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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-210

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



 
        VETERANS HEALTH CARE FACILITIES CAPITAL IMPROVEMENT ACT

                                _______
                                

 July 15, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Smith of New Jersey, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1720]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 1720) to authorize the Secretary of Veterans Affairs 
to carry out construction projects for the purpose of 
improving, renovating, establishing, and updating patient care 
facilities at Department of Veterans Affairs medical centers, 
having considered the same, reports favorably thereon with 
amendments and recommends that the bill as amended do pass.

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans Health Care Facilities 
Capital Improvement Act''.

SEC. 2. AUTHORIZATION OF MAJOR MEDICAL FACILITY PROJECTS FOR PATIENT 
                    CARE IMPROVEMENTS.

  (a) In General.--(1) Subject to paragraph (3), the Secretary of 
Veterans Affairs is authorized to carry out major medical facility 
projects in accordance with this section, using funds appropriated for 
fiscal year 2004 or 2005 pursuant to subsection (e). The cost of any 
such project may not exceed
          (A) $100,000,000 in fiscal year 2004; and
          (B) $125,000,000 in fiscal year 2005.
  (2) Projects carried out under this section are not subject to 
section 8104(a)(2) of title 38, United States Code.
  (3) The Secretary may not award a contract by reason of the 
authorization provided by paragraph (1) until after the Secretary has 
awarded a contract for each construction project authorized by section 
3(a) and a contract for each lease authorized by section 3(d).
  (b) Type of Projects.--A project carried out under subsection (a) may 
be carried out only at a Department of Veterans Affairs medical center 
and only for the purpose of one or more of the following:
          (1) Improving a patient care facility.
          (2) Replacing a patient care facility.
          (3) Renovating a patient care facility.
          (4) Updating a patient care facility to contemporary 
        standards.
          (5) Establishing a new patient care facility at a location 
        where no Department patient care facility exists.
          (6) Improving, replacing, or renovating a research facility 
        or updating such a facility to contemporary standards.
  (c) Purpose of Projects.--In selecting medical centers for projects 
under subsection (a), the Secretary shall select projects to improve, 
replace, renovate, update, or establish facilities to achieve one or 
more of the following:
          (1) Seismic protection improvements related to patient safety 
        (or, in the case of a research facility, patient or employee 
        safety).
          (2) Fire safety improvements.
          (3) Improvements to utility systems and ancillary patient 
        care facilities (including such systems and facilities that may 
        be exclusively associated with research facilities).
          (4) Improved accommodation for persons with disabilities, 
        including barrier-free access.
          (5) Improvements at patient care facilities to specialized 
        programs of the Department, including the following:
                  (A) Blind rehabilitation centers.
                  (B) Inpatient and residential programs for seriously 
                mentally ill veterans, including mental illness 
                research, education, and clinical centers.
                  (C) Residential and rehabilitation programs for 
                veterans with substance-use disorders.
                  (D) Physical medicine and rehabilitation activities.
                  (E) Long-term care, including geriatric research, 
                education, and clinical centers, adult day care 
                centers, and nursing home care facilities.
                  (F) Amputation care, including facilities for 
                prosthetics, orthotics programs, and sensory aids.
                  (G) Spinal cord injury centers.
                  (H) Traumatic brain injury programs.
                  (I) Women veterans' health programs (including 
                particularly programs involving privacy and 
                accommodation for female patients).
                  (J) Facilities for hospice and palliative care 
                programs.
  (d) Review Process.--(1) The Secretary shall provide that, before a 
project is submitted to the Secretary with a recommendation that it be 
approved as a project to be carried out under the authority of this 
section, the project shall be reviewed by a board within the Department 
of Veterans Affairs that is independent of the Veterans Health 
Administration and that is constituted by the Secretary to evaluate 
capital investment projects. The board shall review such project to 
determine the project's relevance to the medical care mission of the 
Department and whether the project improves, renovates, repairs, 
establishes, or updates facilities of the Department in accordance with 
this section.
  (2) In selecting projects to be carried out under the authority 
provided by this section, the Secretary shall consider the 
recommendations of the board under paragraph (1). In any case in which 
the Secretary approves a project to be carried out under this section 
that was not recommended for such approval by the board under paragraph 
(1), the Secretary shall include in the report of the Secretary under 
subsection (g)(2) notice of such approval and the Secretary's reasons 
for not following the recommendation of the board with respect to that 
project.
  (e)  Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Veterans Affairs for the Construction, 
Major Projects, account for projects under this section--
          (1) $500,000,000 for fiscal year 2004;
          (2) $600,000,000 for fiscal year 2005; and
  (f) Limitation.--Projects may be carried out under this section only 
using funds appropriated pursuant to the authorization of 
appropriations in subsection (e), except that funds appropriated for 
advance planning may be used for the purposes for which appropriated in 
connection with such projects.
  (g) Reports.--(1) Not later than April 1, 2005, the Comptroller 
General shall submit to the Committees on Veterans' Affairs and on 
Appropriations of the Senate and House of Representatives a report 
evaluating the advantages and disadvantages of congressional 
authorization for projects of the type described in subsection (b) 
through general authorization as provided by subsection (a), rather 
than through specific authorization as would otherwise be applicable 
under section 8104(a)(2) of title 38, United States Code. Such report 
shall include a description of the actions of the Secretary of Veterans 
Affairs during fiscal year 2004 to select and carry out projects under 
this section.
  (2) Not later than 120 days after the date on which the site for the 
final project under this section for each such fiscal year is selected, 
the Secretary shall submit to the committees referred to in paragraph 
(1) a report on the authorization process under this section. The 
Secretary shall include in each such report the following:
          (A) A listing by project of each such project selected by the 
        Secretary under that section, together with a prospectus 
        description of the purposes of the project, the estimated cost 
        of the project, and a statement attesting to the review of the 
        project under subsection (c), and, if that project was not 
        recommended by the board, the Secretary's justification under 
        subsection (d) for not following the recommendation of the 
        board.
          (B) An assessment of the utility to the Department of 
        Veterans Affairs of that authorization process.
          (C) Such recommendations as the Secretary considers 
        appropriate for future congressional policy for authorizations 
        of major and minor medical facility construction projects for 
        the Department of Veterans Affairs.
          (D) Any other matter that the Secretary considers to be 
        appropriate with respect to oversight by Congress of capital 
        facilities projects of the Department of Veterans Affairs.

SEC. 3. AUTHORIZATION OF MAJOR MEDICAL FACILITY PROJECTS AND LEASES.

