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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-538

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



 
 DEPARTMENT OF VETERANS AFFAIRS NURSE RECRUITMENT AND RETENTION ACT OF 
                                  2004

                                _______
                                

  June 9, 2004.--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. 4231]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 4231) to provide for a pilot program in the 
Department of Veterans Affairs to improve recruitment and 
retention of nurses, and for other purposes, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Department of Veterans Affairs Nurse 
Recruitment and Retention Act of 2004''.

SEC. 2. PILOT PROGRAM TO STUDY INNOVATIVE RECRUITMENT TOOLS TO ADDRESS 
                    NURSING SHORTAGES AT DEPARTMENT OF VETERANS AFFAIRS 
                    HEALTH-CARE FACILITIES.

  (a) Pilot.--(1) Not later than 90 days after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall 
designate a health-care service region, or a section within such a 
region, in which health-care facilities of the Department of Veterans 
Affairs are adversely affected by a shortage of qualified nurses.
  (2) The Secretary shall conduct a pilot program in the region or 
section designated under paragraph (1) to determine the effectiveness 
of the use of innovative human-capital tools and techniques in the 
recruitment of qualified nurses for positions at Department health-care 
facilities and for the retention of nurses at such facilities. In 
carrying out the pilot program, the Secretary shall enter into a 
contract with a private-sector entity for services under the pilot 
program for recruitment of qualified nurses.
  (b) Private-Sector Recruitment Practices.--For purposes of the pilot 
program under this section, the Secretary shall identify and use 
recruitment practices that have proven effective for placing qualified 
individuals in positions that are difficult to fill due to shortages of 
qualified individuals or other factors. Recruitment practices to be 
reviewed by the Secretary for use in the pilot program shall include--
          (1) employer branding and interactive advertising strategies;
          (2) Internet technologies and automated staffing systems; and
          (3) the use of recruitment, advertising, and communication 
        agencies.
  (c) Streamlined Hiring Process.--In carrying out the pilot program 
under this section, the Secretary shall, at health-care facilities of 
the Department in the region or section in which the pilot program is 
conducted, revise procedures and systems for selecting and hiring 
qualified nurses to reduce the length of the hiring process. If the 
Secretary identifies measures to streamline and automate the hiring 
process that can only be implemented if authorized by law, the 
Secretary shall submit to the Committees on Veterans' Affairs of the 
Senate and House of Representatives recommendations for such changes in 
law as may be necessary to enable such measure to be implemented.
  (d) Report.--Not later than one year after the date of the enactment 
of this Act, the Secretary shall submit to the Committees on Veterans' 
Affairs of the Senate and House of Representatives a report on the 
extent to which the pilot program achieved the goal of improving the 
recruitment and retention of nurses in Department of Veterans Affairs 
health-care facilities.

SEC. 3. ALTERNATE WORK SCHEDULES FOR NURSES.

  (a) Enhanced Shift Flexibility.--Chapter 74 of title 38, United 
States Code, is amended by inserting after section 7456 the following 
new section:

``Sec. 7456a. Alternate work schedules

  ``(a) Applicability.--This section applies to registered nurses 
appointed under this chapter.
  ``(b) 36/40 Work Schedule.--(1) Subject to paragraph (2), if the 
Secretary determines it to be necessary in order to obtain or retain 
the services of registered nurses at a Department health-care facility, 
the Secretary may provide, in the case of registered nurses employed at 
that facility, that such a nurse who works three regularly scheduled 
12-hour tours of duty within a workweek shall be considered for all 
purposes (except computation of full-time equivalent employees for the 
purposes of determining compliance with personnel ceilings) to have 
worked a full 40-hour basic workweek. Such a schedule may be referred 
to as a `36/40 work schedule'.
  ``(2) (A) Basic and additional pay for a registered nurse who is 
considered under paragraph (1) to have worked a full 40-hour basic 
workweek is subject to subparagraphs (B) and (C).
  ``(B) The hourly rate of basic pay for such a nurse for service 
performed as part of a regularly scheduled 36-hour tour of duty within 
the workweek shall be derived by dividing the nurse's annual rate of 
basic pay by 1,872.
  ``(C) (i) Such a nurse who performs a period of service in excess of 
such nurse's regularly scheduled 36-hour tour of duty within a workweek 
is entitled to overtime pay under section 7453(e) of this title, or 
other applicable law, for officially ordered or approved service 
performed in excess of--
          ``(I) eight hours on a day other than a day on which such 
        nurse's regularly scheduled 12-hour tour falls;
          ``(II) 12 hours for any day included in the regularly 
        scheduled 36-hour tour of duty; and
          ``(III) 40 hours during an administrative workweek.
  ``(ii) Except as provided in clause (i), a registered nurse to whom 
this subsection is applicable is not entitled to additional pay under 
section 7453 of this title, or other applicable law, for any period 
included in a regularly scheduled 12-hour tour of duty.
  ``(3) A nurse who works a 36/40 work schedule described in this 
subsection who is absent on approved sick leave or annual leave during 
a regularly scheduled 12-hour tour of duty shall be charged for such 
leave at a rate of ten hours of leave for nine hours of absence.
  ``(c) 7/7 Work Schedule--(1) Subject to paragraph (2), if the 
Secretary determines it to be necessary in order to obtain or retain 
the services of registered nurses at a Department health-care facility, 
the Secretary may provide, in the case of registered nurses employed at 
such facility, that such a nurse who works seven regularly scheduled 
10-hour tours of duty, with seven days off duty, within a two-week pay 
period, shall be considered for all purposes (except computation of 
full-time equivalent employees for the purposes of determining 
compliance with personnel ceilings) to have worked a full 80 hours for 
the pay period. Such a schedule may be referred to as a `7/7 work 
schedule'.
  ``(2) (A) Basic and additional pay for a registered nurse who is 
considered under paragraph (1) to have worked a full 80-hour pay period 
is subject to subparagraphs (B) and (C).
  ``(B) The hourly rate of basic pay for such a nurse for service 
performed as part of a regularly scheduled 70-hour tour of duty within 
the pay period shall be derived by dividing the nurse's annual rate of 
basic pay by 1,820.
  ``(C) (i) Such a nurse who performs a period of service in excess of 
such nurse's regularly scheduled 70-hour tour of duty within a pay 
period is entitled to overtime pay under section 7453(e) of this title, 
or other applicable law, for officially ordered or approved service 
performed in excess of--
          ``(I) eight hours on a day other than a day on which such 
        nurse's regularly scheduled 10-hour tour falls;
          ``(II) 10 hours for any day included in the regularly 
        scheduled 70-hour tour of duty; and
          ``(III) 80 hours during a pay period.
  ``(ii) Except as provided in subparagraph (i), a registered nurse to 
whom this subsection is applicable is not entitled to additional pay 
under section 7453 of this title, or other applicable law, for any 
period included in a regularly scheduled 10-hour tour of duty.
  ``(3) A nurse who works a 7/7 work schedule described in this 
subsection who is absent on approved sick leave or annual leave during 
a regularly scheduled 12-hour tour of duty shall be charged for such 
leave at a rate of eight hours of leave for seven hours of absence.
  ``(d) 9-Month Work Schedule.--The Secretary may authorize a 
registered nurse appointed under section 7405 of this title, with the 
nurse's written consent, to work full-time for nine months with three 
months off duty, within a fiscal year, and be paid at 75 percent of the 
full-time rate for such nurse's grade for each pay period of that 
fiscal year. A nurse working on such a schedule for any fiscal year 
shall be considered a \3/4\ full-time equivalent employee for that 
fiscal year in computing full-time equivalent employees for the 
purposes of determining compliance with personnel ceilings. Service on 
such a schedule shall be considered to be part-time service for 
purposes of computing benefits under chapters 83 and 84 of title 5.
  ``(e) Regulations.--The Secretary shall prescribe regulations for the 
implementation of this section.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 74 of such title is amended by inserting after the item 
relating to section 7456 the following new item:

``7456a. Alternate work schedules.''.

