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                                                       Calendar No. 718
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-358
======================================================================
 
DEPARTMENT OF VETERANS AFFAIRS REAL PROPERTY AND FACILITIES MANAGEMENT 
                        IMPROVEMENT ACT OF 2004

                                _______
                                

               September 27, 2004.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2485]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), to which was referred the bill (S. 2485), to 
amend title 38, United States Code, to improve and enhance the 
authorities of the Secretary of Veterans Affairs relating to 
the management and disposal of real property and facilities, 
and for other purposes, having considered the same, reports 
favorably thereon with an amendment in the nature of a 
substitute, and recommends that the bill, as amended, do pass.

                              Introduction

    On June 1, 2004, Committee Chairman Arlen Specter 
introduced, at the request of the Administration, S. 2485, the 
``Department of Veterans Affairs Real Property and Facilities 
Management Improvement Act of 2003.'' S. 2485, as introduced, 
would have allowed the Department of Veterans Affairs 
(hereinafter, ``VA'') to use major construction project funds 
to construct or relocate parking facilities when such 
relocations or construction projects are incident to a major 
construction project; would have authorized the VA's Under 
Secretaries for Benefits and Memorial Affairs to enter into 
enhanced-use lease projects; would have authorized VA to 
dispose of, or transfer, real property under its jurisdiction 
without complying with certain provisions of the McKinney-Vento 
Homeless Assistance Act and deposit any proceeds from such 
disposal or transfer into a newly-created Capital Asset Fund; 
would have terminated the VA's Nursing Home Revolving Fund; and 
would have limited VA's authority to dispose of real property 
with a value of more than $7 million unless the disposal was 
proposed in the most recent budget submitted to Congress by the 
President of the United States.
    On October 16, 2003, Senator Barbara Boxer introduced S. 
1745, a bill to designate a Prisoner of War/Missing in Action 
National Memorial at Riverside National Cemetery in Riverside, 
California. The bill was referred to the Committee on Veterans' 
Affairs.
    On February 26, 2004, Senator Hillary Rodham Clinton 
introduced S. 2133, a bill to designate the Department of 
Veterans Affairs Medical Center in Bronx, New York, as the 
James J. Peters Department of Veterans Affairs Medical Center. 
Senator Charles E. Schumer was later added as a cosponsor of 
the bill. The bill was referred to the Committee on Veterans' 
Affairs.
    On April 7, 2004, Committee Member Jim Bunning introduced 
S. 2296, a bill to require the Secretary of Veterans Affairs to 
give the Commonwealth of Kentucky the first option on the 
Louisville Department of Veterans Affairs Medical Center, 
Kentucky, upon its conveyance, lease or other disposal by the 
Department of Veterans Affairs. The bill was referred to the 
Committee on Veterans' Affairs.
    On April 21, 2004, Committee Member Ben Nighthorse Campbell 
introduced S. 2327, a bill to amend title 38, United States 
Code, to clarify that per diem payments made by the Department 
of Veterans Affairs for the care of veterans in State Veterans 
Homes shall not be used to offset or reduce other payments made 
to assist veterans. Senators Olympia Snowe and Susan Collins 
are original cosponsors of S. 2327. Committee Member Patty 
Murray and Senator Hillary Rodham Clinton were later added as 
cosponsors of the bill. The bill was referred to the Committee 
on Veterans' Affairs.
    On May 13, 2004, Senator Norm Coleman introduced S. 2417, a 
bill to amend title 38, United States Code, to authorize the 
Secretary of Veterans Affairs to furnish care for newborn 
children of women veterans receiving maternity care, and for 
other purposes. Committee Members Kay Bailey Hutchison, Lindsey 
Graham, Lisa Murkowski, and Zell Miller, and Senators Ted 
Stevens and Susan Collins, were later added as cosponsors of 
the bill. The bill was referred to the Committee on Veterans' 
Affairs.
    On June 1, 2004, Chairman Specter introduced, at the 
request of the Administration, S. 2486, a bill to amend title 
38, United States Code, to improve and enhance education, 
housing, employment, medical, and other benefits for veterans, 
to improve and extend certain authorities relating to the 
administration of benefits for veterans, and for other 
purposes. Committee Member Lisa Murkowski is an original 
cosponsor of S. 2486, and Committee Member Patty Murray was 
later added as a cosponsor of the bill. The bill was referred 
to the Committee on Veterans' Affairs.
    On June 16, 2004, Committee Ranking Member Bob Graham 
introduced S. 2524, a bill to amend title 38, United States 
Code, to improve the provision of health care, rehabilitation, 
and related services to veterans suffering from trauma related 
to a blast injury, and for other purposes. The bill was 
referred to the Committee on Veterans' Affairs.