  (a) Project Authorizations.--The Secretary of Veterans Affairs may 
carry out the following major medical facility projects, with each 
project to be carried out in the amount specified for that project:
          (1) Construction of a new bed tower to consolidate two 
        inpatient sites of care in inner city Chicago at the West Side 
        Division of the Department of Veterans Affairs health care 
        system in Chicago, Illinois, in an amount not to exceed 
        $98,500,000.
          (2) Seismic corrections to strengthen Medical Center Building 
        1 of the Department of Veterans Affairs health care system in 
        San Diego, California, in an amount not to exceed $48,600,000.
          (3) A project for (A) renovation of all inpatient care wards 
        at the West Haven, Connecticut, facility of the Department of 
        Veterans Affairs health system in Connecticut to improve the 
        environment of care and enhance safety, privacy, and 
        accessibility, and (B) establishment of a consolidated medical 
        research facility at that facility, in an amount not to exceed 
        $50,000,000.
          (4) Construction of a medical facility on available Federal 
        land at the Defense Supply Center, Columbus, Ohio, in an amount 
        not to exceed $90,000,000.
          (5) Construction of a Department of Veterans Affairs-
        Department of Navy joint venture, comprehensive outpatient 
        medical care facility to be built on the grounds of the 
        Pensacola Naval Air Station, Pensacola, Florida, in an amount 
        not to exceed $45,000,000.
  (b) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Veterans Affairs for fiscal year 2004 
for the Construction, Major Projects, account $332,100,000 for the 
projects authorized in subsection (a).
  (c) Limitation.--The projects authorized in subsection (a) may only 
be carried out using--
          (1) funds appropriated for fiscal year 2004 pursuant to the 
        authorization of appropriations in subsection (b);
          (2) funds appropriated for Construction, Major Projects, for 
        a fiscal year before fiscal year 2004 that remain available for 
        obligation; and
          (3) funds appropriated for Construction, Major Projects, for 
        fiscal year 2004 for a category of activity not specific to a 
        project.
  (d) Authorization of Major Medical Facility Leases.--The Secretary of 
Veterans Affairs may enter into leases as follows:
          (1) For an outpatient clinic in Charlotte, North Carolina, in 
        an amount not to exceed $3,000,000.
          (2) For facilities for a multi-specialty outpatient clinic 
        for the Veterans Health Administration and a satellite office 
        for the Veterans Benefits Administration in Clark County, 
        Nevada, at an annual lease amount not to exceed $6,500,000.

SEC. 4. LIMITATION ON DISPOSAL OF LAKESIDE DIVISION, DEPARTMENT OF 
                    VETERANS AFFAIRS MEDICAL FACILITIES, CHICAGO, 
                    ILLINOIS.

  (a) Limitation.--The Secretary of Veterans Affairs may not make a 
final disposal under section 8162 of title 38, United States Code, of 
the Lakeside Division facility of the Department of Veterans Affairs 
medical facilities in Chicago, Illinois, until the Secretary has 
entered into a contract for the construction project authorized by 
section 3(a)(1).
  (b) Definition.-- For purposes of this section, the term 
``disposal'', with respect to the Lakeside Division facility, includes 
entering into a long-term lease or sharing agreement under which a 
party other than the Secretary has operational control of the facility.

SEC. 5. PLANS FOR FACILITIES IN SOUTHERN NEW JERSEY AND FAR SOUTH 
                    TEXAS.

  (a) Plan.--(1) The Secretary of Veterans Affairs shall develop--
          (A) a plan to establish an inpatient facility to meet 
        hospital care needs of veterans who reside in southern New 
        Jersey; and
          (B) a plan for hospital care needs of veterans who reside in 
        far south Texas.
  (2) In developing the plans under paragraph (1), the Secretary shall, 
at a minimum, consider options using the existing authorities of 
section 8111 and 8153 of title 38, United States Code--
          (A) to establish a hospital staffed and managed by employees 
        of the Department, either in private or public facilities, 
        including Federal facilities; or
          (B) to enter into contracts with existing private facilities 
        and private providers for that care.
  (b) Reports.--The Secretary shall submit to the Committees on 
Veterans' Affairs of the Senate and House of Representatives a report 
on each plan under subsection (a) not later than January 31, 2004.
  (c) Definitions.--In this section:
          (1) The term ``far south Texas'' means the following counties 
        of the State of Texas: Bee, Calhoun, Crockett, DeWitt, Dimmit, 
        Goliad, Jackson, Victoria, Webb, Aransas, Duval, Jim Wells, 
        Kleberg, Nueces, Refugio, San Patricio, Brooks, Cameron, 
        Hidalgo, Jim Hogg, Kenedy, Starr, Willacy, and Zapata.
          (2) The term ``southern New Jersey'' means the following 
        counties of the State of New Jersey: Ocean, Burlington, Camden, 
        Gloucester, Salem, Cumberland, Atlantic, and Cape May.

SEC. 6. INCREASE IN MAJOR MEDICAL FACILITY CONSTRUCTION COST THRESHOLD.

  Section 8104(a)(3)(A) of title 38, United States Code, is amended by 
striking ``$4,000,000'' and inserting ``$6,000,000''.

SEC. 7. NAME OF DEPARTMENT OF VETERANS AFFAIRS HEALTH CARE FACILITY, 
                    CHICAGO, ILLINOIS.

   The Department of Veterans Affairs health care facility located at 
820 South Damen Avenue in Chicago, Illinois, shall after the date of 
the enactment of this Act be known and designated as the ``Jesse Brown 
Department of Veterans Affairs Medical Center''. Any reference to such 
facility in any law, map, regulation, document, paper, or other record 
of the United States shall be considered to be a reference to the Jesse 
Brown Department of Veterans Affairs Medical Center.

SEC. 8. STUDY AND REPORT ON FEASIBILITY OF COORDINATION OF VETERANS 
                    HEALTH CARE SERVICES IN SOUTH CAROLINA WITH NEW 
                    UNIVERSITY MEDICAL CENTER.

  (a) Study Required.--The Secretary of Veterans Affairs shall conduct 
a study to examine the feasibility of coordination by the Department of 
Veterans Affairs of its needs for inpatient hospital, medical care, and 
long-term care services for veterans with the pending construction of a 
new university medical center at the Medical University of South 
Carolina, Charleston, South Carolina.
  (b) Matters To Be Included in Study.--(1) As part of the study under 
subsection (a), the Secretary shall consider the following:
          (A) Integration with the Medical University of South Carolina 
        of some or all of the services referred to in subsection (a) 
        through contribution to the construction of that university's 
        new medical facility or by becoming a tenant provider in that 
        new facility.
          (B) Construction by the Department of Veterans Affairs of a 
        new independent inpatient or outpatient facility alongside or 
        nearby the university's new facility.
  (2) In carrying out paragraph (1), the Secretary shall consider the 
degree to which the Department of Veterans Affairs and the university 
medical center would be able to share expensive technologies and scarce 
specialty services that would affect any such plans of the Secretary or 
the university.
  (3) In carrying out the study, the Secretary shall especially 
consider the applicability of the authorities under section 8153 of 
title 38, United States Code (relating to sharing of health care 
resources between the Department and community provider organizations) 
to govern future arrangements and relationship between the Department 
and the Medical University of South Carolina.
  (c) Consultation With Secretary of Defense.--The Secretary of 
Veterans Affairs shall consult with the Secretary of Defense in 
carrying out the study under this section. Such consultation shall 
include consideration of establishing a Department of Veterans Affairs-
Department of Defense joint health-care venture at the site referred to 
in subsection (a).
  (d) Report.--Not later than March 31, 2004, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and House 
of Representatives a report on the results of the study. The report 
shall include the Secretary's recommendations with respect to 
coordination described in subsection (a), including recommendations 
with respect to each of the matters referred to in subsection (b).

  Amend the title so as to read:

      A bill to authorize the Secretary of Veterans Affairs to 
carry out construction projects for the purpose of improving, 
renovating, establishing, and updating patient care facilities 
at Department of Veterans Affairs medical centers, and for 
other purposes.

