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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-293
_______________________________________________________________________


 
            VETERANS HEALTH PROGRAMS IMPROVEMENT ACT OF 1997

_______________________________________________________________________


October 2, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 2206]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 2206) to amend title 38, United States Code, to 
improve programs of the Department of Veterans Affairs for 
homeless veterans, and for other purposes, having considered 
the same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans Health Programs Improvement 
Act of 1997''.

SEC. 2. TREATMENT AND REHABILITATION FOR SERIOUSLY MENTALLY ILL AND 
                    HOMELESS VETERANS.

  (a) Codification and Revisions of Veterans Homeless Programs.--
Chapter 17 of title 38, United States Code, is amended by adding at the 
end the following new subchapter:

 ``SUBCHAPTER VII--TREATMENT AND REHABILITATION FOR SERIOUSLY MENTALLY 
                       ILL AND HOMELESS VETERANS

``Sec. 1771. General treatment

  ``In providing care and services under section 1710 of this title to 
veterans suffering from serious mental illness, including veterans who 
are homeless, the Secretary may provide (directly or in conjunction 
with a governmental or other entity)--
          ``(1) outreach services;
          ``(2) care, treatment, and rehabilitative services (directly 
        or by contract in community-based treatment facilities, 
        including halfway houses); and
          ``(3) therapeutic transitional housing assistance under 
        section 1772 of this title, in conjunction with work therapy 
        under section 1718(a) or (b) of this title and outpatient care.

``Sec. 1772. Therapeutic housing

  ``(a) The Secretary, in connection with the conduct of compensated 
work therapy programs, may operate residences and facilities as 
therapeutic housing.
  ``(b) The Secretary may use such procurement procedures for the 
purchase, lease, or other acquisition of residential housing for 
purposes of this section as the Secretary considers appropriate to 
expedite the opening and operation of transitional housing and to 
protect the interests of the United States.
  ``(c) A residence or other facility may be operated as transitional 
housing for veterans described in paragraphs (1) and (2) of section 
1710(a) of this title under the following conditions:
          ``(1) Only veterans described in those paragraphs and a house 
        manager may reside in the residence.
          ``(2) Each resident, other than the house manager, shall be 
        required to make payments that contribute to covering the 
        expenses of board and the operational costs of the residence 
        for the period of residence in such housing.
          ``(3) In order to foster the therapeutic and rehabilitative 
        objectives of such housing (A) residents shall be prohibited 
        from using alcohol or any controlled substance or item, (B) any 
        resident violating that prohibition may be expelled from the 
        residence, and (C) each resident shall agree to undergo drug 
        testing or such other measures as the Secretary shall prescribe 
        to ensure compliance with that prohibition.
          ``(4) In the establishment and operation of housing under 
        this section, the Secretary shall consult with appropriate 
        representatives of the community in which the housing is 
        established and shall comply with zoning requirements, building 
        permit requirements, and other similar requirements applicable 
        to other real property used for similar purposes in the 
        community.
          ``(5) The residence shall meet State and community fire and 
        safety requirements applicable to other real property used for 
        similar purposes in the community in which the transitional 
        housing is located, but fire and safety requirements applicable 
        to buildings of the Federal Government shall not apply to such 
        property.
  ``(d) The Secretary shall prescribe the qualifications for house 
managers for transitional housing units operated under this section. 
The Secretary may provide for free room and subsistence for house 
managers in addition to, or instead of payment of, a fee for such 
services.
  ``(e)(1) The Secretary may operate as transitional housing under this 
section--
          ``(A) any suitable residential property acquired by the 
        Secretary as the result of a default on a loan made, 
        guaranteed, or insured under chapter 37 of this title;
          ``(B) any suitable space in a facility under the jurisdiction 
        of the Secretary that is no longer being used (i) to provide 
        acute hospital care, or (ii) as housing for medical center 
        employees; and
          ``(C) any other suitable residential property purchased, 
        leased, or otherwise acquired by the Secretary.
  ``(2) In the case of any property referred to in paragraph (1)(A), 
the Secretary shall--
          ``(A) transfer administrative jurisdiction over such property 
        within the Department from the Veterans Benefits Administration 
        to the Veterans Health Administration; and
          ``(B) transfer from the General Post Fund of the Department 
        of Veterans Affairs to the appropriate revolving fund under 
        chapter 37 of this title an amount (not to exceed the amount 
        the Secretary paid for the property) representing the amount 
        the Secretary considers could be obtained by sale of such 
        property to a nonprofit organization or a State for use as a 
        shelter for homeless veterans.
  ``(3) In the case of any residential property obtained by the 
Secretary from the Department of Housing and Urban Development under 
this section, the amount paid by the Secretary to that Department for 
that property may not exceed the amount that the Secretary of Housing 
and Urban Development would charge for the sale of that property to a 
nonprofit organization or a State for use as a shelter for homeless 
persons. Funds for such charge shall be derived from the General Post 
Fund.
  ``(f) The Secretary shall prescribe--
          ``(1) a procedure for establishing reasonable payment rates 
        for persons residing in transitional housing; and
          ``(2) appropriate limits on the period for which such persons 
        may reside in transitional housing.
  ``(g) The Secretary may dispose of any property acquired for the 
purpose of this section. The proceeds of any such disposal shall be 
credited to the General Post Fund of the Department of Veterans 
Affairs.
  ``(h) Funds received by the Department under this section shall be 
deposited in the General Post Fund. The Secretary may distribute out of 
the fund such amounts as necessary for the acquisition, management, 
maintenance, and disposition of real property for the purpose of 
carrying out such program. The Secretary shall manage the operation of 
this section so as to ensure that expenditures under this subsection 
for any fiscal year shall not exceed by more than $500,000 proceeds 
credited to the General Post Fund under this section. The operation of 
the program and funds received shall be separately accounted for, and 
shall be stated in the documents accompanying the President's budget 
for each fiscal year.

``Sec. 1773. Additional services at certain locations

  ``(a) Subject to the availability of appropriations, the Secretary 
shall operate a program under this section to expand and improve the 
provision of benefits and services by the Department to homeless 
veterans.
  ``(b) The program shall include the establishment of not fewer than 
eight programs (in addition to any existing programs providing similar 
services) at sites under the jurisdiction of the Secretary to be 
centers for the provision of comprehensive services to homeless 
veterans. The services to be provided at each site shall include a 
comprehensive and coordinated array of those specialized services which 
may be provided under existing law.
  ``(c) The program shall include the services of such employees of the 
Veterans Benefits Administration as the Secretary determines 
appropriate at sites under the jurisdiction of the Secretary at which 
services are provided to homeless veterans.

``Sec. 1774. Coordination with other agencies and organizations

  ``(a) In assisting homeless veterans, the Secretary shall coordinate 
with, and may provide services authorized under this title in 
conjunction with, State and local governments, other appropriate 
departments and agencies of the Federal Government, and nongovernmental 
organizations.
  ``(b)(1) The Secretary shall require the director of each medical 
center or the director of each regional benefits office to make an 
assessment of the needs of homeless veterans living within the area 
served by the medical center or regional office, as the case may be.
  ``(2) Each such assessment shall be made in coordination with 
representatives of State and local governments, other appropriate 
departments and agencies of the Federal Government, and nongovernmental 
organizations that have experience working with homeless persons in 
that area.
  ``(3) Each such assessment shall identify the needs of homeless 
veterans with respect to the following:
          ``(A) Health care.
          ``(B) Education and training.
          ``(C) Employment.
          ``(D) Shelter.
          ``(E) Counseling.
          ``(F) Outreach services.
  ``(4) Each assessment shall also indicate the extent to which the 
needs referred to in paragraph (3) are being met adequately by the 
programs of the Department, of other departments and agencies of the 
Federal Government, of State and local governments, and of 
nongovernmental organizations.
  ``(5) Each assessment shall be carried out in accordance with uniform 
procedures and guidelines prescribed by the Secretary.
  ``(c) In furtherance of subsection (a), the Secretary shall require 
the director of each medical center and the director of each regional 
benefits office, in coordination with representatives of State and 
local governments, other Federal officials, and nongovernmental 
organizations that have experience working with homeless persons in the 
areas served by such facility or office, to--
          ``(1) develop a list of all public and private programs that 
        provide assistance to homeless persons or homeless veterans in 
        the area concerned, together with a description of the services 
        offered by those programs;
          ``(2) seek to encourage the development by the 
        representatives of such entities, in coordination with the 
        director, of a plan to coordinate among such public and private 
        programs the provision of services to homeless veterans;
          ``(3) take appropriate action to meet, to the maximum extent 
        practicable through existing programs and available resources, 
        the needs of homeless veterans that are identified in the 
        assessment conducted under subsection (b); and
          ``(4) attempt to inform homeless veterans whose needs the 
        director cannot meet under paragraph (3) of the services 
        available to such veterans within the area served by such 
        center or office.''.
  (b) Conforming Amendments.--(1) Section 1720A of such title is 
amended--
          (A) by striking out subsections (a), (e), (f), and (g); and
          (B) by redesignating subsections (b), (c), and (d) as 
        subsections (a), (b), and (c), respectively.
  (2) The heading of such section is amended to read as follows:

``Sec. 1720A. Treatment and rehabilitative services for persons with 
                    drug or alcohol dependency''.

  (c) Conforming Repeals.--The following provisions are repealed:
          (1) Section 7 of Public Law 102-54 (38 U.S.C. 1718 note).
          (2) Section 107 of the Veterans' Medical Programs Amendments 
        of 1992 (38 U.S.C. 527 note).
          (3) Section 2 of the Homeless Veterans Comprehensive Service 
        Programs Act of 1992 (38 U.S.C. 7721 note).
  (d) Clerical Amendments.--The table of sections at the beginning of 
chapter 17 of such title is amended--
          (1) by striking out the item relating to section 1720A and 
        inserting in lieu thereof the following:

``1720A. Treatment and rehabilitative services for persons with drug or 
alcohol dependency.''; and
          (2) by adding at the end the following:

  ``subchapter vii--treatment and rehabilitation for seriously mentally 
                        ill and homeless veterans

``1771. General treatment.
``1772. Therapeutic housing.
``1773. Additional services at certain locations.
``1774. Coordination with other agencies and organizations.''.

SEC. 3. EXTENSION OF HOMELESS VETERANS COMPREHENSIVE SERVICE GRANT 
                    PROGRAM.

  (a) Extension for Two Fiscal Years.--Subsection (a)(2) of section 3 
of the Homeless Veterans Comprehensive Service Programs Act of 1992 (38 
U.S.C. 7721 note) is amended by striking out ``September 30, 1997'' and 
inserting in lieu thereof ``September 30, 1999''.
  (b) Repeal of Limitation on Number of Projects.--Subsection (b)(2) of 
such section is amended by striking out ``, which shall'' and all that 
follows through ``paragraph (1)''.
  (c) Technical Correction.--Subsection (a)(1) of such section is 
amended by striking out ``, during''.

SEC. 4. ANNUAL REPORT ON ASSISTANCE TO HOMELESS VETERANS.

  Section 1001 of the Veterans' Benefits Improvements Act of 1994 (38 
U.S.C. 7721 note) is amended--
          (1) in subsection (a)(2)--
                  (A) by striking out ``and'' at the end of 
                subparagraph (B);
                  (B) by striking out the period at the end of 
                subparagraph (C) and inserting in lieu thereof ``; 
                and''; and
                  (C) by adding at the end the following new 
                subparagraphs:
          ``(D) evaluate the effectiveness of the programs of the 
        Department (including residential work-therapy programs, 
        programs combining outreach, community-based residential 
        treatment, and case-management, and contract care programs for 
        alcohol and drug-dependence or abuse disabilities) in providing 
        assistance to homeless veterans; and
          ``(E) evaluate the effectiveness of programs established by 
        recipients of grants under section 3 of the Homeless Veterans 
        Comprehensive Service Programs Act of 1992 (38 U.S.C. 7721 
        note), and describe the experience of such entities in applying 
        for and receiving grants from the Secretary of Housing and 
        Urban Development to serve primarily homeless persons who are 
        veterans.''; and
          (2) by striking out subsection (b) and redesignating 
        subsection (c) as subsection (b).

SEC. 5. NONINSTITUTIONAL ALTERNATIVES TO NURSING HOME CARE.

  Section 1720C of title 38, United States Code, is amended--
          (1) in subsection (a), by striking out ``During'' and all 
        that follows through ``furnishing of'' and inserting in lieu 
        thereof ``The Secretary may furnish''; and
          (2) in subsection (b)(1), by striking out ``pilot''.

SEC. 6. PERSIAN GULF WAR VETERANS.

  (a) Scope of Counseling.--Section 703 of the Veterans Health Care Act 
of 1992 (Public Law 102-585; 106 Stat. 4976) is amended by adding at 
the end the following new subsection:
  ``(c) Form of Counseling.--Counseling provided in this section may 
not be provided through written materials only, but shall include 
verbal counseling.''.
  (b) Criteria for Priority Health Care.--(1) Subsection (a)(2)(F) of 
section 1710 of title 38, United States Code, is amended by striking 
out ``environmental hazard'' and inserting in lieu thereof ``other 
conditions''.
  (2) Subsection (e)(1)(C) of such section is amended--
          (A) by striking out ``the Secretary finds may have been 
        exposed while serving'' and inserting in lieu thereof 
        ``served'';
          (B) by striking out ``to a toxic substance or environmental 
        hazard''; and
          (C) by striking out ``exposure'' and inserting in lieu 
        thereof ``service''.
  (3) Subsection (e)(2)(B) of such section is amended by striking out 
``an exposure'' and inserting in lieu thereof ``the service''.
  (c) Demonstration Projects for Treatment of Persian Gulf Illness.--
(1) The Secretary shall carry out a program of demonstration projects 
to test new approaches to treating, and improving the satisfaction with 
such treatment of, Persian Gulf veterans who suffer from undiagnosed 
and ill-defined disabilities. The program shall be established not 
later than July 1, 1998, and shall be carried out at up to 10 
geographically dispersed medical centers of the Department of Veterans 
Affairs.
  (2) At least one of each of the following models shall be used at no 
less than two of the demonstration projects:
          (A) A specialized clinic which serves Persian Gulf veterans.
          (B) Multidisciplinary treatment aimed at managing symptoms.
          (C) Use of case managers.
  (3) A demonstration project under this subsection may be undertaken 
in conjunction with another funding entity, including agreements under 
section 8111 of title 38, United States Code.
  (4) The Secretary shall make available from appropriated funds (which 
have been retained for contingent funding) $5,000,000 to carry out the 
demonstrations projects.
  (5) The Secretary may not approve a medical center as a location for 
a demonstration project under this subsection unless a peer review 
panel has determined that the proposal submitted by that medical center 
is among those proposals that have met the highest competitive 
standards of clinical merit and the Secretary has determined that the 
facility has the ability to--
          (A) attract the participation of clinicians of outstanding 
        caliber and innovation to the project; and
          (B) effectively evaluate the activities of the project.
  (6) In determining which medical centers to select as locations for 
demonstration projects under this subsection, the Secretary shall give 
special priority to medical centers that have demonstrated a capability 
to compete successfully for extramural funding support for research 
into the effectiveness and cost-effectiveness of the care provided 
under the demonstration project.

SEC. 7. PERSONNEL POLICY.

  Section 7425 of title 38, United States Code, is amended by adding at 
the end the following new subsection:
  ``(c)(1) Notwithstanding any other provision of law, employees 
described in paragraph (2), and the personnel positions in which such 
employees are employed, are not subject to any reduction required by 
law or executive branch policy in the number or percentage of 
employees, or of personnel positions, within specified pay grades.
  ``(2) Paragraph (1) applies to employees, and personnel positions, of 
the Veterans Health Administration performing the following functions:
          ``(A) The provision of, or the supervision of the provision 
        of, care and services to patients.
          ``(B) The conduct of research.''.

