[Senate Report 108-193]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 383
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-193

======================================================================



 
 VETERANS HEALTH CARE AUTHORITIES EXTENSION AND IMPROVEMENT ACT OF 2003

                                _______
                                

               November 10, 2003.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 1156]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), to which was referred the bill (S. 1156), to 
amend title 38, United States Code, to improve and enhance the 
provision of long-term health care for veterans by the 
Department of Veterans Affairs, to enhance and improve 
authorities relating to the administration of personnel of the 
Department of Veterans Affairs, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment in the nature of a committee substitute and an 
amendment to the title, and recommends that the bill, as 
amended, do pass.

                              Introduction

    On May 23, 2003, Committee Chairman Arlen Specter 
introduced S. 1156, the proposed ``Department of Veterans 
Affairs Long-Term Care and Personnel Authorities Enhancement 
Act of 2003.'' S. 1156, as introduced, would have extended VA's 
authority to provide non-institutional long-term care services 
to all enrolled veterans; modified and extended the requirement 
that VA provide institutional nursing care to certain disabled 
veterans; and authorized VA to enter into agreements with 
appropriate private sector health care institutions for the 
provision of long-term care services to veterans. In addition, 
S. 1156 would have authorized major medical facility 
construction projects; modified VA's authority to appoint 
certain health care professionals in the VA's Veterans Health 
Administration (hereinafter, ``VHA''); authorized the non-
competitive transfer of certain employees of VA's Veterans 
Canteen Service for employment within VA; and made permanent 
VA's authority to enter into contracts with private sector 
organizations for the provision of disability ratings medical 
examinations. Finally, the bill would have made retroactive the 
changes relating to the retirement annuities of certain part-
time health-care professionals made in Title 38, United States 
Code, by section 132 of Public Law 107-135.
    On March 6, 2003, Committee Member John D. Rockefeller IV 
introduced S. 548, a bill to improve mental health programs for 
veterans, and for other purposes.
    On March 13, 2003, Senator Rick Santorum and Chairman 
Specter introduced S. 615, a bill to name the VA outpatient 
clinic in Horsham, Pennsylvania, the ``Victor J. Saracini 
Department of Veterans Affairs Outpatient Clinic.''
    On May 23, 2003, Senator Richard Durbin introduced S. 1144, 
a bill to name the VA Medical Center at 820 South Damen Avenue, 
Chicago, Illinois, the ``Jesse Brown Department of Veterans 
Affairs Medical Center.'' Committee Members Rockefeller, Jim 
Bunning, and Patty Murray were later added as cosponsors.
    On June 9, 2003, Chairman Specter introduced, at the 
request of the Secretary of Veterans Affairs, S. 1213, a bill 
to amend Title 38, United States Code, to improve benefits 
afforded to Filipino veterans of World War II and survivors of 
such veterans, and for other purposes.
    On June 18, 2003, Committee Ranking Member Bob Graham 
introduced S. 1283, a bill to require advance notification to 
Congress regarding any action proposed to be taken by VA in 
connection with the VA Capital Asset Realignment for Enhanced 
Services (hereinafter, ``CARES'') initiative. Committee Members 
Rockefeller and Murray were later added as cosponsors.
    On June 19, 2003, Ranking Member Graham introduced S. 1289, 
a bill to name the VA Medical Center in Minneapolis, Minnesota, 
the ``Paul Wellstone Department of Veterans Affairs Medical 
Center.'' Committee Members Rockefeller, Murray, Zell Miller, 
and Ben Nelson were later added as cosponsors.
    On June 26, 2003, Committee Member Kay Bailey Hutchison 
introduced S. 1341, a bill to name the VA Medical Center in 
Houston, Texas, the ``Michael E. DeBakey Department of Veterans 
Affairs Medical Center.''
    On September 2, 2003, Ranking Member Graham introduced S. 
1572, a bill to authorize the expansion of VA's pilot program 
on assisted living for veterans to include an additional health 
care region.

                           Committee Hearings

    On July 29, 2003, the Committee held a hearing to receive 
testimony on, among other bills, S. 615, S. 1144, S. 1156, S. 
1213, S. 1283, and S. 1289. Testimony was heard from: The 
Honorable Tim S. McClain, VA's General Counsel; Ms. Cathleen C. 
Wilembo, Deputy Director for Health Care, Veterans Affairs and 
Rehabilitation Commission, The American Legion; Mr. Paul A. 
Hayden, Deputy Director, National Legislative Service, Veterans 
of Foreign Wars of the United States; Mr. Adrian M. Atizado, 
Associate National Legislative Director, Disabled American 
Veterans; Mr. Carl Blake, Associate Legislative Director, 
Paralyzed Veterans of America; and Mr. Richard Jones, National 
Legislative Director, AMVETS.
    On September 11, 2003, the Committee held a hearing on VA's 
CARES initiative. The Committee received testimony from 
theHonorable Anthony J. Principi, Secretary of Veterans Affairs; Robert 
H. Roswell, MD, VA's Under Secretary for Health; and Mr. Everett 
Alvarez, Jr., Chairman, Capital Asset Realignment for Enhanced Services 
Commission, U.S. Department of Veterans Affairs.

                           Committee Meeting

    After carefully reviewing the testimony from the foregoing 
hearings, the Committee met in open session on September 30, 
2003, and voted by unanimous voice vote to report favorably S. 
1156, as amended to include provisions derived from S. 548, S. 
615, S. 1144, S. 1156 as introduced, S. 1213, S. 1283, S. 1289, 
S. 1341, and S. 1572.

               Summary of the Committee Bill as Reported

    S. 1156, as reported (hereinafter, ``Committee bill''), 
consists of four titles, summarized below.

         TITLE I--EXTENSION OF CERTAIN HEALTH CARE AUTHORITIES

    Title I contains freestanding provisions and amendments to 
Title 38, United States Code, that would:
    1. Extend for five years VA's authority to provide enrolled 
veterans with a range of non-institutional extended care 
services as set forth in Public Law 106-117, the ``Veterans 
Millennium Health Care and Benefits Act,'' and extend through 
2008 the same statute's mandate that VA provide institutional 
nursing care services, as indicated, to severely service-
connected disabled veterans (section 101).
    2. Authorize VA to enter into agreements with non-VA 
providers of institutional nursing care or non-institutional 
extended care in a manner similar to that which is permitted 
under the Social Security Act (section 102).
    3. Authorize the expansion of a pilot program for the 
provision of assisted living services to veterans (section 
103).
    4. Increase from $15 million to $25 million annual funding 
to be set aside for a program designed to expand and improve 
services relating to the treatment of post-traumatic stress 
disorder (hereinafter, ``PTSD'') and substance use disorders; 
clarify that these funds are to be provided on an annual basis 
for a three year period; require that not less than $10 million 
be allocated by direct grants to programs that are identified 
by VA's Mental Health Strategic Health Care Group and VA's 
Committee on Care of Severely Chronically Mentally Ill 
Veterans; require that not less than $5 million be allocated 
for PTSD treatment programs; and require that not less than $5 
million be allocated for substance use disorder treatment 
programs (section 104).

                   TITLE II--CONSTRUCTION AUTHORITIES

    Title II contains freestanding provisions and amendments to 
Title 38, United States Code, that would:
    1. Increase from $4,000,000 to $9,000,000 the threshold 
amount which will result in a medical facility construction 
project being classified a ``major'' construction project 
(section 201).
    2. Establish in the Treasury the ``Department of Veterans 
Affairs Facilities Demolition Fund''; authorize that $25 
million be appropriated to the fund; and authorize VA to use 
amounts deposited into the fund for the purpose of demolishing 
or removing dilapidated or hazardous VA structures (section 
202).
    3. Authorize VA to carry out major construction projects in 
Lebanon, Pennsylvania and Beckley, West Virginia (section 211).
    4. Authorize VA to enter into major medical facilities 
leases in Denver, Colorado; Pensacola, Florida; Boston, 
Massachusetts; and Charlotte, North Carolina (section 212).
    5. Authorize $34.5 million in major construction funds and 
$13.385 million in leasing authority to carry out the projects 
and leases specified in sections 211 and 212 of the Committee 
bill (section 213).
    6. Name a VA Outpatient Clinic in Horsham, Pennsylvania the 
``Victor J. Saracini Department of Veterans Affairs Outpatient 
Clinic'' (section 221).
    7. Name a VA Medical Center in Chicago, Illinois the 
``Jesse Brown Department of Veterans Affairs Medical Center'' 
(section 222).
    8. Name the VA Medical Center in Houston, Texas the 
``Michael E. DeBakey Department of Veterans Affairs Medical 
Center'' (section 223).
    9. Name the VA Medical Center in Minneapolis, Minnesota the 
``Paul Wellstone Department of Veterans Affairs Medical 
Center'' (section 224).

                      TITLE III--PERSONNEL MATTERS

    Title IIIuc contains freestanding provisions and amendments 
to Title 38, United States Code, that would:
    1. Modify VA authority to make appointments of certain 
personnel in VHA (section 301).
    2. Provide hourly-rate employees of VA's Veterans Canteen 
Service with transfer rights to Title 5 positions in VA 
(section 302).
    3. Provide that the effective date of the amendment made by 
section 132 of Public Law 107-135 shall be January 23, 2002; 
and require that the Office of Personnel Management 
(hereinafter, ``OPM'') recompute the annuities of affected 
health care professionals who retired between April 7, 1986, 
and January 23, 2002 (section 303).

                        TITLE IV--OTHER MATTERS

    Title IV contains freestanding provisions and amendments to 
Title 38, United States Code, that would:
    1. Require VA to notify Congress of facility closings 
proposed under the Capital Asset Realignment for Enhanced 
Services initiative, and prohibit such closings from occurring 
until the lapse of 60 days following the notification or 30 
days of continuous session of Congress, whichever is longer 
(section 401).
    2. Authorize the Secretary to carry out major construction 
projects in connection with the CARES initiative no sooner than 
60 days following the submission of a report that lists all 
major construction projects on which VA proposes to expend such 
funds; require VA, when it develops that list, to develop it in 
accordance with priorities specified in this section; authorize 
VA to enter into multi-year contracts for the construction of 
major medical facilities; and authorize VA to expend funds 
appropriated for the CARES initiative and for ``major 
construction'' to carry out the provisions of this section 
(section 402).
    3. Authorize a three-year extension of a program which 
assists not-for-profit organizations and State and local 
government agencies in providing housing assistance for 
homeless veterans (section 411).
    4. Authorize a four-year extension of a program that 
mandates that VA evaluate the health status of spouses and 
children of Persian Gulf War veterans (section 412).
    5. Authorize VA to provide to U.S.-resident World War II 
veterans of the Commonwealth Army of the Philippines and so-
called ``new Philippine Scouts'' medical services on the same 
basis as those services are provided to veterans of the Armed 
Forces of the United States (section 421).
    6. Repeal the requirement that certain officials in VA's 
Office of the Under Secretary for Health be appointed for terms 
of four years (section 422).