                              Introduction

    The reported bill reflects the Committee's consideration of 
several bills introduced during the 108th Congress, to include 
H.R. 1720, H.R. 2307, and H.R. 2349.
    On June 11, 2003, the Subcommittee on Health held a hearing 
on four bills, among them H.R. 1720, the Veterans Health Care 
Facilities Capital Improvement Act, introduced by Honorable Rob 
Simmons and Honorable Christopher H. Smith on April 10, 2003; 
H.R. 2307, to provide for the establishment of new Department 
of Veterans Affairs medical facilities for veterans in the area 
of Columbus, Ohio, and in south Texas, introduced by Honorable 
David L. Hobson, Honorable Solomon P. Ortiz, Honorable Deborah 
Pryce, Honorable Patrick J. Tiberi, Honorable Paul E. Gillmor, 
Honorable Ciro D. Rodriguez, Honorable Ralph Regula, Honorable 
Silvestre Reyes, and Honorable Michael G. Oxley on June 3, 
2003; and H.R. 2349, to authorize certain major medical 
facility projects for the Department of Veterans Affairs, 
introduced by Honorable Lane Evans, Honorable Rob Simmons, 
Honorable Luis V. Gutierrez, Honorable Bob Filner, Honorable 
Shelley Berkley, and Honorable Susan A. Davis on June 5, 2003. 
Witnesses who appeared before the Subcommittee included Ms. 
Cathleen C. Wiblemo, Deputy Director, Health Care, Veterans 
Affairs and Rehabilitation Division, The American Legion; Mr. 
Richard Jones, National Legislative Director, AMVETS; Mr. 
Adrian M. Atizado, Associate National Legislative Director, 
Disabled American Veterans; Mr. Carl Blake, Associate 
Legislative Director, Paralyzed Veterans of America; Mr. Paul 
A. Hayden, Deputy Director, National Legislative Service, 
Veterans of Foreign Wars; and Honorable Robert H. Roswell, 
M.D., Under Secretary for Health, Department of Veterans 
Affairs, who was accompanied by Mr. D. Mark Catlett, Principal 
Deputy Assistant Secretary for Management, and Mr. Robert L. 
Neary, Jr., Associate Chief Facilities Management Officer for 
Service Delivery. Written testimonies were received from 
Honorable Joel Hefley, Member of Congress from the State of 
Colorado; Honorable David L. Hobson, Member of Congress from 
the State of Ohio; Honorable Solomon P. Ortiz, Member of 
Congress from the State of Texas; and Honorable Deborah Pryce, 
Member of Congress from the State of Ohio.
    On June 24, 2003, the Subcommittee on Health met and 
unanimously ordered H.R. 1720, as amended, reported favorably 
to the full Committee.
    On June 26, 2003, the full Committee met and ordered H.R. 
1720, as amended, reported favorably to the House by unanimous 
voice vote.

                      Summary of the Reported Bill

    H.R. 1720, as amended, would:

    1.  LAuthorize the Secretary of Veterans Affairs to carry 
out major medical facility construction projects to improve, 
renovate, replace, update or establish patient care facilities 
of the Department of Veterans Affairs (VA), using funds 
appropriated for two fiscal years beginning with fiscal year 
2004.

    2.  LLimit the cost of a single project to no more than 
$100,000,000 in fiscal year 2004; and $125,000,000 in fiscal 
year 2005.

    3.  LRequire the Secretary to award the specific major 
construction projects this bill would authorize before the 
Secretary may authorize additional capital improvement projects 
using the delegation of authority provided in this bill.

    4.  LLimit the projects only to VA medical centers for the 
purposes of improving, replacing, renovating or updating a 
patient care facility; or for the purpose of establishing a new 
patient care facility at a location where no VA patient care 
facility exists.

    5.  LRequire the Secretary to meet certain criteria in 
approving projects under this authority, including review by an 
independent board appointed by the Secretary.

    6.  LRequire the Secretary to consider the recommendations 
of the board and to disclose such reasons for deviating from 
the recommendations of the board.

    7.  LAuthorize a total of $500,000,000 for fiscal year 
2004; and $600,000,000 for fiscal year 2005 to be appropriated 
to the Secretary for construction of undesignated major 
projects.

    8.  LRequire the Comptroller General to make a report to 
the Committees on Veterans' Affairs and on Appropriations of 
the Senate and House of Representatives by April 1, 2005, 
evaluating the effectiveness of this legislation compared to 
previous authorizations, and describing the actions of the 
Secretary to select and carry out projects under this 
authority.

    9.  LRequire the Secretary to make a report each fiscal 
year to the Committees on Veterans' Affairs and on 
Appropriations of the Senate and House of Representatives on 
the authorization process, providing a list of the projects 
selected, their purposes and costs, the results of the 
selection and the authorization processes, and recommendations 
for amending or extending this authority, and other appropriate 
recommendations.

    10. LAuthorize $98,500,000 to consolidate two inpatient 
sites of care in Chicago by constructing a new bed tower at 
West Side Division.

    11. LAuthorize $48,600,000 for seismic corrections to 
Building 1 at the San Diego, California VA Medical Center.

    12. LAuthorize $50,000,000 to renovate all inpatient care 
wards at the West Haven, Connecticut VA Medical Center to 
improve the environment of care and enhance safety, privacy and 
accessibility; and to consolidate medical research at that 
facility.

    13. LAuthorize a new VA Medical Center in Columbus, Ohio, 
at a cost of $90,000,000.

    14. LAuthorize a joint VA-DOD venture to construct a 
comprehensive outpatient medical care facility on the grounds 
of the Pensacola Naval Air Station, in an amount not to exceed 
$45,000,000.

    15. LAuthorize a lease for an outpatient clinic in 
Charlotte, North Carolina, in the amount of $3,000,000, to be 
paid from the medical care account.

    16. LAuthorize the lease of a multi-specialty outpatient 
clinic for the Veterans Health Administration and a satellite 
office for the Veterans Benefits Administration in Clark 
County, Nevada, at an annual rental cost not to exceed 
$6,500,000.

    17. LRequire the Secretary to develop a plan for meeting 
the future inpatient hospitalization needs of veterans who 
reside in a number of counties of southern New Jersey, with a 
report to the Committees by January 31, 2004.

    18. LRequire the Secretary to develop a plan for meeting 
the future inpatient hospitalization needs of veterans who 
reside in a number of the far southern counties of the State of 
Texas, with a report to the Committees by January 31, 2004.

    19. LProhibit the Secretary from disposing of the Lakeside 
Division facility in Chicago, Illinois, before the construction 
contract for the new bed tower at the West Side Division is 
awarded.

    20. LRaise the threshold for major construction projects 
from $4,000,000 to $6,000,000.

    21. LName the VA Medical Center (West Side Division) at 820 
South Damen Avenue in Chicago, Illinois, the Jesse Brown 
Department of Veterans Affairs Medical Center.

    22. LRequire the Secretary to conduct a feasibility study 
in coordination with the Medical University of South Carolina 
and in consultation with the Secretary of Defense to consider 
establishing a joint health-care venture to deliver inpatient, 
outpatient and/or long-term care to veterans, DOD and other 
beneficiaries who reside in Charleston, South Carolina, with a 
report to the Committees by March 31, 2004.

