was enacted into law as 
the ``Veterans' Benefits Improvements Act of 1996,'' Public Law 
104-275.

                    VIII. Home Loan Guaranty Program

                              A. OVERVIEW

    The VA Home Loan Guaranty Program is designed to encourage 
and facilitate the extension of favorable credit terms by 
private lenders to veterans, and to the surviving spouses of 
those who die from service-connected causes, for the purchase, 
construction, or improvement of homes. The program operates by 
substituting the Federal Government's guaranty of a portion of 
the loan for down payments required under conventional 
mortgages. Eligible veterans are thereby able to purchase a 
home even if they lack down payment funds.
    Most veterans pay a fee to VA for the guaranty. Service-
disabled veterans and certain surviving spouses are exempt from 
paying the fee. For loans of up to $45,000, VA guarantees up to 
50 percent of the loan amount; for loans between $45,000 and 
$144,000, VA guarantees up to 40 percent, with a maximum 
guaranty of $36,000; and for loans of more than $144,000, VA 
guarantees 25 percent, with a maximum guaranty of $50,750.
    When a lender forecloses on a VA-guaranteed loan, VA uses a 
formula, known as the ``no-bid'' formula, to determine whether 
it would be to VA's advantage to pay the guaranty amount or, 
alternatively, to acquire, then resell, the property. When VA 
resells properties it acquires through foreclosure, it 
typically finances purchasers through arrangements known as 
``vendee loans.'' Such loans are either retained as VA 
``portfolio loans,'' or are pooled and sold as mortgage-backed 
securities, known as real estate mortgage investment conduits 
or ``REMICs.'
    Under a 5-year pilot program established by Public Law 102-
547, VA makes direct loans to Native American veterans to 
finance the purchase or construction of housing on native 
lands. VA makes direct loans for such purchases since 
commercial lenders cannot take title to trust lands and so will 
not finance such purchases, even with a VA guarantee. Like 
vendee loans which are not sold as REMICs, such loans are held 
by VA as portfolio loans.

                            B. FIRST SESSION

1. Legislation to Extend Expiring Legal Authorities

    On June 29, 1995, Chairman Simpson introduced, at VA's 
request, S. 991. S. 991 contained no provisions relating to the 
home loan guaranty program.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, a Committee Print of S. 991, as 
amended. In amended form, S. 991 contained provisions which 
would have extended until September 30, 1997, VA's authority 
under 38 U.S.C. Sec. 3707(a) to guarantee, on a demonstration 
project basis, adjustable rate home mortgage loans. The 
Committee voted to report S. 991, as amended, favorably to the 
Senate without written report. On December 12, 1995, S. 991 was 
reported with an amendment in the nature of a substitute and an 
amendment to the title. There was no further action on this 
legislation during the first session.

2. Other Legislation

    On October 19, 1995, Committee member Akaka introduced S. 
1342, a bill to authorize VA to make direct loans to refinance 
direct loans previously made to veterans to finance home 
purchases or construction on Native lands under the Native 
American Veterans Direct Loan Program. No action was taken on 
the bill during the First Session.
    On October 19, 1995, Chairman Simpson introduced S. 1345, 
the proposed ``Department of Veterans Affairs Improvement and 
Reinvention Act of 1995,'' at VA's request. Title II of S. 1345 
contained three provisions relating to the home loan guaranty 
program. The first would have terminated VA's program of 
guaranteeing loans for the purchase of manufactured homes. The 
second would have modified statutory VA loan fee schedules to 
delete references to fees for loans for manufactured housing. 
The third would have authorized VA to contract, for a term of 
15 years, with a private firm to manage its portfolio loans. No 
action was taken on these measures during the 104th Congress.