SEC. 4. APPOINTMENT OF NURSES WHO DO NOT HAVE BACCALAUREATE DEGREES.

  Section 7403 of title 38, United States Code, is amended by adding at 
the end the following new subsection:
  ``(h) In a case in which a registered nurse applying for an 
appointment under this chapter as a registered nurse has presented the 
qualifications established under subsection (a) for such an 
appointment, the lack of a baccalaureate degree in nursing shall not be 
a bar to appointment, and in such a case the registered nurse shall not 
be denied appointment on that basis.''.

SEC. 5. TECHNICAL CORRECTION TO LISTING OF CERTAIN HYBRID POSITIONS IN 
                    VETERANS HEALTH ADMINISTRATION.

  Section 7401(3) of title 38, United States Code, is amended--
          (1) by striking ``and dental technologists'' and inserting 
        ``technologists, dental hygienists, dental assistants''; and
          (2) by striking ``technicians, therapeutic radiologic 
        technicians, and social workers'' and inserting 
        ``technologists, therapeutic radiologic technologists, social 
        workers, blind rehabilitation specialists, and blind 
        rehabilitation outpatient specialists''.

SEC. 6. ASSISTANCE FOR HIRING AND RETENTION OF NURSES AT STATE VETERANS 
                    HOMES.

  (a) In General.--(1) Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1743 the following new section:

``Sec. 1744. Hiring and retention of nurses: payments to assist States

  ``(a) Payment Program.--The Secretary shall make payments to States 
under this section for the purpose of assisting State homes in the 
hiring and retention of nurses and the reduction of nursing shortages 
at State homes.
  ``(b) Eligible Recipients.--Payments to a State for a fiscal year 
under this section shall, subject to submission of an application, be 
made to any State that during that year--
          ``(1) receives per diem payments under this subchapter for 
        that fiscal year; and
          ``(2) has in effect an employee incentive scholarship program 
        or other employee incentive program at a State home designed to 
        promote the hiring and retention of nursing staff and to reduce 
        nursing shortages at that home.
  ``(c) Use of Funds Received.--A State may use an amount received 
under this section only to provide funds for a program described in 
subsection (b)(2). Any program shall meet such criteria as the 
Secretary may prescribe. In prescribing such criteria, the Secretary 
shall take into consideration the need for flexibility and innovation.
  ``(d) Limitations on Amount of Payment.--(1) A payment under this 
section may not be used to provide more than 50 percent of the costs 
for a fiscal year of the employee incentive scholarship or other 
incentive program for which the payment is made.
  ``(2) The amount of the payment to a State under this section for any 
fiscal year is, for each State home in that State with a program 
described in subsection (b)(2), the amount equal to 2 percent of the 
amount of payments estimated to be made to that State, for that State 
home, under section 1741 of this title for that fiscal year.
  ``(e) Applications.--A payment under this section for any fiscal year 
with respect to any State home may only be made based upon an 
application submitted by the State seeking the payment with respect to 
that State home. Any such application shall describe the nursing 
shortage at the State home and the employee incentive scholarship 
program or other incentive program described in subsection (c) for 
which the payment is sought.
  ``(f) Source of Funds.--Payments under this section shall be made 
from funds available for other payments under this subchapter.
  ``(g) Disbursement.--Payments under this section to a State home 
shall be made as part of the disbursement of payments under section 
1741 of this title with respect to that State home.
  ``(h) Use of Certain Receipts.--The Secretary shall require as a 
condition of any payment under this section that, in any case in which 
the State home receives a refund payment made by an employee in breach 
of the terms of an agreement for employee assistance that used funds 
provided under this section, the payment shall be returned to the State 
home's incentive program account and credited as a non-Federal funding 
source.
  ``(i) Annual Report From Payment Recipients.--Any State home 
receiving a payment under this section for any fiscal year, shall, as a 
condition of the payment, be required to agree to provide to the 
Secretary a report setting forth in detail the use of funds received 
through the payment, including a descriptive analysis of how effective 
the incentive program has been on nurse staffing in the State home 
during that fiscal year. The report for any fiscal year shall be 
provided to the Secretary within 60 days of the close of the fiscal 
year and shall be subject to audit by the Secretary. Eligibility for a 
payment under this section for any later fiscal year is contingent upon 
the receipt by the Secretary of the annual report under this subsection 
for the previous year in accordance with this subsection.
  ``(j) Regulations.--The Secretary shall prescribe regulations to 
carry out this section. The regulations shall include the establishment 
of criteria for the award of payments under this section.''.
  (2) The table of sections at the beginning of such chapter is amended 
by inserting after section 1743 the following new item:

``1744. Hiring and retention of nurses: payments to assist States.''.

  (b) Implementation.--The Secretary of Veterans Affairs shall 
implement section 1744 of title 38, United States Code, as added by 
subsection (a), as expeditiously as possible. The Secretary shall 
establish such interim procedures as necessary so as to ensure that 
payments are made to eligible States under that section commencing not 
later than January 1, 2005, notwithstanding that regulations under 
subsection (j) of that section may not have become final.

SEC. 7. TECHNICAL CLARIFICATION.

  Section 8111(d)(2) of title 38, United States Code, is amended by 
inserting before the period at the end of the last sentence the 
following: ``and shall be available for any purpose authorized by this 
section''.

SEC. 8. UNDER SECRETARY FOR HEALTH.

  Section 305(a)(2) of title 38, United States Code, is amended--
          (1) in the matter preceding subparagraph (A), by striking 
        ``shall be a doctor of medicine and''; and
          (2) in subparagraph (A), by striking ``and in health-care'' 
        and inserting ``or in health-care''.