                       Background and Discussion

    Major Medical Facility Projects and Leases in VA.--For 
fiscal years 1998 to 2003, the Department of Veterans Affairs 
(VA) requested an average of two major medical facility 
construction projects per year. The average funding requested 
by VA for such projects was $52.2 million for the major 
construction account. Congress, realizing that safety, quality, 
and improved health care are enhanced by facilities that 
comport to contemporary standards of care, has authorized an 
average of five major medical projects and appropriated an 
average of $104.7 million for major construction projects 
during the same period.

    In the First Session of the 107th Congress, Honorable 
Christopher H. Smith, Chairman of the Committee on Veterans' 
Affairs, along with other Members, introduced H.R. 811, the 
Veterans Hospital Emergency Repair Act. H.R. 811 would have 
provided the Department with $550 million in emergency repair 
funds over a two-year period for VA's crumbling health care 
infrastructure. The House unanimously passed H.R. 811 on March 
27, 2001, and it was associated subsequently with a House-
passed construction appropriation of $300,000,000. In the 
Second Session of the 107th Congress, the Committee reported 
H.R. 4514, the Veterans' Major Medical Facilities Construction 
Act of 2002. H.R. 4514 would have authorized the Secretary of 
Veterans Affairs to initiate ten major medical facility 
construction projects in fiscal year 2003 at a cost of 
$285,000,000. These particular projects were chosen from a list 
of the Secretary's top twenty major medical facility 
construction projects submitted to Congress on February 13, 
2002, in accordance with requirements of section 8107(d)(1) of 
title 38, United States Code. The House unanimously passed this 
construction authorization measure on May 21, 2002. The Senate 
did not address these measures during either session of the 
107th Congress.
    The Committee believes that veterans enrolled in VA health 
care deserve medical facilities that provide high quality 
services, ensure safety and improve efficiency. The reported 
bill would establish a two-year delegation of authority 
enabling the Secretary to establish, improve and replace VA 
health care facilities where needed. H.R. 1720, as amended, 
would give the Secretary the authority to approve individual 
facility projects based on recommendations of an independent 
capital investments board. The criteria detailed in the 
reported bill would place a high premium on projects that 
address patient safety and privacy, seismic protection, 
barrier-free accommodations, and patient care capabilities. In 
order to meet the contemporary standards of care that veterans 
need, these criteria are intended to encourage VA to focus on 
several specialized areas of concern, such as privacy needs, 
specialized care programs (spinal cord injury, blind 
rehabilitation, and long-term care) and other high priorities 
of Congress. The reported bill would also help improve the 
safety of veterans who are furnished medical care in VA health 
care facilities, as well as the Department staff who must work 
in them to provide that care.
    H.R. 1720, as amended, would authorize appropriations of 
$500 million in fiscal year 2004, and $600 million in fiscal 
year 2005 to accommodate vitally needed and overdue 
construction projects. The discretionary budget approved by 
Congress for veterans benefits and services accommodates this 
level of commitment in appropriations for fiscal year 2004.
    The bill would mandate a review and a report of findings by 
the General Accounting Office of this delegated-project 
approach. This review would compare the Secretary's use of this 
authority to previous authorizations, and describe the actions 
of the Secretary to select and carry out projects under this 
authority so that Congress can determine the effectiveness of 
this approach.
    The Secretary would be required to make a report each 
fiscal year to the Committees on Veterans' Affairs and on 
Appropriations of the Senate and House of Representatives on 
the authorization process. This report would provide a list of 
the projects selected, their purposes and costs, the results of 
the selection and the authorization processes, recommendations 
for amending or extending this authority, and other appropriate 
recommendations.
    In addition to the broad delegation of authority granted to 
the Secretary, this bill would authorize several specific VA 
major medical facility construction projects in fiscal year 
2004, as follows:

    Columbus, Ohio: This project would construct a new medical 
facility on available Federal land at the Defense Supply 
Center. Columbus is the largest city in the United States 
without a VA hospital.

    West Side Division, Illinois: This project would 
consolidate two existing inpatient sites of care in Chicago 
that are located in 50-year old facilities only five miles 
apart. The bill would authorize a new VA bed tower at the West 
Side Division to consolidate all inpatient acute VA care within 
the city of Chicago. The West Side Division project that would 
be authorized by this bill was included in the President's 
fiscal year 2004 budget request.

    San Diego, California: This project would seismically 
strengthen the primary medical center building. This seismic 
upgrade would correct significant risks to life safety in an 
area that is known to be highly prone to earthquakes.

    West Haven, Connecticut: This project would make essential 
renovations to inpatient wards to correct privacy inadequacies, 
upgrade the environment, consolidate support services, correct 
deficiencies in air quality, and make other improvements in the 
delivery of care and in the general safety of patients and 
staff. It would provide a new research facility to offer 
functional and safe laboratories for investigators currently 
working in inadequate, antiquated facilities.

    Pensacola, Florida: This project would authorize a joint 
venture between the Department of Veterans Affairs and the 
Department of the Navy to construct a state-of-the-art 
outpatient care facility on the grounds of the Pensacola Naval 
Air Station.

    Clark County, Nevada: This project would authorize the 
Department to lease space for a multi-specialty clinic in Clark 
County, Nevada, to replace an unsafe facility that the 
Department has abandoned. This clinic would include a satellite 
benefits claims office.

    Charlotte, North Carolina: This project would authorize the 
Department to lease outpatient clinical space in Charlotte, 
North Carolina, to replace an inadequate clinic in one of the 
largest and fastest growing municipalities in the country which 
lacks a VA hospital.

    South Texas and Southern New Jersey: The Committee desires 
that VA investigate opportunities for providing geographically 
isolated veterans reasonable access to inpatient care. This 
bill is not a specific project authorization. However, it would 
require the Secretary to develop a plan for meeting the 
inpatient hospitalization needs of veterans who reside in a 
number of the far south counties of the State of Texas, where 
access to VA facilities is nearly impossible due to geographic 
and economic factors and extreme remoteness. This region is the 
most underserved in the United States, in terms of access to 
acute inpatient hospital care. The Department's CARES 
initiative makes no provision for these veterans' needs for VA 
inpatient care. Presumably these veterans would continue to 
travel several hours to the distant San Antonio VA medical 
center for their hospitalizations.
    The bill would also require the Secretary to develop a plan 
for meeting the inpatient hospitalization needs of veterans who 
reside in southern New Jersey, an area that is also rural and 
isolated from the remainder of the State of New Jersey and 
sources of VA care in other eastern states. VA's CARES 
initiative projects that VA needs to accommodate an average 
daily hospitalization census range of 22-24 patients for 
southern New Jersey veterans through the year 2022. Thus far, 
VA has made no commitments with respect as to how these 
veterans' needs are to be met, except to suggest that they will 
be met primarily at the over-crowded VA Medical Center in 
Philadelphia, Pennsylvania, or at the more distant but less 
crowded VA Medical Center in Wilmington, Delaware. The 
Committee believes these are unacceptable alternatives.
    The Committee concludes that in both cases VA seems more 
focused on ensuring the viability of existing VA facilities, 
than on meeting the needs of veterans. The bill would require 
the Secretary to submit separate special reports to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives reflecting these required plans.

    Charleston, South Carolina: The reported bill would require 
the Secretary to conduct a feasibility study to examine 
coordinating and integrating the delivery of health care in a 
joint venture with the Department of Defense (DOD) and the 
Medical University of South Carolina at the site of the Medical 
University. No later than March 31, 2004, the Secretary would 
report to the Committees on Veterans' Affairs of the Senate and 
House of Representatives regarding the results and 
recommendations of this study.