                           Committee Hearings

    On June 22, 2004, the Committee held a hearing to receive 
testimony on, among other bills, S. 1745, S. 2133, S. 2296, S. 
2327, S.2417, S. 2485, S. 2486, and S. 2524. Testimony was 
heard from: Senators Kent Conrad, Jon S. Corzine, and Hillary Rodham 
Clinton; The Honorable Tim S. McClain, VA's General Counsel and Michael 
J. Kussman, M.D., Acting Deputy Under Secretary for Health, Veterans 
Health Administration; Mr. Donald L. Mooney, Assistant Director for 
Resource Development, Veterans Affairs and Rehabilitation Commission, 
The American Legion; Mr. Paul A. Hayden, Deputy Director, National 
Legislative Service, Veterans of Foreign Wars; Mr. Adrian M. Atizado, 
Assistant National Legislative Director, Disabled American Veterans; 
Mr. Carl Blake, Associate Legislative Director, Paralyzed Veterans of 
America; and Mr. Richard Jones, National Legislative Director, AMVETS.

                           Committee Meeting

    After carefully reviewing the testimony from the foregoing 
hearing, the Committee met in open session on July 20, 2004, 
and voted by unanimous voice vote to report favorably S. 2485, 
as amended to also incorporate provisions derived from S. 1745, 
S. 2133, S. 2296, S. 2327, S. 2417, S. 2486, and S. 2524.

               Summary of the Committee Bill as Reported

    S. 2485, as reported (hereinafter, the ``Committee bill''), 
consists of two titles, summarized below.

             TITLE I--REAL PROPERTY AND FACILITIES MATTERS

    Title I contains freestanding provisions and amendments to 
Title 38, United States Code, that would:
          1. Authorize VA for five years to dispose of its 
        excess real property by sale, transfer or exchange to a 
        Federal agency, a State, political subdivision of a 
        State, or to any public or private entity, and allow VA 
        to retain the proceeds from such transfers in a Capital 
        Asset Fund to be used for non-recurring capital 
        projects, maintenance, clean-up, or improvements of 
        properties identified for disposal (section 101);
          2. Remove the requirement that VA consider certain 
        statutory strictures of the McKinney-Vento Homeless 
        Assistance Act, 42 U.S.C. Sec. 11411, when it disposes 
        of excess real property and allow VA to enter into real 
        property enhanced-use leases for the benefit of the 
        Veterans Benefits Administration and the National 
        Cemetery Administration (section 102);
          3. Authorize the use of major construction project 
        funds to construct or relocate surface parking lots if 
        the parking construction or relocation is incidental to 
        the underlying major construction project for which the 
        funds have been appropriated (section 103);
          4. Terminate the Nursing Home Revolving Fund (section 
        104);
          5. Allow VA to use advance-planning funds on any 
        construction project without notifying Congress if the 
        planning is for a project that has already been 
        authorized by law (section 105);
          6. Permit VA to lease certain undeveloped or 
        underutilized land of the National Cemetery 
        Administration (section 106);
          7. Transfer to VA jurisdiction over certain property 
        in Boise, Idaho, currently administered by the General 
        Services Administration (section 111);
          8. Designate the VA Medical Center in Bronx, New 
        York, the ``James J. Peters Department of Veterans 
        Affairs Medical Center'' (section 121);
          9. Designate a Prisoner of War/Missing in Action 
        National Memorial at the Riverside National Cemetery in 
        Riverside, California (section 122); and
          10. Grant to the Commonwealth of Kentucky the first 
        option on the VA Medical Center in Louisville, 
        Kentucky, upon its proposed conveyance, lease or other 
        disposal by VA (section 131).

                       TITLE II--BENEFITS MATTERS

    Title II contains freestanding provisions and amendments to 
title 38, United States Code, that would:
          1. Prohibit the collection of copayments for VA-
        provided hospice care (section 201);
          2. Expand and make permanent VA's authority to 
        provide counseling and treatment for veterans suffering 
        from sexual trauma (section 202);
          3. Clarify that per diem payments made by VA for the 
        care of veterans in State Veterans Homes shall not be 
        used to offset or reduce other payments made to assist 
        veterans (section 203);
          4. Authorize care for newborn children of women 
        veterans receiving maternity care in a VA facility or 
        in a private facility under a VA contract (section 
        204);
          5. Establish centers for research, education, and 
        clinical activities that specialize in blast injuries 
        sustained by active duty service personnel (section 
        205);
          6. Extend for five years the requirement that VA's 
        special medical advisory group issue certain reports 
        and extend VA pilot programs that are currently in 
        force relating to long term care (section 206); and
          7. Require VA to report annually on waiting times for 
        appointments for care and services (section 207).