                       Background and Discussion


         TITLE I--EXTENSION OF CERTAIN HEALTH CARE AUTHORITIES


Section 101. Extension and modification of certain health care 
        authorities

    By the enactment of Public Law 106-117, the Veterans 
Millennium Health Care and Benefits Act'' (hereinafter, 
``Millennium Act'') in 1999, the Congress directed that VA 
establish a comprehensive program to provide non-institutional 
extended care services for veterans enrolled for VA care. 
Further, it directed by enactment of the Millennium Act that VA 
provide institutional nursing care to veterans in need of such 
care for service-connected disabilities and to veterans who 
have sustained service-connected disabilities rated at 70 
percent or more and who are in need of institutional long-term 
care to treat any condition. These provisions are scheduled to 
expire on December 31, 2003.
    In January 2003, VA reported to Congress on its experience 
in providing both non-institutional extended care services and 
nursing home care as required by the Millennium Act. Some of 
the information reported by VA is encouraging; some is not. On 
the positive side, VA reports that over 90 percent of VA 
medical centers now provide outpatient-based long-term care. VA 
reported, further, that the proportion of VA long-term care 
patients treated in an outpatient-based care setting has 
increased from 57 percent (in 1998) to 64 percent (in 2001). 
These data suggest that growth in non-institutional care 
programs is allowing more veterans to receive necessary 
extended care services while remaining in a home setting. 
Additionally, the Committee is encouraged that the number of 
patients treated in VA long-term care settings grew by 6.7 
percent from 1998 thru 2001 and that during the same period 
geriatric evaluation and management programs grew by over 50 
percent.
    VA's January 2003 report, however, also sets forth a number 
of discouraging revelations. VA reports that ``only small 
changes in VA long-term care occur[ed] immediately after 
enactment of Public Law 106-117'' and ``overall costs are 
basically equal to what one would expect in the absence of the 
Act through fiscal year 2001.'' In fact, the report notes that, 
since enactment of the Millennium Act, the percentage of VA's 
overall health care budget spent on long-term care has declined 
from just over--to slightly under--7.5 percent. Findings such 
as these suggest that VA has done too little to provide added 
extended care services for an aging veterans' population 
despite Congress' clear direction that it do so.
    In response, in part, to the insufficient progress being 
made to expand VA long-term care services, Chairman Specter 
introduced legislation, S. 1156, a bill which, as introduced, 
would have lowered to 50 percent the threshold of service-
connected disability that would give rise to qualification for 
mandatory institutional extended care services. However, 
testimony rendered by VA General Counsel Tim S. McClain to the 
Committee on July 29, 2003, raised serious concerns about the 
costs and consequences of such a change. Mr. McClain stated:

          We estimate that the change from 70 percent to 50 
        percent would cost $2.5 billion over 5 years * * * 
        [and] the provisions could have serious unintended 
        consequences including slowing the rate of growth of 
        non-institutional long-term care and reducing the 
        availability of services for non-mandatory categories 
        of veterans. * * *

    In light of that testimony, and because the current backlog 
of patients waiting 6 months or more for primary care services 
still stands at approximately 100,000 veterans, the Committee 
bill extends the expiration dates of both long-term care 
authorities for an additional five years, until December 31, 
2008, but it does not lower the threshold for eligibility for 
mandatory institutional care. Even so, the Committee is 
committed to expanding the range of long-term care services 
available to veterans. The Committee expects that VA will 
respond to that commitment despite the Committee's 
determination to defer for now the issue of modifying the 
mandatory care threshold.

Sec. 102. Enhanced agreement authority for provision of nursing home 
        care and adult day health care in non-Department of Veterans 
        Affairs facilities

    Under current law, VA is authorized to enter into 
contractual arrangements with private providers of extended 
care services to serve the needs of veterans. Federal reporting 
requirements relating to the demographics of contractor 
employees and applicants are required tobe submitted to the 
Department of Labor under these contractual arrangements. The Committee 
has learned that, due to these reporting requirements, many small 
providers of extended care services are unable, or they are unwilling, 
to admit VA patients. Many such providers have apparently concluded 
that reimbursement from VA for caring for one or two veterans is not 
worth the cost of compiling and reporting the data required by general 
Federal contract law.
    The Social Security Act allows the Centers for Medicare and 
Medicaid Services (hereinafter, ``CMS'') to enter into provider 
agreements for the provision of care to both Medicare and 
Medicaid beneficiaries. Such agreements require that 
contractors comply with Federal laws concerning hiring 
practices. But they do not require that providers prepare 
reports of such compliance. Nor do they subject providers to 
annual audits like most Federal contracts do. Not surprisingly, 
CMS is more successful than VA in inducing smaller providers to 
provide care to its beneficiaries.
    Section 102 of the Committee bill places VA contractors in 
a similar position as CMS contractors with respect to Federal 
reporting requirements. By this action, the Committee seeks to 
encourage VA to bring care closer to veterans' homes and 
community support structures by contracting with small 
community-based providers. Even so, however, the Committee 
fully anticipates and expects that VA will require compliance 
with all applicable Federal laws concerning employment and 
hiring practices.

Sec. 103. Expansion of pilot program in the Department of Veterans 
        Affairs to provide assisted living for veterans

    Currently, 35 percent of veterans--some 8.75 million 
veterans--are 65 years of age or older. Of these, approximately 
640,000 are over 85 years old. VA estimates that the numbers of 
this ``most-in-need'' segment of the veterans' population will 
more than double, to approximately 1.3 million veterans, by 
2012.
    These facts lead the Committee to conclude that VA must 
concentrate on the development of a national policy on the 
provision of assisted living services for veterans. The 
assisted living pilot program authorized by section 103(b) of 
Public Law 106-117 was designed to allow VA to assess veterans' 
needs for assisted living care, to determine the cost of 
providing such care, and to explore the best setting in which 
to provide such care. The success of this initial program--
which is still under way in Veterans Integrated Service Network 
20--and the strong emphasis the CARES Draft National Plan has 
placed on assisted-living services, have led the Committee to 
conclude that another pilot is both warranted, and needed, to 
allow VA to compile more data and to study this issue further.
    By immediately adding an additional site and building on 
the achievements of the first pilot, VA will be provided with 
the further information it requires to formulate a national 
plan. The Committee's expectation is that, eventually, the 
entire nation will benefit from this important program.

Sec. 104. Improvement of program for provision of specialized mental 
        health services to veterans

    VA has a unique responsibility to meet the special 
requirements of veterans who need spinal cord injury care, 
prosthetic devices, blind rehabilitation services, and PTSD 
therapy services. VA's specialized programs to serve these 
``special need'' veterans, however, have been under budgetary 
pressure due to VA's shift in health care focus from inpatient-
based care to outpatient-based services and the introduction of 
a new resource allocation system.
    In 1996, Congress recognized that specialized services 
might face such funding pressure, and it took steps to counter 
the potential erosion of these programs. The Veterans' Health 
Care Eligibility Reform Act of 1996, Public Law 104-262, 
mandated that VA maintain its capacity to treat the ``special 
need'' disabled veterans at then-current levels, and required 
VA to report to Congress annually on the maintenance of these 
specialized services. Further, in December 2001, Congress 
reinforced its direction that ``special need'' services be 
maintained by enacting the Department of Veterans Affairs 
Health Care Programs Enhancement Act, Public Law 107-135. That 
statute described the manner in which VA is to maintain such 
capacity and, in addition, specified that $15 million in VA 
medical care funding would be set aside solely to assist 
medical facilities in improving care for veterans with 
substance use disorders and PTSD. That set-aside provision is 
scheduled to expire at the end of fiscal year 2003.
    The Committee believes that VA has made improvements in 
substance use disorder treatment and PTSD care--in large part 
because of this funding set-aside provision. It seeks to 
sustain that progress. Accordingly, section 104 of the 
Committee bill would ``protect'' this set-aside funding for 
three additional years. Additionally, it would increase the 
total amount of funding identified specifically for treatment 
of substance use disorders and PTSD from $15 million to $25 
million. The Committee expects that this extension and increase 
in funding levels will allow VA to continue the trend of 
improving these vital services for veterans.

             TITLE II--CONSTRUCTION AND FACILITIES MATTERS


                  Subtitle A--Construction Authorities


Sec. 201. Increase in threshold for major medical facility projects

    Under current law, VA medical facility construction 
projects with a projected total cost of less than $4 million 
are classified as ``minor'' projects. Those with costs 
projected to exceed $4 million are ``major'' construction 
projects and, as such, they are subject to the statutory 
requirement that they be individually authorized and funded by 
Congress. See 38 U.S.C. Sec. 8104. While minor projects are not 
subject to this stricture, all VA construction projects, 
including ``minor'' projects, are subjected to internal VA 
review and are approved and ranked by VHA's Capital Asset 
Board, VA's Strategic Management Council and VA's Deputy 
Secretary. Among the factors considered in this approval and 
ranking process are projected need, projected costs, projected 
impact on CARES activities, projectedimpact on medical care 
quality and access, and projected impact on medical appointment waiting 
times.
    Recent VA requests for the authorization and funding of 
major medical facility construction projects have shown that 
major facility projects rarely cost less than $10 million. 
Indeed, VA's Fiscal Year 2004 budget submission listed 22 
``major'' projects that are authorized, funded and, in many 
cases, now under construction. Only two of these 22 projects 
had projected costs of less than $10 million.
    In light of this, the Committee believes that the original 
intent of the law--that VA not undertake major medical facility 
construction projects without the approval of Congress--would 
be advanced by a modification of the major project threshold 
amount to $9 million. Section 201 of the Committee bill 
contains language raising the major construction threshold to 
reflect that view.

Sec. 202. Demolition of obsolete, dilapidated and hazardous structures 
        on Department of Veterans Affairs property

    There are many buildings on VA property, e.g., former staff 
living quarters and even farming structures, that lie vacant 
and, in many cases, are semi-derelict. In August 1999, the U.S. 
General Accounting Office (hereinafter, ``GAO'') reported that 
VA lacks an incentive to dispose of such structures because VA 
construction funds may, by law, only be spent to build, alter 
or acquire facilities, not to tear down unneeded and unused 
ones.
    Section 202 of the Committee bill authorizes the 
appropriation of $25 million for a VA Facilities Demolition 
Fund. It further authorizes VA to use amounts deposited into 
the fund for the purpose of demolishing or removing dilapidated 
or hazardous structures from VA property. Such properties are, 
at best, eyesores. Worse, they are potential hazards.