SEC. 8. VETERANS CANTEEN SERVICE.

  (a) Authority To Set Prices.--Paragraph (7) of section 7802 of title 
38, United States Code, is amended to read as follows:
          ``(7) notwithstanding any other provision of law, have sole 
        authority to establish canteens (including vending facilities 
        and vending machines), and determine, and fix the prices of, 
        merchandise and services sold at such canteens;''.
  (b) Off-Premises Use.--Section 7803 of such title is amended--
          (1) in subsection (a), by striking out ``in this 
        subsection;'' and all that follows through ``the premises'' and 
        inserting in lieu thereof ``in this section''; and
          (2) by striking out subsection (b).
  (c) Support Services.--Section 7803 of such title is further amended 
by adding at the end the following new subsection:
  ``(b) A canteen may provide support services to medical facilities of 
the Department. Such services shall be provided on a reimbursable 
basis.''.
  (d) Technical Amendments.--(1) Paragraphs (1) and (11) of section 
7802 of such title are each amended by striking out ``hospitals and 
homes'' and inserting in lieu thereof ``medical facilities''.
  (2) Section 7803(a) of such title is further amended--
          (A) by striking out ``hospitals and homes'' each place it 
        appears and inserting in lieu thereof ``medical facilities''; 
        and
          (B) by striking out ``hospital or home'' and inserting in 
        lieu thereof ``medical facility''.

SEC. 9. TREATMENT FOR RETIREMENT PURPOSES OF SPECIAL PAY PAID TO 
                    PHYSICIANS AND DENTISTS OF THE VETERANS HEALTH 
                    ADMINISTRATION.

  (a) Crediting of Special Pay for Retirement Purposes.--Section 7438 
of title 38, United States Code, is amended by adding at the end the 
following new subsection:
  ``(d)(1) The Secretary may authorize special pay paid under this 
subchapter to a physician or dentist described in paragraph (2) who 
retires from Federal service during the period beginning on the date of 
the enactment of this subsection and ending on September 30, 1999, to 
be considered to be basic pay for the purposes of chapter 83 or 84 of 
title 5, as appropriate.
  ``(2) Paragraph (1) applies to any physician or dentist employed by 
the Veterans Health Administration--
          ``(A) who--
                  ``(i) is in receipt of special pay under chapter 74 
                of this title;
                  ``(ii) is eligible to retire from Federal Government 
                service;
                  ``(iii) has completed, or by September 30, 1999, 
                would have completed, 15 years of service in the 
                Veterans Health Administration (determined assuming the 
                physician or dentist remained continuously employed in 
                the Veterans Health Administration until that date); 
                and,
                  ``(iv) by September 30, 1999, would have completed at 
                least eight years of service in the Veterans Health 
                Administration while in receipt of special pay under 
                this subchapter (determined assuming the physician or 
                dentist remained continuously employed in the Veterans 
                Health Administration until that date); and
          ``(B) with respect to whom the director of the Department 
        health care facility at which the physician or dentist is 
        employed has determined, and certified to the Under Secretary 
        for Health, that--
                  ``(i) the physician or dentist holds a position 
                which, because of changes in staffing patterns or 
                staffing levels at such facility, is no longer required 
                to be maintained at such facility; and
                  ``(ii) there exists no available position at such 
                facility appropriate to the training and experience of 
                the physician or dentist.
  ``(3)(A) For each physician or dentist who retires with the benefit 
of the provisions of paragraph (1), the Secretary shall deposit in the 
Treasury to the credit of the appropriate Federal retirement fund each 
year, for the period specified in subparagraph (B), an amount equal to 
the amount of the annuity paid (or to be paid) to the retired physician 
or dentist for that year.
  ``(B) The period applicable under subparagraph (A) for any retired 
physician or dentist is the period beginning on the date on which the 
physician or dentist retires and ending on the later of the following 
(determined as if the physician or dentist had remained continuously 
employed in the Veterans Health Administration rather than retiring):
          ``(i) The date on which the physician or dentist completed or 
        would have completed 15 years of service in the Veterans Health 
        Administration.
          ``(ii) The date on which the physician or dentist would have 
        completed eight years of service in the Veterans Health 
        Administration while in receipt of special pay under this 
        subchapter.
  ``(C) A physician or dentist who retires with the benefit of the 
provisions of paragraph (1) is not eligible to receive a voluntary 
separation incentive payment under the provisions of section 663 of the 
Treasury, Postal Service, and General Government Appropriations Act, 
1997 (as contained in section 101(f) of division A of Public Law 104-
208; 110 Stat. 3009-383), relating to voluntary separation incentives 
for employees of certain Federal agencies, or any other provision of 
law.''.
  (b) Amendments To Reflect Effective Date of Chapter 74 Special Pay 
Authority.--Subchapter III of chapter 74 of such title is amended as 
follows:
          (1) Section 7431(g)(1) is amended by striking out ``the day 
        before the effective date of this subchapter'' and inserting in 
        lieu thereof ``July 13, 1991,''.
          (2) Section 7432(c)(1) is amended by striking out ``the 
        effective date of the Department of Veterans Affairs Physician 
        and Dentist Recruitment and Retention Act of 1991'' and 
        inserting in lieu thereof ``July 14, 1991''.
          (3) Section 7437(e) is amended in each of paragraphs (1) and 
        (2)--
                  (A) in the matter preceding subparagraph (A), by 
                striking out ``the day before the effective date of 
                this subchapter'' and inserting in lieu thereof ``July 
                13, 1991,''
                  (B) in subparagraph (B), by striking out ``the day 
                before such effective date'' and inserting in lieu 
                thereof ``such date''; and
                  (C) in subparagraph (C), by striking out 
                ``effective''.
          (4) Section 7438(b) is amended--
                  (A) in paragraph (2)(A)--
                          (i) by striking out ``the day before the 
                        effective date of this section'' and inserting 
                        in lieu thereof ``July 13, 1991,''; and
                          (ii) by striking out ``the day before such 
                        effective date'' and inserting in lieu thereof 
                        ``such date''; and
                  (B) in paragraph (2)(B)--
                          (i) by striking out ``the day before the 
                        effective date of this section'' and inserting 
                        in lieu thereof ``July 13, 1991''; and
                          (ii) by striking out ``the effective date of 
                        this section'' and inserting in lieu thereof 
                        ``such date'';
                  (C) in paragraph (4)--
                          (i) by striking out ``the effective date of 
                        this section'' and inserting in lieu thereof 
                        ``July 14, 1991''; and
                          (ii) by striking out ``effective'' after 
                        ``before such''; and
                  (D) in paragraph (5), by striking out ``the effective 
                date of this section'' in subparagraphs (A) and (B) and 
                inserting in lieu thereof ``July 14, 1991''.
          (5) Section 7438(c) is amended by striking out ``the day 
        before the effective date of the Department of Veterans Affairs 
        Physician and Dentist Recruitment and Retention Act of 1991'' 
        and inserting in lieu thereof ``July 13, 1991''.

SEC. 10. PURCHASES OF PHARMACEUTICAL PRODUCTS.

  Section 8125 of title 38, United States Code, is amended--
          (1) by redesignating subsection (e) as subsection (f); and
          (2) by inserting after subsection (d) the following new 
        subsection (e):
  ``(e)(1) A drug, pharmaceutical or biological product, or hematology-
related product that is listed on the pharmaceutical supply schedule 
described in section 8126(a) of this title may only be procured or 
ordered from that supply schedule by or for any entity specified in 
paragraph (2), notwithstanding any other provision of law (whether 
enacted before, on, or after the date of the enactment of this 
subsection).
  ``(2) An entity specified in this paragraph is (A) any agency or 
instrumentality of the Federal Government, or (B) any other entity that 
is specified in Federal law or regulation, as in effect before July 1, 
1997, as eligible to procure or order drugs, pharmaceutical or 
biological products, or hematology-related products from such 
pharmaceutical supply schedule.''.

SEC. 11. TECHNICAL AMENDMENTS.

  (a) Section Reference.--Section 1717(a)(2)(B) of title 38, United 
States Code, is amended by striking out ``section 1710(a)(2)'' and 
inserting in lieu thereof ``section 1710(a)''.
  (b) Hospital Reference.--The Wm. Jennings Bryan Dorn Veterans' 
Hospital in Columbia, South Carolina, shall hereafter be known and 
designated as the ``Wm. Jennings Bryan Dorn Department of Veterans 
Affairs Medical Center''. Any reference to such hospital in any law, 
regulation, document, map, record, or other paper of the United States 
shall be deemed to be a reference to the Wm. Jennings Bryan Dorn 
Department of Veterans Affairs Medical Center.

                              Introduction

    On July 10, 1997, the Subcommittee on Health conducted 
oversight on VA pharmaceutical prices and heard expert 
testimony on draft legislation, which was subsequently 
incorporated into H.R. 2206, pertaining to homeless veterans 
and Persian Gulf veterans.
    On July 22, 1997, the Honorable Cliff Stearns was joined by 
the Honorable Luis Gutierrez in the introduction of H.R. 2206, 
legislation based on such draft bill, to amend title 38, United 
States Code, to improve programs of the Department of Veterans 
Affairs for homeless veterans, and for other purposes.
    The Subcommittee on Health met on July 24, 1997 and ordered 
H.R. 2206 reported to the full Committee by unanimous voice 
vote.
    The Full Committee met on September 11, 1997 and ordered 
H.R. 2206 reported with an amendment in the nature of a 
substitute.

                      Summary of the Reported Bill

    H.R. 2206 would:

    1. LWith regards to homeless veterans,
          a. Codify into a single section of title 38 expiring 
        (and partially overlapping) homeless program 
        authorities and statutory responsibilities under which 
        VA:

                  i) provides (directly or by contract) halfway 
                house and other residential care to homeless, 
                chronically mentally ill veterans (section 115, 
                Public Law 102-322);
                  ii) establishes and provides therapeutic 
                transitional housing for veterans participating 
                in compensated work therapy programs (section 
                7, Public Law 102-54);
                  iii) provides community-based halfway house 
                care under contract for veterans suffering from 
                drug or alcohol dependence (38 U.S.C. 1720A); 
                and
                  iv) is required at the facility level (to the 
                extent resources permit) to meet the needs of 
                homeless veterans identified in a community 
                assessment process (section 107, Public Law 
                102-405).

          b. With respect to the expiring VA grant and per diem 
        program for homeless veterans (section 3, Public Law 
        102-590):

                  i) expand VA's authority to make grants and 
                per diem payments for two years and require a 
                report to evaluate the effectiveness of the 
                programs established under these VA grants; and
                  ii) eliminate provisions of current law which 
                limit the number of specified programs which 
                can be supported through grant funds.

          c. Extend VA's authority under Public Law 102-590 to 
        operate centers which provide comprehensive services to 
        homeless veterans.
          d. Consolidate into a single report requirement the 
        series of separate reporting requirements regarding 
        homeless veterans established under the above public 
        laws.

    2. LExtend VA's expiring authority to provide 
noninstitutional alternatives to nursing home care.

    3. LWith respect to Persian Gulf veterans:
          a. restate with greater specificity VA's obligation 
        to provide counseling to Persian Gulf veterans 
        regarding the findings of its registry examinations;
          b. create a competitive grant program under which up 
        to ten VA facilities would establish demonstration 
        projects to improve care to Persian Gulf veterans with 
        undiagnosed or difficult to diagnose conditions; and
          c. clarify Persian Gulf veterans' eligibility for 
        care (which is now limited to care for conditions which 
        may be attributable to exposure to toxic substances or 
        environmental hazards) by tying such eligibility to any 
        condition which may by associated with the veteran's 
        service in the Gulf. This would eliminate any question 
        regarding provision of care which is unrelated to 
        exposure but cannot be disassociated from service in 
        the Gulf.

    4. LExempt VHA personnel engaged in patient care activities 
or research or supervision of patient care or research, from 
any policy which requires targeted reductions in the number of 
GS-14/15 employees in federal departments.

    5. LClarify VA's exclusive authority to establish and 
operate canteens and vending facilities and set prices, and to 
authorize the Veterans Canteen Service to provide support 
services on a reimbursable basis to VA medical facilities.

    6. LAuthorize the Secretary of Veterans Affairs to permit 
certain retirement-eligible physicians and dentists who, as 
determined by the applicable VA facility director, hold 
positions which are no longer required to be maintained at that 
facility and for whom there is no other appropriate position at 
that facility, to have their ``special pay'' credited in full, 
for annuity purposes, if they retire during the period from the 
date of enactment through September 30, 1999.

    7. LProvides that, notwithstanding any other provision of 
law, drugs listed on the Federal Supply Schedule may only be 
procured from that schedule by a Federal agency or 
instrumentality or other entity currently specified in law or 
regulation as eligible to procure items from the pharmaceutical 
supply schedule.

    8. LMakes technical changes to include clarifying that any 
veteran under treatment by VA is eligible for VA benefits for 
home improvements or structural alterations required for 
continued treatment or home access.

                       Background and Discussion

 Treatment and Rehabilitation for Seriously Mentally Ill and Homeless 
                                Veterans