                           C. SECOND SESSION

1. Legislation to Extend Expiring Legal Authorities

    On January 5, 1996, the Senate took up S. 991 and approved 
an amendment in the nature of a substitute. The substitute 
excised provisions which would have extended VA's authority to 
guarantee adjustable rate home mortgage loans. The substitute 
also added provisions to: (1) extend until December 31, 1997, 
VA's authority under 38 U.S.C. Sec. 3703(c)(4)(A) to guarantee 
home mortgage loans having negotiated interest rates; (2) 
extend until December 31, 1997, VA's authority under 38 U.S.C. 
Sec. 3710(d)(7) to guarantee energy efficiency mortgages; (3) 
extend until December 31, 1996, VA's enhanced loan asset sale 
authority as specified in 38 U.S.C. Sec. 3720(h)(2); and (4) 
extend until December 31, 1997, the authority under 38 U.S.C. 
Sec. 3731(f)(3) for lenders of automatically guaranteed loans 
to review appraisals. The Senate then took up H.R. 2353 and 
substituted the text of S. 991, as amended, and passed H.R. 
2353 by voice vote. On January 25, 1996, the House amended H.R. 
2353, as amended by the Senate, to provide for, among other 
things, a permanent authorization for VA to guarantee home 
mortgage loans having negotiated interest rates. The House's 
January 25 amendments also required VA to report on: loans made 
to veterans whose only qualifying service was in the Selected 
Reserves; interest rates and ``points'' charged by lenders 
under VA's authority to guarantee home mortgage loans having 
negotiated interest rates; lenders'' determinations of 
reasonable value under 38 U.S.C. Sec. 3731(f); energy 
efficiency mortgages guaranteed by VA; and direct loans made to 
finance home purchases or construction on Native American 
lands. On January 30, 1996, the Senate agreed to the House 
amendments to H.R. 2353, as amended. On February 13, 1996, the 
President signed H.R. 2353, as amended, into law as Public Law 
104-110.

2. Other Legislation

    On May 23, 1996, the Committee held a hearing on pending 
legislation, including S. 1342. The Committee received 
testimony from VA and various veterans service organizations on 
S. 1342 at the May 23 hearing. On July 24, 1996, the Committee 
met in open session to consider, among other things, a 
Committee Print of S. 1711 (discussed in section VI.C.5., 
above), which incorporated various provisions, including S. 
1342. The Committee voted to report S. 1711, as amended, 
favorably to the Senate. On September 24, 1996, S. 1711 was 
reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained the provisions of S. 1342 contained in S. 
1711, as reported. It also added provisions derived from H.R. 
3673, which passed the House on July 16, 1996, to extend 
through December 31, 1997, VA's authority under 38 U.S.C. 
Sec. 3720(h) to guarantee the timely payment of principal and 
interest to purchasers of REMICs in order to enhance their 
value in the securities markets. The Senate then passed S. 
1711, as amended. On September 28, 1996, the House passed S. 
1711, and on October 9, 1996, the President signed S. 1711, the 
``Veterans' Benefits Improvements Act of 1996,'' into law as 
Public Law 104-275.
    On September 5, 1996, Senator Warner introduced S. 2057, a 
bill to amend title 38, United States Code, to make permanent 
the authority of VA to guarantee adjustable rate mortgage 
loans. As noted above, S. 991, as approved by the Committee on 
September 20, 1995, contained a provisions which would have 
extended that authority until September 30, 1997. However, 
Public Law 104-110, by which provisions contained in S. 991 
were enacted, did not contain the Committee-approved extension. 
No action was taken on S. 2057 during the Second Session.

              IX. Claims Adjudication and Judicial Review

                              A. OVERVIEW

    In Public Law 100-687, Congress established the United 
States Court of Veterans Appeals (CVA), and provided for 
judicial review of denials of claims for veterans' benefits 
through the Court. The Court has exclusive jurisdiction to 
review final decisions of the Board of Veterans' Appeals (BVA) 
in cases in which a notice of disagreement was filed on or 
after November 18, 1988, the date of enactment of Public Law 
100-687. In cases of individual claims for benefits, the 
Court's review is based on the record of proceedings before the 
BVA, and only a person adversely affected by the BVA decision--
but not the Secretary--may appeal to the Court. Decisions of 
the Court are subject to appellate review in the United States 
Court of Appeals for the Federal Circuit, and decisions of the 
United States Court of Appeals for the Federal Circuit are 
subject to appellate review in the United States Supreme Court.
    The decisions of CVA have had a significant impact on VA's 
adjudication system, including the operation of the BVA.