                Subtitle B--Construction Authorizations


Sec 211. Authorization of major medical facility projects

    As noted above, VA may not obligate or expend funds on any 
``major medical facility project'' unless that project has been 
specifically authorized by law.
    Section 211 of the Committee bill authorizes two projects 
that Congress had previously approved, but which have not yet 
been funded. First, the Committee bill authorizes $20 million 
to construct a nursing care facility at the Beckley, West 
Virginia VA Medical Center. Second, the Committee bill extends 
the $14.5 million authorization now in place for the 
construction of a nursing home project at the Lebanon, 
Pennsylvania VA Medical Center. These projects continue to have 
merit for the reasons cited in previous legislative reports.

Sec. 212. Authorization of major medical facility leases

    VA may not obligate or expend funds on any major medical 
facility lease unless that lease has been specifically 
authorized by law. Id. A ``major medical facility lease'' is 
one that involves the annual expenditure of $600,000 or more in 
rent.
    In its Fiscal Year 2004 budget request, VA requested 
authority to enter into the following leases: (1) The 
relocation and expansion of a health administration center in 
Denver, Colorado ($4.08 million); (2) an outpatient clinic 
extension in Pensacola, Florida ($3.8 million); (3) an 
outpatient clinic extension in Boston, Massachusetts ($2.879 
million); and (4) a Satellite Outpatient Clinic in Charlotte, 
North Carolina ($2.626 million). Each of these proposed leases 
is, in the judgment of the Committee, necessary to improve 
health care for all veterans. Accordingly, section 212 of the 
Committee bill would authorize each of them.
    The Committee is aware that many communities and 
organizations have made efforts to provide VA with space to 
lease for the provision of health care services to veterans. 
Many of these proposals--such as one offered for services in 
Elko, Nevada--are potentially of great importance to the local 
health care and veterans' communities. The Committee urges VA 
to work with such organizations where possible to bring care 
closer to veterans.

Sec. 213. Authorization of appropriations

    Section 8104(a)(2) of title 38, U.S. Code, requires 
statutory authorization of all major medical facility projects 
and major medical facility leases prior to appropriation of 
funds. In its Fiscal Year 2004 budget request, VA requested the 
authorization of $98.5 million for major medical facility 
projects and $10.759 million for major medical facility leases 
in 2004.
    Section 213 of the Committee bill authorizes appropriations 
for major VA medical facility projects and major VA medical 
facility leases for fiscal year 2004. Specifically, section 213 
authorizes a total of $34.5 million for the major medical 
facility projects specified in section 211 of the Committee 
bill, and $13.385 million for leases specified in section 212 
of the Committee bill. The Committee believes these major 
medical facility projects and leases are in the interest of 
improving health care for all veterans.

                 Subtitle C--Designation of Facilities


Sec. 221. Designation of Department of Veterans Affairs Outpatient 
        Clinic, Horsham, Pennsylvania

    Victor J. Saracini was a decorated United States Navy 
officer. He ended his naval career in the Naval Reserve at 
Naval Air Station Willow Grove, Pennsylvania. During his 
civilian career as a United Airlines pilot, Mr. Saracini was 
captain of United Airlines Flight 175, one of the four 
commercial jets hijacked by terrorists on September 11, 2001. 
Flight 175 was flown into the South Tower of the World Trade 
Center in New York City, killing all people onboard including 
Captain Saracini.
    The Committee believes that naming the VA outpatient clinic 
in Horsham, Pennsylvania would be an appropriate tribute to a 
devoted aviator and veteran. Section 221 of the Committee bill 
would so name the VA Outpatient Clinic in Horsham, Pennsylvania 
the ``Victor J. Saracini Department of Veterans Affairs 
Outpatient Clinic.''

Sec. 222. Designation of Department of Veterans Affairs Health Care 
        Facility, Chicago, Illinois

    The Honorable Jesse Brown was disabled by enemy fire in 
1965 while serving as a United States Marine in Vietnam. He 
later served in the Disabled American Veterans, rising to the 
office of Executive Director. Subsequently, he was appointed 
Secretary of Veterans Affairs by President Bill Clinton in 
January 1993. He served with distinction in that position until 
July 1997. Secretary Brown died on August 15, 2002.
    The Committee believes that naming a VA Medical Center in 
Chicago, Illinois--Secretary Brown's home town--would be an 
appropriate tribute to the Secretary's service. Section 222 of 
the Committee bill would so name the VA Medical Center at 820 
South Damen Avenue, Chicago, Illinois, the ``Jesse Brown 
Department of Veterans Affairs Medical Center.''

Sec. 223. Designation of Department of Veterans Affairs Medical Center, 
        Houston, Texas

    Dr. Michael E. DeBakey is one of the world's foremost heart 
surgeons. During World War II, he served as a Colonel on the 
staff of the U.S. Army Surgeon General and conducted studies 
that led to the development of mobile army surgical hospital 
(``MASH'') units. He is a recipient of the U.S. Army Legion of 
Merit Award, and he is credited with assisting in the 
establishment of the system of treating military personnel 
returning from war which eventually evolved into VA's modern 
Veterans Health Administration.
    The Committee believes that naming the VA Medical Center in 
Houston, Texas would be an appropriate tribute to Dr. DeBakey's 
longstanding commitment to the health care of veterans. Section 
223 of the Committee bill would so name the VA Medical Center 
in Houston, Texas the ``Michael E. DeBakey Department of 
Veterans Affairs Medical Center.''

Sec. 224. Designation of Department of Veterans Affairs Medical Center, 
        Minneapolis, Minnesota

    The late Paul Wellstone of Minnesota served as a 
distinguished member of the Senate Committee on Veterans' 
Affairs, and was the principal author of the Hmong Veterans' 
Naturalization Act and the Heather French Homeless Veterans 
Assistance Act. During his life, Senator Wellstone was honored 
by the Military Order of the Purple Heart, the Disabled 
American Veterans, the Minnesota chapter of the Paralyzed 
Veterans of America, the Minnesota Department of the Veterans 
of Foreign Wars, and the Vietnam Veterans of America for his 
commitment to veterans' issues. On October 25, 2002, Senator 
Paul Wellstone died in a tragic plane crash.
    The Committee believes that naming the VA Medical Center in 
Minneapolis, Minnesota would be an appropriate tribute to 
Senator Wellstone. Section 224 of the Committee bill would so 
name the VA Medical Center in Minneapolis, Minnesota as the 
``Paul Wellstone Department of Veterans Affairs Medical 
Center.''

                      TITLE III--PERSONNEL MATTERS


Sec. 301. Modification of authority on appointment of personnel in the 
        Veterans Health Administration

    Under current law, VHA employs its hospital and clinical 
staff under three separate legal authorities; the authority 
under which a particular staff member is employed is a function 
of the duties the employee in question performs. Critical 
``hands-on'' clinical staff--physicians, dentists, and 
registered nurses--are employed under legal authorities unique 
to VHA contained in chapter 74 of title 38, U.S. Code. As 
distinguished from these ``Title 38'' employees, other VA 
staff--so-called ``Title 5'' employees--are employed under 
traditional civil service legal authorities specified in Title 
5 of United States Code. A third group of VA staff, discussed 
below, is employed under a system known as ``hybrid Title 38'' 
status.
    VHA's Title 38 employees work within a ``rank-in-person'' 
system; each clinician's pay grade, and his or her pay scale 
within each grade, are determined by comparing the individual's 
professional qualifications against published VA standards. 
Under the Title 38 employment system, VA has considerable 
hiring flexibility--it can hire professional employees 
directly--to assure that necessary health care staffing levels 
are always maintained. Further, VHA has flexibility to 
remunerate Title 38 employees at levels that are consistent 
with such staff's professional qualifications, thereby 
enhancing VA's ability to retain highly-trained staff. 
Promotions under the Title 38 system are awarded by review 
panels comprised principally of clinical peers having similar 
credentials and experience.
    Title 5, or traditional civil service employment is, by 
contrast, a ``rank-in-position'' system that is administered 
according to standards specified by the Office of Personnel 
Management. Positions within the Title 5 employment system are 
graded according to classification standards, and employee pay 
is determined based on the position classification, not on the 
individual qualifications of the person occupying the position. 
As distinguished from Title 38 hiring, VHA management cannot 
fill Title 5 positions by direct hiring. Rather, management is 
provided a ``certificate'' of eligible candidates by OPM (or by 
a VA Delegated Examining Unit) which administers competitive 
examinations to candidates seeking employment. VHA managers may 
choose from among the top three candidates on the certificate.
    The Title 5 hiring process is time-consuming; it typically 
takes a minimum of several weeks, and often as long as several 
months, to fill a position. Title 5 employees are afforded many 
protections and benefits not extended to Title 38 employees, 
including grievance procedures, Reduction-in-Force protections, 
annual pay increases based on increases in the consumer price 
index, and leave time accrued according to length of service.
    Finally, VA employs limited clinical staff--e.g., clinical 
and counseling psychologists, respiratory and physical 
therapists, etc.--under so-called ``hybrid Title 38'' status. 
VA's ``hybrid'' system was developed to merge the best 
characteristics of the Title 38 and Title 5hiring and 
compensation schemes. Candidates for employment under hybrid Title 38 
status can be hired quickly, and they may receive special pay rates and 
promotions based on individual qualifications and peer review. However, 
hybrid Title 38 employees also enjoy grievance protections and annual 
leave accrual rights, and other benefits and protections, afforded to 
``conventional'' Title 5 employees.
    Section 301 of the Committee bill would place three 
clinical professions--certain psychologists not already within 
the ``hybrid'' system, social workers, and kinesiologists--who 
are now hired under Title 5 authority into hybrid Title 38 
status. As discussed above, these professionals would then be 
subject to hybrid rules concerning hiring authority and peer 
review-based promotion. But they would also retain many of the 
protections enjoyed by staff employed under Title 5, United 
States Code. The Committee believes that it is in the interest 
of veterans and the VA health care system to hire and promote 
clinicians in these professions on the basis of individual 
qualifications and performance. However, the Committee also 
recognizes that many clinicians in these professions have 
worked for, and enjoy, the greater protections and employment 
security afforded under their current Title 5 status, and they 
ought to retain the bulk of such benefits.