    Section 2 of the bill is based on the Committee's review of 
several expiring VA programs which aim to assist seriously 
mentally ill and homeless veterans. Over the years, reports 
have documented the accomplishments of these programs and the 
positive impact they have had in fostering the rehabilitation 
of homeless veterans who are often very ill. While such reports 
have laid a foundation for extending the periods for which 
these programs have been authorized, the Committee is unaware 
of any prior effort to review comprehensively these specific 
authorities and the operation of the programs in question.
Overlapping statutory authorities
    In its most recent extension of expiring VA medical care 
authorities, the Committee initiated a proposal, ultimately 
included as section 202(a) of Public Law 104-110, which 
directed VA to assess and report to Congress by March 1, 1997, 
on the advantages and disadvantages of consolidating three 
programs targeted primarily to providing psychiatric 
residential treatment to homeless, mentally ill veterans. 
(These are the contract halfway-house care program for veterans 
suffering from alcohol and drug dependence authorized by 
section 1720A of title 38, United States Code; the community-
based residential care program for homeless chronically 
mentally ill veterans established in section 115 of Public Law 
100-322; and the demonstration program of providing 
transitional therapeutic housing for veterans participating in 
VA compensated work therapy programs, established under section 
7 of Public Law 102-54.)
    Although VA failed to provide a timely report on the issue 
of consolidating the three programs (submitting this report 
only after the Subcommittee's markup of H.R. 2206), the 
Subcommittee undertook its own review of these statutory 
provisions, and found substantial overlap and redundancy among 
the respective authorities as well as instances in which there 
is no evident foundation for now longstanding VA clinical 
practices (see discussion below on clinical outreach 
activities). The Subcommittee found a lack of cohesive focus 
among the several provisions of law. In essence, much of the 
current framework of law under which VA provides assistance to 
homeless veterans--some elements of which are codified, others 
not--represents a piecemeal, disparate maze, which appears more 
likely to confuse than to inform.
    Section 2 of the reported bill would address these findings 
by consolidating these overlapping authorities into a unified 
set of provisions codified in title 38, United States Code. The 
section addresses the provision of care and services to 
veterans suffering from serious mental illness, including 
veterans who are homeless. While the intended beneficiaries of 
these provisions are not limited to homeless veterans, it has 
become apparent that homeless veterans bring deep-seated needs 
to the VA and represent a significant percentage of the 
beneficiaries VA serves. The programs authorized (and re-
authorized) under the reported bill provide VA important tools 
to assist these individuals.
    According to VA reports, homeless veterans overwhelmingly 
suffer from serious psychiatric or substance abuse disorders. 
(VA has found such problems among 85 percent of the homeless it 
has seen). In a one-day (September 30, 1996) survey of its 
patients in acute care beds, VA found that 13.5 percent had 
been homeless when admitted; 7.5 percent resided in a shelter, 
the streets, or similar circumstances; and 6 percent had only 
temporary housing with family or friends. Of patients in VA 
substance abuse programs, 47 percent were homeless, as were 24 
percent in psychiatry beds.
    The reported bill reflects a recognition that VA does not 
bear sole responsibility for the care of homeless veterans. 
Indeed, the bill would reinforce VA's role as one among a 
spectrum of service-providers--governmental and 
nongovernmental--which must work in coordination to effectively 
assist in the care and rehabilitation of homeless veterans. 
(See Sense of the Congress expression in section 1005 of Public 
Law 103-446.) The reported bill, however, is intended to give 
VA clear authority to continue, and, where indicated, to 
expand, initiatives which have had demonstrated success, such 
as the establishment of transitional therapeutic housing tied 
to work-therapy. The reported bill also encourages VA, in 
carrying out its authority, to establish linkages and joint 
efforts with community organizations and other entities 
assisting the homeless.
    In substantially revising, consolidating and clarifying 
existing law, the reported bill does not seek to diminish VA 
efforts on behalf of the homeless or the chronically mentally 
ill, or to eliminate program models which have had demonstrable 
success in assisting these veterans. To the contrary, the bill 
would effectively extend VA's authority to administer these 
programs, as well as what had begun as a pilot authority in 
Public Law 102-590 to operate comprehensive service centers for 
homeless veterans on a demonstration basis. The language 
consolidating several of these authorities should also be read 
in concert with the language of section 1706 (b) of title 38, 
United States Code, which requires VA to maintain its capacity 
to provide for the specialized treatment and rehabilitative 
needs of disabled veterans, specifically including veterans 
with mental illness. In essence, the measure would provide VA 
with a relatively comprehensive, flexible statutory framework 
to enable it to provide a continuum of care to seriously 
mentally ill and homeless veterans.
    VA's role in the care of homeless veterans has historically 
involved partnerships with community-based entities. The 
reported bill anticipates that such relationships will 
continue. Prior to the enactment of any law specifically 
directed to homeless veterans, Congress vested VA with 
authority to contract for the care of veterans suffering from 
alcohol or drug dependence or abuse. Originally established in 
1979 under Public Law 96-22, this authority enabled VA to 
contract for care, treatment and rehabilitative services in 
halfway houses, therapeutic communities, psychiatric 
residential treatment centers and other community-based 
treatment centers for eligible veterans suffering from alcohol 
and drug dependence and abuse disorders.
    In Public Law 100-6 and subsequently Public Law 100-322, 
Congress for the first time specifically addressed VA provision 
of health care services to homeless veterans in establishing 
authority similar to that enacted in Public Law 96-22. The 
Homeless Chronically Mentally Ill (HCMI) veterans program, 
established under those authorities, employs VA-provided 
outreach, medical and psychiatric examination and care, and 
case management services, but also places homeless veterans 
under contract arrangements in community-based residential 
treatment facilities. Under the program, VA has contracts with 
more than 200 community entities which provide residential care 
at an average cost of $41 per day. Residential care under the 
program has generally been short to moderate-term care; VA 
reports a mean length of stay for the program of 75.3 days. 
Under the program, contract treatment is to be closely 
monitored by VA clinicians, who continue their involvement with 
the veteran during the term of the placement. Established in 
1987, this program is operated at 61 VA sites.
    It is noteworthy that entirely separate provisions of 
current law (employing virtually identical language in 
pertinent part) authorize VA to contract ``for care, treatment 
and rehabilitative services in halfway houses, therapeutic 
communities, psychiatric residential treatment centers, and 
other community-based treatment facilities'' for veterans 
suffering from alcohol or drug dependence or abuse disabilities 
(38 USC sec. 1720A) as well as for homeless veterans suffering 
from chronic mental illness (Public Law 100-322, as amended). 
HR 2206 would consolidate these provisions, reflecting the 
reality that many homeless veterans suffer from drug or alcohol 
dependence, and that many veterans with such health problems 
are also either homeless or at substantial risk of 
homelessness. With respect to VA's ongoing programs, the 
reported bill would also provide clear authority for VA to 
provide outreach services in connection with furnishing health 
care services to homeless veterans. The use of clinician-
provided outreach services has been a core element of VA 
efforts to serve homeless veterans, particularly given the 
unique circumstances of homelessness and the distrust and 
resistance of these often-mentally ill individuals to self-help 
measures. In order to provide health services to these 
veterans, VA staff have had to seek out these veterans in 
shelters, soup kitchens and even the streets. VA reports that 
its outreach efforts have often required staff to provide such 
basic services as a meal or clean clothing to encourage such 
veterans to take the first step on the long road to improved 
health and rehabilitation.
Experience with current programs
    VA's early experience with provision of care to the 
homeless, particularly under the HCMI program, brought a 
recognition that, in addition to health care, case management, 
and residential support, homeless veterans needed a range of 
other services to provide a continuum of care. Congress 
provided a foundation for VA to expand the range of its 
services to homeless veterans by enacting authority in 1991 for 
VA to conduct a demonstration program linking the provision of 
compensated work therapy with therapeutic transitional housing. 
The program, authorized in Public Law 102-54, was designed to 
assist veterans suffering from substance abuse problems or 
severe mental illness to make a successful reentry into 
independent community living. VA has long operated therapeutic 
work programs providing incentive pay or compensation under 
section 1718 of title 38, United States Code. Linking such 
work-based therapies with supervised housing was seen as a 
means to help veterans suffering from alcoholism or drug 
problems, for example, to develop skills and support needed to 
prevent relapse and to foster community reintegration. The 
program is unique in providing for veterans to make rent 
payments from their CWT earnings, thereby gaining self-esteem 
and independence-building skills, while minimizing program 
operating expenses.
    Under this novel program VA was authorized to purchase up 
to 50 residences, using funds from VA's General Post Fund, for 
these purposes. VA-reported outcome data indicate that this has 
been a successful program, with three-month followup data for 
veterans discharged from the program in Fiscal Year 1996 
showing 64 percent alcohol and drug free, 73 percent 
independently housed, and 61 percent competitively employed. 
Building on the VA's achievements under Public Law 102-54, H.R. 
2206 would provide specifically for VA to continue to furnish 
transitional housing assistance in conjunction with work 
therapy or in conjunction with provision of outpatient care. 
H.R. 2206 would incorporate much of the authority found in 
section 7 of Public Law 102-54, but would go further in 
authorizing VA to establish transitional housing, alone or in 
conjunction with a governmental or other entity, in any 
suitable space in a VA medical center which is no longer being 
used to provide acute hospital care or as housing for medical 
center employees.
    In consolidating provisions of enabling law, the Committee 
recognizes that no single program meets in full the needs of 
the homeless veteran. To the contrary, successful outcomes 
involve sustained effort and provision of a range of services, 
including medical and psychiatric care, social support 
services, supervised housing, instruction in independent skill 
building and job training. The provisions of section 2 of the 
reported bill lay a foundation for VA to continue to provide 
such services.
    The VA, in a letter of July 28, 1997, from Acting Secretary 
Hershel Gober to Committee Chairman Bob Stump, expressed 
unqualified support for the provisions of section 2 as 
reflected in the draft legislation on which the Subcommittee 
took testimony. VA indicated that this correspondence 
represented its response to the above discussed report 
requirement in section 202 of Public Law 104-110. In this 
correspondence, the Department offered the view that enactment 
of this legislation into law would provide VA significant 
benefits. Among them, ``clarification of programs and services 
that can be offered to address the needs of homeless and 
seriously mentally ill veterans, including those with substance 
abuse disorders; consolidation of legislative authority for 
programs and services to address the needs of homeless and 
seriously mentally ill veterans, including those with substance 
abuse disorders; and provision of permanent authority to 
provide programs and services for homeless and seriously 
mentally ill veterans, including those with substance abuse 
disorders.''

   Extension of Homeless Veterans Comprehensive Service Grant Program

    In recognizing that many entities, governmental and other, 
have a role in assisting homeless veterans, Congress laid the 
foundation for building important partnerships through the 
establishment in 1992 of a new grant program. Modeled in 
significant measure on the successful State home construction 
grant program, the homeless providers grant and per diem 
program has served as a means through which VA has been able to 
stimulate the development of new capacities to serve homeless 
veterans. VA has expended some $17 million in grant support to 
public and nonprofit agencies and entities. Grants have 
supported the development of such projects as the establishment 
of a 104-bed substance abuse residential treatment facility, 
the acquisition and renovation of homes to provide transitional 
housing in many communities, the establishment of single-room 
occupancy facilities, the rehabilitation of vacant buildings on 
VA medical center grounds to provide supportive or transitional 
housing, the provision of outreach and transportation services 
in several communities, and acquiring and equipping a mobile 
medical service health and outreach unit to serve veterans in a 
number of communities. Section 3 of the bill would extend the 
VA's grant and per diem program for homeless veterans for two 
years, until September 30, 1999.

          Annual Reporting on Assistance to Homeless Veterans

    Consistent with its consolidation of program authorities, 
the reported bill would effectively discontinue the reporting 
requirements associated with separate provisions of law, and 
substitute a single annual report requirement. To assist both 
the Congress and the Department in reviewing the operation of 
the grant and per diem program, and the merits of a more 
sustained authorization, the measure would also require that 
the VA report to Congress on the effectiveness of programs 
established under these grants.

           Noninstitutional Alternatives to Nursing Home Care

    Section 1720C of Title 38 United States Code authorizes, 
through December 31, 1997, a pilot project to furnish medical, 
rehabilitative, and health related services in non-
institutional settings to veterans eligible and in need of VA 
nursing home care. VA provides hospital-based home care, adult 
day health care, homemaker/ home health aide services, and 
community residential care to veterans under its non-
institutional long-term care program. Non-institutional long-
term care alternatives have been used effectively by many 
providers to reduce the costs of care for patients who require 
ongoing care for chronic conditions or assistance with some 
daily activities. They do so by drawing from patients' informal 
caregiving networks, such as family and friends, to provide 
needed care. Generally, patients prefer less restrictive care 
settings to hospital or institutional care and often patients 
receive better care from loved ones than they would in an 
institutional setting. Non-institutional programs are designed 
to maximize patient independence and functionality and manage 
chronic conditions.
    Through its hospital-based home care programs, VA sends 
multi-disciplinary care teams to a veteran's home after 
discharge to help with recuperation. In 1996 VA made 316,091 
home visits to discharged veterans. Adult day health care is an 
alternative to nursing home care for many frail elderly or 
severely disabled people who need less than round-the-clock 
care. Adult day health care provides primary care givers with 
an opportunity for respite. VA operates 14 adult day health 
care programs and contracts for services at 83 medical centers. 
As part of its case management services for veterans who would 
otherwise require nursing home care, VA has coordinated 
homemaker/home health aide services since April 1993. In 1996, 
116 VA medical centers reimbursed private and public care 
providers for these services. Homemaker services include light 
housekeeping or meal preparation and allow patients who would 
otherwise have to have institutional care to live 
independently.
    As the veteran population ages and resources become more 
limited, it is imperative for VA to maximize its use of the 
most cost-effective means of offering treatment. The reported 
bill would help foster that objective by providing ongoing 
authorization for this program.

                 Persian Gulf War Veterans Health Care

    Approximately 697,000 American men and women served their 
country during Operations Desert Shield and Desert Storm. These 
soldiers braved unfamiliar, uncomfortable and dangerous 
conditions and were successful in completing the mission they 
were tasked to do. Grateful expressions of welcome marked their 
homecoming, in marked contrast to the experience of service-
members returning from Vietnam some two decades earlier.
    Now, however, thousands of veterans of the relatively brief 
period of combat operations in the Persian Gulf are suffering 
from unexplained health problems, which generally became 
manifest after their return.
    The House Veterans' Affairs Committee has conducted ongoing 
oversight since concerns regarding health problems among these 
veterans were first voiced in 1991. The Committee has held 
fourteen hearings and initiated the passage of several pieces 
of legislation. While urging the conduct of scientific inquiry 
and research to ascertain the nature of the still unexplained 
illness or illnesses and to determine the most effective means 
of treatment, the Committee has led efforts to ensure that lack 
of definitive answers not be a barrier to provision of health 
care and compensation for health problems which appear to have 
their origin in service.
Scope of the problem
    It is important to note the scope--in terms of numbers 
affected--of the problem. Of the almost 700,000 veterans who 
served in the Persian Gulf during the war, about 75,000--or 11 
percent--have taken advantage of the VA's Persian Gulf 
Registry, which offers a free, complete physical examination to 
every Persian Gulf veteran. In analyzing the results of the 
first 68,000 of these tests, VA found that 26 percent--about 
18,000--report symptoms for which there is no definitive 
diagnosis. Approximately 12 percent have had no health 
complaints. For the remaining veterans whose symptoms have been 
diagnosed, the most frequent findings have been psychiatric (15 
percent), respiratory (14 percent), skin disorders (13.5 
percent), gastro-intestinal (11 percent), neurologic (8 
percent), and cardiovascular (7 percent).
    The Department of Defense has also created its own database 
to track the findings of its own examination of Persian Gulf 
veterans who are still on active duty. Called the Comprehensive 
Clinical Evaluation Program (CCEP), this database represents a 
compilation of DoD's findings on approximately 18,600 service 
members who have completed the evaluation process. So far, the 
data show that about 18 percent have no definitive diagnosis 
and 10 percent have had no health complaints. The most commonly 
diagnosed conditions are psychological (18 percent), 
musculoskeletal (18 percent), respiratory (7 percent), and 
digestive (6 percent).
Research
    The federal government has also funded a broad portfolio of 
research studies, designed to learn more about the prevalence 
and incidence of these health problems, and the series of 
possible risk factors which have been identified. More than 90 
such projects--covering a wide range of topics--are either 
ongoing or completed.
    While it is hoped that recently published research will 
start to bring a better focus to the issue, there remain 
substantial unanswered questions.
    A 1996 study published in the New England Journal of 
Medicine, for example, indicates that disease-specific deaths 
of deployed Persian Gulf veterans do not exceed those of other 
Persian Gulf-era veterans who were not deployed. Similarly, 
another 1996 study--also published in the New England Journal 
of Medicine--indicates that active duty personnel deployed to 
the Gulf during Desert Shield/Storm are not more likely to be 
hospitalized than their non-deployed counterparts.
    At the same time, however, another federally-funded study--
done by the Iowa Persian Gulf Study Group in 1997 and published 
in the Journal of the American Medical Association (JAMA)--
found a higher prevalence of self-reported adverse symptoms--
such as depression, PTSD, and alcohol abuse--in deployed 
Persian Gulf veterans than in non-deployed veterans of the same 
era. Another study, published in the American Journal of 
Gastroenterology in 1996, indicates that deployed Persian Gulf 
veterans report a higher rate of gastrointestinal (GI) symptoms 
than non-deployed vets.
    While veterans and others seek definitive answers, the 
nature of research inquiry is such that these studies tend to 
have limitations, and to produce qualified findings. The study 
of hospitalization rates, for example, included only active 
duty personnel to the exclusion of veterans. The Iowa study was 
limited to veterans who listed Iowa as their home of record. 
And the gastrointestinal study does not distinguish between 
functional and organic GI disease. Like the Iowa study, its 
exclusive reliance on self-reported cases is an inherent 
limitation.
    To date, no single study relating to Persian Gulf veterans' 
health holds the key to a comprehensive understanding of the 
illness or illnesses afflicting many veterans. Each research 
study provides evidence--sometimes compelling and sometimes 
not--which leads to broader understanding. Understandably, 
findings of individual studies can be misunderstood, and in 
some instances have been seized upon to support particular 
views. Given the lack of consensus in the scientific community 
that there is any single illness and any single exposure which 
would explain the health effects being experienced, the 
Committee has proceeded with caution in responding to 
contentions that any specific exposure explains the widespread 
health problems experienced by service-members.
Causation
    What is causing these illnesses? Some suggest this question 
may never be definitively answered. To date, the most 
comprehensive information on this subject comes from the 
Presidential Advisory Committee on Gulf War Illnesses, which 
issued a report earlier this year and testified at the full 
Committee's February 11 hearing. The Committee reviewed the 
results of epidemiologic studies of Gulf War veterans, data 
from clinical evaluation and treatment programs for these 
veterans, and the published literature of toxological research. 
Among its findings, the Committee reported that:

     Lmany of the veterans examined in the ongoing 
clinical and research programs have illnesses likely to be 
connected to their service in the Gulf;
     Lcurrent scientific evidence does not support a 
causal link between the symptoms and illnesses reported by Gulf 
veterans and exposures in the Gulf region to the following 
environmental risk factors: pesticides, chemical warfare 
agents, biological warfare agents, vaccines, pyridostigmine 
bromide, infectious diseases, depleted uranium, oil well fires 
and smoke and petroleum products.
     Lstress (which is known to affect the brain, 
immune system, cardiovascular system, and various hormonal 
responses) is likely to be an important contributing factor to 
the broad range of physical and psychological illnesses 
currently being reported by Gulf War veterans.