                            B. FIRST SESSION

    On June 8, 1995, the Committee held an oversight hearing on 
two significant judicial rulings, Gardner v. Brown, supra, and 
Davenport v. Brown, supra. In Gardner, the U.S. Supreme Court 
upheld a CVA ruling, affirmed by the U.S. Court of Appeals for 
the Federal Circuit, that persons who suffer negative medical 
outcomes while being treated in VA medical facilities are, 
under the terms of statute, entitled to VA compensation without 
a showing of VA fault. In Davenport, CVA held that persons who 
have a service-connected disability are, under the terms of 
statute, eligible for vocational rehabilitation benefits even 
if there is no nexus between the service-connected disability 
and the veteran's employment handicap. Both cases hinged on 
issues of statutory construction; in both cases, the Courts 
affirmed that claimants who meet benefits eligibility standards 
set forth in statute are entitled to benefits, and that VA has 
no authority to restrict such standards by regulations which 
are narrower than statute. Concomitantly, the Courts held that 
adjudication decisions that rely on VA regulation will be 
overturned if the regulation is found to be legally faulty.
    Testimony was received at the June 8, 1995, hearing from 
VA's General Counsel and other VA officials. The Committee 
requested the General Counsel's views on the merits of the 
Gardner and Davenport decisions, on whether VA recommended that 
eligibility restrictions previously imposed by VA regulation 
should be codified by statute, on the effect that Gardner and 
Davenport were having on adjudications of eligibility, and on 
whether VA had undertaken a review to determine whether other 
VA regulations governing eligibility for benefits would likely 
be challenged under the same legal theory advanced in Gardner 
and Davenport.

                           C. SECOND SESSION

    On May 13, 1996, Chairman Simpson introduced S. 1751, at 
VA's request. S. 1751 would have revised procedures for 
providing claimants and their representatives copies of BVA 
decisions. The bill also would have modified statutes 
pertaining to the rights of claimants to appoint VSOs as their 
representatives in claims before VA.
    On May 23, 1996, the Committee held a hearing on pending 
legislation, including S. 1751. The Committee received 
testimony on S. 1751 from VA, various veterans service 
organizations, and other interested organizations.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in section VI.C.5., above) which incorporated 
various provisions, including S. 1751. Those provisions:
    1. Authorized BVA to send decisions to claimants' 
representatives by any means (including hand-delivery) 
reasonably calculated to provide adecision within the time 
frame a decision sent by first-class mail would be expected to be 
delivered; and
    2. Authorized BVA, in cases where a claimant has designated 
a service officer employed by a VSO as his or her 
representative, to treat a claimant's power of attorney as an 
appointment of the entire VSO (rather than an individual 
service officer only) unless a contrary intent is expressed by 
the claimant, and to thereby effect service of process by 
notifications to the VSO rather than to the individual service 
officer.
    The Committee voted to report S. 1711, as amended, 
favorably to the Senate. On September 24, 1996, S. 1711 was 
reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to BVA procedures. The substitute also incorporated 
provisions derived from H.R. 3673 and H.R. 3674, as passed the 
House on July 16, 1996. As amended, those provisions:
    1. Authorized the Veterans Benefits Administration to use 
contract physicians (rather than VA physicians, as otherwise 
required) for disability examinations at up to 10 VBA regional 
offices;
    2. Authorized VA, in cases where a claimant dies while his 
or her claim is being adjudicated, to pay 2 years' (rather than 
1 year's) accrued benefits to the claimant's survivors if the 
claim is ultimately approved; and
    3. Authorized an extension in the deadline for the 
Veterans' Claims Adjudication Commission, established by 
section 402 of the Veterans' Benefits Improvements Act of 1994, 
Public Law 103-446, to issue its final report concerning VA 
procedures for adjudicating and reviewing VA benefits claims.
    The Senate then passed S. 1711, as amended. On September 
28, 1996, the House passed S. 1711, and on October 9, 1996, the 
President signed S. 1711, the ``Veterans' Benefits Improvements 
Act of 1996,'' into law as Public Law 104-275.