Sec. 302. Coverage of employees of Veterans' Canteen Service under 
        additional employment laws

    Hourly-rate employees of VA's Veterans Canteen Service 
(hereinafter, ``VCS'') are Federal employees under authority of 
38 U.S.C. Sec. 7802. However, while they are hired through a 
merit system and they are provided many of the same benefits as 
other Federal employees--e.g., workers compensation, health, 
and retirement benefits, and veterans' preference rights--there 
are benefits to which they are not entitled. For example, VCS 
hourly-rate employees do not have the same rights to transfer 
to positions within VA that VCS managers have. As a 
consequence, when an hourly food service employee in a VCS 
canteen applies for a similar position in VA food service 
operations, he or she is not treated as a transferring VA 
employee (or, in technical terms, as an ``internal competitive 
service candidate''). His or her years of service and 
experience in a VCS position are irrelevant to VA hiring; in 
practical terms, the VCS employee cannot transfer to a job 
within VA without first going through civil service competition 
despite a history of service within a VA health care facility.
    In 1979, OPM approved an interchange agreement that permits 
eased movement between VA and VCS--but only for management-
level employees. VA has repeatedly sought (in 1984, 1987 and in 
1998) to establish a similar interchange agreement for VCS 
hourly employees, but OPM has declined to approve these VA 
proposals. The Committee disagrees with OPM's judgment on this 
issue. It believes that principles of equity dictate that VCS 
hourly-rate employees be afforded the same transfer rights as 
their managerial counterparts. Section 302 of the Committee 
bill so specifies.

Sec. 303. Effective date of modification of treatment for retirement 
        annuity purposes of part-time service of certain Department of 
        Veterans Affairs health-care professionals

    In 1985, Congress enacted Public Law 99-272, the 
Consolidated Omnibus Budget Reconciliation Act of 1985 
(hereinafter, ``COBRA''). That law granted to all part-time 
Federal employees full-time annuity credits for part-time work. 
Previously, the government had prorated part-time work for 
Title 38 employees.
    The following year, VA requested legislation to exclude all 
part-time Title 38 employees from the 1985 COBRA retirement 
change. VA's request was based on the premise that part-time VA 
physicians earn significant outside salaries, and that the 
granting to them of full-time annuity credit for part-time work 
would have disproportionately enriched them. Congress granted 
VA's request and incorporated the requested change into Public 
Law 99-509, the 1986 Omnibus Budget Reconciliation Act.
    In 2001, it was recognized that the 1986 legislation 
affected all part-time Title 38 employees--including VA nurses. 
VA nurses, unlike VA physicians, do not engage in lucrative 
outside practices. In recognition of that fact, Congress 
enacted section 132 of Public Law 107-135, ``The Department of 
Veterans Affairs Health Care Programs Enhancement Act of 2001'' 
in an attempt to ``undo'' the 1986 exclusion of nurses from the 
COBRA liberalization of retirement benefits so that, once 
again, VA nurses would get full-time credit for part-time work 
for purposes of computing retirement annuities. OPM, however, 
interpreted the changes contained in Public Law 107-135 as 
applying only to nurses who retired after the enactment date. 
As a consequence, similarly situated VA nurses receive 
different retirement annuities based not on their terms of 
service, but based purely on the date on which they retired.
    Section 303 of the Committee bill would rectify this 
unintended situation by requiring OPM to recalculate the 
annuities for these retired health care professionals using a 
system that awards full-time credit for part-time service.

                        TITLE IV--OTHER MATTERS


 Subtitle A--Capital Asset Realignment for Enhanced Services Initiative


Sec. 401. Advance notification of capital asset realignment initiatives

    VA's Capital Assets Realignment for Enhanced Services 
initiative is a nine-step process that was initiated in late 
2000. The purpose of CARES is to evaluate the projected health 
care needs of veterans over the next twenty years and to 
realign VA's infrastructure to better meet those needs. To 
simplify the procedures which have taken place to date--and 
which the Committee anticipates will give rise to CARES 
recommendations in late 2003--VA's Under Secretary for Health 
has issued a preliminary CARES report (hereinafter, the ``Draft 
National Plan''), see 68 Fed. Reg. 50224 et seq. (August 20, 
2003). That plan relies heavily--but not exclusively--
onrecommendations which the Directors of 20 of VA's veterans integrated 
service networks had submitted to the Under Secretary earlier in the 
year. The Draft National Plan, the contents of which are discussed 
below, is now being reviewed by a Commission appointed by the Secretary 
of Veterans Affairs (hereinafter, ``CARES Commission'') which, as of 
the date of this report, is in the midst of conducting a series of 
public hearings throughout the Nation in advance of its issuance of 
recommendations to the Secretary. The preliminary stages of the CARES 
process--preliminary in the sense that VA will only have identified 
actions it proposes to take--will culminate with the issuance of a 
Final CARES Report by the Secretary in, if he is able to adhere to a 
time line that he has set, December 2003.
    The Draft National Plan, among other things, recommends the 
closing of seven VA health care facilities, and recommends 
major mission changes at over 30 other VA facilities. The sites 
slated to be closed are in the following locations: 
Canandaigua, New York; Pittsburgh, Pennsylvania (Highland Drive 
Division); Lexington, Kentucky (Leestown Division); Cleveland, 
Ohio (Brecksville Unit); Gulfport, Mississippi; Waco, Texas; 
and Livermore, California. Patients currently provided services 
at these VA sites will still be provided care, but at other 
nearby sites. In many cases, e.g., in Pittsburgh, new capacity 
at alternative nearby sites will have to be built before those 
sites may be closed.
    VA proposals to close sites now providing services to 
veterans will, if they are adopted, affect hundreds of 
thousands of veterans. Accordingly, section 401 of the 
Committee bill provides for a 60-day notice and wait period 
before the VA would be authorized to take such actions. The 
Committee intends to continue vigorous oversight of the 
identification of sites where VA proposes to close VA medical 
facilities under CARES, and the implementation of such 
proposals.

Sec. 402. Authorization of major construction projects in connection 
        with capital asset realignment initiative

    The Draft National Plan proposes to do more than close VA 
facilities. It also recommends that new major medical 
facilities be built in Las Vegas, Nevada and East Central 
Florida. In addition, the CARES Commission has held hearings on 
proposals to build a replacement hospital in Denver, Colorado. 
Further, the Draft National Plan anticipates significant 
infrastructure upgrades at numerous sites including, as noted 
above, at or near locations where VA proposes to close 
facilities. Finally, the Draft National Plan suggests that VA 
open new Community Based Outpatient Clinics (hereinafter, 
``CBOCs'') in over 100 communities not currently served by a 
VA-operated health care facility.
    The Committee supports VA efforts to modernize existing VA 
facilities, to place major medical facilities in locales where 
they are needed, and to expand veterans' access to CBOCs so 
that they might receive care close to their homes and families. 
And it supports VA's movement toward these objectives with all 
deliberate speed. At this point, however, the Committee does 
not authorize specific major construction projects, except 
those specified in subtitle B of title II of the Committee 
bill, since VA has not yet finalized its CARES proposals. Yet 
the Committee does want VA to be able to proceed without 
inordinate delay once the Secretary issues the Final CARES 
Report. Accordingly, section 402 of the Committee bill 
authorizes major construction projects as may be contained in 
the Secretary's Final CARES Report. That authority, however, 
would be contingent upon the Secretary submitting to the 
Congress a report that lists the projects on which VA proposes 
to expend construction funds under authority of this section. 
And it would be contingent, further, upon the Secretary 
specifying projects that conform to the priorities specified in 
section 402 and described below.
    It is likely that the Final CARES Report will identify far 
more needed construction projects than can be started 
simultaneously. Thus, once the Final CARES Report is issued, it 
will still be necessary to prioritize projects. The non-
specific authorization specified in section 402--qualified as 
it is to require VA reporting and VA ranking of projects in 
accordance with Congressionally-mandated priorities--is 
intended to assure that VA priorities conform to the 
Committee's judgment on such matters. The Committee believes VA 
must proceed first on projects involving the construction or 
renovation of facilities that the Final CARES Report states are 
necessary in order to facilitate the closure of existing 
healthcare sites. For example, VA's Draft National Plan 
proposes to close the Highland Drive VA Medical Center in 
Pittsburgh, Pennsylvania. But that facility is currently in 
use; its closure would require significant construction at two 
other VA sites in Pittsburgh--at University Drive and in 
Aspinwall--so that patients served, and care modalities 
provided, at Highland Drive may be provided at those sites. 
Similar considerations apply to Draft National Plan proposals 
at Montrose and Canandaigua, New York; at Leestown, Kentucky; 
at Livermore, California; and at Waco, Texas. If these Draft 
recommendations ripen to proposed actions under the Final CARES 
Report, it would be the Committee's expectation that such 
projects have first priority to construction funds. Further, if 
other projects of this nature not included in the Draft 
National Plan--e.g., a proposed replacement hospital in Denver, 
Colorado--are specified in the Final CARES Report, the 
Committee would also expect that those projects have first 
priority. For it is abundantly clear that many veterans do not 
believe that CARES will result in the building of new and 
modern facilities; they believe CARES is only about closing 
``surplus'' hospitals. By listing the completion of replacement 
or enhancement projects in places in which a major facility is 
slated for closure as the highest construction priority, the 
Committee intends to convey the following message to both VA 
and America's veterans: CARES will modernize and enhance care; 
it will not cut care.
    Second, the Committee is aware that the Draft National Plan 
recommends that two new tertiary care hospitals (in East 
Central Florida and in Las Vegas, Nevada) be built. The 
Committee believes that the construction of such facilities 
will advance the CARES objective of providing modern medical 
care in modern 21st Century facilities, close to where the 
veterans reside. These two sites are among the fastest growing 
areas of the country. Accordingly,construction at these 
locations would be accorded a high priority under the standards 
specified in the Committee bill if, indeed, these sites are identified 
in the Final CARES Report.
    Additionally, the Committee lists the construction of new 
CBOCs, and projects necessary to make facilities attractive for 
``enhanced-use leases,'' as important priorities to which VA 
should devote post-CARES construction funding.
    The non-specific construction authorization contained in 
section 402--and the Committee's willingness to grant to this 
Secretary project authority not heretofore delegated--do not 
signal complete approval by the Committee, or the Congress, of 
all VA proposals that are identified in the Draft National 
Plan. Indeed, the Committee anticipates changes in that plan; 
were that not the case, the Committee would now proceed to 
authorize the projects recommended by the Draft National Plan 
that, in the Committee's judgment, have merit. For this year, 
however, the Committee is willing to afford this Secretary 
considerable authority subject, as noted, to his adherence to 
Committee priorities and reporting requirements. The Committee 
anticipates hearings and informal interactions between VA and 
Congress to assure full oversight--and opportunity to object--
prior to the obligation of funds.