    The reported bill would also prohibit the Secretary from 
disposing of the Chicago Lakeside Division property until the 
Secretary awards a construction contract for the new bed tower 
at the Chicago West Side Division. The Committee believes that 
VA should keep its commitment to the veterans of Chicago and 
begin the West Side project before it concludes any disposition 
of the Lakeside property. Throughout the duration of the CARES 
initiative, veterans have relied on VA's commitment to provide 
the funds to improve the West Side Division.
    VA has not identified the source of funds for the West Side 
inpatient tower project. VA is negotiating either a sale or an 
enhanced-use lease of the Lakeside facility for non-veteran, 
commercial purposes. VA is proposing to use the revenues from 
this enhanced-use lease for construction.
    In addition to these matters, the bill would also raise the 
dollar threshold for VA major medical facility construction 
projects from its current level of $4 million to $6 million. 
This higher threshold would provide flexibility to VA in 
selecting and scheduling smaller construction projects. The 
Committee notes that under existing law, VA tends to split 
major construction projects into projects that are less than 
the current $4 million threshold, in order to avoid delays 
attendant to the Congressional approval process. Split-funded 
projects add contract administration burdens, complicate the 
process for local managers, often require more time and added 
expense to complete, and may not receive sufficient oversight.

    Naming of VA Medical Facility.--The Committee bill would 
honor the late former Secretary of Veterans Affairs, Jesse 
Brown, for his exemplary service to his country as a combat-
wounded U.S. Marine Corps veteran of the Vietnam War and 
dedicated leader of the Department of Veterans Affairs.

    Mr. Brown enlisted in the Marine Corps in 1963. During the 
Vietnam War he was wounded in combat in 1965 while on patrol in 
Danang, Republic of Vietnam, leaving him partially paralyzed. 
After a lengthy recuperation, Mr. Brown began a career in 
advocacy for veterans that spanned the remainder of his life. 
He worked for fellow veterans for 25 years with the Disabled 
American Veterans, culminating his career by serving as 
executive director from 1989 to 1993.
    The Honorable Jesse Brown was sworn in by President Clinton 
as the Secretary of Veterans Affairs on January 22, 1993. Under 
his leadership for nearly five years, VA expanded benefits and 
treatment services for those exposed to Agent Orange, 
radiation, mustard gas, and veterans suffering from post-
traumatic stress disorder. He made programs for homeless 
veterans the ``fifth mission'' of VA.
    On August 21, 2002, following a lengthy battle with 
amyotrophic lateral sclerosis (ALS), commonly known as Lou 
Gehrig's disease, Mr. Brown was laid to rest at Arlington 
National Cemetery with full military honors.
    The Committee believes naming the West Side Division of the 
VA Chicago Health Care System after Secretary Brown would 
appropriately memorialize his earnest efforts to help those 
wounded in battle and would recognize his accomplishments and 
commitment to improving the quality of life for all veterans.
    The Illinois Congressional delegation is unanimous in its 
support for this provision of the bill, as are the major 
veterans organizations of the State of Illinois.

                      Section-By-Section Analysis

    Section 1 of the bill would name the Act the ``Veterans 
Health Care Facilities Capital Improvement Act''.

    Section 2(a)(1) of the bill would authorize the Secretary 
of Veterans Affairs to carry out major medical facility 
projects using appropriated funds for fiscal year 2004 or 2005.

    Section 2(a)(1)(A) of the bill would prohibit appropriated 
funds used in fiscal year 2004 for a major medical facility 
project from exceeding $100,000,000.

    Section 2(a)(1)(B) of the bill would prohibit appropriated 
funds used in fiscal year 2005 for a major medical facility 
project from exceeding $125,000,000.

    Section 2(a)(2) of the bill would exempt major medical 
projects in this bill from the requirements of section 
8104(a)(2) of title 38, United States Code, which states that 
the Secretary cannot obligate or expend funds (other than for 
advance planning and design) for any major medical facility 
project or lease unless those projects have been authorized by 
law.

    Section 2(a)(3) of the bill would prohibit the Secretary 
from awarding contracts for any major medical facility projects 
or leases until projects and leases listed in section 3 of the 
bill are awarded.

    Section 2(b) of the bill would limit the type of major 
medical facility projects to be carried out using funds 
authorized by this bill to projects with one or more of the 
following purposes: (1) improve a patient care facility; (2) 
replace a patient care facility; (3) renovate a patient care 
facility; (4) update a patient care facility so that it meets 
contemporary standards; (5) establish a new patient care 
facility in a location where no other VA facilities exist; or 
(6) improve, replace, renovate, or update a research facility 
so that it meets contemporary standards.

    Section 2(c) of the bill would limit the Secretary's 
authority to select major medical facility projects that 
improve, replace, renovate, update, or establish new 
facilities, in order to (1) make seismic protection 
improvements to provide patient safety, or in the case of a 
research facility, to provide patient and employee safety; (2) 
make fire safety improvements; (3) improve utility systems and 
ancillary patient care facilities, including any research 
facilities associated with these systems and facilities; (4) 
improve accommodations for persons with disabilities, including 
barrier-free access to facilities; (5) make improvements at 
patient care facilities which specialize in (A) blind 
rehabilitation; (B) inpatient and residential programs for 
seriously mentally ill veterans, including mental illness 
research, education and clinical centers; (C) residential and 
rehabilitation programs for veterans with substance-use 
disorders; (D) physical medicine and rehabilitation activities; 
(E) geriatric research, long-term care, adult day care, and 
nursing home care; (F) amputation care, including facilities 
for prosthetics, orthotics programs, and sensory aids; (G) 
spinal cord injuries; (H) traumatic brain injuries; (I) women 
veterans' health programs involving privacy and accommodation 
for female patients; and (J) hospice and palliative care 
programs.

    Section 2(d)(1) of the bill would require a review process 
by an independent board within VA to evaluate proposed capital 
investment projects before making recommendations to the 
Secretary. This board would review projects to determine 
whether or not a project would improve, renovate, repair, 
establish, or update VA facilities.

    Section 2(d)(2) of the bill would require the Secretary to 
consider the recommendations made by the board when approving 
major medical facility projects. If the Secretary does not 
implement the board's recommendations, the Secretary must 
provide an explanation for not doing so in a report to the 
Committees on Veterans' Affairs and on Appropriations of the 
Senate and House of Representatives.

    Section 2(e)(1) of the bill would authorize $500,000,000 to 
be appropriated for major construction projects at VA for 
fiscal year 2004.

    Section 2(e)(2) of the bill would authorize $600,000,000 to 
be appropriated for major construction projects at VA for 
fiscal year 2005.

    Section 2(f) of the bill would require the appropriated 
amounts listed in subsection (e) to be the only funds used to 
carry out the major construction projects authorized by this 
bill, except for any funds appropriated for the advance 
planning of projects.

    Section 2(g)(1) of the bill would require the Comptroller 
General to submit a report to the Committees on Veterans' 
Affairs and on Appropriations of the Senate and House of 
Representatives by April 1, 2005. The report would evaluate the 
advantages and disadvantages of general authorization versus 
specific authorization, and a description of the projects the 
Secretary approved during fiscal year 2004.