                X. Burial Benefits and Memorial Affairs

                              A. OVERVIEW

    VA operates and maintains the National Cemetery System and 
provides a range of burial benefits for eligible veterans. 
Among the benefits offered, in addition to burial in a national 
cemetery, are burial allowances to help defray burial and 
funeral expenses; plot allowances; flags for draping over the 
caskets of eligible deceased veterans; and headstones or 
markers for the graves of veterans and their eligible 
dependents.
    The National Cemetery System is comprised of 115 cemeteries 
(not including Arlington National Cemetery, which is maintained 
by the U.S. Army) and 34 soldiers lots, plots, and monument 
sites. Veterans and certain dependents of veterans may be 
interred in such cemeteries. In addition, VA operates a program 
of grants to States to assist in the construction of State 
veterans cemeteries.
    The American Battle Monuments Commission (ABMC) maintains 
overseas monuments for service members who died in foreign 
conflicts.

                            B. FIRST SESSION

    On June 29, 1995, Chairman Simpson introduced S. 994, at 
VA's request. S. 994 would have clarified the definition of 
``minor child'' for purposes of eligibility of a deceased 
veteran's minor child family members for burial with the 
veteran in a national cemetery, and included within that 
definition children up to age 23 if they had been students at 
the time of death. No action was taken on the bill during the 
First Session.

                           C. SECOND SESSION

    On May 23, 1996, the Committee held a hearing on pending 
legislation, including S. 994. The Committee received testimony 
on S. 994 from VA and various veterans service organizations.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in section VI.C.5., above), which incorporated 
various provisions, including S. 994. The Committee Print also 
incorporated an original provision authorizing VA to provide to 
veterans interred in the national cemeteries ``outer burial 
receptacles''--either grave liners or, at the option of the 
deceased veteran or his or her survivors, burial vaults--but 
only if the veteran or survivors paid the extra cost incurred 
by VA in securing a more expensive burial vault. The Committee 
voted to report S. 1711, as amended, favorably to the Senate. 
On September 24, 1996, S. 1711 was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to the definition of ``minor child'' and relating to 
outer burial receptacles. The substitute also incorporated 
provisions derived from H.R. 3673, passed by the House on July 
16, 1996, which (1) authorized VA to provide burial benefits, 
and transportation to the place of burial, for veterans who die 
in State veterans' homes; and (2) authorized ABMC to accept 
monetary donations for the maintenance of overseas memorials 
and required ABMC to adopt systems for reporting on, and 
accounting for, such donations. The Senate then passed S. 1711, 
as amended. On September 28, 1996, the House passed S. 1711, 
and on October 9, 1996, the President signed S. 1711, the 
``Veterans' Benefits Improvements Act of 1996,'' into law as 
Public Law 104-275.

                             XI. Insurance

                              A. OVERVIEW

    VA administers six life insurance programs, and supervises 
the administration of two additional programs, for the benefit 
of service members and veterans and their beneficiaries. Over 
4.9 million policies are in force having a total value of over 
$560 billion, making VA the Nation's fourth largest life 
insurer.

                            B. FIRST SESSION

    On June 29, 1995, Chairman Simpson introduced S. 996, the 
proposed ``Veterans' Insurance Reform Act of 1995,'' at VA's 
request. S. 996 would have:
    1. Changed the name of Servicemen's Group Life Insurance to 
Servicemembers' Group Life Insurance;
    2. Merged the Retired Reservists' Servicemembers' Group 
Life Insurance program into the Veterans' Group Life Insurance 
program;
    3. Extended Veterans' Group Life Insurance coverage to 
members of the Ready Reserve of a uniformed service who retire 
with less than 20 years of service;
    4. Permitted an insured to convert a Veterans' Group Life 
Insurance policy into an individual policy of life insurance 
with a commercial insurance company at any time; and
    5. Permitted an insured to convert a Servicemembers' Group 
Life Insurance policy to an individual policy of life insurance 
with a commercial company upon separation from service.
    No action was taken on the bill during the First Session.

                           C. SECOND SESSION

    On May 23, 1996, the Committee held a hearing on pending 
legislation, including S. 996. The Committee received testimony 
on S. 996 from VA and various VSOs.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in section VI.C.5., above), which incorporated 
various provisions, including S. 996. The Committee voted to 
report S. 1711, as amended, favorably to the Senate. On 
September 24, 1996, S. 1711 was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 996 but added a provision 
derived from H.R. 3373, passed by the House on May 21, 1996, 
requiring that service members be provided general information 
about life insurance options. The Senate then passed S. 1711, 
as amended. On September 28, 1996, the House passed S. 1711, 
and on October 9, 1996, the President signed S. 1711, the 
``Veterans' Benefits Improvements Act of 1996,'' into law as 
Public Law 104-275.