               Subtitle B--Extension of Other Authorities


Sec. 411. Three-year extension of housing assistance for homeless 
        veterans

    VA currently furnishes assistance to homeless veterans 
through two major mechanisms: by providing services directly 
and by assisting community-based not-for-profit entities, and 
State or local governmental agencies, that furnish services to 
homeless veterans. One of the legal authorities under which VA 
provides assistance to community-based and governmental 
service-providers is scheduled to expire on December 31, 2003. 
See 38 U.S.C. Sec. 2041(c). Specifically, this expiring 
provision authorizes VA to enter into agreements with the 
above-mentioned providers for the sale, lease, or donation of 
real property acquired by VA as a result of a default of a loan 
made, insured, or guaranteed by VA. The Committee believes such 
providers are invaluable in addressing the needs of homeless 
veterans.
    Section 411 of the Committee bill would extend VA authority 
to enter into such agreements for three additional years to 
December 31, 2006.

Sec. 412. Four-year extension evaluation of health status of spouses 
        and children of Persian Gulf war veterans

    Section 107(b) of the Persian Gulf War Veterans' Benefits 
Act, title I of Public Law 103-446, directs that VA monitor and 
study the health status of the spouses and children of Persian 
Gulf War veterans. It also specifies that VA develop standard 
protocols and guidelines for providing diagnostic testing of 
these spouses and children to ensure the uniform development of 
medical data. Finally, the statute requires that VA enter its 
study results into a Persian Gulf War Veterans Health Registry. 
These mandates are scheduled to expire on December 31, 2003.
    Section 412 of the Committee bill would extend these 
mandates for an additional four years, to December 31, 2007.

                       Subtitle C--Other Matters


Sec. 421. Modification of eligibility of Filipino veterans for health 
        care in the United States

    Section 107 of title 38, U.S. Code, specifies that World 
War II service by Filipinos in the organized military forces of 
the Commonwealth of the Philippines (the so-called Philippine 
Commonwealth Army) shall be considered to be active service in 
U.S. forces for purposes of eligibility for veterans benefits, 
but only as provided by law. Similarly, that statute specifies 
that service as a so-called new Philippine Scout will be 
considered to be active service in U.S. forces for purposes of 
veterans benefits, but only as specified by law.
    Under section 1734 of title 38, U.S. Code, Commonwealth 
Army veterans who are citizens or lawful residents of the 
United States are eligible to receive VA medical care benefits, 
but only if the Commonwealth Army veteran in question is 
disabled and receiving compensation benefits under chapter 11 
of title 38, U.S. Code (as limited by section 107). Similarly, 
New Philippine Scouts who are disabled and receiving 
compensation benefits under chapter 11 (as limited by section 
107) and who are citizens or lawful residents of the United 
States are eligible to receive VA medical care benefits, but 
they may only be provided treatment for their service-connected 
disabilities.
    By letter dated May 12, 2003, VA Secretary Anthony J. 
Principi proposed legislation (S. 1213) on behalf of the 
Administration to modify the above-summarized limitations, 
stating as follows:

          The proposal would extend to new Philippine Scouts 
        who reside legally in the United States the same 
        eligibility for medical care * * * that currently 
        exists for Commonwealth Army veterans, while 
        eliminating the receipt-of-compensation requirement for 
        these veterans and scouts.

    Section 421 of the Committee bill would extend to new 
Philippine Scouts who reside legally in the United States the 
same eligibility for medical care services, including care for 
non-service-connected disabilities, that are currently afforded 
to Commonwealth Army veterans. And it would eliminate for both 
groups of Filipino veterans the requirement that they be 
receiving compensation in order to be eligible for VA-provided 
medical care services.

Sec. 422. Repeal of limits on terms of certain officials in the Office 
        of the Under Secretary for Health

    Under current law, the Office of the VA Under Secretary for 
Health shall include a number of positions subordinate to the 
Under Secretary including a Deputy Under Secretary, an 
Associate Deputy Under Secretary, several Assistant Deputy 
Under Secretaries and Directors of various enumerated clinical 
services, e.g., Dental Services, Nursing Services, Podiatric 
Services, etc. By statute, the appointees to these subordinate 
positions are appointed for four year terms, and they may be 
removed from such positions only for cause. See 38 U.S.C. 
Sec. 7306(d). This is true whether the incumbent Under 
Secretary who appointed them ``turns over'' or not.
    The clinicians appointed to these key positions are 
directly responsible to the Under Secretary. In the view of the 
Committee, the Under Secretary must have a positive working 
relationship with these professionals, and the Under Secretary 
must personally value their respective judgments. A statutory 
mandate that, in effect, requires the Under Secretary to retain 
his or her predecessor's staff is, in the judgment of the 
Committee, contrary to these purposes. Further, it interferes 
more than the Committee deems necessary or advisable with the 
prerogative of a very senior VA official to assemble the team 
of advisors that he or she believes will best assist in the 
execution of his or her responsibilities. Accordingly, section 
422 of the Committee bill eliminates the terms for appointments 
to positions in the Office of the Under Secretary for Health. 
The Committee stresses that it is not of the view that a newly-
appointed Under Secretary must--or should--replace all 
incumbents of such positions. To the contrary, the interests of 
the Under Secretary, and veterans, are generally served by 
maintaining continuity at senior management levels.

                             Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the Congressional Budget Office 
(hereinafter, ``CBO''), estimates that enactment of the 
Committee bill would increase direct spending for veterans 
programs by $4 million in 2004, $28 million over the 2004-2008 
period, and $62 million over the 2004-2013 period. In addition, 
CBO estimates that enactment of the Committee bill would 
increase direct spending outlays by $71 million in 2004, and 
$51 million over the 2004-2008 period, assuming appropriation 
of the estimated amounts. Enactment of the Committee bill would 
not affect the budgets of state, local, or tribal governments.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 27, 2003.
Hon. Arlen Specter,
Chairman, Committee on Veterans' Affairs
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has prepared the enclosed cost estimate for S. 1156, the 
Veterans' Health Care Authorities Extension and Improvement Act 
of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

Veterans Health Care Authorities Extension and Improvement Act of 2003

    Summary: S. 1156 would extend an authorization that the 
Department of Veterans Affairs (VA) provide nursing home care 
to certain veterans. In addition, the bill would:
           Affect annuities for certain part-time 
        employees of VA,
           Provide new health care benefits to some 
        Filipino veterans,
           Require that VA provide more mental health 
        care to veterans than it currently does,
           Establish a pilot program to provide 
        assisted living services to veterans,
           Authorize appropriations for major 
        construction,
           Create and authorize appropriations for a 
        new fund to pay for the demolition and removal of 
        obsolete, dilapidated and hazardous structures on VA 
        property,
           Change the names of four health care 
        facilities operated by VA, and
           Authorize VA to lease three medical 
        facilities.
    CBO estimates that enacting this bill would increase direct 
spending by $4 million in 2004, $28 million over the 2004-2008 
period,and $62 million over the 2004-2013 period. Additionally, 
S. 1156 would modify provisions governing discretionary spending for 
veterans' health care and construction programs, which CBO estimates 
would result in outlays of $71 million in 2004 and $451 million over 
the 2004-2008 period, assuming appropriation of the estimated amounts.
    S. 1156 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1156 is shown in Table 1. The costs of 
this legislation fall within budget functions 600 (income 
security) and 700 (veterans benefits and services).

                                 TABLE 1.--ESTIMATED BUDGETARY IMPACT OF S. 1156
                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority.........................................        4        6        6        6        6
Estimated Outlays..................................................        4        6        6        6        6

                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......................................      135      100      101       64       61
Estimated Outlays..................................................       71      114      120       80       66
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: This estimate assumes that S. 1156 will 
be enacted by the end of calendar year 2003 and that the 
necessary amounts for implementing the bill will be 
appropriated for each year.

Direct spending

    The Department of Veterans Affairs Health Care Programs 
Enhancement Act of 2001 (Public Law 107-135), enacted on 
January 23, 2002, made changes to the way retirement benefits 
are determined for federal retirees who performed part-time 
service as registered nurses, physician's assistants, and 
certain dental technicians at VA prior to April 7, 1986, and 
retired on or after the enactment date of that legislation. 
That legislation treated pre-April 7, 1986, part-time service 
as full-time service for the purposes of calculating retirement 
annuities.
    S. 1156 would extend these changes to the types of workers 
covered by Public Law 107-135, but who retired between April 6, 
1986, and January 23, 2002, by treating their pre-April 7, 
1986, part-time service as full-time service for the purpose of 
calculating retirement annuities. Retirement benefits for these 
workers currently are set according to a formula that prorates 
all part-time service performed in these positions. For most 
other federal workers, including those covered by Public Law 
107-135, part-time service performed prior to April 7, 1986, is 
treated as full-time service when calculating retirement 
annuities. In most cases, the changes result in higher 
retirement benefits.
    Information about retirees who would be covered by S. 1156 
is limited, but based on data provided by the Office of 
Personnel Management, CBO estimates that about 1,500 current 
retirees would have their benefits increased by the bill. CBO 
estimates that the new formula would increase benefits for 
affected retirees by 13 percent to 22 percent, depending on how 
much part-time service was performed prior to April 7, 1986. As 
a result, CBO estimates that enacting S. 1156 would increase 
direct spending by $4 million in 2004, $28 million over the 
2004-2008 period, and $62 million over the 2004-2013 period 
(see Table 2).

                          TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER S. 1156
                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                             2004   2005   2006   2007   2008   2009   2010   2011   2012   2013
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority................      4      6      6      6      6      6      7      7      7      7
Estimated Outlays.........................      4      6      6      6      6      6      7      7      7      7
----------------------------------------------------------------------------------------------------------------

Spending Subject to Appropriation

    As shown in Table 3, CBO estimates that implementing S. 
1156 would increase discretionary spending for veterans' health 
care programs and major construction by $71 million in 2004 and 
$451 million over the 2004-2008 period, assuming that 
appropriations are provided in the authorized and estimated 
amounts. Individual provisions that would affect discretionary 
spending are described below.
    Veterans Medical Care. Federal spending for all veterans 
medical care totals more than $25 billion a year. Several 
sections of the bill would affect medical care for veterans. In 
total, CBO estimates that implementing these provisions would 
cost $64 million in 2004 and $370 million over the 2004-2008 
period.