                       Background and Discussion


             TITLE I--REAL PROPERTY AND FACILITIES MATTERS

Section 101. Restatement and enhancement of real property disposal 
        authorities

    Under current law, the Secretary is authorized to dispose 
ofproperty administered by VA and to retain the proceeds from 
such a disposal but only if: (1) the property is considered excess to 
the needs of VA; (2) there is no use for it in providing services to 
homeless veterans; and (3) the property is valued at less than $50,000 
or, in cases where it is valued at more than $50,000, the disposal was 
proposed in the most recent budget submitted to Congress by the 
President of the United States. In the event VA disposes of property, 
all proceeds must be deposited into the Nursing Home Revolving Fund. 
Funds in the Nursing Home Revolving Fund may only be used for the 
construction, acquisition, or alteration of VA nursing home facilities.
    Section 101 of the Committee bill would authorize VA for 
five years to dispose of excess real property by sale, transfer 
or exchange to a Federal agency, a State, or a political 
subdivision of a State, or to any public or private entity. 
Such transfers would not be subject to restrictions currently 
in force. Further, the Committee bill would allow VA to retain 
the proceeds generated by such disposals of property in a new 
Capital Asset Fund rather than in the Nursing Home Revolving 
Fund. Funds in the new account could be used to perform non-
recurring maintenance, develop construction proposals, or 
dispose of other VA property. Removal of current limitations on 
the use of land transfer proceeds would assist VA in carrying 
out the goals as outlined in VA's Capital Asset Realignment for 
Enhanced Services (CARES) plan.

Sec. 102. Improvements of enhanced-use lease authorities

    VA is currently authorized to lease real property 
administered by VA to non-Federal entities in cases where VA 
determines that such a lease will advance the mission of VA and 
enhance the use of the property. See 38 U.S.C. Sec. 8161 et 
seq. In making the determination to enter into such an 
``enhanced-use lease,'' VA may only consider the needs of the 
Veterans Health Administration as outlined in business plans 
set forth by the Under Secretary for Health. Once a 
determination to lease is made, VA may receive facilities, 
space, or services as consideration for the lease, but only if 
the facilities, space or services are on the VA-leased 
property.
    Section 102 of the Committee bill would allow VA, as part 
of making a determination to enter into an enhanced-use lease, 
to consider the needs of the Veterans Benefits Administration 
or the National Cemetery Administration as outlined in business 
plans prepared by the respective Under Secretaries of those 
Administrations. For a number of years, Congress has encouraged 
VA to stop operating as three distinct health, benefits, and 
memorial affairs administrations and instead act as a single 
Department for the benefit of former service members. VA has 
responded with plans such as this one; the Committee believes 
it merits support.
    Further, this section would permit VA to receive 
facilities, space, or services in consideration for a lease 
regardless of whether the facilities, space, or services are on 
the leased property. The Committee agrees with VA that the 
requirement that space, services, or facilities offered in 
consideration be on the affected property advances no 
compelling policy interest. The overarching goal of leasing in 
exchange for space, services, or facilities is that the 
consideration, wherever it might be delivered, be for the 
benefit of veterans.

Sec. 103. Authority to use project funds to construct or relocate 
        surface parking incidental to a construction or non-recurring 
        maintenance project

    When construction projects are undertaken at VA medical 
centers, it is often necessary to move existing surface parking 
facilities to permit the project to proceed. In addition, major 
construction projects often require the addition of new surface 
parking spaces to accommodate a programmatic mission or special 
requirements, e.g., handicapped spaces adjacent to the new 
building.
    Under current law, all money spent for the construction of 
VA parking lots must be derived from the Parking Revolving 
Fund, which receives all of its deposits from fees charged for 
parking. VA may not spend ``construction'' funds on parking 
lots.
    The Committee supports the basic concept that parking 
facilities at VA should be constructed using monies derived 
from the Parking Revolving Fund. Notwithstanding that, section 
103 would authorize the use of funds in a construction or 
capital account for the relocation of a surface parking 
facility if the relocation is necessitated by a construction or 
non-recurring maintenance project.