                         XII. Homeless Veterans

                              A. OVERVIEW

    VA and the Department of Labor administer several programs 
designed to assist homeless veterans, including outreach and 
contracting services, domiciliary care, work therapy, job 
training, and grants to community-based organizations that 
serve homeless veterans.

                            B. FIRST SESSION

    On June 29, 1995, Chairman Simpson introduced S. 991, at 
VA's request. Among other things, S. 991 would have:
    1. Extended until December 31, 1997, VA's authority under 
38 U.S.C. Sec. 3735(c) to enter into agreements for housing 
assistance services to homeless veterans;
    2. Extended until December 31, 1997, VA's authority under 
section 115(d) of the Veterans Benefits and Services Act of 
1988 (38 U.S.C. Sec. 1712 note) to secure community-based 
residential care for homeless chronically mentally ill 
veterans; and
    3. Extended until December 31, 1998 VA's authority under 
section 7(a) of Public Law 102-54 (38 U.S.C. Sec. 1718 note) to 
conduct a demonstration program for compensated work therapy 
and therapeutic transitional housing.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, a Committee Print of S. 991, as 
amended. In amended form, S. 991 contained provisions which 
would have:
    1. Extended until December 31, 1997, VA's authority under 
38 U.S.C. Sec. 3735(c) to enter into agreements for housing 
assistance services to homeless veterans;
    2. Extended until December 31, 1997, VA's authority under 
section 115(d) of the Veterans Benefits and Services Act of 
1988 (38 U.S.C. Sec. 1712 note) to secure community-based 
residential care for homeless chronically mentally ill 
veterans;
    3. Extended until December 31, 1997, VA's authority under 
section 7(a) of Public Law 102-54 (38 U.S.C. Sec. 1718 note) to 
conduct a demonstration program for compensated work therapy 
and therapeutic transitional housing; and
    4. Extended until September 30, 1997, VA's authority under 
sections 3(a) and 12 of the Homeless Veterans Comprehensive 
Service Programs Act of 1992 (38 U.S.C. Sec. 7721 note) to make 
grants for assistance in furnishing services and assistance to 
homeless veterans.
    The Committee voted to report S. 991, as amended, favorably 
to the Senate without written report. On December 12, 1995, S. 
991 was reported. There was no further action on this 
legislation during the First Session.

                           C. SECOND SESSION

    On January 5, 1996, the Senate took up S. 991 and approved 
an amendment in the nature of a substitute. The substitute 
contained all the extensions outlined above and added a 
provision to extend authority under section 741 of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. Sec. 11450) for 
the support of Homeless Veterans' Reintegration Projects, and 
to authorize appropriations of $10,000,000 for fiscal years 
1996 and 1997 respectively for the support of such programs. 
The Senate then took up H.R. 2353 and substituted S. 991, as 
amended, and passed H.R. 2353 by voice vote.
    On January 25, 1996, the House amended H.R. 2353, as 
amended by the Senate on January 5, 1996, to require VA reports 
on: (1) the potential consolidation of drug and alcohol 
treatment and rehabilitation programsauthorized under section 
38 U.S.C. Sec. 1720A; (2) the program for community-based residential 
care to homeless chronically mentally ill veterans under section 115 of 
the Veterans' Benefits and Services Act of 1988 (38 U.S.C. Sec. 1712 
note); and (3) the demonstration program for compensated work therapy 
and therapeutic transitional housing under section 7 of Public Law 102-
54 (38 U.S.C. Sec. 1718 note). The House amendment also authorized 
appropriations of $10,000,000 under the Stewart B. McKinney Homeless 
Assistance Act (42 U.S.C. Sec. 11450) for the support of Homeless 
Veterans' Reintegration Projects for fiscal year 1996 only. On January 
30, 1996, the Senate agreed to the House amendments to H.R. 2353, as 
amended. On February 13, 1996, the President signed H.R. 2353, as 
amended, into law as Public Law 104-110.
    On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in section VI.C.5., above). The Committee Print 
incorporated two original provisions relating to programs to 
assist homeless veterans: one extended until December 31, 1998, 
VA's authority under section 115(d) of the Veterans Benefits 
and Services Act of 1988 (38 U.S.C. Sec. 1712 note) to secure 
community-based residential care for homeless chronically 
mentally ill veterans; the other extended authority under 
section 741 of the Stewart B. McKinney Homeless Assistance Act 
(42 U.S.C. Sec. 11450) for the support of Homeless Veterans' 
Reintegration Projects, and authorized appropriations of 
$10,000,000 for fiscal years 1996 and 1997 respectively for the 
support of such programs. The Committee voted to report S. 
1711, as amended, favorably to the Senate. On September 24, 
1996, S. 1711 was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to programs to assist the homeless. The Senate then 
passed S. 1711, as amended. On September 28, 1996, the House 
passed S. 1711, and on October 9, 1996, the President signed S. 
1711, the ``Veterans' Benefits Improvements Act of 1996,'' into 
law as Public Law 104-275.