    The Advisory Committee did, however, recommend that further 
study be initiated on the long-term health effects of low-level 
exposure to chemical warfare agents and on the synergistic 
effects of pyridostigmine bromide with other Gulf War risk 
factors. The Committee also recommended more emphasis on basic 
and applied research on the body's physical response to stress.
    These Advisory Committee's findings as regards causation 
are similar to the findings of the Institute of Medicine (IOM) 
Committee to Review the Health Consequences of Service during 
the Persian Gulf War, which released a report late last year. 
(IOM is an independent, non-governmental entity chartered by 
the National Academy of Sciences which enlists distinguished 
scientists and other members of appropriate professions to 
examine policy matters relating to public health.) Like the 
Advisory Committee, the IOM committee could find no acceptable 
evidence that the illnesses being exhibited by Gulf War 
veterans have any physical or physiological basis in chemical 
or any other exposures in the Gulf. The IOM also found that 
stress may have been a major cause in the manifestation of 
these physical ailments.
    Recent Department of Defense disclosures regarding chemical 
warfare agent detonations in Iraq have enlarged public 
understanding of the potential scope of exposures of US 
military personnel to such agents. In July, the Pentagon 
disclosed the results of a year-long effort to determine the 
extent to which U.S. troops may have been exposed to chemical 
warfare agents when Iraqi chemical weapons were destroyed at 
Khamisiyah on March 10, 1991. In a July 24, 1997 release, the 
Pentagon stated that ``based on new data, computer models and 
interviews with troops involved in the demolitions, officials 
now believe 98,910 service members were in an area generally 
south of Khamisiyah and were possibly exposed to a very low 
level of nerve agent vaporized during the weapons destruction. 
Little is known about delayed effects from a brief, low-level 
exposure to nerve agents such as might have occurred in this 
case, however, current medical evidence indicates that long 
term health problems are unlikely.'' Based on field testing and 
other efforts, the release reported an estimate that only 18 
percent of the nerve agent from 500 affected chemical rockets 
at the March 10, 1991 open ``pit'' explosion was released into 
the atmosphere. Officials calculated that the dose of the agent 
was well below the level of 1 milligram-minute per cubic meter 
which is the level at which there would be noticeable health 
effects.
    The series of disclosures regarding events at Khamisiyah 
and data from modelling studies as to the nature and extent of 
likely exposures from those detonations serve to underscore the 
importance of the Advisory Committee's call for additional 
research into the health effects of low level exposures to such 
chemicals. While important, the disclosures alone do not appear 
to undermine earlier expressed views as to a lack of scientific 
evidence to support a causal link between veterans' health 
problems and low-level exposure to these agents.
Health care delivery
    Committee hearings in the 105th Congress regarding the 
findings and recommendations of the Presidential Advisory 
Committee (February 11, 1997) and concerning potential exposure 
of veterans to chemical warfare agents (April 16, 1997) served 
to heighten concerns regarding the quality of care provided 
Persian Gulf veterans.
    On June 19, 1997, the Subcommittee on Health held a hearing 
to examine the manner in which VA has met health care needs of 
Persian Gulf veterans. The Subcommittee had requested the 
General Accounting Office to study this question, and at that 
hearing, Stephen Backhus, the Director of Veterans' Affairs and 
Military Health Care Issues in the Health, Education and Human 
Services Division of the General Accounting Office, testified 
on preliminary GAO findings.
    Specifically, through site visits and interviews conducted 
at VA medical facilities, GAO found that the VA's guidance 
regarding the evaluation and treatment of Persian Gulf veterans 
is not yet being uniformly followed. GAO reported, for example, 
that Persian Gulf veterans often encountered delays in registry 
examinations and follow-up testing, unsympathetic attitudes on 
the part of some health care professionals, superficial 
examinations, and instances in which a diagnosis merely 
restated the veteran's reported symptoms. GAO testified that VA 
seldom provided veterans any personal counseling regarding the 
results of registry examinations, despite the fact that such 
counseling is one of the key responsibilities of registry 
physicians; instead veterans generally received form letters 
listing exam findings. GAO reported finding that many veterans 
appeared to be confused, frustrated, and mistrustful as a 
result of their encounters in seeking VA care for unexplained 
health problems. In addition to reporting poor feedback and 
communication with health care personnel, veterans whom GAO had 
interviewed reported a lack of post-examination treatment. VA 
itself has established no mechanism to monitor treatment 
outcomes. Medical center personnel cited limited resources and 
increased workloads as reasons for less timely and responsive 
service than they and veterans would like. GAO reported better 
responses at one medical center which gives veterans access to 
a special Persian Gulf veterans' clinic at which they may 
receive primary care from staff experienced with Gulf War 
veterans and their concerns. Unlike other facilities, 
responsibility for monitoring patients' overall care is 
assigned to a Persian Gulf clinic case-manager.
    The American Legion also questioned the effectiveness of 
the VA's health care delivery for Persian Gulf veterans. In his 
testimony, Matthew Puglisi, the Assistant Director for Gulf War 
Veterans of The Legion's National Veterans Affairs and 
Rehabilitation Commission, stated that Persian Gulf registry 
examinations are often administered by the least experienced 
physicians on staff. Also, follow-up care after the registry 
exam is sometimes disorganized and haphazard and, at many VA 
facilities, no one tracks or manages the patient's care after 
the initial exam. In summary, the Legion expressed the view 
that ``there is little evidence that VA effectively treats 
veterans who suffer from Gulf War illnesses.''
    The Committee has heard firsthand accounts and perceptions 
of Persian Gulf veterans who have sought care from the VA. At a 
February 11, 1997 full Committee hearing, three Persian Gulf 
veterans provided personal accounts of their experiences with 
VA after returning from Gulf service with multiple health 
problems. While anecdotal in nature, these accounts highlighted 
problems which are mirrored in the heavy correspondence the 
Committee receives and in the reports and testimony furnished 
by service organizations as to their members' experiences.
    Of those testifying, a Marine veteran from Idaho recounted 
the frustration experienced over a span of five years trying to 
get a diagnosis and treatment for a variety of ailments. VA 
referrals, which took him to a number of VA medical centers, 
were marked by lack of coordination or ``case management''. The 
veteran reported that his primary VA treatment facility 
disagreed with, and would not treat him for, the diagnostic 
findings made by a tertiary VA medical center to which the 
primary treatment center had referred him for an extensive 
workup of his health problems in the first instance.
    The testimony of another Marine veteran from Oklahoma 
reflected an often expressed perspective. After feeling the 
effects of illnesses he ascribed to his service in the Gulf and 
receiving little or no assistance from civilian doctors, the 
veteran went to the VA. Despite his assertions, he was 
consistently diagnosed as having mental health problems and his 
physical symptoms were either not treated or treated with 
medication which was ineffective.
    Not all experiences with VA health have been negative. The 
commander of an Army National Guard Unit when he was deployed 
to the Gulf in 1991 expressed general satisfaction with the way 
he has been treated at the VA, although his multiple symptoms 
had not improved markedly.
    Significantly, the VA has begun to acknowledge the 
difficulties it has had in treating and managing Persian Gulf 
veterans with ill-defined health problems, and the complaints 
it has received from veterans dissatisfied with availability or 
access to VA care or the continuity of their care.
    In February, the VA testified to its plans to establish an 
evaluation effort--the Service Evaluation and Action Team 
(SEAT) program--which was described as a way to collect data to 
improve care-delivery, and that would initially focus on 
Persian Gulf veterans. SEATs were subsequently established in 
all 22 VISN offices. In an informal survey, the Subcommittee on 
Health surveyed 19 of the 22 networks. While individual 
responses varied, certain trends were apparent.
    First, network officials expressed the view that complaints 
are handled and effectively resolved by individual facilities' 
patient representatives. Second, SEAT evaluators generally 
reported having seen no trends suggestive of health delivery 
deficiencies; in fact, several noted that the most common 
concern heard relates to compensation claims, not health. 
Third, because of the lack of systemic issues coming to the 
attention of the SEAT (and because the program has not been in 
place for a sustained period of time), no changes in health 
care delivery to Persian Gulf veterans were anticipated at that 
time.
    The marked disparity between the responses of those 
chairing the SEAT effort and veterans themselves and those in 
communication with them suggest to the Committee that the SEAT 
program is not performing the job it was set up to do. The 
testimony of the GAO and American Legion at the Subcommittee's 
June 19, 1997 hearing is wholly at odds with the views 
expressed by the VA officials heading the SEAT initiative. 
Clearly, many Persian Gulf veterans feel that the VA is not 
providing adequate health care to those who are suffering from 
undiagnosed illnesses. The SEAT is supposed to identify and 
correct these deficiencies. However, the mechanism appears to 
have failed to even identify a widely evident problem. It is 
far too early to suggest that the program is a failure and 
should be scrapped; however, the VA should reevaluate the 
efficacy of the SEAT program before expanding it.
    Dr. Kenneth Kizer, VA Under Secretary for Health, testified 
at the Subcommittee's June 19, 1997 hearing and acknowledged 
the frustrations experienced and reported by many veterans. He 
stated that it had been his view that instituting primary care 
systems at VA facilities would provide both better access to 
and continuity of care. But he acknowledged that primary care 
had not always provided an acceptable solution for some with 
complex medical problems, and stated that ``many of these 
veterans, and certainly the most complex Gulf War cases, need a 
system of care which utilizes case management.''
    At its June 19 hearing, the Subcommittee also heard 
testimony from several experts who described the limitations 
that medicine itself faces in grappling with unexplained 
illnesses which produce a wide range of symptoms. Dr. Daniel 
Clauw, Chief of Rheumatology, Immunology and Allergy at 
Georgetown Medical Center, expressed the view, based on his own 
research and clinical experience, that the ill-defined health 
problems affecting Persian Gulf veterans occur in the general 
population as well. Dr. Clauw testified that while such 
conditions as chronic fatigue syndrome and fibromyalgia cannot 
be detected by blood tests or other diagnostic studies, they 
are real, if not well understood illnesses, and can be managed. 
He described multi-disciplinary treatment that employ low doses 
of medication, exercise, and cognitive behavioral therapy, a 
therapy aimed at changing lifestyle and behavior to better 
adapt to this illness.
    Echoing views expressed at the June 19 hearing regarding 
the limitations of the medical model in treating the ill-
defined health problems experienced by Persian Gulf veterans, 
Dr. Charles Engel, Chief of the Gulf War Health Center at 
Walter Reed Army Medical Center, described his experience in 
care provided to these patients. Dr. Engel described a multi-
disciplinary specialized care program which he directs which is 
aimed at helping Persian Gulf veterans to understand and cope 
with their persistent symptoms and to improve quality of life 
and functional status.
    Although VA has done little to explore such approaches, Dr. 
Kizer testified that ``VA clinicians must . . . carefully 
evaluate the latest and best available therapies for 'symptom 
syndromes' such as chronic fatigue syndrome and fibromyalgia 
that are seen in a number of Gulf War veterans. We encourage 
the use of innovative and non-traditional forms of therapy . . 
.''
Legislation
    The Committee's review this session of the status of the 
health problems of Persian Gulf veterans and VA's record in 
providing them care and treatment has set the framework for 
this legislation. The Committee's oversight has, for example, 
resulted in certain findings, which in turn have helped shape 
what is seen as needed legislation. The Committee has found, 
for example, that:

    1. LVA has assigned a relatively high priority to both 
research regarding the health status of Persian Gulf veterans, 
and to maintaining a database, or registry, of diagnostic 
findings on Persian Gulf veterans.

    2. LIn contrast, VA has given very little priority to 
designing programs aimed specifically at treating Persian Gulf 
veterans or at helping them manage their symptoms.

    3. LVA has provided registry examinations, based on 
standardized registry protocols, to tens of thousands of 
Persian Gulf veterans, but the results of such examinations are 
seldom discussed personally with the veterans, and are instead 
communicated, often ineffectively, through form letters.

    4. LVA's registry process indicates that a substantial 
subset of Persian Gulf veterans, some 26 percent of those who 
have sought out registry examinations, have unexplained health 
problems.

    5. LVA's record of follow-up treatment after a registry 
examination appears uneven from facility to facility, with many 
instances of veterans ``falling through the cracks'' and little 
evidence that complex cases are being managed.

    6. LLack of understanding of the illnesses afflicting 
Persian Gulf veterans and lack of tools available to medicine 
to resolve the array of their symptoms has fueled the 
perception in many veterans that VA health care professionals 
lack empathy for their conditions, and many are convinced that 
the treatment they receive as a result suffers.

    7. LThe VA's primary care system appears ill-suited to help 
the estimated 18,000 Persian Gulf veterans who suffer from ill-
defined, multiple symptom health problems which appear to have 
their origin in Persian Gulf service.

    8. LGiven the scope of this problem and its apparent origin 
in wartime service, it is incumbent on VA to design and test 
alternative treatment models with an eye to improving the care 
afforded these veterans and their satisfaction with that care.

    In light of these findings, the Committee recommends 
legislation aimed at making VA health care more responsive to 
the health problems with which Persian Gulf veterans are 
suffering. That legislation would:

     Lrequire VA to create a $5 million competitive 
grant program under which up to ten VA facilities would 
establish demonstration projects to test new approaches to 
treating, and improving the satisfaction of, Persian Gulf 
veterans with undiagnosed or ill-defined conditions. The 
measure would require VA to employ at least three approaches, 
alone or in combination, at no less than two demonstration 
sites: (1) a specialized clinic which serves Persian Gulf 
veterans, (2) multidisciplinary treatment aimed at managing 
symptoms, and (3) use of case managers. The measure directs VA 
to give priority in selecting demonstration sites to medical 
centers which have a demonstrated capability to compete 
successfully for extramural funding support for research into 
the effectiveness and cost-effectiveness of the care provided. 
The Committee anticipates that VA would design and carry out 
research to study the efficacy of the various treatment models 
employed.
     Lrestate with greater specificity VA's obligation 
to provide verbal counseling to Persian Gulf veterans regarding 
the findings of its registry examinations.
     Lclarify Persian Gulf veterans' eligibility for 
care (which is now limited to care for conditions which may be 
attributable to exposure to toxic substances or environmental 
hazards) by tying such eligibility to any condition which may 
be associated with the veteran's service in the Gulf. This 
would eliminate any question regarding provision of care which 
might be unrelated to an exposure as such but cannot be 
disassociated from service in the Gulf. (For example, Persian 
Gulf veterans who have PTSD or who have developed chronic 
fatigue syndrome as an aftermath of a routine infection would 
not necessarily be eligible for medical care under a technical 
reading of current law.)