Sec. 104. Termination of Nursing Home Revolving Fund

    Under current law, proceeds from the transfer of an 
interest in real property under the jurisdiction of the 
Secretary of Veterans Affairs must be deposited in the Nursing 
Home Revolving Fund. This fund may only be used for the purpose 
of constructing, altering or acquiring nursing home care 
facilities.
    Section 104 of the Committee bill would terminate the VA 
Nursing Home Revolving Fund. In light of the Committee's 
approval of section 101 of the bill, creating a new Capital 
Asset Fund to serve as the repository of funds received by VA 
as a consequence of real property transfers, the Nursing Home 
Revolving Fund would no longer be needed.

Sec. 105. Inapplicability of limitation on use of Advance Planning Fund 
        to authorized major medical facility projects

    Under current law, VA may not spend more than $500,000 from 
its Advanced Planning Fund for the development of a 
construction proposal unless it notifies Congress of its 
intention to do so, and it waits for a period of 30 days. The 
reporting requirement was established to ensure that the 
Veterans' Affairs Committees of the United States Senate and 
House of Representatives have advance knowledge of VA project 
development activities.
    The above-summarized reporting requirement applies 
irrespective of whether a project has already been authorized 
by Congress. Thus, VA is precluded from spending advanced-
planning funds on a project that has been vetted and approved 
by Congress until VA gives further notification to Congress and 
the 30-day period has lapsed. The requirement that Congress be 
given notice of something it has already reviewed and approved 
is, at best, inefficient. Further, the requirement causes delay 
of up to three months for no compelling purpose. Accordingly, 
Section 105 of the Committee bill would eliminate the ``notice 
and wait'' provision if the project VA is planning has already 
been authorized by law.

Sec. 106. Lease of certain National Cemetery Administration property

    National Cemetery Administration (hereinafter ``NCA'') 
burial sites are developed in 10-year increments using a 
``just-in-time'' approach. NCA's premise is that it would be 
wasteful to develop an entire cemetery the first year VA 
operates the property when much of the land will not be needed 
until far into the future. NCA monitors the depletion of grave 
sites, projected burial requirements, and estimated timing for 
new construction activities and then develops increments of new 
space as needed.
    Under current law, VA is not permitted to lease NCA lands. 
As a consequence, the NCA has in its possession significant 
acreage that is not yet needed and might be useful for other 
purposes until it is needed for burial sites. Under current 
law, it must remain idle.
    Section 106 of the Committee bill would allow the NCA to 
lease land that is not yet needed or is unsuitable for use by 
NCA. Under this authority, proceeds from such leases would be 
retained by NCA for the operation of the national cemeteries. 
Congress has already determined that using land administered by 
the Veterans Health Administration to generate revenues for VA 
to use for the betterment of veterans is both sound public 
policy and a good stewardship of taxpayer resources. This 
section simply extends that philosophy to the National Cemetery 
Administration.

Sec. 111. Transfer of jurisdiction, General Services Administration 
        property, Boise, Idaho

    Section 111 of the Committee bill would direct the transfer 
of certain land in Boise, Idaho, administered by the General 
Services Administration (hereinafter, ``GSA'') to VA. The land 
in question was originally under the jurisdiction of the 
Department of the Army as part of Ft. Boise. The Army 
transferred the land to VA for use in caring for veterans. 
Subsequently, VA transferred the land to GSA for the purpose of 
building a Federal courthouse in Boise.
    Today, the land is, at best, underutilized, serving as an 
overflow courthouse parking lot. VA spends $500,000 annually 
leasing space from a private developer for the operation its 
Boise Veterans Benefits Administration regional office.
    Transfer of this land back to VA would potentially reduce 
VA's annual leasing costs and, just as important, make 
appropriate use of an otherwise underutilized parcel of Federal 
land.

Sec. 121. Designation of Department of Veterans Affairs Medical Center, 
        Bronx, New York

    For 31 years, James J. Peters, now deceased, was the 
Executive Director of the Eastern Paralyzed Veterans 
Association (hereinafter, ``EPVA''), a service organization now 
known as the United Spinal Association. During his tenure, EPVA 
invested significantly in spinal cord injury care and research. 
The Bronx VA Medical Center is now a premier center for the 
treatment of spinal cord injured veterans.
    Section 121 of the Committee bill would designate the VA 
Medical Center in Bronx, New York the ``James J. Peters 
Department of Veterans Affairs Medical Center.'' The Committee 
has concluded that naming the VA Medical Center in Bronx, New 
York would be an appropriate tribute to Mr. Peters' 
longstanding commitment to veterans.