    Section 2(g)(2) of the bill would require the Secretary to 
submit a report to the Committees on Veterans' Affairs and on 
Appropriations of the Senate and House of Representatives no 
later than four months after the Secretary approves the final 
major medical facility projects for each fiscal year. This 
report would (A) include a list of each project selected by the 
Secretary, the purpose for each project, and a review of each 
project; the Secretary would be required to justify his reasons 
should he choose to not implement recommendations of the board; 
(B) assess VA's utilization of the authorization process; (C) 
include recommendations from the Secretary on future 
authorizations for major and minor medical facility 
construction projects for VA; and (D) include any other 
oversight matter deemed appropriate by the Secretary.

    Section 3(a) of the bill would authorize the Secretary to 
carry out the following major medical facility projects: (1) 
construction of a new bed tower to consolidate two inpatient 
sites of care in the West Side Division of the VA health care 
system in Chicago, Illinois, in an amount not to exceed 
$98,500,000; (2) seismic corrections to strengthen Medical 
Center Building 1 of the VA health care system in San Diego, 
California, in an amount not to exceed $48,600,000; (3)(A) a 
project for renovation of all inpatient care wards at the West 
Haven, Connecticut, facility of the VA health care system to 
improve the environment of care and enhance safety, privacy, 
and accessibility, and (B) a project to establish a 
consolidated medical research facility at that facility, in an 
amount not to exceed $50,000,000; (4) construction of a medical 
facility on available Federal land at the Defense Supply Center 
in Columbus, Ohio, in an amount not to exceed $90,000,000; and 
(5) construction of a Department of Veterans Affairs-Department 
of Navy joint venture, comprehensive outpatient medical care 
facility on the grounds of the Pensacola Navel Air Station, 
Pensacola, Florida, in an amount not to exceed $45,000,000.

    Section 3(b) of the bill would authorize $332,100,000 to be 
appropriated in fiscal year 2004 to VA for the major medical 
facility projects listed in subsection (a).

    Section 3(c) of the bill would limit the funds used to 
carry out the major medical facility projects listed in 
subsection (a) to (1) funds appropriated in fiscal year 2004 as 
required by subsection (b); (2) funds appropriated for major 
construction projects prior to fiscal year 2004 which are still 
available for obligation; and (3) funds appropriated in fiscal 
year 2004 for major construction projects which are not 
obligated to a specific project.

    Section 3(d) of the bill would authorize the Secretary to 
enter into major medical facility leases for (1) an outpatient 
clinic in Charlotte, North Carolina, in an amount not to exceed 
$3,000,000; and (2) a multi-specialty outpatient clinic for the 
Veterans Health Administration and a satellite office for the 
Veterans Benefits Administration in Clark County, Nevada, at an 
annual lease amount not to exceed $6,500,000.

    Section 4(a) of the bill would prohibit the Secretary from 
disposing of the Lakeside Division facility of VA in Chicago, 
Illinois, until a contract is awarded and executed for 
construction of a new bed tower at the West Side Division of 
the VA health care system in Chicago, Illinois.

    Section 4(b) of the bill would define the term ``disposal'' 
used in subsection (a) as entering into a long-term lease or 
sharing agreement in which a party other than the Secretary has 
operational control of the facility.

    Section 5(a)(1) of the bill would require the Secretary to 
develop a plan to (A) establish an inpatient care facility to 
meet the health care needs of southern New Jersey veterans, and 
(B) establish a plan to meet the health care needs of far south 
Texas veterans.

    Section 5(a)(2) of the bill would require the Secretary to 
consider options using the existing authorities in sections 
8111 and 8153 of title 38, United States Code, when developing 
the plans under section 5(a)(1)(A) and (B) in developing the 
plans to (A) establish a hospital staffed and managed by 
Department employees in private, public, or federal facilities, 
or (B) enter into contracts with private facilities and 
providers for health care of veterans.

    Section 5(b) of the bill would require the Secretary to 
submit a report to the Committees on Veterans' Affairs of the 
Senate and House of Representatives by January 31, 2004; the 
report would include the Secretary's plans for facilities in 
southern New Jersey and far south Texas, as authorized in 
subsection (a).

    Section 5(c)(1) of the bill would define the term ``far 
south Texas'' as the region that includes the following 
counties of the State of Texas: Bee, Calhoun, Crockett, DeWitt, 
Dimmit, Goliad, Jackson, Victoria, Webb, Aransas, Duval, Jim 
Wells, Kleberg, Nueces, Refugio, San Patricio, Brooks, Cameron, 
Hidalgo, Jim Hogg, Kenedy, Starr, Willacy, and Zapata.

    Section 5(c)(2) of the bill would define the term 
``southern New Jersey'' as the region that includes the 
following counties of the State of New Jersey: Ocean, 
Burlington, Camden, Gloucester, Salem, Cumberland, Atlantic, 
and Cape May.

    Section 6 of the bill would amend section 8104(a)(3)(A) of 
title 38, United States Code, to define a ``major medical 
facility project'' as a project for the construction, 
alteration, or acquisition of a medical facility which has a 
total expenditure of more than $6,000,000, thus increasing the 
ceiling for minor construction projects by $2,000,000.

    Section 7 of the bill would designate the VA health care 
facility located at 820 South Damen Avenue in Chicago, 
Illinois, as the ``Jesse Brown Department of Veterans Affairs 
Medical Center'' after the enactment of this Act.

    Section 8(a) of the bill would require the Secretary to 
conduct a study to examine the feasibility of coordination by 
VA of its needs for inpatient hospital, medical care, and long-
term care services for veterans, with the pending construction 
of a new university medical center at the Medical University of 
South Carolina, Charleston, South Carolina.

    Section 8(b)(1) of the bill would require the study to 
examine (A) the integration with the Medical University of 
South Carolina of some or all of VA's needs for inpatient 
hospital, medical care, and long-term care services for 
veterans through contribution to the construction of the 
university's new medical facility or by becoming a tenant 
provider in the new facility, and (B) construction by VA of a 
new independent inpatient or outpatient facility alongside or 
nearby the university's new facility.

    Section 8(b)(2) of the bill would require the Secretary to 
consider the degree to which VA and the university medical 
center would be able to share expensive technologies and scarce 
specialty services that would affect construction plans of the 
Secretary or the university.

    Section 8(b)(3) of the bill would require the Secretary to 
consider the applicability of the authorities under section 
8153 of title 38, United States Code, relating to sharing of 
health care resources between VA and community provider 
organizations, to govern future arrangements and relationships 
between VA and the Medical University of South Carolina.

    Section 8(c) of the bill would require the Secretary to 
consult with the Secretary of Defense to consider establishing 
a VA-DOD joint health-care venture at this site.

    Section 8(d) of the bill would require the Secretary to 
report to the Committees on Veterans' Affairs of the Senate and 
House of Representatives on the results of the study and the 
Secretary's recommendations based on the findings of the study 
by March 31, 2004.

                    Performance Goals and Objectives

    The performance goals and objectives of VA programs dealing 
with VA major medical facility construction authorizations, the 
management of VA's capital investment and capital maintenance 
programs, management of the portfolio of VA minor construction 
projects, and prioritization of major medical facility 
construction projects, are established in VA's annual 
performance plans and budget formulation processes, and are 
subject to the Committee's regular oversight.