            Veterans Health Administration Personnel Policy

    Executive branch policies aimed at achieving arbitrary 
department by department reductions in employment levels have 
in the past sparked concern from this Committee as related to 
VA's accomplishing its medical care mission. As recently as 
1994, the Committee introduced legislation, ultimately enacted 
as title XII of Public Law 103-446, to ensure that such 
Government-wide policies were not inconsistent with VA's 
meeting its obligation to veterans. Section 711 of title 38, 
United States Code, requires the Secretary of Veterans Affairs 
to report to Congress and delay for a specified period any 
systematic reduction in grade of employees engaged in direct 
patient care or who are professional employees and computer 
specialists.
    The Committee is concerned with proposed implementation of 
another Executive Branch policy, apparently based on an 
executive order, which calls for achieving a 10 percent 
reduction among GS-14/15 positions government wide.
    In 1995, the VA pledged to eliminate 20 percent of GS-14/15 
positions in an effort to conform with Vice President Gore's 
efforts to reduce the number of middle managers in federal 
government. Such a policy could have a severely detrimental 
impact on VA health care and research because many VA 
physicians and researchers are GS-14/15 equivalents. 
Recognizing this, the VA exempted physicians from this 
reduction. However, Ph.D. researchers were not included in the 
exemption and continue to face uncertain futures. The above-
cited provisions of law do not offer protection from the 
proposed reductions.
    This legislation is designed to ensure that VHA personnel 
engaged in patient care activities or research--or supervision 
of patient care or research--are exempt from any policy which 
requires targeted reductions in the number of GS-14/15 
employees in federal departments.

                        Veterans Canteen Service

    The Committee in its oversight capacity has monitored the 
operation of the Veterans Canteen Service (VCS) and its success 
in meeting its mission of making merchandise and services 
available at reasonable prices to veterans hospitalized or 
treated at VA medical facilities for their comfort and well 
being.
    The VCS has in recent years faced several unanticipated 
challenges to carrying out its mission. For example, 
notwithstanding an express statutory authority ``to establish, 
maintain, and operate canteens'' and ``to fix prices of 
merchandise and services so as to carry out the purposes'' of 
the VCS, it has been asserted that the prices of food items 
represent a condition of employment over which VA should 
negotiate. The proposition that the VCS would not have sole 
authority to respond to changing market conditions and to set 
prices accordingly consistent with its mission is contrary to 
the purposes for which VCS was established. Challenges have 
also been mounted under other provisions of law. Such 
challenges have argued in effect that the Secretary of Veterans 
Affairs lacks ultimate and exclusive authority to determine 
how, when and where VCS operates; whether and where it may 
install vending machines; and which products and services may 
be provided by canteens. Where such challenges have prevailed, 
it is apparent to the Committee that the results have been at 
odds with the intent of those who crafted provisions of law 
establishing the Veterans Canteen Service, and that such 
outcomes pose a threat to the financial viability of a self-
sustaining Canteen Service.
    The reported bill would clarify existing law to provide 
with greater specificity that the Secretary of Veterans Affairs 
has sole authority to establish canteens (including vending 
facilities and vending machines) at VA medical facilities and 
to determine and set the prices of merchandise and services 
sold at such canteens.
    The Canteen Service has long operated cafeterias, vending 
facilities, and retail stores for patients, visitors, 
employees, and volunteers. As such, the VCS operates a food 
service program parallel to the Nutrition and Food Service 
program which is responsible for inpatient feeding at every VA 
medical center. The reported bill, in authorizing VCS to 
provide support services to VA medical facilities on a 
reimbursable basis, would permit VCS to provide, in whole or in 
part, the food service needs of a medical center. Exercising 
such an option could be expected to achieve significant cost 
savings.

                   Physician and Dentist Retirements

    The reported bill incorporates provisions of H.R. 1687, 
legislation to provide that special pay paid to certain 
physicians and dentists of the Veterans Health Administration 
who retire before October 1, 1999, shall be considered to be 
basic pay for retirement purposes. H.R. 1687 was ordered 
reported by the full Committee on May 21, 1997, and is the 
subject of a separate report.

                            Pharmaceuticals

    At a July 10, 1997 hearing, the Subcommittee on Health 
heard testimony regarding the potential effects on the VA of 
opening the Federal Supply Schedule (FSS) on drugs to state and 
local government purchasing under section 1555 of the Federal 
Acquisition Streamlining Act of 1994 (FASA). (The Federal 
Supply Schedule for drugs is a series of VA-administered 
contracts currently listing almost 23,000 pharmaceuticals which 
are available for purchase by federal agencies and 
institutions, and the District of Columbia, U.S. territorial 
governments, and some Indian tribal governments at generally 
very favorable prices.) At the July 10 hearing, the 
Subcommittee also heard testimony regarding an Administration 
proposal which was being offered as an apparent compromise in 
light of efforts to repeal section 1555. The Administration 
proposal would authorize state and local governments to make 
purchases from certain FSS schedules, to include authorizing 
purchases of drugs for treating HIV, HIV-related conditions, 
and life-threatening conditions.
    Congress last year suspended implementation of FASA and 
directed the General Accounting Office to assess its potential 
effects. GAO testified at the July 10 hearing on its study of 
the pharmaceutical market. While acknowledging the difficulties 
of predicting the impact of ``cooperative purchasing'' on 
federal drug prices, GAO testified that the size of the market 
created by allowing state and local governments access to the 
FSS--as much as a threefold increase--has the potential to 
produce an upward pressure on prices. Citing VA's experience in 
facing a substantial increase in drug prices after the Medicaid 
rebate program was enacted in 1990, Ms. Bernice Steinhardt, 
Director, Health Services Quality and Public Health Issues for 
GAO, stated that ``we do know from historical experience that 
having to offer discounted prices to a larger market puts an 
upward pressure on drug prices.'' Steinhardt analogized the 
effect of expanding the market, to include the expansion 
proposed by the Administration, as being ``like squeezing a 
balloon, the consequence elsewhere.''
    VA is the largest single purchaser of drugs from the FSS, 
procuring nearly $1 billion in pharmaceuticals from that source 
annually. VA purchased $922 million from the FSS in fiscal year 
1996 of the $1.2 billion it spent on drugs in that year.
    VA officials testified as to the department's experience 
with price increases widely attributed to provisions of the 
Omnibus Budget Reconciliation Act of 1990 which required drug 
manufacturers to give state Medicaid programs rebates for 
outpatient drugs on the basis of the lowest prices charged 
other purchasers. ``Manufacturers sought to protect their 
margins whenever possible or wherever possible and remove low-
priced items from their federal supply schedule contracts,'' 
John Ogden, VA's Chief Consultant for Pharmacy Benefits 
Management, explained. ``If similar tactics are employed in 
1997 in response to opening FSS pharmaceutical contracts, just 
as a new round of FSS contracts are being negotiated for the 
next five years or more, VA alone could suffer an increase in 
pharmaceutical costs of as much as $250 million per year.''
    VA's Deputy Under Secretary for Health, Dr. Thomas 
Garthwaite, echoed the concern that opening the FSS, as 
proposed, could increase VA pharmaceutical costs by up to $250 
million annually. Garthwaite described the impact of such an 
increase as being the equivalent of the cost of providing care 
to 50,000 sick veterans, and therefore as putting in jeopardy 
VA's ability to treat all of its current patients.
    In testifying for the Department, VA's Ogden acknowledged 
that as the Federal Government's manager of the pharmaceutical 
supply schedule, the VA is best able to assess the likely 
effects of changing the rules on access to the pharmaceutical 
supply schedule. Responding to questioning at the hearing, VA 
officials also acknowledged both the dangers inherent in the 
Administration's legislative proposal and, given its adverse 
impact on VA, VA's unwillingness to support that proposal. 
While advocates have suggested that a proposal limited to drugs 
for the care of HIV and HIV-related conditions is a narrow one, 
VA's Ogden conveyed just how broad such an ``exception'' is: 
``We're talking about health care conditions in the area of 
infections, cancer therapy, pain management, nutritional 
support and other conditions involving the upper respiratory 
system, GI problems, and also dermatological problems.''
    It is apparent to the Committee that permitting state and 
local governments to purchase drugs from the Federal Supply 
Schedule, whether subject to a targeted exception as proposed 
by the Administration or without limitation as proposed under 
FASA, would be injurious to VA. Given VA's heavy reliance on 
the FSS drug schedule and the industry's use of the FSS as an 
efficient, favored marketing vehicle to provide very favorable 
drug prices to the Federal government, VA should be afforded 
protection against measures that have a high probability of 
distorting that market and resulting in VA's incurring 
substantially higher prices.
    While a repeal of section 1555 of FASA, as proposed in 
pending legislation, would for the moment resolve the concerns 
over an escalation in VA drug prices, efforts to expand access 
to FSS drug prices could be renewed at any time, with 
predictable impact on VA. The reported bill is seen as a means 
of preventing such future problems. It would essentially 
provide that, notwithstanding any other provision of law 
(enacted before or after the enactment of this act), drugs 
listed on the pharmaceutical schedule of the Federal Supply 
Schedule may only be procured from that schedule by a Federal 
agency or instrumentality or an entity specified in law or 
regulation in effect prior to July 1, 1997 as eligible to 
procure items from the pharmaceutical supply schedule. In 
making provision for "grandfathering" entities which are 
specified in Federal law or regulation, as in effect before 
July 1, 1997, as eligible to procure or order from the 
pharmaceutical supply schedule, the Committee intends that the 
provision apply to entities which are specified as being so 
eligible either individually or inclusively within a defined, 
specified class.

                      Section-by-Section Analysis

    Section 1 would name the Act the ``Veterans Health Programs 
Improvement Act of 1997.''

    Section 2(a) would amend chapter 17 of title 38, United 
States Code, by adding Subchapter VII at the end and creating 
sections 1771 (General treatment), 1772 (Therapeutic housing), 
1773 (Additional services at certain locations), and 1774 
(Coordination with other agencies and organizations). New 
section 1771 would provide that VA, in furnishing care and 
services under section 1710 to seriously mentally ill veterans, 
including homeless veterans, may provide outreach services; 
care, treatment, and rehabilitation services (directly or by 
contract in community-based treatment facilities); and 
therapeutic transitional housing assistance under section 1772, 
in conjunction with work therapy and outpatient care. Section 
1772 provides that the Department may, in conjunction with 
conducting compensated work therapy programs, establish and 
operate residences and facilities as therapeutic housing, 
subject to the provisions of that section. Section 1773 would 
direct the Department, subject to the availability of 
appropriations, to operate no fewer than eight comprehensive-
services centers to assist homeless veterans. Section 1774 
would require VA, in assisting homeless veterans, to 
coordinate, and permit the Department to provide authorized 
services in conjunction, with other agencies of State, local 
and Federal government, and nongovernmental organizations. It 
would also require VA facility directors to assess and identify 
local homeless veterans' needs and the adequacy of existing 
programs to meet those needs, and take appropriate action, to 
the extent practicable to meet those needs.

    Section 2(b) would amend and rename section 1720A in order 
to conform with changes made in section 2(a).

    Section 2(c) would repeal certain sections of public law in 
order to conform with changes made in section 2(a).

    Section 2(d) would amend the table of contents at the 
beginning of chapter 17 in order to conform with changes made 
in section 2(a).

    Section 3 would amend section 3 of the Homeless Veterans 
Comprehensive Service Programs Act of 1992 by (a) extending 
until September 30, 1999 the Secretary's authority to operate 
the grant and per diem payments program authorized by that 
section, and (b) striking limitations in current law on the 
number of specified projects for which grants may be awarded.

    Section 4 would amend section 1001 of the Veterans' 
Benefits Improvements Act of 1994 to require the VA to submit 
an annual report to Congress detailing the effectiveness of 
programs designed to provide assistance to homeless veterans, 
to include an evaluation of the effectiveness of programs 
established under the grant program being extended under 
section 3 and a description of the experience of such grantees 
in seeking grants from the Secretary of Housing and Urban 
Development to serve primarily homeless veterans.

    Section 5 would amend section 1720C of title 38, United 
States Code, to extend indefinitely VA's authority to provide 
noninstitutional alternatives to nursing home care.

    Section 6(a) would amend section 703 of the Veterans Health 
Care Act of 1994 (Public Law 102-585; 106 Stat. 4976) to 
require with greater specificity that Persian Gulf veterans 
shall be verbally counseled as to the results of Persian Gulf 
registry examinations.

    Section 6(b) would amend section 1710 of title 38, United 
States Code, to clarify that a Persian Gulf veteran is eligible 
for VA health care for any condition which may be associated 
with a veteran's service in the Gulf.

    Section 6(c) would direct the Secretary to carry out a 
program of demonstration projects designed to test innovative 
approaches to treating Persian Gulf veterans at up to 10 VA 
medical centers across the country.

    Section 7 would amend section 7425 of title 38, United 
States Code by adding a new subsection at the end of the 
section exempting VHA personnel involved in the provision of 
health care or the conduct of research from reductions required 
by law or Executive Branch policy in the number or percentage 
of employees or positions, within specified pay grades.

    Section 8(a) would amend paragraph 7 of section 7802 of 
title 38, United States Code, to clarify that, notwithstanding 
any other provision of law, the VA has sole authority to 
establish canteens (including vending facilities and vending 
machines) at VA medical facilities, and to determine and set 
prices of merchandise and services sold at such canteens.

    Section 8(b) would amend section 7803 of title 38, United 
States Code, to delete restrictions on the merchandise or 
services for sale at VA canteens to permit sales for 
consumption or use off premises.

    Section 8(c) would further amend section 7803 of title 38, 
United States Code, to permit VA canteens to provide support 
services to medical facilities on a reimbursable basis.

    Section 8(d) would amend paragraphs 1 and 11 of section 
7802 of title 38, United States Code, as well as section 
7803(a) of such title, to replace the term ``hospitals and 
homes'' with the term ``medical facilities''.

    Section 9(a) would amend section 7438 of title 38, United 
States Code, to add a new subsection (d) which would authorize 
the Secretary of Veterans Affairs to permit certain retirement-
eligible physicians and dentists who, as determined by the 
applicable VA facility director, hold positions which are no 
longer required to be maintained at that facility and for whom 
there is no other appropriate position at that facility, to 
have their ``special pay'' under chapter 74 of such title 
credited in full, for annuity purposes, if they retire during 
the period from the date of enactment through September 30, 
1999. New subsection (d) further limits the applicability of 
such provision to an individual who is in receipt of special 
pay and as of September 30, 1999 (a) has completed or would 
have completed 15 years of VA service, and (b) would have 
completed eight years of service while in receipt of special 
pay. The new subsection further provides that for each 
individual who retires with this benefit the Secretary shall 
deposit in the Treasury to the credit of the appropriate 
Federal retirement fund each year the amount of the 
individual's annuity for that year; such payments shall be made 
for the period beginning on the date of the individual's 
retirement until the later of the date on which that person 
would have completed 15 years of service or would have 
completed eight years of service while in receipt of special 
pay. The subsection also provides that an individual who 
retires with this benefit is not eligible to receive a 
voluntary separation payment under pertinent provisions of law.

    Section 9(b) would amend subchapter III of chapter 74 of 
title 38 to reflect the effective date of the special pay 
authority, July 14, 1991, in each place in which there is 
reference to such effective date.

    Section 10 would amend section 8125 of title 38, United 
States Code, to add a new subsection (e) that would provide 
that, notwithstanding any other provision of law (whether 
enacted before or after the date of enactment of the 
subsection), any product listed on the pharmaceutical schedule 
of the Federal Supply Schedule may only be procured from that 
schedule by or for an agency or institution of the Federal 
Government, or any other entity specified in Federal law or 
regulation, as in effect before July 1, 1997, as eligible to 
procure covered items from such schedule.

    Section 11(a) would amend section 1717(a)(2)(B) of title 
38, United States Code, to clarify that any veteran described 
in section 1710(a) under treatment by VA is eligible for the 
one-time $1200 home improvement/structural alterations benefit 
under section 1717.