Sec. 122. Designation of Prisoner of War/Missing in Action National 
        Memorial at the Riverside National Cemetery in Riverside, 
        California

    Section 2403 of title 38, United States Code, authorizes 
the NCA to establish memorial areas to honor veterans who are 
missing in action or whose remains are otherwise unavailable 
for burial. Under current law, VA is permitted to erect group 
memorials to honor the memory of two or more service members 
who died in service and whose remains were never recovered.
    Section 122 of the Committee bill would designate at the 
Riverside National Cemetery a memorial to former Prisoners of 
War and members of the Armed Services listed as missing in 
action. The section directs that the memorial be known as the 
``Prisoner of War/Missing in Action National Memorial.''

Sec. 131. First option for Commonwealth of Kentucky on the VA Medical 
        Center in Louisville, Kentucky

    Under current law, VA generally may not transfer any 
property to a State unless VA receives compensation equal to 
the fair market value of the property and the transfer, as 
proposed, is described in the budget submitted by the President 
of the United States to the Congress for the fiscal year within 
which the proposed transfer would take place. VA may, however, 
transfer excess land to a State for use as the site of a State 
nursing home or domiciliary without adhering to these 
restrictions.
    Section 131 of the Committee bill would require VA, if it 
determines that it will convey, lease, or otherwise dispose of 
all or part of the Louisville VA Medical Center, to negotiate 
for the conveyance, lease, or other disposal of the Medical 
Center with the Commonwealth of Kentucky for its use to provide 
services for veterans or for otherpurposes. The Committee bill 
would not relieve the Commonwealth of the burden of paying fair market 
value for the land if VA were to transfer the Medical Center to 
Kentucky.

                       TITLE II--BENEFITS MATTERS

Sec. 201. Prohibition on collection of copayments for hospice care

    Section 1710B of title 38, United States Code, requires VA 
to operate a program to provide extended care services, 
including hospice care, to eligible veterans. However, section 
1710B(c)(1) prohibits VA from providing such care for a non-
service-connected disabling condition unless the veteran agrees 
to pay a copayment. The law does exempt compensable service-
connected veterans and low-income veterans from the copayment 
requirement.
    Hospice care is provided to patients who are suffering 
during the last phase of an incurable disease. As stated by the 
American Cancer Society, ``hospice philosophy recognizes death 
as the final stage of life and seeks to enable patients to 
continue an alert, pain-free life and to manage other symptoms 
so that their last days may be spent with dignity and quality, 
surrounded by their loved ones.'' Given the nature of hospice 
care, the Committee believes that waiving the copayment 
obligation for such services would advance the requirement that 
VA provide compassionate care. Accordingly, section 201 of the 
Committee bill would exempt veterans receiving hospice care 
under section 1710B from the copayment requirement.

Sec. 202. Expansion and permanent extension of authority for counseling 
        and treatment for sexual trauma

    Section 1720D of title 38, United States Code, authorizes 
VA to provide counseling and treatment to victims who suffer 
from an incident of sexual trauma while in service. That 
authority expires on December 31, 2004. To ensure that 
appropriate treatment will at least be available to victims of 
sexual trauma after they separate from service, the Committee 
bill would make permanent VA's authority to provide these 
services.
    As a further matter, the Committee notes that VA's current 
authority does not extend to the treatment of members of the 
Reserves who are victims of sexual trauma while serving on 
active duty for training. This section would also authorize VA 
to provide counseling to members of the Reserves who were 
victims of sexual trauma during such periods.

Sec. 203. Treatment of VA per diem payments to state homes for veterans

    Under current law, VA pays each State a per diem payment of 
$57.78 for each veteran provided nursing home care in a State 
veterans' home. Costs above $57.78 are borne by the State.
    In an effort in increase revenues, many States have had 
their State homes Medicaid-certified; they have thus secured 
eligibility for payment of a fixed daily cost for each veteran 
who qualifies for care under the Medicaid program. Under 
current Medicaid rules, payments from any source other than 
Medicaid made on behalf of an individual patient must be 
reimbursed to the Medicaid program by the treating facility. 
For example, if Medicaid provided $150 per day for the care of 
a veteran and the facility caring for the veteran receives $20 
per day from the veteran's spouse, Medicaid is entitled to 
reimbursement of the $20 received from the spouse. Recently, 
Medicaid officials determined that VA per diem payments are 
``additional payments'' made on behalf on an individual 
patient. Thus, VA's per diem payments must now be reimbursed to 
the Medicaid program.
    The purpose of the VA's program of supporting State homes 
is to provide high quality nursing home care to aging veterans. 
VA's per diem payments are an integral part of that effort and 
were never intended to be reimbursed to Medicaid. Section 203 
of the Committee bill would assure that per diem payments 
accomplish their intended purpose--assistance to the States in 
providing care to veterans--and that they are not being passed 
from one Governmental account (VA) to another (Medicaid).
    Section 203 is not intended to alter the current rules 
applicable to patients who wish to qualify for Medicaid 
treatment. And it is not intended to exempt from Medicaid 
recoupment any other payments made on behalf of a veteran. 
Rather, the bill would simply specify that per diem payments 
made by VA for the care of veterans in State homes will not be 
used to offset or reduce any other payment made to assist 
veterans in securing health care services.