                        TABLE 3.--ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR S. 1156
                                    [By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              2003     2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                              VETERANS MEDICAL CARE

Baseline Spending Under Current Law:
    Estimated Authorization Level \1\.....................   25,279   26,153   26,987   27,890   28,824   29,452
    Estimated Outlays.....................................   25,677   26,179   26,783   27,655   28,583   29,271
Proposed Changes:
    Estimated Authorization Level.........................        0       71       95       96       59       56
    Estimated Outlays.....................................        0       64       93       96       61       56
Spending Under S. 1156:
    Estimated Authorization Level.........................   25,279   26,224   27,082   27,986   28,883   29,508
    Estimated Outlays.....................................   25,677   26,243   26,876   27,751   28,644   29,327

                                            CONSTRUCTION AND LEASING

Spending Under Current Law:
    Estimated Authorization Level \1\.....................       99      101      103      105      107      110
    Estimated Outlays.....................................      174      155      130      112      106      105
Proposed Changes:
    Estimated Authorization Level.........................        0       64        5        5        5        5
    Estimated Outlays.....................................        0        7       21       24       19       10
Spending Under S. 1156:
    Estimated Authorization Level.........................       99      165      108      110      112      115
    Estimated Outlays.....................................      174      162      151      136      125      115

                             SUMMARY OF CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.............................        0      135      100      101       64       61
Estimated Outlays.........................................        0       71      114      120       80      66
----------------------------------------------------------------------------------------------------------------
\1\ The 2003 level is the estimated net amount appropriated for that year. No full-year appropriation has yet
  been provided for fiscal year 2004. The current-law amounts for the 2004-2008 period assume that
  appropriations remain at the 2003 level with adjustments for anticipated inflation.

    Long-Term Care. Section 101 would extend a requirement in 
current law that VA provide nursing home care to veterans that 
have a disability rating of 70 percent or greater. Under 
current law, this requirement expires on December 31, 2003. 
This provision would extend the requirement through December 
31, 2008. According to VA, the department currently spends more 
than $2 billion for nursing home care. VA provided nursing home 
care to veterans with disability ratings of 70 percent or 
greater before the requirement in current law was enacted. 
According to VA, since enactment of this requirement in 1999, 
the number of veterans with disability ratings of 70 percent or 
greater receiving nursing home care from VA increased from 
about 1,800 to 2,300 at a cost of about $56 million in 2002. 
CBO assumes that 75 percent of that increase resulted from the 
current requirement to provide such care. Adjusting for 
inflation, CBO estimates that extending this requirement would 
cost $34 million in 2004, and $254 million over the 2004-2008 
period, assuming appropriation of the estimated amounts. Costs 
are slightly lower in 2004 because the extension would only 
affect the last nine months of fiscal year 2004.
    Mental Health Programs. Section 104 would require VA to 
spend an additional $25 million a year on mental health care 
over the 2004-2006 period, above the level spent in 2003 ($583 
million). Under current law, VA is required to spend $15 
million more each year than what they otherwise would have 
spent on post-traumatic stress disorder and substance use 
disorders; there is no expiration date associated with this 
requirement. Under section 104, VA would be required to spend 
$25 million more than specified under current law over the 
2004-2006 period, but would then not be required to spend any 
additional amounts after 2006. Thus, CBO estimates that 
implementing this section would cost $23 million in 2004, cost 
$73 million over the 2004-2006 period, and save $27 million 
over the 2007-2008 period, assuming appropriation of the 
required amounts.
    Health Care for Filipino Veterans. Under current law, only 
certain Filipino veterans who served during World War II are 
eligible for health care benefits from VA. Under section 421 of 
the bill, any individual who is a veteran of the Philippine 
Commonwealth Army or a former New Philippine Scout living 
legally in the United States would be eligible for health care 
benefits provided by VA. Using information from VA, CBO 
estimates that in 2004 about 9,500 Filipino veterans would 
qualify for this new benefit and that they would beclassified 
as Category 5 veterans, based on income and other factors. Based on 
average enrollment and use rates for Category 5 veterans, CBO estimates 
that about 35 percent of these veterans would use VA health care 
benefits in 2004 at an estimated cost of $5,100 per person. After 
adjusting for mortality, CBO expects that the number of eligible 
Filipino veterans using VA health care benefits would grow to 2,900 in 
2005 as more of these veterans become aware of the benefit, and then 
gradually decline to about 1,900 by 2008. Accordingly, CBO estimates 
that implementing this section would cost $7 million in 2004 and $61 
million over the 2004-2008 period, assuming appropriation of the 
estimated amounts.
    Assisted Living Pilot Program. Section 103 would allow VA 
to establish another pilot program to help veterans obtain 
assisted living services for a period of three years. VA 
currently administers one pilot program to provide these 
services and, according to VA, expects to spend a total of 
about $9 million for this program. Assuming that costs for the 
new program are similar, CBO estimates that implementing this 
section would cost less than $500,000 in 2004 and $9 million 
over the 2004-2008 period.
    Construction and Leasing. S. 1156 contains several sections 
that would authorize appropriations for major construction 
projects, the leasing of facilities in three cities, and 
establish a new fund that would pay for the demolition and 
removal of obsolete, dilapidated and hazardous structures on VA 
property. CBO estimates that implementing these sections would 
cost $7 million in 2004 and $81 million over the 2004-2008 
period, assuming appropriation of the authorized amounts.
    Section 213 would authorize the appropriation of $34.5 
million for the construction of two long-term care facilities. 
The long-term care facilities would be located in Lebanon, 
Pennsylvania, and Beckley, West Virginia. Section 201 would 
create the Department of Veterans Affairs Facilities Demolition 
Fund for the purpose of removing obsolete, dilapidated, and 
hazardous buildings and structures on VA property and would 
authorize the appropriation of $25 million in 2004 to be 
deposited into that fund. CBO estimates that implementing these 
two sections would cost $3 million in 2004 and $57 million over 
the 2004-2008 period, assuming appropriation of the authorized 
amounts.
    Section 213 also would authorize VA to lease three medical 
facilities for lease payments that together could not exceed $5 
million a year. The three medical facilities would be located 
in Denver, Colorado; Pensacola, Florida; and Boston, 
Massachusetts. While the bill does not specify the length of 
the leases, according to VA, it expects to lease these 
facilities for up to 20 years. The actual length of each lease 
will depend on the results of an ongoing process that VA is 
using to determine its future construction and leasing needs. 
Based on information from VA, CBO believes these leases would 
meet the criteria for an operating lease. CBO estimates that 
implementing these leases would cost $4 million in 2004 and $24 
million over the 2004-2008 period, assuming appropriation of 
the authorized amounts.
    S. 1156 also would raise the threshold for projects to be 
financed out of the appropriation for construction of major 
medical facilities from $4 million to $9 million. (Thus, under 
the bill, projects costing up to $9 million would be considered 
minor construction.)
    Naming Provisions. S. 1156 also contains four provisions 
that would change the names of health care facilities operated 
by VA. Section 221 would name the VA outpatient clinic in 
Horsham, Pennsylvania, as the ``Victor J. Saracini Department 
of Veterans Affairs Outpatient Clinic.'' Section 222 would name 
the VA health care facility located at 820 South Damen Avenue 
in Chicago, Illinois, as the ``Jesse Brown Department of 
Veterans Affairs Medical Center.'' Section 223 would name the 
VA Medical Center in Houston, Texas, as the ``Michael E. 
DeBakey Department of Veterans Affairs Medical Center.'' 
Finally, section 224 would name the VA medical center in 
Minneapolis, Minnesota, as the ``Paul Wellstone Department of 
Veterans Affairs Medical Center.'' All four sections would 
require that any reference to such medical center or outpatient 
clinic in any law, regulation, map, document, record, or other 
paper of the United States be considered to be a reference to 
the medical center or clinic by the new name. CBO estimates 
that implementing those provisions would have a negligible 
cost, subject to the availability of appropriated funds.
    Intergovernmental and private-sector impact: S. 1156 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Previous CBO estimates: On June 30, 2003, CBO transmitted a 
cost estimate of H.R. 2357, the Veterans Health Care 
Improvement Act of 2003, as ordered reported by the House 
Committee on Veterans' Affairs on June 26, 2003. Section 2 of 
H.R. 2357, which would authorize the provision of health care 
to certain Filipino veterans, is similar to section 421 of S. 
1156 and CBO's estimated cost is the same for both provisions.
    On May 13, 2003, CBO transmitted a cost estimate of H.R. 
1908, a bill to name the health care facility of the Department 
of Veterans Affairs located at 820 South Damen Avenue in 
Chicago, Illinois, as the ``Jesse Brown Department of Veterans 
Affairs Medical Center,'' as introduced on May 1, 2003. On May 
19, 2003, CBO also transmitted an estimate of H.R. 1562, the 
Veterans Health Care Cost Recovery Act of 2003, as ordered 
reported by the House Committee on Veterans' Affairs on May 15, 
2003. H.R. 1908 and section 4 in H.R. 1562 are both the same as 
section 222 in S. 1156.
    Estimate prepared by: Federal Costs: Sam Papenfuss and 
Geoffrey Gerhardt. Impact on State, Local, and Tribal 
Governments: Melissa Merrell. Impact on the Private Sector: 
Daniel G. Frisk.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its September 30, 2003, meeting. On that 
date, the Committee, by unanimous voice vote, ordered H.R. 
1156, a bill to amend title 38, United States Code, to improve 
and enhance the provision of long-term health care to veterans 
by the Department of Veterans Affairs, to enhance and improve 
authorities relating to the Administration of personnel of the 
Department of Veterans Affairs, and for other purposes, as 
amended, reported favorably to the Senate.

                             Agency Report

    On July 29, 2003, VA General Counsel, the Honorable Tim S. 
McClain, appeared before the Committee on Veterans' Affairs and 
submitted testimony on, among other things, S. 615, S. 1144, S. 
1156, S. 1213, S. 1283, and S. 1289. Excerpts from this 
statement are reprinted below:

 Statement of Tim S. McClain, General Counsel, Department of Veterans 
                                Affairs

    Good afternoon Mr. Chairman and Members of the Committee. I 
am pleased to be here to present the Administration's views on 
six bills that pertain primarily to the veterans health-care 
system.


                                S. 1156


    Mr. Chairman, I will begin by addressing S. 1156, your 
omnibus health-care bill. It includes provisions pertaining to 
long-term health care in VA, personnel matters, authorization 
for construction of two major medical facilities, and permanent 
authorization of the Veterans Benefits Administration to obtain 
disability examinations on a contract basis.