    Section 11(b) would change the designation of the Wm. 
Jennings Bryan Dorn Veterans' Hospital in Columbia, South 
Carolina to the Wm. Jennings Bryan Dorn Department of Veterans 
Affairs Medical Center.

                           Oversight Findings

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

               Congressional Budget Office Cost Estimate

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





                     Inflationary Impact Statement

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

                            Department Views

    The Department testified at a July 10, 1997 hearing on a 
draft legislation which was subsequently incorporated into H.R. 
2206. The Department expressed strong support for provisions 
which proposed to extend, consolidate, and clarify provisions 
of law authorizing programs to assist homeless and chronically 
mentally ill veterans, and also expressed support for the 
remaining provisions of the draft bill, which proposed to 
improve VA care of Persian Gulf veterans and to extend 
indefinitely VA's authority to provide noninstitutional care as 
an alternative to nursing home care.

                  Applicability to Legislative Branch

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

                     Statement of Federal Mandates

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

                 Statement of Constitutional Authority

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

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

                       PART II--GENERAL BENEFITS

          * * * * * * *

   CHAPTER 17--HOSPITAL, NURSING HOME, DOMICILIARY, AND MEDICAL CARE

          * * * * * * *

 subchapter ii--hospital, nursing home or domiciliary care and medical 
                                treatment

     * * * * * * *
[1720A.   Treatment and rehabilitation for alcohol or drug dependence or 
          abuse disabilities.]
1720A. Treatment and rehabilitative services for persons with drug or 
          alcohol dependency.
     * * * * * * *

   subchapter vii--treatment and rehabilitation for seriously mentally 
                        ill and homeless veterans

1771. General treatment.
1772. Therapeutic housing.
1773. Additional services at certain locations.
1774. Coordination with other agencies and organizations.
          * * * * * * *

 SUBCHAPTER II--HOSPITAL, NURSING HOME OR DOMICILIARY CARE AND MEDICAL 
                               TREATMENT

Sec. 1710. Eligibility for hospital, nursing home, and domiciliary care

  (a)(1) * * *
          * * * * * * *
  (2) The Secretary (subject to paragraph (4)) shall furnish 
hospital care and medical services, and may furnish nursing 
home care, which the Secretary determines to be needed to any 
veteran--
          (A) * * *
          * * * * * * *
          (F) who was exposed to a toxic substance, radiation, 
        or [environmental hazard] other conditions, as provided 
        in subsection (e); or
          * * * * * * *
  (e)(1)(A) * * *
          * * * * * * *
  (C) Subject to paragraphs (2) and (3) of this subsection, a 
veteran who [the Secretary finds may have been exposed while 
serving] served on active duty in the Southwest Asia theater of 
operations during the Persian Gulf War [to a toxic substance or 
environmental hazard] is eligible for hospital care, medical 
services, and nursing home care under subsection (a)(2)(F) for 
any disability, notwithstanding that there is insufficient 
medical evidence to conclude that such disability may be 
associated with such [exposure] service.
  (2)(A) In the case of a veteran described in paragraph 
(1)(A), hospital care, medical services, and nursing home care 
may not be provided under subsection (a)(2)(F) with respect 
to--
          (i) * * *
          * * * * * * *
  (B) In the case of a veteran described in paragraph (1)(C), 
hospital care, medical services, and nursing home care may not 
be provided under subsection (a)(2)(F) with respect to a 
disability that is found, in accordance with guidelines issued 
by the Under Secretary for Health, to have resulted from a 
cause other than [an exposure] the service described in that 
paragraph.
          * * * * * * *

Sec. 1717. Home health services; invalid lifts and other devices

  (a)(1) * * *
  (2) Improvements and structural alterations may be furnished 
as part of such home health services only as necessary to 
assure the continuation of treatment for the veteran's 
disability or to provide access to the home or to essential 
lavatory and sanitary facilities. The cost of such improvements 
and structural alterations (or the amount of reimbursement 
therefor) under this subsection may not exceed--
          (A) * * *
          (B) $1,200 in the case of medical services furnished 
        under any other provision of [section 1710(a)(2)] 
        section 1710(a) of this title.
          * * * * * * *

[Sec. 1720A. Treatment and rehabilitation for alcohol or drug 
                    dependence or abuse disabilities]

Sec. 1720A. Treatment and rehabilitative services for persons with drug 
                    or alcohol dependency

  [(a)(1) The Secretary, in furnishing hospital, nursing home, 
and domiciliary care and medical and rehabilitative services 
under this chapter, may contract for care and treatment and 
rehabilitative services in halfway houses, therapeutic 
communities, psychiatric residential treatment centers, and 
other community-based treatment facilities for eligible 
veterans suffering from alcohol or drug dependence or abuse 
disabilities.
  [(2) Before furnishing such care and services to any veteran 
through a contract facility as authorized by paragraph (1) of 
this subsection, the Secretary shall approve (in accordance 
with criteria which the Secretary shall prescribe by 
regulation) the quality and effectiveness of the program 
operated by such facility for the purpose for which such 
veteran is to be furnished such care and services.]
  [(b)] (a) The Secretary, in consultation with the Secretary 
of Labor and the Director of the Office of Personnel 
Management, may take appropriate steps to (1) urge all Federal 
agencies and appropriate private and public firms, 
organizations, agencies, and persons to provide appropriate 
employment and training opportunities for veterans who have 
been provided treatment and rehabilitative services under this 
title for alcohol or drug dependence or abuse disabilities and 
have been determined by competent medical authority to be 
sufficiently rehabilitated to be employable, and (2) provide 
all possible assistance to the Secretary of Labor in placing 
such veterans in such opportunities.
  [(c)] (b) Upon receipt of an application for treatment and 
rehabilitative services under this title for an alcohol or drug 
dependence or abuse disability from any individual who has been 
discharged or released from active military, naval, or air 
service but who is not eligible for such treatment and 
services, the Secretary shall--
          (1) * * *
          * * * * * * *
  [(d)] (c)(1) Any person serving in the active military, 
naval, or air service who is determined by the Secretary 
concerned to have an alcohol or drug dependence or abuse 
disability may not be transferred to any facility in order for 
the Secretary to furnish care or treatment and rehabilitative 
services for such disability unless such transfer is during the 
last thirty days of such member's enlistment period or tour of 
duty, in which case such care and services provided to such 
member shall be provided as if such member were a veteran. Any 
transfer of any such member for such care and services shall be 
made pursuant to such terms as may be agreed upon by the 
Secretary concerned and the Secretary, subject to the 
provisions of sections 1535 and 1536 of title 31.
          * * * * * * *
  [(e) The Secretary may not furnish care and treatment and 
rehabilitative services under subsection (a) of this section 
after December 31, 1997.
  [(f)(1) During the period beginning on December 1, 1988, and 
ending on October 1, 1997, the Secretary shall conduct an 
ongoing clinical evaluation in order to determine the long-term 
results of drug and alcohol abuse treatment furnished to 
veterans in contract residential treatment facilities under 
this section.
  [(2) The evaluation shall include an assessment of the 
following:
          [(A) The long-term results of treatment referred to 
        in paragraph (1) of this subsection on drug and alcohol 
        use by veterans who may have received such treatment.
          [(B) The need for hospitalization of such veterans 
        for drug and alcohol abuse after completion of the 
        residential treatment.
          [(C) The employment status and income of such 
        veterans.
          [(D) The extent of any criminal activity of such 
        veterans.
          [(E) Whether certain models and methods of 
        residential treatment for drug and alcohol abuse are 
        more successful for veterans with specific abuses, 
        specific levels of resources available to them, and 
        specific needs than are other models and methods.
  [(3) To the extent feasible, the Secretary shall select for 
consideration in the evaluation veterans whose treatment for 
drug and alcohol abuse in contract residential treatment 
facilities under such section represents a variety of models 
and methods of residential drug and alcohol abuse treatment.
  [(4) The Secretary shall submit to the Committees on 
Veterans' Affairs of the Senate and House of Representatives 
the following reports on the evaluation under this subsection:
          [(A) Not later than February 1, 1993, an interim 
        report containing information obtained during the first 
        four years of the evaluation and any conclusions that 
        the Secretary has drawn on the basis of that 
        information.
          [(B) Not later than March 31, 1998, a final report 
        containing information obtained during the evaluation 
        and the determinations and conclusions of the Secretary 
        based on that information.
  [(g) The authority of the Secretary to enter into contracts 
under this section shall be effective for any fiscal year only 
to such extent or in such amounts as are provided in 
appropriation Acts.]
          * * * * * * *

Sec. 1720C. Noninstitutional alternatives to nursing home care: pilot 
                    program

  (a) [During the period through December 31, 1997, the 
Secretary may conduct a pilot program for the furnishing of] 
The Secretary may furnish medical, rehabilitative, and health-
related services in noninstitutional settings for veterans who 
are eligible under this chapter for, and are in need of, 
nursing home care. The Secretary shall give priority for 
participation in such program to veterans who--
          (1) * * *
          * * * * * * *
  (b)(1) Under the [pilot] program conducted pursuant to 
subsection (a), the Secretary shall (A) furnish appropriate 
health-related services solely through contracts with 
appropriate public and private agencies that provide such 
services, and (B) designate Department health-care employees to 
furnish case management services to veteran furnished services 
under the program.
          * * * * * * *

SUBCHAPTER VII--TREATMENT AND REHABILITATION FOR SERIOUSLY MENTALLY ILL 
                         AND HOMELESS VETERANS

Sec. 1771. General treatment

  In providing care and services under section 1710 of this 
title to veterans suffering from serious mental illness, 
including veterans who are homeless, the Secretary may provide 
(directly or in conjunction with a governmental or other 
entity)--
          (1) outreach services;
          (2) care, treatment, and rehabilitative services 
        (directly or by contract in community-based treatment 
        facilities, including halfway houses); and
          (3) therapeutic transitional housing assistance under 
        section 1772 of this title, in conjunction with work 
        therapy under section 1718(a) or (b) of this title and 
        outpatient care.

Sec. 1772. Therapeutic housing

  (a) The Secretary, in connection with the conduct of 
compensated work therapy programs, may operate residences and 
facilities as therapeutic housing.
  (b) The Secretary may use such procurement procedures for the 
purchase, lease, or other acquisition of residential housing 
for purposes of this section as the Secretary considers 
appropriate to expedite the opening and operation of 
transitional housing and to protect the interests of the United 
States.
  (c) A residence or other facility may be operated as 
transitional housing for veterans described in paragraphs (1) 
and (2) of section 1710(a) of this title under the following 
conditions:
          (1) Only veterans described in those paragraphs and a 
        house manager may reside in the residence.
          (2) Each resident, other than the house manager, 
        shall be required to make payments that contribute to 
        covering the expenses of board and the operational 
        costs of the residence for the period of residence in 
        such housing.
          (3) In order to foster the therapeutic and 
        rehabilitative objectives of such housing (A) residents 
        shall be prohibited from using alcohol or any 
        controlled substance or item, (B) any resident 
        violating that prohibition may be expelled from the 
        residence, and (C) each resident shall agree to undergo 
        drug testing or such other measures as the Secretary 
        shall prescribe to ensure compliance with that 
        prohibition.
          (4) In the establishment and operation of housing 
        under this section, the Secretary shall consult with 
        appropriate representatives of the community in which 
        the housing is established and shall comply with zoning 
        requirements, building permit requirements, and other 
        similar requirements applicable to other real property 
        used for similar purposes in the community.
          (5) The residence shall meet State and community fire 
        and safety requirements applicable to other real 
        property used for similar purposes in the community in 
        which the transitional housing is located, but fire and 
        safety requirements applicable to buildings of the 
        Federal Government shall not apply to such property.
  (d) The Secretary shall prescribe the qualifications for 
house managers for transitional housing units operated under 
this section. The Secretary may provide for free room and 
subsistence for house managers in addition to, or instead of 
payment of, a fee for such services.
  (e)(1) The Secretary may operate as transitional housing 
under this section--
          (A) any suitable residential property acquired by the 
        Secretary as the result of a default on a loan made, 
        guaranteed, or insured under chapter 37 of this title;
          (B) any suitable space in a facility under the 
        jurisdiction of the Secretary that is no longer being 
        used (i) to provide acute hospital care, or (ii) as 
        housing for medical center employees; and
          (C) any other suitable residential property 
        purchased, leased, or otherwise acquired by the 
        Secretary.
  (2) In the case of any property referred to in paragraph 
(1)(A), the Secretary shall--
          (A) transfer administrative jurisdiction over such 
        property within the Department from the Veterans 
        Benefits Administration to the Veterans Health 
        Administration; and
          (B) transfer from the General Post Fund of the 
        Department of Veterans Affairs to the appropriate 
        revolving fund under chapter 37 of this title an amount 
        (not to exceed the amount the Secretary paid for the 
        property) representing the amount the 
        Secretary considers could be obtained by sale of such 
        property to a nonprofit organization or a State for use 
        as a shelter for homeless veterans.
  (3) In the case of any residential property obtained by the 
Secretary from the Department of Housing and Urban Development 
under this section, the amount paid by the Secretary to that 
Department for that property may not exceed the amount that the 
Secretary of Housing and Urban Development would charge for the 
sale of that property to a nonprofit organization or a State 
for use as a shelter for homeless persons. Funds for such 
charge shall be derived from the General Post Fund.
  (f) The Secretary shall prescribe--
          (1) a procedure for establishing reasonable payment 
        rates for persons residing in transitional housing; and
          (2) appropriate limits on the period for which such 
        persons may reside in transitional housing.
  (g) The Secretary may dispose of any property acquired for 
the purpose of this section. The proceeds of any such disposal 
shall be credited to the General Post Fund of the Department of 
Veterans Affairs.
  (h) Funds received by the Department under this section shall 
be deposited in the General Post Fund. The Secretary may 
distribute out of the fund such amounts as necessary for the 
acquisition, management, maintenance, and disposition of real 
property for the purpose of carrying out such program. The 
Secretary shall manage the operation of this section so as to 
ensure that expenditures under this subsection for any fiscal 
year shall not exceed by more than $500,000 proceeds credited 
to the General Post Fund under this section. The operation of 
the program and funds received shall be separately accounted 
for, and shall be stated in the documents accompanying the 
President's budget for each fiscal year.

Sec. 1773. Additional services at certain locations

  (a) Subject to the availability of appropriations, the 
Secretary shall operate a program under this section to expand 
and improve the provision of benefits and services by the 
Department to homeless veterans.
  (b) The program shall include the establishment of not fewer 
than eight programs (in addition to any existing programs 
providing similar services) at sites under the jurisdiction of 
the Secretary to be centers for the provision of comprehensive 
services to homeless veterans. The services to be provided at 
each site shall include a comprehensive and coordinated array 
of those specialized services which may be provided under 
existing law.
  (c) The program shall include the services of such employees 
of the Veterans Benefits Administration as the Secretary 
determines appropriate at sites under the jurisdiction of the 
Secretary at which services are provided to homeless veterans.