Sec. 204. Care for newborn children of women veterans receiving 
        maternity care

    Under current law, a former servicewoman can use her 
eligibility for VA care to secure prenatal care, delivery 
services, and postnatal care. In most instances, VA provides 
such care by contract with community hospitals. VA does not, 
however, provide care (or pay for care) needed by the veteran's 
newborn following delivery.
    In many cases, where a veteran-mother seeks care from VA, 
the newborn is uninsured until a hospital social worker or the 
newborn's parents can arrange for private healthcare coverage 
or, in other cases, Medicaid assistance. This uninsured period 
of time often reaches two weeks.
    Section 204 of the Committee bill would authorize VA to 
furnish care to a newborn child of a female veteran who is 
receiving maternity care furnished by VA for up to 14 days 
after the birth of the child. This authorization applies if the 
veteran delivered the child in a VA facility or in a non-VA 
facility under a contract agreement with VA.

Sec. 205. Centers for research, education, and clinical activities on 
        blast injuries of veterans

    Modern technologies and advanced body armor have led to an 
increase in the number of service personnel who survive 
explosions while serving overseas in hostile territory. 
Additionally, better triage and battlefield care have also 
contributed to the increased survival rate among service 
members who have suffered such injuries.
    Section 205 of the Committee bill would establish at VA, in 
collaboration with the Department of Defense, at least one, but 
not more than three, War-Related Blast Injury Centers. These 
centers would provide comprehensive rehabilitation programs, 
targeted education and outreach programs, and research 
initiatives. The structure for the Center(s) would be modeled 
after similar research, education, and clinical centers that 
now exist within VA, namely the Geriatric Research Education 
and Clinical Centers and the Mental Illness Research Education 
and Clinical Centers.

Sec. 206. Extension of various authorities relating to veterans 
        benefits

            Special Medical Advisory Group
    Under current law, VA is required to establish a Special 
Medical Advisory Group to advise the Secretary on the care and 
treatment provided to disabled veterans. The Special Medical 
Advisory Group is required to report its findings to the 
Secretary on February 1st of each year through December 31, 
2004.
    The contributions of this body are, in the Committee's 
view, highly valuable. Section 206 would extend the authority 
for the Special Medical Advisory Group through December 31, 
2009.
            Pilot program relating to long-term care
    Public Law 106-117, the Veterans Millennium Health Care and 
Benefits Act, established a three-year pilot program to 
evaluate three different models of providing long-term care to 
veterans. One model was to provide the care wholly ``in-house'' 
using VA employees. Another was to provide the entirety of care 
by contract with a private provider. The third was to be a mix 
of in-house and contract care. The law requires VA to report on 
its experience under each of the models so that Congress might 
determine whether it is appropriate to continue or promote the 
advancement of any or all of the models.
    The expiration date of the pilot falls during the summer of 
2004. However, the report required by statute will not be 
available until the spring of 2005. VA states that, absent an 
extension in the underlying authority to provide these forms of 
care, it will be forced to suspend contract-based care programs 
before advising Congress as to whether the programs are 
working.
    Section 206 of the Committee bill allows the pilot program 
to continue through December 31, 2005. This extension will 
provide VA with sufficient time to evaluate its experience 
under this pilot program, prepare the report, and allow a 
reasonable opportunity for Congress to review its 
recommendations.