                          XIII. Miscellaneous

                            A. FIRST SESSION

    On January 31, 1995, Chairman Simpson introduced S.J. Res. 
26, a resolution to designate April 9, 1995, and April 9, 1996, 
as ``National Former Prisoner of War Recognition Day.'' The 
bill was referred to the Committee on the Judiciary. No further 
action was taken on this measure during the 104th Congress.
    On June 29, 1995, Chairman Simpson introduced S. 991, at 
VA's request. S. 991 contained provisions which would have 
extended until December 31, 1997, VA's authority under 38 
U.S.C. Sec. 8169 to enter into enhanced-use leases of real 
property.
    On September 20, 1995, the Committee met in open session to 
consider, among other things, a Committee Print of S. 991, as 
amended. In amended form, S. 991 contained provisions which 
would have extended until December 31, 1997, VA's authority to 
enter into enhanced-use leases. The Committee voted to report 
S. 991, as amended, favorably to the Senate without written 
report. On December 12, 1995, S. 991 was reported. There was no 
further action on this legislation during the First Session.
    On May 3, 1995, Senator Akaka introduced S. 749, a bill to 
revise authorities relating to VA's Centers for Minority 
Veterans and Women Veterans. S. 749 would have: defined the 
term ``minority''; authorized that Directors of the Centers for 
Minority Veterans and Women Veterans be career or non-career 
employees; and directed that the Center for Minority Veterans 
monitor minority-focused medical research. No action was taken 
on this legislation during the First Session.

                           B. SECOND SESSION

    On January 5, 1996, the Senate took up S. 991 and approved 
an amendment in the nature of a substitute. The substitute left 
unchanged the Committee-reported provision relating to 
enhanced-use leases of real property. The Senate then took up 
H.R. 2353 and substituted S. 991, as amended, and passed H.R. 
2353 by voice vote. On January 25, 1996, the House amended H.R. 
2353 to provide that, among other things, VA issue certain 
reports on its use of enhanced-use leasing authority. On 
January 30, 1996, the Senate agreed to the House amendments to 
H.R. 2353. On February 13, 1996, the President signed H.R. 
2353, as amended, into law as Public Law 104-110.
    On May 23, 1996, the Committee held a hearing on pending 
legislation, including S. 749. The Committee received testimony 
on S. 749 from VA and various veterans service organizations. 
On July 24, 1996, the Committee met in open session to 
consider, among other things, a Committee Print of S. 1711 
(discussed in section VI.C.5., above), which incorporated 
various provisions, including S. 749. The Committee voted to 
report S. 1711, as amended, favorably to the Senate. On 
September 24, 1996, S. 1711 was reported (S. Rept. 104-371).
    On September 28, 1996, the Senate took up S. 1711 and 
approved an amendment in the nature of a substitute. The 
substitute retained provisions of S. 1711, as reported, 
relating to VA's Centers for Minority Veterans and Women 
Veterans. The Senate then passed S. 1711, as amended. On 
September 28, 1996, the House passed S. 1711, and on October 9, 
1996, the President signed S. 1711, the ``Veterans' Benefits 
Improvements Act of 1996,'' into law as Public Law 104-275.

                                
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