Sec. 1774. Coordination with other agencies and organizations

  (a) In assisting homeless veterans, the Secretary shall 
coordinate with, and may provide services authorized under this 
title in conjunction with, State and local governments, other 
appropriate departments and agencies of the Federal Government, 
and nongovernmental organizations.
  (b)(1) The Secretary shall require the director of each 
medical center or the director of each regional benefits office 
to make an assessment of the needs of homeless veterans living 
within the area served by the medical center or regional 
office, as the case may be.
  (2) Each such assessment shall be made in coordination with 
representatives of State and local governments, other 
appropriate departments and agencies of the Federal Government, 
and nongovernmental organizations that have experience working 
with homeless persons in that area.
  (3) Each such assessment shall identify the needs of homeless 
veterans with respect to the following:
          (A) Health care.
          (B) Education and training.
          (C) Employment.
          (D) Shelter.
          (E) Counseling.
          (F) Outreach services.
  (4) Each assessment shall also indicate the extent to which 
the needs referred to in paragraph (3) are being met adequately 
by the programs of the Department, of other departments and 
agencies of the Federal Government, of State and local 
governments, and of nongovernmental organizations.
  (5) Each assessment shall be carried out in accordance with 
uniform procedures and guidelines prescribed by the Secretary.
  (c) In furtherance of subsection (a), the Secretary shall 
require the director of each medical center and the director of 
each regional benefits office, in coordination with 
representatives of State and local governments, other Federal 
officials, and nongovernmental organizations that have 
experience working with homeless persons in the areas served by 
such facility or office, to--
          (1) develop a list of all public and private programs 
        that provide assistance to homeless persons or homeless 
        veterans in the area concerned, together with a 
        description of the services offered by those programs;
          (2) seek to encourage the development by the 
        representatives of such entities, in coordination with 
        the director, of a plan to coordinate among such public 
        and private programs the provision of services to 
        homeless veterans;
          (3) take appropriate action to meet, to the maximum 
        extent practicable through existing programs and 
        available resources, the needs of homeless veterans 
        that are identified in the assessment conducted under 
        subsection (b); and
          (4) attempt to inform homeless veterans whose needs 
        the director cannot meet under paragraph (3) of the 
        services available to such veterans within the area 
        served by such center or office.
          * * * * * * *

             PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

          * * * * * * *

         CHAPTER 74--VETERANS HEALTH ADMINISTRATION-- PERSONNEL

          * * * * * * *

   SUBCHAPTER II--COLLECTIVE BARGAINING AND PERSONNEL ADMINISTRATION

          * * * * * * *

Sec. 7425. Employees: laws not applicable

  (a) * * *
          * * * * * * *
  (c)(1) Notwithstanding any other provision of law, employees 
described in paragraph (2), and the personnel positions in 
which such employees are employed, are not subject to any 
reduction required by law or executive branch policy in the 
number or percentage of employees, or of personnel positions, 
within specified pay grades.
  (2) Paragraph (1) applies to employees, and personnel 
positions, of the Veterans Health Administration performing the 
following functions:
          (A) The provision of, or the supervision of the 
        provision of, care and services to patients.
            (B) The conduct of research.
          * * * * * * *

        SUBCHAPTER III--SPECIAL PAY FOR PHYSICIANS AND DENTISTS

Sec. 7431. Special pay: authority

  (a) * * *
          * * * * * * *
  (g)(1) In the case of a physician or dentist who is employed 
in a position that is covered by a determination by the 
Secretary under subsection (d)(1) that the Administration does 
not have a significant recruitment or retention problem with 
respect to a particular category of positions and who on [the 
day before the effective date of this subchapter] July 13, 
1991, was receiving special pay under an agreement entered into 
under section 4118 of this title (as in effect before such 
date), the Secretary may pay to that physician or dentist, in 
addition to basic pay, retention pay under this subsection.
          * * * * * * *

Sec. 7432. Special pay: written agreements

  (a) * * *
          * * * * * * *
  (c)(1) If a proposed agreement under this subchapter will 
provide a total annual amount of special pay to be provided to 
a physician or dentist who has previously entered into an 
agreement under this subchapter (or under section 4118 of this 
title as in effect before [the effective date of the Department 
of Veterans Affairs Physician and Dentist Recruitment and 
Retention Act of 1991] July 14, 1991) that will exceed the 
previous annual amount of special pay provided for the 
physician or dentist by more than 50 percent (other than in the 
case of a physician or dentist employed in an executive 
position in the Central Office of the Department), or that will 
be less than the previous annual amount of special pay provided 
for the physician or dentist by more than 25 percent, the 
proposed agreement shall be promptly submitted to the 
Secretary. The proposed agreement shall not take effect if it 
is disapproved by the Secretary within 60 days after the date 
on which the physician or dentist entered into the proposed 
agreement.
          * * * * * * *

Sec. 7437. Special pay: general provisions

  (a) * * *
          * * * * * * *
  (e)(1) A physician or dentist shall be paid special pay under 
this subchapter at a rate not less than the rate of special pay 
the physician or dentist was paid under section 4118 of this 
title as of [the day before the effective date of this 
subchapter] July 13, 1991, if the physician or dentist--
          (A) is employed on a full-time basis in the Veterans 
        Health Administration;
          (B) was employed as a physician or dentist on a full-
        time basis in the Administration on [the day before 
        such effective date] such date; and
          (C) on such [effective] date was being paid for no 
        special-pay factors other than primary, full-time, 
        length of service, and speciality or board 
        certification.
  (2) A physician or dentist shall be paid special pay under 
this subchapter at a rate not less than the rate of special pay 
the physician or dentist was paid under section 4118 of this 
title as of [the day before the effective date of this 
subchapter] July 13, 1991, if the physician or dentist--
          (A) is employed on a part-time basis in the Veterans 
        Health Administration;
          (B) was employed as a physician or dentist on a part-
        time basis in the Administration on [the day before 
        such effective date] such date; and
          (C) on such [effective] date was being paid for no 
        special-pay factors other than primary, full-time, 
        length of service, and speciality or board 
        certification.
          * * * * * * *

Sec. 7438. Special pay: coordination with other benefits laws

  (a) * * *
  (b)(1) * * *
  (2) A physician or dentist who has section 4118 service and 
has completed a total of not less than 15 years of service as a 
physician or dentist in the Veterans Health Administration 
shall be entitled to have special pay paid to the physician or 
dentist under this subchapter considered basic pay for the 
purposes of chapter 83 or 84, as appropriate, of title 5 as 
follows:
          (A) In an amount equal to the amount that would have 
        been so considered under section 4118 of this title on 
        [the day before the effective date of this section] 
        July 13, 1991, based on the rates of special pay the 
        physician or dentist was entitled to receive under that 
        section on [the day before such effective date] such 
        date.
          (B) With respect to any amount of special pay 
        received under this subchapter in excess of the amount 
        such physician or dentist was entitled to receive under 
        section 4118 of this title on [the day before the 
        effective date of this section] July 13, 1991, in an 
        amount equal to 25 percent of such excess amount for 
        each two years that the physician or dentist has 
        completed as a physician or dentist in the Veterans 
        Health Administration after [the effective date of this 
        section] such date.
          * * * * * * *
  (4) Special pay paid under section 4118 of this title, as in 
effect before [the effective date of this section] July 14, 
1991, to a physician or dentist who has section 4118 service 
shall be credited to the physician or dentist for the same 
purposes and in the same manner and to the same extent that 
such special pay was credited to the physician or dentist 
before such [effective] date.
  (5) For purposes of this subsection:
          (A) The term ``physician or dentist who has no 
        section 4118 service'' means a physician or dentist 
        employed as a physician or dentist in the Veterans 
        Health Administration who has no previous service as a 
        physician or dentist in the Administration (or its 
        predecessor) before [the effective date of this 
        section] July 14, 1991.
          (B) The term ``physician or dentist who has section 
        4118 service'' means a physician or dentist employed as 
        a physician or dentist in the Veterans Health 
        Administration who has previous service as a physician 
        or dentist in the Administration (or its predecessor) 
        before [the effective date of this section] July 14, 
        1991.
          (C) Service in any predecessor entity of the Veterans 
        Health Administration shall be considered to be service 
        in the Veterans Health Administration.
  (c) Compensation paid as special pay under this subchapter or 
under an agreement entered into under section 4118 of this 
title (as in effect on [the day before the effective date of 
the Department of Veterans Affairs Physician and Dentist 
Recruitment and Retention Act of 1991] July 13, 1991) shall be 
considered as annual pay for the purposes of chapter 87 of 
title 5, relating to life insurance for Federal employees.
  (d)(1) The Secretary may authorize special pay paid under 
this subchapter to a physician or dentist described in 
paragraph (2) who retires from Federal service during the 
period beginning on the date of the enactment of this 
subsection and ending on September 30, 1999, to be considered 
to be basic pay for the purposes of chapter 83 or 84 of title 
5, as appropriate.
  (2) Paragraph (1) applies to any physician or dentist 
employed by the Veterans Health Administration--
          (A) who--
                  (i) is in receipt of special pay under 
                chapter 74 of this title;
                  (ii) is eligible to retire from Federal 
                Government service;
                  (iii) has completed, or by September 30, 
                1999, would have completed, 15 years of service 
                in the Veterans Health Administration 
                (determined assuming the physician or dentist 
                remained continuously employed in the Veterans 
                Health Administration until that date); and,
                  (iv) by September 30, 1999, would have 
                completed at least eight years of service in 
                the Veterans Health Administration while in 
                receipt of special pay under this subchapter 
                (determined assuming the physician or dentist 
                remained continuously employed in the Veterans 
                Health Administration until that date); and
          (B) with respect to whom the director of the 
        Department health care facility at which the physician 
        or dentist is employed has determined, and certified to 
        the Under Secretary for Health, that--
                  (i) the physician or dentist holds a position 
                which, because of changes in staffing patterns 
                or staffing levels at such facility, is no 
                longer required to be maintained at such 
                facility; and
                  (ii) there exists no available position at 
                such facility appropriate to the training and 
                experience of the physician or dentist.
  (3)(A) For each physician or dentist who retires with the 
benefit of the provisions of paragraph (1), the Secretary shall 
deposit in the Treasury to the credit of the appropriate 
Federal retirement fund each year, for the period specified in 
subparagraph (B), an amount equal to the amount of the annuity 
paid (or to be paid) to the retired physician or dentist for 
that year.
  (B) The period applicable under subparagraph (A) for any 
retired physician or dentist is the period beginning on the 
date on which the physician or dentist retires and ending on 
the later of the following (determined as if the physician or 
dentist had remained continuously employed in the Veterans 
Health Administration rather than retiring):
          (i) The date on which the physician or dentist 
        completed or would have completed 15 years of service 
        in the Veterans Health Administration.
          (ii) The date on which the physician or dentist would 
        have completed eight years of service in the Veterans 
        Health Administration while in receipt of special pay 
        under this subchapter.
  (C) A physician or dentist who retires with the benefit of 
the provisions of paragraph (1) is not eligible to receive a 
voluntary separation incentive payment under the provisions of 
section 663 of the Treasury, Postal Service, and General 
Government Appropriations Act, 1997 (as contained in section 
101(f) of division A of Public Law 104-208; 110 Stat. 3009-
383), relating to voluntary separation incentives for employees 
of certain Federal agencies, or any other provision of law.
          * * * * * * *

                 CHAPTER 78--VETERANS' CANTEEN SERVICE

          * * * * * * *

Sec. 7802. Duties of Secretary with respect to Service

  The Secretary shall--
          (1) establish, maintain, and operate canteens where 
        deemed necessary and practicable at [hospitals and 
        homes] medical facilities of the Department and at 
        other Department establishments where similar essential 
        facilities are not reasonably available from outside 
        commercial sources;
          * * * * * * *
          [(7) fix the prices of merchandise and services in 
        canteens so as to carry out the purposes of this 
        chapter;]
          (7) notwithstanding any other provision of law, have 
        sole authority to establish canteens (including vending 
        facilities and vending machines), and determine, and 
        fix the prices of, merchandise and services sold at 
        such canteens;
          * * * * * * *
          (11) authorize the use of funds of the Service when 
        available, subject to such regulations as the Secretary 
        may deem appropriate, for the purpose of cashing 
        checks, money orders, and similar instruments in 
        nominal amounts for the payment of money presented by 
        veterans hospitalized or domiciled at [hospitals and 
        homes] medical facilities of the Department, and by 
        other persons authorized by section 7803 of this title 
        to make purchases at canteens. Such checks, money 
        orders, and other similar instruments may be cashed 
        outright or may be accepted, subject to strict 
        administrative controls, in payment for merchandise or 
        services, and the difference between the amount of the 
        purchase and the amount of the tendered instrument 
        refunded in cash.

Sec. 7803. Operation of Service

  (a) The canteens at [hospitals and homes] medical facilities 
of the Department shall be primarily for the use and benefit of 
veterans hospitalized or domiciled at such hospitals and homes. 
Service at such canteens may also be furnished to personnel of 
the Department and recognized veterans' organizations employed 
at such [hospitals and homes] medical facilities and to other 
persons so employed, to the families of all the foregoing 
persons who reside at the [hospital or home] medical facility 
concerned, and to relatives and other persons while visiting 
any of the persons named [in this subsection; however, service 
to any person not hospitalized, domiciled, or residing at the 
hospital or home shall be limited to the sale of merchandise or 
services for consumption or use on the premises] in this 
section.
  [(b) Service at canteens other than those established at 
hospitals and homes shall be limited to sales of merchandise 
and services for consumption or use on the premises, to 
personnel employed at such establishments, their visitors, and 
other persons at such establishments on official business.]
  (b) A canteen may provide support services to medical 
facilities of the Department. Such services shall be provided 
on a reimbursable basis.
          * * * * * * *

            PART VI--ACQUISITION AND DISPOSITION OF PROPERTY

          * * * * * * *

   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
    FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL 
                                PROPERTY

          * * * * * * *

Sec. 8125. Procurement of health-care items

  (a) * * *
          * * * * * * *
  (e)(1) A drug, pharmaceutical or biological product, or 
hematology-related product that is listed on the pharmaceutical 
supply schedule described in section 8126(a) of this title may 
only be procured or ordered from that supply schedule by or for 
any entity specified in paragraph (2), notwithstanding any 
other provision of law (whether enacted before, on, or after 
the date of the enactment of this subsection).
  (2) An entity specified in this paragraph is (A) any agency 
or instrumentality of the Federal Government, or (B) any other 
entity that is specified in Federal law or regulation, as in 
effect before July 1, 1997, as eligible to procure or order 
drugs, pharmaceutical or biological products, or hematology-
related products from such pharmaceutical supply schedule.
  [(e)] (f) For the purposes of this section:
          (1) * * *
          * * * * * * *
                              ----------                              


                 SECTION 7 OF THE ACT OF JUNE 13, 1991

AN ACT To amend title 38, United States Code, with respect to veterans 
   programs for housing and memorial affairs, and for other purposes.

[SEC. 7. DEMONSTRATION PROGRAM OF COMPENSATED WORK THERAPY AND 
                    THERAPEUTIC TRANSITIONAL HOUSING.