Sec. 207. Annual reports on waiting times for appointments for health 
        care and services

    In July 2002, VA took a ``one day snapshot look'' at 
waiting times for clinical care in facilities throughout the 
country. At that time, VA reported over 300,000 veterans were 
waiting more than 30 days for appointments in primary and 
specialty care clinics. Since then, members of the Committee 
have received numerous complaints about widely-varying lengths 
of time veterans must wait to see a physician at a VA medical 
center. Anecdotally, Committee members have been told of waits 
of up to one year.
    In January 2004, VA required that all facilities schedule 
an appointment within 30 days of a service-connected veteran's 
request or, in the alternative, that the facility arrange for 
care for that veteran at another VA facility or at a community 
facility. Problems continue to persist for those who are not 
service-connected inasmuch as they do not fall under this 
directive.
    In an effort to obtain more frequent updates on the 
progress VA is making in reducing waiting times, Section 207 of 
the Committee bill would require VA to report annually on 
patient appointment waiting times. The required reports would 
break out data by facility and service network, and would 
contain data relating to both speciality and primary care 
services.

                             Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the Congressional Budget Office 
(hereinafter, ``CBO''), estimates that enactment of the 
Committee bill would increase direct spending for veterans 
programs by $16 million over the 2005-2009 period, and $40 
million over the 2005-2014 period. In addition, CBO estimates 
that enactment of the Committee bill would cost $20 million in 
2005 and $110 million over the 2005-2009 period, assuming 
appropriation of the estimated amounts. Enactment of the 
Committee bill might benefit public academic institutions in 
the form of grants for research. And the Commonwealth of 
Kentucky would benefit from the exclusive right to negotiate 
for the VA Medical Center in Louisville, KY if VA chooses to 
lease, convey, or dispose of the facility. Any costs to those 
institutions would be incurred voluntarily.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                                            Washington, DC,
                                                 September 2, 2004.
Hon. Arlen Specter,
Chairman, Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office 
hasprepared the enclosed cost estimate for S. 2485, the Department of 
Veterans Affairs Real Property Facilities Improvement 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.
            Sincerely,
                                     Douglas Holtz-Eakin, Director.

S. 2485--Department of Veterans Affairs Real Property and Facilities 
        Management Improvement Act of 2004

    Summary: S. 2485 would permanently extend the authority for 
the Department of Veterans Affairs A) to provide counseling to 
those veterans who have suffered from sexual trauma and would 
allow VA to provide care to newborn infants when the mother is 
a veteran receiving maternity care from the department. The 
bill also would extend, through the end of calendar year 2005, 
the authority for VA to provide long-term care for veterans 
already enrolled in certain pilot programs and would direct VA 
to create at least one center for research on blast injuries. 
Additionally, S. 2485 would create a new fund, the Department 
of Veterans Affairs Capital Asset Fund, that the department 
could use to pay for certain construction projects, subject to 
appropriation of the necessary amounts. Finally, the bill would 
allow both the Veterans Benefits Administration (VBA) and the 
National Cemetery Administration (NCA) to use enhanced-use 
lease authority.
    CBO estimates that implementing S. 2485 would cost $20 
million in 2005 and $110 million over the 2005-2009 period, 
assuming appropriation of the necessary amounts. CBO also 
estimates that enacting S. 2485 would increase direct spending 
for enhanced-use leases by $16 million over the 2005-2009 
period, and about $40 million over the 2005-2014 period.
    S. 2485 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Public academic institutions may benefit from grants for 
research and the state of Kentucky would benefit from exclusive 
rights to negotiate for the Louisville Medical Center if the VA 
chooses to lease, convey, or dispose of the facility; any costs 
to those institutions or the state would be incurred 
voluntarily.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2485 is summarized in Table 1. The costs 
of this legislation fall within budget function 700 (veterans 
benefits and services).

                               TABLE 1.--ESTIMATED COSTS TO THE FEDERAL GOVERNMENT
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                   CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 Estimated Authorization Level......................................       28       22       21       23       17
Estimated Outlays..................................................       20       25       24       24       17
                                            CHANGES IN DIRECT SPENDING
 Estimated Budget Authority.........................................        0        5       10        0        5
Estimated Outlays..................................................        0        1        5        5        5
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted before the end of calendar year 2004 and 
that the necessary amounts for implementing the bill will be 
appropriated each year.
    Spending subject to appropriation: CBO estimates that 
implementing S. 2485 would increase discretionary spending for 
veterans' medical care by $20 million in 2005 and $110 million 
over the 2005-2009 period, assuming appropriation of the 
necessary amounts (see Table 2).