Long-term care provisions
    In 1999, the Congress made significant changes in our long-
term-care programs through enactment of what we commonly refer 
to as ``The Millennium Act.'' Among other things, that law 
directed that VA ``shall'' furnish nursing home care to any 
veteran needing such care for a service-connected disability 
and to any veteran with a service-connected disability rated at 
least 70 percent. It also directed that VA include various non-
institutional extended care services in the medical benefits 
package. At the time of enactment, the impact both provisions 
would have on VA was uncertain, and Congress chose to limit 
their applicability to the four-year period ending December 
31st of this year. Section 101 of your bill would extend the 
provisions for an additional five years through December 31, 
2008. That section would also extend the requirement that we 
furnish needed nursing home care to all veterans with service-
connected disabilities rated 50 or 60 percent.
    The Department's view is that it would be premature at this 
time to extend the two Millennium Act provisions for five 
years. As you know, we provided the Congress with a report on 
implementation of the Millennium Act in March. We are 
continuing to gather information and will provide the Congress 
with an additional report later this year. That report, and 
other actuarial analyses, will provide data that will aid VHA 
leaders and Congressional policymakers in determining 
appropriate longer-term directions for development of VA long-
term care services. Accordingly, we recommend only a one-year 
extension at this time.
    We are also concerned about extending so-called 
``mandatory'' nursing home eligibility to all veterans with 
service-connected disabilities rated at least 50 percent. We 
estimate that the change from 70 percent to 50 percent would 
cost $2.5 billion over 5 years and has not been planned for in 
the budget process. As a result, the provision could have 
serious unintended consequences including slowing the rate of 
growth of non-institutional long-term care services and 
reducing the availability of services for non-mandatory 
categories of veterans because of competing priorities for 
limited resources. We recommend that the Committee defer any 
such change in law until further data about VA's experience 
under the Millennium Act are available to better inform its 
decision. We also believe State homes should be included in the 
options available to these severely disabled service-connected 
veterans. State-home care should be made available to these 
veterans without out-of-pocket cost. We would like to work with 
the Committee to develop the necessary legislation.
    Section 102 of your bill would amend existing law to 
clarify that we have authority to provide veterans with nursing 
home care and adult day health care in private community 
nursing homes and other facilities using agreements for 
reimbursement similar to those used under the Medicare Program. 
That approach would differ from our current practice of 
providing such care only through actual contracts with the 
nursing homes or providers of adult day health care. To 
implement the authority, the Department would have to 
promulgate regulations to establish a program to directly 
reimburse the community facilities on behalf of veterans for 
the care furnished. The regulations would include all of the 
parameters for the program, including amounts VA would pay for 
various types of care, and the standards that facilities would 
have to meet to receive VA reimbursement. In many respects, the 
parameters for the program could mirror those now used in the 
Medicare Program. We do not object to section 102 as an 
alternative approach to assist us in meeting the needs of 
veterans for nursing home care and adult day health care in 
non-Department facilities.

Construction authorization
    Section 201 of the bill would authorize construction of a 
long-term care facility in Lebanon, Pennsylvania, in an amount 
not exceeding $14,500,000 and a long-term care facility in 
Beckley, West Virginia, in an amount not to exceed $20,000,000. 
We would point out that the cost for the project in Beckley is 
now estimated to be $20,800,000. We generally support these 
projects in concept and we will be considering them in the 
context of future budget preparations.
    Mr. Chairman, the President's fiscal year 2004 budget 
included a request for authorization for a major construction 
project at Chicago (West Side), Illinois for a new inpatient 
tower; outpatient clinic leases in Boston, Massachusetts and 
Pensacola, Florida; and a lease for the Health Administration 
Center in Denver, Colorado. In addition we requested an 
authorization for an outpatient lease in Charlotte, North 
Carolina that received an appropriation in FY 2002. We ask that 
you act favorably on those requests, as well as those seismic 
projects that were listed in the President's FY 2003 budget. 
The facilities at Palo Alto, San Francisco, and West Los 
Angeles remain as a critical risk to the safety of patients and 
staff in the case of seismic events and those projects remain a 
high priority for the Department. We are confident that the 
CARES studies will validate the continued need for these major 
facilities. In addition, we request authorization for a health 
care facility in Las Vegas to replace the existing clinic that 
we were required to vacate on July 1st because of structural 
inadequacies in the building. It is important that the 
Department be provided this authorization so we will be able to 
move forward next year.

Personnel provisions
    S. 1156 also contains four separate sections that address 
personnel matters. The first provision, section 301, would 
amend existing law to add a significant number of mission-
critical, scarce, skilled health care positions, such as 
dietitians, medical technologists, and medical records 
administrators/specialists to the current list of title-38 
hybrid positions. We support the goals of increased flexibility 
in staffing these positions because of today's fierce 
competition for qualified candidates (particularly those who 
possess skills acquired in primary care settings), market-wide 
shortages in these health care occupations, and VA's aging 
health care work force. We are currently considering a similar 
proposal to increase flexibility in staffing these positions, 
and the Office of Personnel Management recently issued interim 
final regulations greatly expanding availability of direct hire 
authority for critical need or shortage situations. We are 
examining whether or not we need legislation given these brand 
new regulations, and will work with Congress to reconcile if we 
do.
    In the past, we have not been able to quickly and 
efficiently recruit candidates. Our inability to consistently 
make timely job offers is a chief reason why the Department is 
experiencing hiring difficulties. These difficulties can 
adversely affect access to care for many of our veterans. 
Second, the delays cause many qualified candidates to forego 
consideration of VA employment. With multiple job opportunities 
in hand, they turn to the private sector where the hiring 
process is more responsive.
    Section 302 of the bill would amend the law establishing 
the Veterans Canteen Service (VCS) to permit persons employed 
by VCS to be considered for competitive service appointments in 
the Department in the same manner that Department employees in 
the competitive service are considered for transfers to 
competitive service positions. Currently, VCS Management 
Program employees may be appointed to positions in the 
competitive service under an interchange agreement between the 
Department and the Office of Personnel Management (OPM). 
Section 302 would authorize a similar interchange agreement for 
non-managerial VCS employees. It would authorize all VCS 
employees to transfer into a competitive service position. Time 
served in the Canteen Service would count toward the 3-year 
service requirement for career civil service status.
    The Administration does not support section 302 because it 
believes that establishing eligibility for the non-competitive 
conversions of VCS hourly employees into competitive service 
positions would provide an unfair advantage over excepted 
service employees from other Departments and agencies seeking 
appointment to competitive service positions at VA.
    Section 303 of the bill would retroactively apply recently 
legislated changes to the method of computing retirement 
annuities for certain VA health-care personnel who are already 
retired. The Department of Veterans Affairs Health Care 
Programs Enhancement Act of 2001 prospectively changed the way 
part-time service performed before April 7, 1986, by certain VA 
health-care personnel is credited for annuity purposes. Section 
303 would extend this change to individuals who retired before 
the effective date of enactment. Traditionally, retirement 
benefit changes have been applicable only to individuals 
retiring after enactment of the change. This change would 
recreate a very expensive precedent for government-wide 
application of the principle of retroactivity in retirement 
cases involving part-time service. Consequently, the 
Administration strongly opposes this provision, as it would 
impact retirement fund outlays and have a PAYGO cost not 
contemplated in the President's Budget

           *         *         *         *         *



                                S. 1213


    S. 1213, a bill entitled the ``Filipino Veterans'' Benefits 
Act of 2003,'' is the Administration's bill that you introduced 
on our behalf. I want to express my sincere appreciation to you 
for introducing the measure. As you know, section 2 of the bill 
would extend health care benefits to Filipino veterans residing 
legally in the United States who served in the Commonwealth 
Army and new Philippine Scouts. I urge that you act on the bill 
as expeditiously as possible so we can meet the needs of these 
very deserving Filipino veterans.


                      s. 615, s. 1289 and s. 1144


    S. 615 would designate the outpatient clinic located in 
Horsham, Pennsylvania, as the ``Victor J. Saracini Department 
of Veterans Affairs Outpatient Clinic''. S. 1289 would 
designate the Minneapolis VA Medical Center as the Paul 
Wellstone Department of Veterans Affairs Medical Center. S. 
1144 would designate the facility in Chicago now known as the 
West Side VA Medical Center as the ``Jesse Brown Department of 
Veterans Affairs Medical Center''. While we ordinarily defer to 
the views of Congress on the naming of Federal properties, in 
the case of former Senator Wellstone and former Secretary Jesse 
Brown we make an exception. Enactment of S. 1144 and S. 1289 
would be an altogether fitting tribute to these two truly 
courageous and steadfast advocates for America's veterans.


                                s. 1283


    S. 1283 would impose new Congressional notice-and-wait 
requirements on VA before we could take any action to implement 
our Capital Asset Realignment for Enhances Services (CARES) 
decisions. The bill would prohibit VA from taking a proposed 
action for 60 days following submission of advance written 
notice of the action to Congress, or before 30 days during a 
continuous session of Congress.
    Mr. Chairman, we must object to enactment of this bill. As 
drafted, the bill is overly broad, unnecessary, and would 
significantly impede our completion of the CARES process. By 
stating that VA must provide prior notice of ``any action,'' 
apparently including even minor actions, the measure would 
effectively prevent completing the CARES process in anything 
like a timely manner. I can assure you we will provide Congress 
and this Committee with our CARES plan well in advance of 
undertaking significant actions to implement it. Congress will 
have considerable lead-time to consider our proposed actions 
before they are undertaken.
    I would also point out that we are already subject to 
various existing notice-and-wait requirements that serve the 
same purpose as that intended by this legislation. We currently 
provide such advance notice under section 510 of title 38 
whenever we undertake a significant reorganization of any 
office or facility. Congress must also approve in advance any 
significant construction project, and we provide Congress with 
advance notice of any proposed enhanced-use leases. The 
additional requirements this bill would impose are therefore 
unnecessary.

           *         *         *         *         *

    That concludes my prepared statement. I would be pleased to 
answer any questions you may have.

    Changes in Existing Law Made by the Committee Bill, as Reported

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the Committee bill, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


Sec. 1701. Definitions

           *       *       *       *       *       *       *


          (1) * * *

           *       *       *       *       *       *       *

          (10) (A) During the period beginning on November 30, 
        1999, and ending on [December 31, 2003] December 31, 
        2008, the term ``medical services'' includes 
        noninstitutional extended care services.

           *       *       *       *       *       *       *


Sec. 1710A. Required nursing home care

    (a) * * *

           *       *       *       *       *       *       *

    (c) The provisions of subsection (a) shall terminate on 
[December 31, 2003], December 31, 2008.

           *       *       *       *       *       *       *


Sec. 1720. Transfers for nursing home care; adult day health care

    (a) * * *

           *       *       *       *       *       *       *

    (c) (1) In furnishing nursing home care, adult day health 
care, or other extended care services under this section, the 
Secretary may enter into agreements for furnishing such care or 
services utilizing such authorities relating to agreements for 
the provision of services under section 1866 of the Social 
Security Act (42 U.S.C. 1395cc) as the Secretary considers 
appropriate.
    (2) In applying the provisions of section 2(b)(1) of the 
Service Contract Act of 1965 (41 U.S.C. 351(b)(1)) with respect 
to any contract entered into under this section to provide 
nursing home care of veterans, the payment of wages not less 
than those specified in section 6(b) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 206(b)) shall be deemed to 
constitute compliance with such provisions.