  [(a) Demonstration Program.--During the period beginning on 
October 1, 1991, and ending on December 31, 1997, the Secretary 
of Veterans Affairs may carry out a compensated work therapy 
and therapeutic transitional housing demonstration program. The 
demonstration program shall have two components, as follows:
          [(1) A component, under subsection (c), which 
        provides for direct operation of therapeutic 
        transitional housing in conjunction with the furnishing 
        of compensated work therapy.
          [(2) A component, under subsection (d), which 
        provides for the contracting with nonprofit 
        corporations to furnish compensated work therapy in 
        conjunction with the operation of the therapeutic 
        transitional housing.
  [(b) Eligible Veterans.--The veterans for whom therapeutic 
transitional housing may be provided under this section are 
veterans--
          [(1) who are furnishing services to the Department of 
        Veterans Affairs under subsection (a) of section 1718 
        of title 38, United States Code; or
          [(2) who are furnished therapeutic work pursuant to 
        subsection (b) of that section.
  [(c) Authority to Operate Residences as Therapeutic 
Transitional Housing.--Under the demonstration program, the 
Secretary, in connection with the conduct of compensated work 
therapy programs, may operate residences as therapeutic 
transitional housing solely for veterans described in 
subsection (b) of this section. The Secretary may operate no 
more than 50 residences as therapeutic transitional housing 
under this subsection.
  [(d) Contract Authority.--(1) Under the demonstration 
program, the Secretary may contract with nonprofit corporations 
to conduct compensated work therapy programs under the 
demonstration program.
  [(2) The Secretary may enter into a contract with a nonprofit 
corporation under the demonstration program only if the 
corporation provides assurances satisfactory to the Secretary 
that it will operate therapeutic transitional housing for 
eligible veterans in conjunction with an existing compensated 
work therapy program at a medical center. The contract may 
remain in effect only as long as the corporation operates the 
therapeutic transitional housing for eligible veterans in 
connection with the demonstration program.
  [(3) A contract with a nonprofit corporation under this 
subsection may provide for the Secretary to furnish the 
corporation (with or without consideration) in-kind services, 
including--
          [(A) technical and clinical advice;
          [(B) supervision of the activities of compensated 
        work therapy participants in the rehabilitation of any 
        property for use as therapeutic transitional housing 
        under the contract and for possible later sale as a 
        private residence; and
          [(C) minor maintenance of and minor repairs to such 
        property.
  [(e) Procurement Procedures.--The Secretary may use such 
procurement procedures for the purchase, lease, or other 
acquisition of residential housing for purposes of this section 
as the Secretary considers appropriate to expedite the opening 
and operation of transitional housing and to protect the 
interests of the United States.
  [(f) Conditions.--A residence may be operated as transitional 
housing for veterans described in subsection (b) under the 
following conditions:
          [(1) Only veterans described in such subsection and a 
        house manager may reside in the residence.
          [(2) Each resident, other than the house manager, 
        shall pay rent for the period of residence in such 
        housing.
          [(3) In the establishment and operation of housing 
        under this section, the Secretary shall consult with 
        appropriate representatives of the community in which 
        the housing is established and shall comply with zoning 
        requirements, building permit requirements, and other 
        similar requirements applicable to other real property 
        used for similar purposes in the community.
          [(4) The residence shall meet State and community 
        fire and safety requirements applicable to other real 
        property used for similar purposes in the community in 
        which the transitional housing is located, but fire and 
        safety requirements applicable to buildings of the 
        Federal Government shall not apply to such property.
  [(g) House Managers.--The Secretary shall prescribe the 
qualifications for house managers for transitional housing 
units operated under this section. The Secretary may provide 
for free room and subsistence for house managers in addition 
to, or instead of payment of, a fee for such services.
  [(h) Sources of Housing.--(1) The Secretary may operate as 
transitional housing under this section--
          [(A) any suitable residential property acquired by 
        the Secretary as the result of a default on a loan 
        made, guaranteed, or insured under chapter 37 of title 
        38, United States Code; and
          [(B) any other suitable residential property 
        purchased, leased, or otherwise acquired by the 
        Secretary.
  [(2) In the case of any property referred to in paragraph 
(1)(A), the Secretary shall--
          [(A) transfer administrative jurisdiction over such 
        property within the Department from the Veterans 
        Benefits Administration to the Veterans Health 
        Administration; and
          [(B) transfer from the General Post Fund of the 
        Department of Veterans Affairs to the Loan Guaranty 
        Revolving Fund under chapter 37 of title 38, United 
        States Code, an amount, not to exceed the amount the 
        Secretary paid for the property, representing the 
        amount the Secretary considers could be obtained by 
        sale of such property to a nonprofit organization or a 
        State for use as a shelter for homeless veterans.
  [(3) In the case of any residential property obtained by the 
Secretary from the Department of Housing and Urban Development 
under this section, the amount paid by the Secretary to that 
Department for that property may not exceed the amount that the 
Secretary of Housing and Urban Development would charge for the 
sale of that property to a nonprofit organization or a State 
for use as a shelter for homeless persons. Funds for such 
charge shall be derived from the General Post Fund.
  [(i) Rent and Length of Residence.--The Secretary shall 
prescribe--
          [(1) a procedure for establishing reasonable rental 
        rates for persons residing in transitional housing; and
          [(2) appropriate limits on the period for which such 
        persons may reside in transitional housing.
  [(j) Disposal of Property.--The Secretary may dispose of any 
property acquired for the purpose of this section. The proceeds 
of any such disposal shall be credited to the General Post Fund 
of the Department of Veterans Affairs.
  [(k) Availability of General Post Fund.--Funds received by 
the Department under this section shall be deposited in the 
General Post Fund. The Secretary may distribute out of the fund 
such amounts as necessary for the acquisition, management, 
maintenance, and disposition of real property for the purpose 
of carrying out such program. The operation of the 
demonstration program and funds received shall be separately 
accounted for, and shall be stated in the documents 
accompanying the President's budget for each fiscal year.
  [(l) Report.--After a demonstration program under this 
section has been in effect for two years, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and 
House of Representatives a report on the operation of the 
program. The Secretary shall include in the report such 
recommendations with regard to the program as the Secretary 
considers appropriate.]
                              ----------                              


    SECTION 107 OF THE VETERANS' MEDICAL PROGRAMS AMENDMENTS OF 1992

                          TITLE I--HEALTH CARE

                      Part A--General Health Care

          * * * * * * *

[SEC. 107. SERVICES FOR HOMELESS VETERANS.

  [(a) Program Development.--The Secretary shall assess all 
programs developed by facilities of the Department of Veterans 
Affairs which have been designed to assist homeless veterans. 
To the maximum extent practicable, the Secretary shall seek to 
replicate at other facilities of the Department those programs 
that have as a goal the rehabilitation of homeless veterans and 
which the Secretary has determined to be successful in 
achieving that goal by fostering reintegration of homeless 
veterans into the community and employment of such veterans.
  [(b) Assessment and Coordination.--(1) In carrying out 
subsection (a), the Secretary shall require the director of 
each medical center or the director of each regional benefits 
office to make an assessment of the needs of homeless veterans 
living within the area served by the medical center or regional 
office, as the case may be.
  [(2) Each such assessment shall be made in coordination with 
representatives of State and local governments, other 
appropriate departments and agencies of the Federal Government, 
and nongovernmental organizations that have experience working 
with homeless persons in that area.
  [(3) Each such assessment shall identify the needs of 
homeless veterans with respect to the following:
          [(A) Health care.
          [(B) Education and training.
          [(C) Employment.
          [(D) Shelter.
          [(E) Counseling.
          [(F) Outreach services.
  [(4) Each assessment shall also indicate the extent to which 
the needs referred to in paragraph (3) are being met adequately 
by the programs of the Department, of other departments and 
agencies of the Federal Government, of State and local 
governments, and of nongovernmental organizations.
  [(5) Each assessment shall be carried out in accordance with 
uniform procedures and guidelines prescribed by the Secretary.
  [(6) The Secretary shall require that the directors referred 
to in paragraph (1) update the assessment required under that 
paragraph during each of 1995, 1996, and 1997.
  [(c) Planning.--In furtherance of subsection (a), the 
Secretary shall require the director of each medical center and 
the director of each regional benefits office, in coordination 
with representatives of State and local governments, other 
Federal officials, and nongovernmental organizations that have 
experience working with homeless persons in the areas served by 
such facility, to--
          [(1) develop a list of all public and private 
        programs that provide assistance to homeless persons or 
        homeless veterans in the area concerned, together with 
        a description of the services offered by those 
        programs; and
          [(2) seek to encourage the development by the 
        representatives of such entities, in coordination with 
        the director, of a plan to coordinate among such public 
        and private programs the provision of services to 
        homeless veterans.
  [(d) Services.--In furtherance of subsection (a), the 
Secretary shall require the director of each medical center or 
regional benefits office, in carrying out such director's 
responsibilities under title 38, United States Code, to take 
appropriate action to--
          [(1) meet, to the maximum extent practicable through 
        existing programs and available resources, the needs of 
        homeless veterans that are identified in the assessment 
        conducted under subsection (b); and
          [(2) attempt to inform homeless veterans whose needs 
        the director cannot meet under paragraph (1) of the 
        services available to such veterans within the area 
        served by such center or office.
  [(e) Authority To Accept Donations for Certain Programs.--The 
Secretary may accept donations of funds and services for the 
purposes of providing one-stop, non-residential services and 
mobile support teams and for expanding the medical services to 
homeless veterans eligible for such services from the 
Department of Veterans Affairs.
  [(f) Definitions.--As used in subsections (a) through (e):
          [(1) The term ``medical center'' means a medical 
        center of the Department of Veterans Affairs.
          [(2) The term ``regional benefits office'' means a 
        regional benefits office of the Department of Veterans 
        Affairs.
          [(3) The term ``veteran'' has the meaning given such 
        term in section 101(2) of title 38, United States Code.
          [(4) The term ``homeless'' has the meaning given such 
        term in section 103(a), as limited by section 103(c), 
        of the Stewart B. McKinney Homeless Assistance Act (42 
        U.S.C. 11302(a)).
  [(g) Extension of Certain Programs for Homeless Veterans.--
Section 801 of the Stewart B. McKinney Homeless Assistance 
Amendments Act of 1988 (Public Law 100-628; 102 Stat. 3257) is 
amended--
          [(1) in subsection (a), by striking out ``to the 
        Veterans' Administration'' and all that follows through 
        the period and inserting in lieu thereof the following: 
        ``to the Department of Veterans Affairs $50,000,000 for 
        fiscal year 1993 for medical care of veterans. Funds 
        appropriated pursuant to this section shall be in 
        addition to any funds appropriated pursuant to any 
        other authorizations (whether definite or indefinite) 
        for medical care of veterans.''; and
          [(2) in subsections (b) and (c), by striking out ``Of 
        the amount appropriated pursuant to subsection (a), 50 
        percent'' and inserting in lieu thereof ``The amounts 
        appropriated pursuant to subsection (a)''.
  [(h) Extension of Program for Mentally Ill Homeless 
Veterans.--Section 115(d) of the Veterans' Benefits and 
Services Act of 1988 (38 U.S.C. 1712 note) is amended by 
striking out ``1992'' and inserting in lieu thereof ``1994''.
  [(i) Reports.--(1) Not later than February 1, 1993, the 
Secretary shall submit to the Committees on Veterans' Affairs 
of the Senate and House of Representatives a report containing 
an evaluation of the programs referred to in subsections (a) 
and (e).
  [(2) Not later than December 31, 1994, the Secretary shall 
submit to such committees a report that--
          [(A) describes the results of the assessment carried 
        out under subsection (b);
          [(B) sets forth the lists developed under paragraph 
        (1) of subsection (c); and
          [(C) describes the progress, if any, made by the 
        directors of the medical centers and the directors of 
        the benefits offices referred to in such subsection (c) 
        in developing the plan referred to in paragraph (2) of 
        such subsection (c).
  [(3) Not later than December 31 of each of 1995, 1996, and 
1997, the Secretary shall submit to such committees a report 
that describes the update to the assessment that is carried out 
under subsection (b)(6) in the year preceding the report.]
                              ----------                              


      HOMELESS VETERANS COMPREHENSIVE SERVICE PROGRAMS ACT OF 1992

          * * * * * * *

[SEC. 2. PILOT PROGRAM.

  [(a) In General.--Subject to the availability of 
appropriations provided for under section 12, the Secretary of 
Veterans Affairs shall establish and operate, through September 
30, 1997, a pilot program under this Act to expand and improve 
the provision of benefits and services by the Department of 
Veterans Affairs to homeless veterans.
  [(b) Comprehensive Centers.--The pilot program shall include 
the establishment of no more than eight demonstration programs 
(in addition to any existing programs providing similar 
services) at sites under the jurisdiction of the Secretary to 
be centers for the provision of comprehensive services to 
homeless veterans. The services to be provided at each site 
shall include a comprehensive and coordinated array of those 
specialized services which may be provided under existing law.
  [(c) Placement of VBA Employees.--The pilot program shall 
also include the services of such employees of the Veterans 
Benefits Administration as the Secretary determines appropriate 
at--
          [(1) no more than 45 sites at which the Secretary 
        provides services to homeless chronically mentally ill 
        veterans pursuant to section 115 of Public Law 100-322 
        (38 U.S.C. 1712 note);
          [(2) no more than 26 sites at which the Secretary 
        furnishes domiciliary care to homeless veterans 
        pursuant to section 801(b) of Public Law 100-628 (102 
        Stat. 3257);
          [(3) no more than 12 centers which provide 
        readjustment counseling services under section 1712A of 
        title 38, United States Code; and
          [(4) each of the demonstration sites established 
        under subsection (b).]

SEC. 3. GRANTS.

  (a) Authority To Make Grants.--(1) Subject to the 
availability of appropriations provided for under section 12, 
the Secretary of Veterans Affairs[, during] shall make grants 
to assist eligible entities in establishing new programs to 
furnish outreach, rehabilitative services, vocational 
counseling and training, and transitional housing assistance to 
homeless veterans.
  (2) The authority of the Secretary to make grants under this 
section expires on September 30, [1997] 1999.
  (b) Criteria for Award of Grants.--The Secretary shall 
establish criteria and requirements for the award of a grant 
under this section, including criteria for entities eligible to 
receive such grants. The Secretary shall publish such criteria 
and requirements in the Federal Register not later than 90 days 
after the date of the enactment of this Act. In developing such 
criteria and requirements, the Secretary shall consult with 
organizations with experience in the area of providing service 
to homeless veterans and to the maximum extent possible shall 
take into account the findings of the assessment of the 
Secretary under section 107 of the Veterans' Medical Programs 
Amendments of 1992. The criteria established under this section 
shall include the following:
          (1) * * *
          (2) Specification as to the number of projects for 
        which grant support is available[, which shall include 
        provision for no more than 25 service centers and no 
        more than 20 programs which incorporate the procurement 
        of vans as described in paragraph (1)].
          * * * * * * *
                              ----------                              


    SECTION 1001 OF THE VETERANS' BENEFITS IMPROVEMENTS ACT OF 1994

SEC. 1001. REPORTS ON ACTIVITIES OF THE DEPARTMENT OF VETERANS AFFAIRS 
                    TO ASSIST HOMELESS VETERANS.

  (a) Annual Report.--(1) Not later than April 15 of each year, 
the Secretary of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives a report on the activities of the Department of 
Veterans Affairs during the year preceding the report under 
programs of the Department for the provision of assistance to 
homeless veterans.
  (2) The report shall--
          (A) set forth the number of homeless veterans 
        provided assistance under those programs;
          (B) describe the cost to the Department of providing 
        such assistance under those programs; [and]
          (C) provide any other information on those programs 
        and on the provision of such assistance that the 
        Secretary considers appropriate[.]; and
          (D) evaluate the effectiveness of the programs of the 
        Department (including residential work-therapy 
        programs, programs combining outreach, community-based 
        residential treatment, and case-management, and 
        contract care programs for alcohol and drug-dependence 
        or abuse disabilities) in providing assistance to 
        homeless veterans; and
          (E) evaluate the effectiveness of programs 
        established by recipients of grants under section 3 of 
        the Homeless Veterans Comprehensive Service Programs 
        Act of 1992 (38 U.S.C. 7721 note), and describe the 
        experience of such entities in applying for and 
        receiving grants from the Secretary of Housing and 
        Urban Development to serve primarily homeless persons 
        who are veterans.
  [(b) Bi-Annual Requirement.--The Secretary shall include in 
the report submitted under subsection (a)(1) in 1995, and every 
two years thereafter, an evaluation of the effectiveness of the 
programs of the Department in providing assistance to homeless 
veterans.]
  [(c)] (b) Conforming Repeal.--Section 10 of Public Law 102-
590 (106 Stat. 5141; 37 U.S.C. 7721 note) is repealed.
                              ----------                              


          SECTION 703 OF THE VETERANS' HEALTH CARE ACT OF 1992

SEC. 703. HEALTH EXAMINATIONS AND COUNSELING FOR VETERANS ELIGIBLE FOR 
                    INCLUSION IN CERTAIN HEALTH-RELATED REGISTRIES.

  (a) * * *
          * * * * * * *
  (c) Form of Counseling.--Counseling provided in this section 
may not be provided through written materials only, but shall 
include verbal counseling.