              Statement of the Views of the Administration

  Testimony of Honorable Robert H. Roswell, M.D., Under Secretary for 
Health, Department of Veterans Affairs, Health Subcommittee Hearing on 
  H.R. 1720, Veterans Health Care Facilities Capital Improvement Act; 
     H.R. 2307, to provide for the establishment of new VA medical 
 facilities for veterans in the area of Columbus, OH, and in south TX; 
and H.R. 2349, to authorize certain major medical facility projects for 
                           VA, June 11, 2003

   H.R. 1720--VETERANS HEALTH CARE FACILITIES CAPITAL IMPROVEMENT ACT

    VA supports H.R. 1720, the Veterans Health Care Facilities Capital 
Improvement Act, which would authorize the Secretary to carry out 
construction of certain projects using funds appropriated for fiscal 
years 2004, 2005, or 2006 without requiring specific authorization on 
an individual project basis. Enactment would accelerate the process for 
correcting deficiencies in the infrastructure of VA hospitals and help 
bring VA hospitals in compliance with existing Federal standards. It 
would also facilitate the future planning of projects.
    The physical infrastructure of the VA health care system remains 
one of the largest in the Federal government with over 5,000 buildings 
and 150 million square feet in the inventory. VA has been significantly 
challenged to maintain this aging infrastructure and to make the 
improvements necessary to meet the needs of modern health care 
delivery. We believe H.R. 1720 would improve our ability to respond to 
immediate needs of the system's infrastructure and to implement CARES.
    The bill would require the review and recommendation of a VA board 
independent of the Veterans Health Administration to evaluate each 
project before it is proposed to the Secretary for approval. The Senior 
Management Council within VA, which has been in place for many years, 
can serve this important purpose. The Senior Management Council 
provides VA with a comprehensive strategic tool to evaluate capital 
program requirements. VA intends to continue with its current capital 
asset management program that includes this independent board. VA is 
committed to a set of capital programming principles that ensure that 
investment decisions are made wisely and efficiently based on accurate 
data, after consideration of reasonable alternatives, and provide 
veterans high quality health care in safe facilities where they need 
it. VA capital asset decision-making continues to evolve and 
continuously improve. Many external groups including the General 
Accounting Office have commended the process.
    VA is encouraged by the intention of H.R. 1720 to provide VA the 
flexibility in funding necessary to make critical improvements to its 
health care infrastructure. VA's interpretation of the legislation is 
that it will not alter the opportunity of VA to propose other projects 
through the traditional authorization process.
          * * * * * * *
H.R. 2307--A BILL TO ESTABLISH NEW VA MEDICAL FACILITIES IN THE AREA OF 
                     COLUMBUS, OHIO AND SOUTH TEXAS

    VA agrees that the need for an expanded/replacement outpatient 
clinic in Columbus, as called for in H.R. 2307, will likely be borne 
out by the CARES study. The outpatient workload at the existing clinic 
has increased beyond the planning level projected when the clinic was 
opened. It is premature to endorse the new facility proposed in South 
Texas. We are reviewing the need for additional sites in CARES and 
until that effort is complete, we do not have a position. Without the 
benefit of additional planning, it would be difficult to accurately 
estimate the cost of either of the contemplated facilities.

                               H.R. 2349

    In the President's Fiscal Year 2004 budget, VA is requesting 
authorization for a major construction project at Chicago (West Side), 
Illinois for a new inpatient tower; outpatient clinic leases in Boston, 
Massachusetts and Pensacola, Florida; and a lease for the Health 
Administration Center in Denver, Colorado. In addition we request an 
authorization for the outpatient lease in Charlotte, North Carolina 
that received an appropriation in FY 2002.
    VA requests an authorization for a lease instead of construction 
for the Las Vegas replacement Ambulatory Care Center. VA has determined 
that a lease can be procured sooner than construction and that it will 
reduce the initial funding required.
    The construction projects in the bill for West Haven, Connecticut 
and San Diego, California are projects that VA identified in our 
``Priority Major Medical Construction Projects'' report to Congress 
that we submitted in 2002 for the FY 2003 budget. Based on our 
preliminary data from CARES, both medical centers will retain their 
current missions and would represent valid projects.
    VA asks that the Committee also consider authorizing those seismic 
projects that were listed in the President's FY 2003 budget. The 
facilities at Palo Alto, San Francisco, and West Los Angeles remain as 
a critical risk to the safety of patients and staff in the case of a 
seismic event and remain a high priority for VA. We are confident that 
the CARES studies will validate the continued need for these major 
facilities.
    VA supports Sections 1, 2 and 3 of H.R. 2349 and requests that the 
Subcommittee consider the additional projects that Dr. Roswell 
mentioned.
    VA strongly objects to Section 4 of H.R. 2349, which prohibits VA 
from spending funds to dispose of the VA's Lakeside property until 
after VA has awarded a contract to construct a new bed tower on the 
VA's West Side campus. VA is proceeding with design of the bed tower 
project for West Side, and concurrently taking steps needed to dispose 
of its Lakeside property as soon as possible through an enhanced-use 
lease. Both projects are critical to VA's successful realignment of 
health care activities to improve veteran services in the City of 
Chicago.
    Planning and successful execution of a real estate disposal in a 
major urban center (like Chicago) is time consuming and complex, taking 
anywhere from twelve to twenty months to close. A complex enhanced-use 
project like Lakeside requires VA to take a number of actions before it 
can actually dispose of the property, including conducting 
environmental baseline surveys and assessments as well as initiating 
critical discussions with veterans, local officials, the public, and 
potential users. For VA to complete these steps and comply with the 
congressional notification requirements for enhanced-use leases, VA 
must act now to be in position to take full advantage of market 
interest and favorable local conditions. Both activities are now on 
schedule and actions are progressing independently without adversely 
impacting progress on either design or construction of the West Side 
project or planning for the execution of the enhanced-use lease.
    Section 4 of H.R 2349 will require VA to cease efforts currently 
underway, and restart them in approximately 14 months. VA awarded a 
schematic design contract on November 2002, a design development 
contract in May 2003 for the West Side bed tower and currently 
estimates a construction award to be made on schedule in August 2004. 
Under the current schedule, an enhanced-use lease might be executed as 
early as spring of 2004. This 14 month hiatus will push that execution 
back to no earlier than Summer/Fall of 2005.
    Linking the two activities, however, will limit VA's ability to use 
revenues generated by the disposal of Lakeside to help finance VA's 
VISN 12 CARES Implementation Plan. Moreover, if award of the 
construction project is delayed due to reasons beyond VA's control, 
changing market conditions would likely reduce VA's return and benefit 
to veterans.
    VA is encouraged by the Subcommittee's interest and actions to 
improve the infrastructure of VA's heath care system. VA's capital 
infrastructure has suffered for many years from an uncertainty of the 
demands and needs for the VA system. I can assure you that there needs 
to be a strong and viable infrastructure to support veterans' health 
care and that these bills will enable VA to meet those needs. We look 
forward to continuing to work with the Subcommittee to ensure that VA 
continues to fulfill a grateful Nation's obligation to care for its 
veterans.

               Congressional Budget Office Cost Estimate

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, July 9, 2003
Hon. Christopher H. Smith
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1720, the Veterans 
Health Care Facilities Capital Improvement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss, who can be reached at 226-2840.