           *       *       *       *       *       *       *

    (f)(1) * * *

           *       *       *       *       *       *       *

          (B) The Secretary may provide in-kind assistance 
        (through the services of Department employees and the 
        sharing of other Department resources) to a facility 
        furnishing care to veterans under subparagraph (A) of 
        this paragraph. Any such in-kind assistance shall be 
        provided under a contract or agreement between the 
        Secretary and the facility concerned. The Secretary may 
        provide such assistance only for use solely in the 
        furnishing of adult day health care and only if, under 
        such contract or agreement, the Department receives 
        reimbursement for the full cost of such assistance, 
        including the cost of services and supplies and normal 
        depreciation and amortization of equipment. Such 
        reimbursement may be made by reduction in the charges 
        to the United States or by payment to the United 
        States. Any funds received through such reimbursement 
        shall be credited to funds allotted to the Department 
        facility that provided the assistance.

           *       *       *       *       *       *       *


Sec. 1734. Hospital and nursing home care and medical services in the 
                    United States

    (a) The Secretary shall, within the limits of Department 
facilities, [may] furnish hospital and nursing home care and 
medical services to [Commonwealth Army veterans and new 
Philippine Scouts for the treatment of the service-connected 
disabilities of such veterans and scouts.] an individual 
described in subsection (b) in the same manner as provided for 
under section 1710 of this title.
    (b) An individual [who is in receipt of benefits under 
subchapter II or IV of chapter 11 of this title [38 USCS 
Sec. Sec. 1110 et seq. or 1131 et seq.] paid by reason of 
service] described in [section 107(a) of this title] this 
subsection is any individual who is residing in the United 
States and [who] is a citizen of, or an alien lawfully admitted 
for permanent residence in, the United States [shall be 
eligible for hospital and nursing home care and medical 
services in the same manner as a veteran, and the disease or 
disability for which such benefits are paid shall be considered 
to be a service-connected disability for purposes of this 
chapter [38 USCS Sec. Sec. 1701 et seq.].] as follows:
          (1) A Commonwealth Army veteran
          (2) A new Philippine Scout.

           *       *       *       *       *       *       *


Sec. 2041. Housing assistance for homeless veterans

    (a) * * *

           *       *       *       *       *       *       *

    (c) The Secretary may not enter into agreements under 
subsection (a) after [December 31, 2003] December 31, 2006.

           *       *       *       *       *       *       *


Sec. 7306. Office of the Under Secretary for Health

    (a) * * *

           *       *       *       *       *       *       *

    [(d)--Except as provided in subsection (e)--
          [(1) any appointment under this section shall be for 
        a period of four years, with reappointment permissible 
        for successive like periods,
          [(2) any such appointment or reappointment may be 
        extended by the Secretary for a period not in excess of 
        three years, and
          [(3) any person so appointed or reappointed or whose 
        appointmentor reappointment is extended shall be 
subject to removal by the Secretary for cause.]
    [(e)](d)(1) The Secretary may designate a member of the 
Chaplain Service of the Department as Director, Chaplain 
Service, for a period of two years, subject to removal by the 
Secretary for cause. Redesignation under this subsection may be 
made for successive like periods or for any period not 
exceeding two years.
    (2) A person designated as Director, Chaplain Service, 
shall at the end of such person's period of service as Director 
revert to the position, grade, and status which such person 
held immediately before being designated Director, Chaplain 
Service, and all service as Director, Chaplain Service, shall 
be creditable as service in the former position.
    [(f)](e) In organizing the Office and appointing persons to 
positions in the Office, the Under Secretary shall ensure 
that--
          (1) the Office is staffed so as to provide the Under 
        Secretary, through a designated clinician in the 
        appropriate discipline in each instance, with expertise 
        and direct policy guidance on--
                  (A) unique programs operated by the 
                Administration to provide for the specialized 
                treatment and rehabilitation of disabled 
                veterans (including blind rehabilitation, care 
                of spinal cord dysfunction, mental illness, and 
                long-term care); and
                  (B) the programs established under section 
                1712A of this title; and
          (2) with respect to the programs established under 
        section 1712A of this title, a clinician with 
        appropriate expertise in those programs is responsible 
        to the Under Secretary for the management of those 
        programs.

           *       *       *       *       *       *       *


Sec. 7401. Appointments in Veterans Health Administration

           *       *       *       *       *       *       *


          (1) * * *
          (2) [Psychologists (other than those described in 
        paragraph (3)), dietitians,] Dietitians, and other 
        scientific and professional personnel, such as 
        microbiologists, chemists, biostatisticians, and 
        medical and dental technologists.
          (3) Clinical or counseling psychologists who hold 
        diplomas as diplomates in psychology from an 
        accrediting authority approved by the Secretary, other 
        psychologists, certified or registered respiratory 
        therapists, licensed physical therapists, licensed 
        practical or vocational nurses, pharmacists, [and] 
        occupational therapists, kinesiologists, and social 
        workers. 

           *       *       *       *       *       *       *


Sec. 7802. Duties of Secretary with respect to Service

    The Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *

          (5) employ such persons as are necessary for the 
        establishment, maintenance, and operation of the 
        Service, and pay the salaries, wages, and expenses of 
        all such employees from the funds of the Service. 
        Personnel necessary for the transaction of the business 
        of the Service at canteens, warehouses, and storage 
        depots shall be appointed, compensated from funds of 
        the Service, and removed by the Secretary without 
        regard to the provisions of title 5 governing 
        appointments in the competitive service and chapter 51, 
        and subchapter III of chapter 53 of title 5 [5 USCS 
        Sec. Sec. 5101 et seq., 5331 et seq.]. Those employees 
        are subject to the provisions of title 5 relating to a 
        preference eligible described in section 2108(3) of 
        title 5, subchapter I of chapter 81 of title 5 [5 USCS 
        Sec. Sec. 8101 et seq.], and subchapter III of chapter 
        83 of title 5 [5 USCS Sec. Sec. 8331 et seq.]. 
        Employees and personnel under this clause may be 
        considered for appointment in Department positions in 
        the competitive service in the same manner that 
        Department employees in the competitive service are 
        considered for transfer to such positions. An employee 
        or individual appointed as personnel under this clause 
        who is appointed to a Department position under the 
        authority of the preceding sentence shall be treated as 
        having a career appointment in such position once such 
        employee or individual meets the three-year requirement 
        for career tenure (with any previous period of 
        employment or appointment in the Service being counted 
        toward satisfaction of such requirement);

           *       *       *       *       *       *       *


Sec. 8104. Congressional approval of certain medical facility 
                    acquisitions

    (a)(1) * * *

           *       *       *       *       *       *       *

    (3) For the purpose of this subsection:
          (A) The term ``major medical facility project'' means 
        a project for the construction, alteration, or 
        acquisition of a medical facility involving a total 
        expenditure of more than [$4,000] $9,000,000, but such 
        term does not include an acquisition by exchange.

           *       *       *       *       *       *       *


            VETERANS MILLENNIUM HEALTH CARE AND BENEFITS ACT


SEC. 103. PILOT PROGRAM RELATING TO ASSISTED LIVING

    (a) * * *
    (b) [Location] Locations of Pilot Program.--
          (1) The pilot program shall be carried out in a 
        designated health care region of the Department 
        selected by the Secretary for purposes of this section.
          (2)(A) In the addition to the health care region of 
        the Department selected for the pilot program under 
        paragraph (1), the Secretary may also carry out the 
        pilot program in not more than one additional 
        designated health care region of the Department 
        selected by the Secretary for purposes of this section.
          (B) Notwithstanding subsection (f), the authority of 
        the Secretary to provide services under the pilot 
        program in a health care region of the Department 
        selected under subparagraph (A) shall cease on the date 
        that is three years after the commencement of the 
        provision of services under the pilot program in the 
        health care region.

           *       *       *       *       *       *       *


SEC. 116. SPECIALIZED MENTAL HEALTH SERVICES

    (a) * * *

           *       *       *       *       *       *       *

    (c) Funding.--
          (1) In carrying out the program described in 
        subsection (a), the Secretary shall identify, from 
        funds available to the Department for medical care, an 
        amount of not less than [$15,000,000] $25,000,000 in 
        each of fiscal years 2004, 2005, and 2006 to be 
        available to carry out the program and to be allocated 
        to facilities of the Department pursuant to subsection 
        (d).
          (2) In identifying available amounts pursuant to 
        paragraph (1), the Secretary shall ensure that, after 
        the allocation of those funds under subsection (d), the 
        total expenditure for programs relating to (A) the 
        treatment of post-traumatic stress disorder, and (B) 
        substance use disorders is not less than [$15,000,000] 
        $25,000,000 in excess of the baseline amount.
          (3) (A) For purposes of paragraph (2), the baseline 
        amount is the amount of the total expenditures on such 
        programs for the most recent fiscal year for which 
        final expenditure amounts are known, adjusted to 
        reflect any subsequent increase in applicable costs to 
        deliver such services in the Veterans Health 
        Administration, as determined by the Committee on Care 
        of Severely Chronically Mentally Ill Veterans.
          (B) For purposes of this paragraph, in fiscal years 
        2004, 2005, and 2006, the fiscal year utilized to 
        determine the baseline amount shall be fiscal year 
        2003.
    (d) Allocation of funds to Department facilities. [The 
Secretary] (1) In each of fiscal years 2004, 2005, and 2006, 
the Secretary shall allocate funds identified pursuant to 
subsection (c)(1) to individual medical facilities of the 
Department as the Secretary determines appropriate based upon 
proposals submitted by those facilities for the use of those 
funds for improvements to specialized mental health services.
    (2) In allocating funds to facilities in a fiscal year 
under paragraph (1), the Secretary shall ensure that--
          (A) not less than $10,000,000 is allocated by direct 
        grants to programs that are identified by the Mental 
        Health Strategic Health Care Group and the Committee on 
        Care of Severely Chronically Mentally Ill Veterans;
          (B) not less than $5,000,000 is allocated for 
        programs on post-traumatic stress disorder; and
          (C) not less than $5,000,000 is allocated for 
        programs on substance abuse disorder.
    (3) The Secretary shall provide that the funds to be 
allocated under this section during each of fiscal years 2004, 
2005, and 2006 are funds for a special purpose program for 
which funds are not allocated through the Veterans Equitable 
Resource Allocation system.

           *       *       *       *       *       *       *


                 PERSIAN GULF WAR VETERANS' BENEFIT ACT


                   TITLE I--PERSIAN GULF WAR VETERANS


SEC. 107. EVALUATION OF HEALTH STATUS OF SPOUSES AND CHILDREN OF 
                    PERSIAN GULF WAR VETERANS.

    (a) * * *

           *       *       *       *       *       *       *

    (b) Duration of Program. The program shall be carried out 
during the period beginning on November 1, 1994, and ending on 
[December 31, 2003] December 31, 2007.

           *       *       *       *       *       *       *


                                
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