                              Introduction

    The reported bill reflects the Committee's consideration of 
two bills in the 108th Congress, H.R. 4231 and H.R. 4020, and a 
provision of a draft bill to reform the qualifications and 
selection requirements for the position of the Under Secretary 
for Health. On April 28, 2004, Honorable Rob Simmons introduced 
H.R. 4231, the Department of Veterans Affairs Nurse Recruitment 
and Retention Act of 2004. On March 24, 2004, Honorable 
Christopher H. Smith and Honorable Lane Evans introduced H.R. 
4020, the State Veterans Home Nurse Recruitment Act of 2004.
    On May 6, 2004, the Subcommittee on Health held a 
legislative hearing to consider these bills. H.R. 4231 would: 
establish a pilot program to use outside recruitment agencies, 
and interactive and online technologies, to improve the 
Department of Veterans Affairs (VA) recruitment of nursing 
personnel; allow VA to offer three new alternative work 
schedules for nurses; prohibit VA from denying employment to a 
registered nurse because the nurse lacks a baccalaureate 
degree; and include blind rehabilitation specialists with 
certain other health care positions that the VA would be 
permitted to appoint through the use of a direct appointment 
authority. H.R. 4020 would direct VA to make payments to states 
for assisting State veterans' homes in hiring nurses to care 
for veterans. A draft proposal considered at that hearing would 
reform the qualifications and selection requirements for the 
position of the Under Secretary for Health.
    Witnesses who appeared before the Subcommittee included 
Honorable Gordon H. Mansfield, Deputy Secretary, Department of 
Veterans Affairs, who was accompanied by Honorable Tim S. 
McClain, General Counsel; Jonathan B. Perlin, M.D., Acting 
Under Secretary for Health; and Mr. Thomas J. Hogan, Deputy 
Assistant Secretary for Human Resources Management. Witnesses 
also included Linda S. Schwartz, R.N., Dr.PH, Commissioner of 
the Connecticut Department of Veterans Affairs; Andrea Mengel, 
Ph.D., R.N., Head, Department of Nursing, Community College of 
Philadelphia, representing the American Association of 
Community Colleges; Mr. Robert Van Keuren, Chair of The VA 
Advisory Committee on Homeless Veterans; Ms. Marsha Four, R.N., 
Chair of The VA Advisory Committee on Women Veterans; Ms. 
Cathleen C. Wimblemo, Deputy Director, Health Care, The 
American Legion; Mr. Rick Weidman, Director, Government 
Relations, Vietnam Veterans of America; Mr. Richard Jones, 
National Legislative Director, AMVETS; Mr. Richard Fuller, 
National Legislative Director, Paralyzed Veterans of America; 
Mr. Dennis Cullinan, National Legislative Director, Veterans of 
Foreign Wars; and Mr. Adrian M. Atizado, Assistant National 
Legislative Director, Disabled American Veterans.
    On May 13, 2004, the Subcommittee on Health met and 
unanimously ordered H.R. 4231, as amended, reported favorably 
to the full Committee.
    On May 19, 2004, the full Committee met and ordered H.R. 
4231, as amended, reported favorably to the House by unanimous 
voice vote.

                      Summary of the Reported Bill

    H.R. 4231, as amended, would:

    1. LEstablish a pilot program within the Department of 
Veterans Affairs (VA) to study the use of outside recruitment, 
advertising and communications agencies and the use of 
interactive and online technologies to improve VA's program for 
recruiting nursing personnel.

    2. LAuthorize the Secretary of Veterans Affairs to offer 
three new options for alternative tours of duty for nurses 
working in VA health care facilities. The first option would 
allow a nurse to work three regularly scheduled 12-hour tours 
of duty within a workweek (a total of 36 hours) and be paid as 
having worked 40 hours. The second option would allow a nurse, 
who works seven regularly scheduled 10-hour tours of duty with 
seven days off duty within a two-week pay period, to be 
considered to have worked a full 80 hours for the pay period. 
The third option would allow a nurse to work full-time for nine 
months with three months off duty within a year, with pay 
apportioned over the 12-month period.

    3. LClarify that VA may not deny employment to a registered 
nurse solely due to the lack of a baccalaureate degree in 
nursing.

    4. LInclude blind rehabilitation specialists in the list of 
positions VA is permitted to hire through use of the direct 
appointment authority provided in title 38, United States Code.

    5. LDirect the Secretary to make payments to States to 
assist in hiring and retaining nurses in State homes; make 
eligible for such payments a State home that has an employee 
incentive program and is receiving per diem payments from VA; 
limit the amount of payment a State home may receive each year; 
require a State home receiving such payment to provide an 
annual report to VA; and require VA to implement the assistance 
program so that eligible States would begin to receive payments 
no later than January 1, 2005.

    6. LRepeal the requirement for VA's Under Secretary for 
Health to be a medical doctor.

                       Background and Discussion

    Pilot Program to study innovative recruitment tools to 
address nursing shortages at Department of Veterans Affairs 
Health-Care Facilities.--The Department of Veterans Affairs 
health care system maintains about 1,300 facilities staffed by 
more than 180,000 employees. The Veterans Health Administration 
(VHA) would rank among the top 25 largest employers as defined 
in Hoover's Handbook of American Business. VHA has more 
employees, for example, than Blue Cross-Blue Shield, the Kaiser 
Foundation Health Plan, and Manor Care, Inc. and is the largest 
employer of nurses in this country. The nursing staff comprises 
the largest group of employees within VHA, totaling about 
58,000 or 32 percent of its employees.
    Maintaining an adequate supply of nurses is critical to 
caring for the increasing number of veterans seeking VA health 
care. Today, about 7.6 million veterans are enrolled in VA 
health care and in 2010 it is estimated that this number will 
grow to approximately 8.4 million. As demand for VA health care 
is rising, VA's nurse vacancy rates are increasing. Mr. Thomas 
J. Hogan, VA's Deputy Assistant Secretary for Human Resources 
Management, testified on May 6, 2004 before the Subcommittee on 
Health that the VA nurse vacancy rate is currently 9 percent 
and VA is in need of hiring in excess of 4,500 nurses. A VA 
report in September 2003 found that the average VA nurse was 
48.9 years old, exceeding the national average age of 41.8.
    In order to address the human capital challenges in VA, the 
Department needs better tools and strategies to plan, attract, 
assess, hire and manage its recruitment process for nurses. In 
2002, Public Law 107-135, the Department of Veterans Affairs 
Health Care Programs Enhancement Act of 2001, established the 
National Commission on VA Nursing. The Commission was charged, 
among other matters, to recommend organizational and 
legislative changes that would enhance VA's recruitment and 
retention of nurses. The Commission's final report was released 
on May 13, 2004. Among the recommendations was that ``VHA 
should strengthen human resources systems and departments to 
develop an active hiring and recruiting process for nursing 
staff that is consistent, to the extent possible, across 
facilities and VISNs.''
    VHA should adopt the best practices of private industry in 
recruiting nurses and other essential personnel. In the private 
sector, human resources professionals have developed and are 
successfully using internet-based recruitment tools, but VA's 
use of such tools is limited and ineffective. Forrester 
Research, Inc., an independent technology research company that 
provides advice about technology's impact on business, recently 
reported on the internet that 100 percent of Fortune 500 
companies are now using online recruiting (www.forrester.com).
    The Committee bill would establish a pilot program to use 
outside recruitment, advertising, communication agencies and 
use interactive and online technologies for recruiting nursing 
personnel to test whether such tools would enhance VA's 
recruitment of nurses to fill Department vacancies. The 
legislation would require a report of the extent to which the 
pilot program achieves this goal. The Committee expects that 
the report would analyze whether: employment vacancies are 
posted faster and in real time; more qualified candidates are 
reached; organizing, screening and comparing skills of 
qualified candidates are more effective; employment 
applications are received and processed faster; the amount of 
time to hire an employee is reduced as soon as the vacancy is 
announced; the Department's visibility as a desirable employer 
is improved; the Department's workforce diversity is expanded; 
and the hiring process is more efficiently managed.