            Sincerely,
                                       Douglas Holtz-Eakin,
                                                           Director
    Enclosure.

               Congressional Budget Office Cost Estimate

   H.R. 1720, Veterans Health Care Facilities Capital Improvement Act

As ordered reported by the House Committee on Veterans' Affairs on June 
                                26, 2003

    H.R. 1720 would primarily authorize appropriations for 
major construction and the leasing of two medical facilities by 
the Department of Veterans Affairs (VA). The bill would 
specifically authorize $332 million for 2004 for specific 
construction projects and another $500 million in 2004 and $600 
million in 2005 for unspecified major construction projects 
that would be chosen by the Secretary of Veterans Affairs.
    The bill also would authorize VA to lease two medical 
facilities for annual lease payments that could not exceed $9.5 
million a year. H.R. 1720 also would raise the threshold for 
projects to be financed out of the appropriation for major 
medical facility construction from $4 million to $6 million. 
(Thus, under the bill, projects costing up to $6 million would 
now be considered minor construction.) Finally, the bill would 
name the health care facility of the Department of Veterans 
Affairs located at 820 South Damen Avenue in Chicago, Illinois, 
as the ``Jesse Brown Department of Veterans Affairs Medical 
Center.''
    CBO estimates that implementing H.R. 1720 would cost $46 
million in 2004 and almost $1.4 billion over the 2004-2008 
period, assuming appropriation of the authorized amounts. The 
bill would not affect direct spending or receipts.
    H.R. 1720 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
Estimated cost to the federal government
    The estimated budgetary impact of H.R. 1720 is shown in the 
following table. This estimate assumes the legislation will be 
enacted by the end of fiscal year 2003, that the necessary 
funds for implementing the bill will be provided for each year, 
and that outlays will follow historical spending patterns for 
existing or similar programs. The costs of this legislation 
fall within budget function 700 (veterans benefits and 
services).






                                                                      By Fiscal Year, in Millions of Dollars
                                                                 -----------------------------------------------
                                                                   2003    2004    2005    2006    2007    2008
----------------------------------------------------------------------------------------------------------------
Spending Under Current Law for Major Construction of Veterans'
 Medical Facilities
  Authorization Level 1.........................................      99       0       0       0       0       0
  Estimated Outlays.............................................     174     151      98      47      15       4

Proposed Changes
  Estimated Authorization Level.................................       0     842     610      10      10      10
  Estimated Outlays.............................................       0      46     260     442     405     230

Spending Under H.R. 1720 for Major Construction of Veterans'
 Medical Facilities
  Estimated Authorization Level 1...............................      99     842     610      10      10      10
  Estimated Outlays.............................................     174     197     358     489     420     234

----------------------------------------------------------------------------------------------------------------
1 The 2003 level is the amount appropriated for that year.





Basis of estimate
    H.R. 1720 contains provisions that would authorize 
appropriations for major construction and the leasing of two 
medical facilities by the Department of Veterans Affairs. Taken 
together, CBO estimates that implementing these provisions 
would cost $46 million in 2004 and almost $1.4 billion over the 
2004-2008 period, assuming appropriation of the authorized 
amounts.
    Section 2 would authorize $500 million in 2004 and $600 
million in 2005 for major construction projects including 
constructing, improving, replacing, renovating, and updating VA 
medical centers. Rather than authorize funds for specific 
facilities, this provision would give the Secretary of Veterans 
Affairs discretion in choosing the projects. CBO estimates that 
implementing this provision would cost $22 million in 2004 and 
about $1 billion over the 2004-2008 period, assuming 
appropriation of the authorized amounts.
    Section 3 would authorize $332 million for 2004 for the 
construction, renovation, and improvement of VA medical 
facilities in Chicago, Illinois; San Diego, California; West 
Haven, Connecticut; Columbus, Ohio; and Pensacola, Florida. CBO 
estimates that implementing this provision would cost $15 
million in 2004 and $332 million over the 2004-2008 period, 
assuming appropriation of the authorized amount.
    Section 3 also would authorize VA to lease two medical 
facilities for annual lease payments that could not exceed $9.5 
million a year. One medical facility would be located in 
Charlotte, North Carolina. Under the bill, the annual lease 
payment for that facility could not exceed $3 million a year. 
While the bill does not specify the length of the lease, 
according to VA, it expects that to lease this facility for 20 
years. Based on information from VA, CBO believes this lease 
would meet the criteria for an operating lease. The second 
medical facility would be located in Las Vegas, Nevada. Under 
the bill, the annual lease payment for that facility could not 
exceed $6.5 million a year. According to VA, it does not 
currently have information or plans for leasing any new 
facilities in Las Vegas. For the purposes of this estimate, CBO 
assumes that this lease also would meet the criteria for an 
operating lease. CBO estimates that implementing these leases 
would cost $9 million in 2004 and $47 million over the 2004-
2008 period, assuming appropriation of the necessary amounts.
    Finally, section 7 would name the health care facility of 
the Department of Veterans Affairs located at 820 South Damen 
Avenue in Chicago, Illinois, as the ``Jesse Brown Department of 
Veterans Affairs Medical Center.'' It also would require that 
any reference to such outpatient clinic in any law, map, 
regulation, document, paper, or other record of the United 
States be considered to be a reference to the clinic by the new 
name. CBO estimates that implementing this provision would have 
a negligible cost, subject to the availability of appropriated 
funds.
Intergovernmental and private-sector impact
    H.R. 1720 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.
Previous cbo estimates
    On May 13, 2003, CBO transmitted a cost estimate for H.R. 
1908, a bill to name the health care facility of the Department 
of Veterans Affairs located at 820 South Damen Avenue in 
Chicago, Illinois, as the ``Jesse Brown Department of Veterans 
Affairs Medical Center,'' as introduced on May 1, 2003. On May 
19, 2003, CBO transmitted a cost estimate for H.R. 1562, the 
Veterans Health Care Costs Recovery Act of 2003, as ordered 
reported by the House Committee on Veterans' Affairs on May 15, 
2003. The provisions in those bills regarding the naming of the 
health care facility of the Department of Veterans Affairs 
located at 820 South Damen Avenue in Chicago, Illinois are 
identical to section 7 of H.R. 1720 and the estimate of 
negligible cost is the same in all three estimates.
Estimate prepared by:
    Federal Costs: Sam Papenfuss (226-2840)
    Impact on State, Local, and Tribal Governments: Melissa 
Merrell (225-3220)
    Impact on the Private Sector: Allison Percy (226-2900)
Estimate approved by:
    Peter H. Fontaine
    Deputy Assistant Director for Budget Analysis

                     Statement of Federal Mandates

    The preceding Congressional Budget Office cost estimate 
states that the bill contains no intergovernmental or private 
sector mandates as defined in the Unfunded Mandates Reform Act.

                 Statement of Constitutional Authority

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

         Changes in Existing Law Made by the Bill, as Reported

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

              SECTION 8104 OF TITLE 38, UNITED STATES CODE

Sec. 8104. Congressional approval of certain medical facility 
                    acquisitions

  (a)(1) * * *

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  (3) For the purpose of this subsection:
          (A) The term ``major medical facility project'' means 
        a project for the construction, alteration, or 
        acquisition of a medical facility involving a total 
        expenditure of more than [$4,000,000] $6,000,000, but 
        such term does not include an acquisition by exchange.

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