    Alternative work schedules for nurses.--On July 18, 2003, 
VA made a legislative proposal to Congress that included three 
new alternative duty schedules for full-time VA nurses. The 
letter accompanying the proposal cited an American Organization 
of Nurse Executives survey, which found that a major cause of 
dissatisfaction in the nursing workforce is the inflexibility 
of work schedules. The Committee bill would authorize VA to 
offer the three new alternative duty schedules for nurses that 
are comparable to work schedules commonly offered in the 
private sector. The first option would allow a nurse to work 
three regularly scheduled 12-hour tours of duty within a 
workweek (a total of 36 hours) to be paid as having worked 40 
hours. The second option would allow a nurse, who works seven 
regularly scheduled 10-hour tours of duty with seven days off 
duty within a two-week pay period, to be considered to have 
worked a full 80 hours for the pay period. The third option 
would allow a nurse to work full-time for nine months with 
three months off duty within a year, with pay apportioned over 
the 12-month period. These options accommodate the need of 
nurses to have more control over their schedules and improve 
VA's ability to retain them in a career status.

    Appointment of nurses who do not have baccalaureate 
degrees.--VA's qualification standards define the education 
requirements for a Registered Nurse (RN) to be appointed to one 
of five grade levels in VA. Under these standards, all new RN 
appointees must present a baccalaureate degree in nursing (BSN) 
to be appointed above the ``Nurse I'' grade level.
    In April 2003, the National Commission on VA Nursing held 
public hearings in New Orleans, Philadelphia, Chicago and Long 
Beach. Nurses' testimony at those hearings repeatedly indicated 
that VA's appointment and promotion policy discourages nurses 
with associate degrees in nursing and those with diplomas from 
hospital schools of nursing from seeking VA employment because 
it qualifies nurses with significant experience and clinical 
expertise for appointment only at the Nurse I level (the lowest 
pay level) under the qualification standards.
    Several educational paths are available for licensed 
registered nurses. In 2002, enrollment in associate degree 
nursing programs nationwide increased by 16 percent compared to 
an eight percent increase in enrollment in baccalaureate 
nursing programs. The American Association of Community 
Colleges (AACC) reports that 62 percent of employed staff 
nurses, including 45 percent in nurse clinician positions, 42 
percent in clinical nurse specialist positions, 52 percent in 
head nurse positions and 65 percent in nurse supervisor 
positions received their nursing educational preparation 
through associate degree or diploma nursing programs. In VA, 
however, the nursing employment picture is quite different from 
the national norm. Almost 59 percent of VA's nurses possess 
bachelors or higher degrees, but only 41 percent have associate 
degrees or diplomas.
    All nursing graduates must pass uniform licensing board 
examinations administered by individual States to become 
registered nurses. Once licensed, registered nurses are 
authorized to provide the identical scope of practice under 
State law, without regard to their particular educational 
preparation. Possession of the BSN degree does not expand the 
RN's patient care responsibilities under any State law. A 
recent report by the National Council of State Boards of 
Nursing indicates that associate-degree nurses' success rates 
in passing State board examinations are virtually identical to 
those with baccalaureate degrees taking the same 
examinations.\1\
---------------------------------------------------------------------------
    \1\ Crawford L, Marks C, Gawel S, White E, Obichere L.2001.2000 
Licensure and Examinations Statistics: National Council of State Boards 
of Nursing, Inc.
---------------------------------------------------------------------------
    Dr. Andrea Mengel, Head, Department of Nursing, Community 
College of Philadelphia, representing the American Association 
of Community Colleges, testified before the Subcommittee on 
Health on May 6, 2004, that:

          Nursing practice outside of the VHA is a better 
        career choice for the well-educated, high quality, and 
        often experienced who earned their degrees at community 
        colleges. With hundreds of choices of workplace 
        opportunities, why would new RN graduates from 
        associate degree programs choose to work at the VHA 
        where the hiring and promotion policy will hold them 
        back? Community colleges across the nation report that 
        their graduates are not choosing the VHA. For example, 
        not one of 300 RNs who graduated from Community College 
        of Philadelphia in the past four years chose to work in 
        the VA.

    Additionally, at the same hearing, Dr. Linda S. Schwartz, 
Commissioner of the Connecticut Department of Veterans Affairs, 
stated that:

          You have put me in a hard place, though, because I 
        also served on the board of directors of the American 
        Nurses Association, which you know promotes the 
        baccalaureate degree. But these are tough times and 20 
        years ago I came before the committee to talk about the 
        nursing shortage and we are back again. And the reality 
        of all of this is the largest producers of nursing, who 
        qualify as nurses and follow licensure, are in the 
        associate degree programs. And, so I would just ask the 
        rhetorical question, which is better, no nurse or a 
        nurse from an associate degree program? And to me the 
        answer is a nurse from an associate degree program 
        because many nurses are very, very determined to go on 
        to get their baccalaureate degree and to go on to 
        higher studies.

    The Committee is concerned that in the midst of a 
nationwide shortage of registered nurses, VA is losing 
opportunities to bring experienced, qualified nurses into VA 
health care because of its overemphasis on basic educational 
preparation rather than a more balanced policy that also 
considers experience and expertise. A 2001 study published in 
the Journal of Nursing Administration found that the experience 
levels of nurses, rather than education alone, accounted for 
lower rates of adverse events.\2\ The Committee bill would 
clarify that VA cannot deny employment consideration to a 
qualified registered nurse solely due to the lack of a 
baccalaureate degree in nursing.
---------------------------------------------------------------------------
    \2\ Blegen M, Vaughn T. Goode C. 2001. Nurse experience and 
education: effect on quality of care. Journal of Nursing Administration 
31(1):33-9.

    Correction to listing of certain hybrid positions in 
Veterans Health Administration.--Under current law, VA has 
three separate authorities to employ hospital and clinical 
staff based on the functions and duties the employee performs. 
Critical care staffs such as physicians and nurses are employed 
under a unique authority to VA contained in chapter 74 of title 
38, United States Code. In addition to title 38 employees, VA 
employs some clinical staff under traditional civil service 
authorities specified in title 5. A third group of VA clinical 
staff is employed under a system known as ``hybrid title 38'' 
status. The hybrid title 38 positions were developed to merge 
certain characteristics of the title 38 and title 5 hiring and 
compensation benefits. The hybrid title 38 authority allows 
employees to be hired more quickly, receive special pay rates 
and promotions based on individual qualifications and peer 
review, as contained in title 38 for other direct-care 
professions. However, these employees are also entitled to the 
same grievance, annual leave and other benefits and protections 
afforded to title 5 employees. The Committee bill would make 
technical corrections to the listing of hybrid title 38 
positions from Public Law 108-170 by replacing the term 
``dental technologists'' with the terms ``dental hygienists'' 
and ``dental assistants'', by replacing the term 
``technicians'' with the term ``technologists'', and by 
replacing the term ``therapeutic radiologic technicians'' with 
the term ``therapeutic radiologic technologists.'' This bill 
would also add blind rehabilitation specialists and blind 
---------------------------------------------------------------------------
rehabilitation outpatient specialists to the hybrid category.

    Assistance for hiring and retention of nurses at State 
veterans homes.--Over the past five years, the veteran 
population most in need of nursing home care, those veterans 85 
years or older, has increased more than 100 percent, growing 
from about 387,000 in fiscal year 1998 to 870,000 in fiscal 
year 2003. This veteran population is expected to continue to 
rise to about 1.3 million by mid-decade. Now the largest 
provider of long-term care to veterans, the State veterans' 
home system plays a vital role. Currently, there are over 
38,000 veterans cared for in 128 State veterans' homes.
    The Department of Health and Human Services (HHS) 
commissioned a survey, released in November 2002 by the Center 
for Health Workforce Studies, School of Public Health, 
University at Albany, State University of New York, to learn 
how States are responding to needs for health care workers. 
Ninety percent of the States reported a shortage of nursing 
staff as a major concern and 44 of 50 States reported 
establishing task forces and commissions to study and seek 
solutions to health care work force shortages. In 25 of these 
States, the focus of the task forces or commissions was to 
study shortages in the long-term care work force.
    The Committee bill would authorize VA to make payments to 
States for the purpose of assisting State veterans' homes in 
hiring and retaining nurses to care for veterans. State homes 
that currently receive per diem payments from VA and have 
established employee incentive programs would be eligible to 
apply for incentive assistance and could receive up to 50 
percent of the annual cost of such a program.

    Under Secretary for Health.--Current law requires the Under 
Secretary for Health to be a ``doctor of medicine,'' 
restricting the pool of candidates that may be considered by 
the President for nomination to the position. Senior executives 
in the health care industry who may have exceptional 
credentials and experience, but who are not doctors of 
medicine, are excluded from consideration.
    The Committee bill would repeal the requirement for VA's 
Under Secretary for Health to be a medical doctor and allow the 
Secretary flexibility to nominate candidates with demonstrated 
abilities to fill this key position from the widest spectrum of 
talents.

                      Section-By-Section Analysis

    Section 1 of the bill would name this Act the ``Department 
of Veterans Affairs Nurse Recruitment and Retention Act of 
2004''.

    Section 2(a) of the bill would establish a pilot program 
within a health-care region adversely affected by a shortage of 
nurses and would require the Secretary to enter into a contract 
with a private-sector entity for services under the pilot 
program to determine the effectiveness of the use of innovative 
private-sector recruiting practices to place qualified nurses 
in vacant positions at Department health-care facilities.

    Section 2(b) of the bill would require the Secretary for 
purposes of the pilot program established under this section to 
identify and use proven effective recruitment practices for 
placing individuals in difficult to fill positions including 
employer branding and interactive advertising strategies; 
internet technologies and automated staffing systems; and 
recruitment, advertising and communication agencies.

    Section 2(c) of the bill would require the Secretary in 
carrying out the pilot program established under this section 
to streamline systems and procedures used in the hiring process 
at sites where the pilot program is conducted and, if 
necessary, to make recommendations to amend the law.

    Section 2(d) of the bill would require the Secretary to 
submit a report to the Committees on Veterans Affairs on the 
extent to which the pilot program achieved the goal of 
improving the recruitment and retention of nurses in VA health-
care facilities.

    Section 3(a) of the bill would amend chapter 74 of title 
38, United States Code, to add a new section 7456a to provide 
for alternative work schedules for nurses.

    New section 7456a(a) would specify that this section 
applies to registered nurses under chapter 74.

    New section 7456a(b)(1) would provide the Secretary 
discretionary authority for chapter 74 nurses to work three 
regularly scheduled 12-hour tours of duty within a workweek, 
and for such tour to be considered for all purposes a full 40-
hour basic workweek (a ``36/40'' work schedule) except for the 
purposes of determining compliance with personnel ceilings.

    New section 7456a(b)(2) would provide the formula for 
determining the hourly rate and set forth rules for overtime 
pay for a nurse who work a 36/40 work schedule described in new 
section 7456a(b)(1).

    New section 7456a(b)(3) would provide the formula for 
determining charged leave for a nurse who works a 36/40 work 
schedule described in new section 7456a(b)(1).

    New section 7456a(c)(1) would provide the Secretary 
discretionary authority for chapter 74 nurses to work seven 
regularly scheduled 10-hour tours of duty, with seven days off 
duty, within a two-week pay period and for such tour to be 
considered for all purposes a full 80-hour pay period (a ``7/
7'' work schedule) except for the purposes of determining 
compliance with personnel ceilings.

    New section 7456a(c)(2) would provide the formula for 
determining the hourly rate and set forth rules for overtime 
pay for a nurse who works a 7/7 work schedule described in new 
section 7456a(c)(1).

    New section 7456a(c)(3) would provide the formula for 
determining charged leave for a nurse who works a 7/7 work 
schedule described in section 7456(c)(1).

    New section 7456a(d) would provide the Secretary 
discretionary authority for chapter 74 nurses to work full-time 
for 9 months with 3 months off within a fiscal year and be paid 
at 75 percent of the full-time rate over the full 12-month 
period (a ``9 month'' work schedule); be considered .75 full-
time equivalent employees; and be considered part-time service 
for purposes of computing retirement benefits.

    New section 7456a(e) would direct the Secretary to 
prescribe regulations to implement new section 7456a(d).

    Section 3(b) of the bill would amend the table of sections 
at the beginning of chapter 74, United States Code, to add the 
following new item: ``7456a. Alternate work schedules.''.

    Section 4 of the bill would amend section 7403 of title 38, 
United States Code, so that a registered nurse applying for a 
VA appointment and presenting the established qualifications 
for employment may not be denied appointment on the basis of 
the lack of a baccalaureate degree in nursing.

    Section 5 of the bill would amend section 7401(3) of title 
38, United States Code, to modify VA authority to make direct 
appointments of certain personnel to include blind 
rehabilitation specialists and blind rehabilitation outpatient 
specialists.

    Section 6(a)(1) of the bill would amend chapter 17 of title 
38, United States Code, to add a new section 1744 to authorize 
the Secretary to provide assistance to States for the purpose 
of hiring and retaining nurses at State veterans homes.

    New section 1744(a) would authorize the Secretary to make 
payments to States for the purpose of assisting State homes in 
the hiring and retention of nurses.

    New section 1744(b) would make eligible for such assistance 
State homes that receive per diem payments under chapter 17, 
subchapter V for the care of veterans for that fiscal year, and 
that have in effect an employee incentive scholarship or other 
program designed to promote the hiring and retention of nursing 
staff and reduce nursing shortages.

    New section 1744(c) would require States to use funds 
received under new section 1744 only to provide funds for a 
program described in new section 1744(b).

    New section 1744(d) would limit a payment under new section 
1744 to no more than 50 percent of the fiscal year costs of a 
program described in new section 1744(b).

    New section 1744(e) would require a State seeking payment 
with respect to any State home to submit an application and set 
forth requirements for that application.

    New section 1744(f-h) would set forth requirements for the 
source of funds, disbursement of funds and use of payments 
under new section 1744.

    New section 1744(i) would require any State home receiving 
a payment under new section 1744 for any fiscal year, within 60 
days of the close of the fiscal year, to submit a report on the 
use of funds received through the payment.

    New section 1744(j) would direct the Secretary to prescribe 
regulations for the implementation of new section 1744.

    Section 6(a)(2) of the bill would amend the table of 
sections at the beginning of chapter 17, United States Code, to 
add the following new item: ``1744. Hiring and retention of 
nurses: payments to assist States.''.

    Section 6(b) of the bill would require the Secretary to 
implement new section 1744 as expeditiously as possible, so 
that payments are made to eligible States commencing no later 
than January 1, 2005.

    Section 7 of the bill would amend section 8111(d)(2) of 
title 38, United States Code, to add that the established DOD-
VA Health Care Sharing Incentive Fund is available for any 
purpose authorized by section 8111.

    Section 8 of the bill would amend section 305(a)(2) of 
title 38, United States Code to strike the requirement that the 
Under Secretary for Health be a doctor of medicine.

                    Performance Goals and Objectives

    The Department of Veterans Affairs' performance goals and 
objectives are established in annual performance plans and are 
subject to the Committee's regular oversight and evaluation by 
the U.S. General Accounting Office. VA also publishes a 
performance and accountability report for each fiscal year.

              Statement of the Views of the Administration

  Statement of The Honorable Gordon H. Mansfield, Deputy Secretary of 
  Department of Veterans Affairs, before the Subcommittee on Health, 
      Committee on Veterans Affairs, U.S. House of Representatives

                              May 6, 2004

H.R. 4231

    This bill would help make VA more competitive in its ongoing 
efforts to recruit and retain registered nurses. I am especially 
pleased that the bill includes VA's proposal allowing enhanced 
flexibility in scheduling tours of duty for registered nurses. Mr. 
Chairman, in testimony last Fall before this Committee, we noted the 
projected increase in the number of aging veterans and increased 
enrollment in the VA healthcare system by veterans of all ages over the 
next several years and the projected national shortage of registered 
nurses. VA's health care providers are its most important resource in 
delivering high-quality, compassionate care to our Nation's veterans. 
VA's nurses are critical front-line components of the VA health care 
team. We must be able to recruit and retain well-qualified nurses. The 
ability to offer compensation, employment benefits and working 
conditions comparable to those available in their community is critical 
to our ability to recruit and retain nurses, particularly in highly 
competitive labor markets and for hard-to-fill specialty assignments. 
Thanks to the efforts of this Committee and the Senate Veterans' 
Affairs Committee, VA has been able to offer generally competitive pay 
for nurses in most markets. VA continuously monitors the recruitment 
and retention of health care providers, particularly nurses, monitoring 
trends in private sector employment and workforce projections.
    VA generally supports H.R. 4231 as it will assist VA in meeting the 
increasing challenge of recruiting and retaining sufficient nurses to 
meet its patient care needs.
    Section 3 of H.R. 4231 adopts a VA proposal for enhanced 
flexibility in scheduling tours of duty for registered nurses. VA 
strongly supports this provision. This provision will help VA remain a 
competitive place of employment for nurses and to meet current and 
future veteran healthcare needs.
    Your bill would also establish a pilot program to study innovative 
recruitment tools to address nursing shortages at VA health-care 
facilities, to be carried out in a region adversely affected by a 
nursing shortage. Using the services of a contractor, VA would identify 
and implement proven private sector recruitment practices. Such 
practices would include employer branding and interactive advertising 
strategies; internet technologies and automated staffing systems; and 
the use of recruitment, advertising and communication agencies. In 
carrying out the pilot program, the bill would require VA to streamline 
hiring procedures. If necessary, VA would be required to submit 
proposed legislation. Within one year, VA is to report to the House and 
Senate Veterans' Affairs committees on the pilot program. VA is already 
undertaking numerous initiatives to improve nurse recruitment and 
retention. Some of the aspects of the bill appear duplicative of these 
initiatives. Therefore, we believe this proposal is unnecessary.
    H.R. 4231 also would amend section 7403 of title 38 to provide that 
a registered nurse who applies for appointment and who meets VA's 
qualification standards may not be denied appointment based on the fact 
that such nurse does not have a baccalaureate degree. VA believes this 
proposal is unnecessary.
    The lack of a baccalaureate degree is not a bar to appointment 
under VA's current qualification standards. We note that we have 
provided the Committee with information that VA currently employs and 
continues to appoint many nurses educated in diploma and associate 
degree programs. VA hires graduates of associate degree and diploma 
programs at the Nurse 1 grade, and graduates of associate degree and 
diploma programs with bachelor degrees in related fields are eligible 
for appointment and promotion to the Nurse II grade, the same grade as 
are nurses with a Bachelor of Science in Nursing (BSN). In addition, 
VHA provides financial support to nurses desiring to obtain a higher 
nursing degree. VA does not ``deny'' appointment based on the lack of a 
baccalaureate degree.
    Finally, section 5 is a technical amendment to correct the titles 
of some of the new hybrid occupations, and adds additional occupations 
to those converted. Public Law number 108-170 converted a number of 
additional VHA health care positions to hybrid status. This section 
would substitute ``dental hygienists'' and ``dental assistants'' for 
``dental technologists'', and would substitute ``technologists'' for 
``technicians'' and therapeutic radiologic technologists'' for 
therapeutic radiologic technicians''. VA supports the clarification of 
the occupations converted to hybrid status. In addition, this section 
would convert blind rehabilitation specialists and blind rehabilitation 
outpatient specialists to hybrid status. VA is currently reviewing the 
need for additional hybrid positions and, therefore, cannot comment on 
this proposal at this time.

H.R. 4020

    H.R. 4020 would add a new section to title 38, United States Code, 
to require VA to make payments to States to assist them in hiring and 
retaining nurses at State veterans homes. To receive these payments, a 
State would need to establish an employee incentive scholarship program 
or other a similar program designed to reduce nursing shortages at its 
State homes. The programs would also need to meet any criteria that VA 
prescribes by regulation. VA would contribute 50% of the actual cost of 
the State program, but limited to 2% of the total per diem payments 
that the State would receive for that home for any fiscal year. States 
would be required to submit reports to VA on their use of the funds and 
the effectiveness of their programs.
    VA opposes this proposal. This bill would require VA to make these 
payments from the Medical Services appropriations account. We estimate 
this bill could cost about $8.2 million per year. These funds would be 
taken from medical care programs for veterans. VA already pays States a 
per diem for the care of each veteran. These payments are intended to 
help cover all the costs of operating State homes including those 
involved in nurse recruitment. In times of fiscal constraint, we do not 
believe this additional grant to state homes at the expense of VA's own 
medical programs can be justified.

Draft Bill re Qualifications and Selection of Under Secretary for 
Health

    This draft bill would amend section 305 of title 38, which concerns 
the procedures for appointment and qualifications of the Under 
Secretary for Health. As currently written, section 305 requires that 
the Under Secretary be a physician. The proposal would delete that 
requirement and substitute in its stead a requirement that the Under 
Secretary have executive knowledge, skill and ability. It would require 
that such knowledge, skill and ability be in health care 
administration, policy formulation and financial management. The draft 
bill also would eliminate the current four-year term for that position, 
and the current search commission process utilized to recommend 
candidates to the President for vacancies. Instead, the Secretary would 
be required to conduct a search for candidates and make a 
recommendation to the President. In conducting the search, the 
Secretary would be required to ``consult'' with stakeholders similar to 
those required to be on the search commission under the current 
procedure.
    VA supports enactment of these amendments as an improvement over 
current law, but we believe that the best outcome would be to amend 
section 305 to provide simply that the Under Secretary is appointed by 
the President, by and with the advice and consent of the Senate, and 
that the Under Secretary shall supervise the Veterans Health 
Administration under the authority of the Secretary of Veterans 
Affairs. The VHA medical system is the largest in the world, with 158 
hospitals, more than 850 ambulatory care and community-based outpatient 
clinics, 132 nursing homes, 42 domiciliaries, 73 comprehensive home-
care programs, 21 service networks and 206 Vet (Readjustment 
Counseling) Centers. More than 4.8 million people received care in VA 
health care facilities in 2003, with nearly 600,000 inpatient 
admissions and approximately 49.8 million outpatient visits.
    VHA also manages the largest medical education and health 
professions training program in the United States. VHA facilities are 
affiliated with 107 medical schools, 55 dental schools and more than 
1,200 other schools across the country. Each year, about 81,000 health 
professionals are trained in VHA medical centers. More than half of the 
physicians practicing in the United States have had part of their 
professional education in the VA health care system.
    VA's medical system additionally serves as a backup to the 
Department of Defense during national emergencies and as a federal 
support organization during major disasters.
    Moreover, VHA has experienced unprecedented growth in the medical 
system workload over the past few years. The number of patients treated 
increased by nearly seven percent from 2002 to 2003.
    Because of the complexity, size and scope of VHA's operations, the 
person who heads VHA first and foremost must be someone with 
significant executive leadership ability and a demonstrated track 
record. The President should not be limited to appointing a physician 
to this critical leadership position, but should be able to appoint the 
person with those executive qualifications that best meets the needs of 
VHA.
    We also favor the proposal to replace the formalized Search 
Commission process with a less-formal search process. The Search 
Commission process has proven to be very cumbersome and very slow. 
Importantly, the less-formal search process would retain stakeholder's 
involvement on a consultative basis. This proposal would allow the 
President to fill a vacant Under Secretary position in a more 
expeditious manner, without sacrificing important stakeholder input.
    Finally, we note that the Subcommittee has inserted as section 2 of 
the draft bill a technical amendment to section 8111(d)(2) of title 38 
to clarify the purposes for which the DOD-VA Health Care Sharing 
Incentive Fund may be used. The amendment would add at the end ``and 
shall be available for any purpose authorized by this section''. We 
thank the Subcommittee for this and strongly concur with this 
provision.
          * * * * * * *
               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, June 9, 2004
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. 4231, the 
Department of Veterans Affairs Nurse Recruitment and Retention 
Act of 2004.
    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.
    
    
                     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):

                      TITLE 38, UNITED STATES CODE

PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


CHAPTER 3--DEPARTMENT OF VETERANS AFFAIRS

           *       *       *       *       *       *       *


Sec. 305. Under Secretary for Health

  (a)(1) * * *
  (2) The Under Secretary for Health [shall be a doctor of 
medicine and] shall be appointed without regard to political 
affiliation or activity and solely--
          (A) on the basis of demonstrated ability in the 
        medical profession, in health-care administration and 
        policy formulation, [and in health-care] or in health-
        care fiscal management; and

           *       *       *       *       *       *       *


PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *


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

                          subchapter i--general

Sec.
1701.    Definitions.
     * * * * * * *

                  subchapter v--payments to state homes

     * * * * * * *
1744.    Hiring and retention of nurses: payments to assist States.

           *       *       *       *       *       *       *


SUBCHAPTER V--PAYMENTS TO STATE HOMES

           *       *       *       *       *       *       *


Sec. 1744. Hiring and retention of nurses: payments to assist States

  (a) Payment Program.--The Secretary shall make payments to 
States under this section for the purpose of assisting State 
homes in the hiring and retention of nurses and the reduction 
of nursing shortages at State homes.
  (b) Eligible Recipients.--Payments to a State for a fiscal 
year under this section shall, subject to submission of an 
application, be made to any State that during that year--
          (1) receives per diem payments under this subchapter 
        for that fiscal year; and
          (2) has in effect an employee incentive scholarship 
        program or other employee incentive program at a State 
        home designed to promote the hiring and retention of 
        nursing staff and to reduce nursing shortages at that 
        home.
  (c) Use of Funds Received.--A State may use an amount 
received under this section only to provide funds for a program 
described in subsection (b)(2). Any program shall meet such 
criteria as the Secretary may prescribe. In prescribing such 
criteria, the Secretary shall take into consideration the need 
for flexibility and innovation.
  (d) Limitations on Amount of Payment.--(1) A payment under 
this section may not be used to provide more than 50 percent of 
the costs for a fiscal year of the employee incentive 
scholarship or other incentive program for which the payment is 
made.
  (2) The amount of the payment to a State under this section 
for any fiscal year is, for each State home in that State with 
a program described in subsection (b)(2), the amount equal to 2 
percent of the amount of payments estimated to be made to that 
State, for that State home, under section 1741 of this title 
for that fiscal year.
  (e) Applications.--A payment under this section for any 
fiscal year with respect to any State home may only be made 
based upon an application submitted by the State seeking the 
payment with respect to that State home. Any such application 
shall describe the nursing shortage at the State home and the 
employee incentive scholarship program or other incentive 
program described in subsection (c) for which the payment is 
sought.
  (f) Source of Funds.--Payments under this section shall be 
made from funds available for other payments under this 
subchapter.
  (g) Disbursement.--Payments under this section to a State 
home shall be made as part of the disbursement of payments 
under section 1741 of this title with respect to that State 
home.
  (h) Use of Certain Receipts.--The Secretary shall require as 
a condition of any payment under this section that, in any case 
in which the State home receives a refund payment made by an 
employee in breach of the terms of an agreement for employee 
assistance that used funds provided under this section, the 
payment shall be returned to the State home's incentive program 
account and credited as a non-Federal funding source.
  (i) Annual Report From Payment Recipients.--Any State home 
receiving a payment under this section for any fiscal year, 
shall, as a condition of the payment, be required to agree to 
provide to the Secretary a report setting forth in detail the 
use of funds received through the payment, including a 
descriptive analysis of how effective the incentive program has 
been on nurse staffing in the State home during that fiscal 
year. The report for any fiscal year shall be provided to the 
Secretary within 60 days of the close of the fiscal year and 
shall be subject to audit by the Secretary. Eligibility for a 
payment under this section for any later fiscal year is 
contingent upon the receipt by the Secretary of the annual 
report under this subsection for the previous year in 
accordance with this subsection.
  (j) Regulations.--The Secretary shall prescribe regulations 
to carry out this section. The regulations shall include the 
establishment of criteria for the award of payments under this 
section.

           *       *       *       *       *       *       *


PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

           *       *       *       *       *       *       *


              CHAPTER 74--VETERANS HEALTH ADMINISTRATION--
                               PERSONNEL

                       subchapter i--appointments

Sec.
7401.    Appointments in Veterans Health Administration.
     * * * * * * *

      subchapter iv--pay for nurses and other health-care personnel

7451.    Nurses and other health-care personnel: competitive pay.
     * * * * * * *
7456a.    Alternate work schedules.

           *       *       *       *       *       *       *


                       SUBCHAPTER I--APPOINTMENTS

Sec. 7401. Appointments in Veterans Health Administration

  There may be appointed by the Secretary such personnel as the 
Secretary may find necessary for the health care of veterans 
(in addition to those in the Office of the Under Secretary for 
Health appointed under section 7306 of this title), as follows:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Audiologists, speech pathologists, and 
        audiologist-speech pathologists, biomedical engineers, 
        certified or registered respiratory therapists, 
        dietitians, licensed physical therapists, licensed 
        practical or vocational nurses, medical instrument 
        technicians, medical records administrators or 
        specialists, medical records technicians, medical [and 
        dental technologists] technologists, dental hygienists, 
        dental assistants, nuclear medicine technologists, 
        occupational therapists, occupational therapy 
        assistants, kinesiotherapists, orthotist-prosthetists, 
        pharmacists, pharmacy technicians, physical therapy 
        assistants, prosthetic representatives, psychologists, 
        diagnostic radiologic [technicians, therapeutic 
        radiologic technicians, and social workers] 
        technologists, therapeutic radiologic technologists, 
        social workers, blind rehabilitation specialists, and 
        blind rehabilitation outpatient specialists.

           *       *       *       *       *       *       *


Sec. 7403. Period of appointments; promotions

  (a)(1) * * *

           *       *       *       *       *       *       *

  (h) In a case in which a registered nurse applying for an 
appointment under this chapter as a registered nurse has 
presented the qualifications established under subsection (a) 
for such an appointment, the lack of a baccalaureate degree in 
nursing shall not be a bar to appointment, and in such a case 
the registered nurse shall not be denied appointment on that 
basis.

           *       *       *       *       *       *       *


SUBCHAPTER IV--PAY FOR NURSES AND OTHER HEALTH-CARE PERSONNEL

           *       *       *       *       *       *       *


Sec. 7456a. Alternate work schedules

  (a) Applicability.--This section applies to registered nurses 
appointed under this chapter.
  (b) 36/40 Work Schedule.--(1) Subject to paragraph (2), if 
the Secretary determines it to be necessary in order to obtain 
or retain the services of registered nurses at a Department 
health-care facility, the Secretary may provide, in the case of 
registered nurses employed at that facility, that such a nurse 
who works three regularly scheduled 12-hour tours of duty 
within a workweek shall be considered for all purposes (except 
computation of full-time equivalent employees for the purposes 
of determining compliance with personnel ceilings) to have 
worked a full 40-hour basic workweek. Such a schedule may be 
referred to as a ``36/40 work schedule''.
  (2)(A) Basic and additional pay for a registered nurse who is 
considered under paragraph (1) to have worked a full 40-hour 
basic workweek is subject to subparagraphs (B) and (C).
  (B) The hourly rate of basic pay for such a nurse for service 
performed as part of a regularly scheduled 36-hour tour of duty 
within the workweek shall be derived by dividing the nurse's 
annual rate of basic pay by 1,872.
  (C)(i) Such a nurse who performs a period of service in 
excess of such nurse's regularly scheduled 36-hour tour of duty 
within a workweek is entitled to overtime pay under section 
7453(e) of this title, or other applicable law, for officially 
ordered or approved service performed in excess of--
          (I) eight hours on a day other than a day on which 
        such nurse's regularly scheduled 12-hour tour falls;
          (II) 12 hours for any day included in the regularly 
        scheduled 36-hour tour of duty; and
          (III) 40 hours during an administrative workweek.
  (ii) Except as provided in clause (i), a registered nurse to 
whom this subsection is applicable is not entitled to 
additional pay under section 7453 of this title, or other 
applicable law, for any period included in a regularly 
scheduled 12-hour tour of duty.
  (3) A nurse who works a 36/40 work schedule described in this 
subsection who is absent on approved sick leave or annual leave 
during a regularly scheduled 12-hour tour of duty shall be 
charged for such leave at a rate of ten hours of leave for nine 
hours of absence.
  (c) 7/7 Work Schedule--(1) Subject to paragraph (2), if the 
Secretary determines it to be necessary in order to obtain or 
retain the services of registered nurses at a Department 
health-care facility, the Secretary may provide, in the case of 
registered nurses employed at such facility, that such a nurse 
who works seven regularly scheduled 10-hour tours of duty, with 
seven days off duty, within a two-week pay period, shall be 
considered for all purposes (except computation of full-time 
equivalent employees for the purposes of determining compliance 
with personnel ceilings) to have worked a full 80 hours for the 
pay period. Such a schedule may be referred to as a ``7/7 work 
schedule''.
  (2)(A) Basic and additional pay for a registered nurse who is 
considered under paragraph (1) to have worked a full 80-hour 
pay period is subject to subparagraphs (B) and (C).
  (B) The hourly rate of basic pay for such a nurse for service 
performed as part of a regularly scheduled 70-hour tour of duty 
within the pay period shall be derived by dividing the nurse's 
annual rate of basic pay by 1,820.
  (C)(i) Such a nurse who performs a period of service in 
excess of such nurse's regularly scheduled 70-hour tour of duty 
within a pay period is entitled to overtime pay under section 
7453(e) of this title, or other applicable law, for officially 
ordered or approved service performed in excess of--
          (I) eight hours on a day other than a day on which 
        such nurse's regularly scheduled 10-hour tour falls;
          (II) 10 hours for any day included in the regularly 
        scheduled 70-hour tour of duty; and
          (III) 80 hours during a pay period.
  (ii) Except as provided in subparagraph (i), a registered 
nurse to whom this subsection is applicable is not entitled to 
additional pay under section 7453 of this title, or other 
applicable law, for any period included in a regularly 
scheduled 10-hour tour of duty.
  (3) A nurse who works a 7/7 work schedule described in this 
subsection who is absent on approved sick leave or annual leave 
during a regularly scheduled 12-hour tour of duty shall be 
charged for such leave at a rate of eight hours of leave for 
seven hours of absence.
  (d) 9-Month Work Schedule.--The Secretary may authorize a 
registered nurse appointed under section 7405 of this title, 
with the nurse's written consent, to work full-time for nine 
months with three months off duty, within a fiscal year, and be 
paid at 75 percent of the full-time rate for such nurse's grade 
for each pay period of that fiscal year. A nurse working on 
such a schedule for any fiscal year shall be considered a \3/4\ 
full-time equivalent employee for that fiscal year in computing 
full-time equivalent employees for the purposes of determining 
compliance with personnel ceilings. Service on such a schedule 
shall be considered to be part-time service for purposes of 
computing benefits under chapters 83 and 84 of title 5.
  (e) Regulations.--The Secretary shall prescribe regulations 
for the implementation of this section.

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            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

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SUBCHAPTER I--ACQUISITION AND OPERATION OF MEDICAL FACILITIES

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Sec. 8111. Sharing of Department of Veterans Affairs and Department of 
                    Defense health care resources

  (a) * * *

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  (d) Joint Incentives Program.--(1) * * *
  (2) To facilitate the incentive program, effective October 1, 
2003, there is established in the Treasury a fund to be known 
as the ``DOD-VA Health Care Sharing Incentive Fund''. Each 
Secretary shall annually contribute to the fund a minimum of 
$15,000,000 from the funds appropriated to that Secretary's 
Department. Such funds shall remain available until expended 
and shall be available for any purpose authorized by this 
section.

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