                             TABLE 2.--SPENDING SUBJECT TO APPROPRIATION IN S. 2485
----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2004     2005     2006     2007     2008     2009
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
 Spending Under Current Law for Veterans' Medical Care:
    Estimated Authorization Level*........................   27,957   28,888   29,706   30,608   31,117   32,104
    Estimated Outlays.....................................   27,141   28,334   29,293   30,210   30,846   31,756
Proposed Changes:
    Sexual Trauma Counseling:
        Estimated Authorization Level.....................        0        7       11       11       12       12
        Estimated Outlays.................................        0        7       10       11       12       12
    Newborn Care:
        Estimated Authorization Level.....................        0        3        4        4        5        5
        Estimated Outlays.................................        0        3        4        4        5        5
    Centers for Blast Injuries:
        Estimated Authorization Level.....................        0        3        6        6        6        0
        Estimated Outlays.................................        0        3        6        6        6        0
    Capital Asset Fund:
        Estimated Authorization Level.....................        0       10        0        0        0        0
        Estimated Outlays.................................        0        2        4        3        1        0
    Pilot Program Extension:
        Estimated Authorization Level.....................        0        5        1        0        0        0
        Estimated Outlays.................................        0        5        1        0        0        0
    Total Changes:
        Estimated Authorization Level.....................        0       28       22       21       23       17
        Estimated Outlays.................................        0       20       25       24       24       17
Spending for Veterans' Medical Care Under S. 2485:
        Estimated Authorization Level.....................   27,957   28,916   29,728   30,629   31,140   32,121
        Estimated Outlays.................................   27,141   28,354   29,318   30,234   31,870   31,773
----------------------------------------------------------------------------------------------------------------
*The 2004 level is the amount appropriated for that year. No full-year appropriation has yet been provided for
  fiscal year 2005. The current-law amounts for the 2005-2009 period assume appropriations remain at the 2004
  level with adjustments for anticipated inflation.

    Sexual Trauma Counseling. Section 202 would permanently 
extend a provision allowing VA to provide counseling to 
veterans who suffered from sexual trauma while serving on 
active duty. Under current law, the authority to provide such 
counseling expires on December 31, 2004. Using information from 
VA, CBO estimates that about 2 percent (approximately 100,000) 
of veterans who received care from VA were eligible to receive 
counseling for sexual trauma in 2003. Data from VA, although 
incomplete, suggests that about 5,000, or 5 percent, of those 
eligible veterans received such counseling in 2003, at an 
average per capita cost of almost $2,000. Assuming that about 
this same number of veterans receives counseling for sexual 
trauma each year over the 2005-2009 period, CBO estimates that 
permanently extending this provision would cost $7 million in 
2005 and $52 million over the 2005-2009 period, assuming 
appropriation of the necessary amounts.
    Newborn Care. Section 204 would allow VA to provide care to 
newborn infants when the mother is a veteran receiving 
maternity care from VA. According to VA, a little more than 700 
women a year are expected to receive maternity care from VA. 
Based on data from VA, CBO estimates that the cost of providing 
neonatal care to those infants would be about $5,700 per infant 
in 2005. (providing neonatal care for most infants would cost 
much less; the high average cost is driven by those infants who 
require extensive care for longer periods of time.) Based on 
assumed enactment late in calendar year 2004, CBO estimates 
that implementing section 204 would cost $3 million in 2005 and 
$21 million over the 2005-2009 period, assuming appropriation 
of the necessary amounts.
    Centers for Blast Injuries. Section 205 would require VA to 
establish at least one, but not more than three, centers for 
research and study of blast injuries to provide better health 
care for veterans with such injuries. The provision would 
authorize $3 million in 2005 and $6 million for 2006, 2007, and 
2008 for these centers and would require that VA provide 
additional amounts if necessary. Based on information from VA, 
CBO believes that the authorized amounts would be sufficient to 
operate at least one center over the four years. Thus, CBO 
estimates that implementing this section would cost $3 million 
in 2005 and $21 million over the 2005-2008 period, assuming 
appropriation of the authorized amounts.
    Capital Asset Fund. Section 101 would make it easier for VA 
to dispose of real property to both public and private entities 
and would establish a new fund in the Treasury to be known as 
the Department of Veterans Affairs Capital Asset Fund. Under 
the bill, VA would be able to dispose of real property without 
the requirement to use the General Services Administration 
(GSA), though VA would still have to notify GSA of its intent 
to dispose of real property. The proceeds from property 
disposal would be deposited into the Capital Asset Fund and 
could be used to pay for costs associated with the transfer of 
property including demolition, environmental clean-up, and 
administrative expenses. However, expenditures from the fund 
would be subject to appropriation action. Thus, CBO does not 
expect that VA would increase its sales or other dispositions 
of real property.
    Section 101 also would authorize the appropriation of $10 
million to the Capital Asset Fund where it could be used for 
the purposes stated above. Using historical spending patterns 
for construction, CBO estimates that implementing this 
provision would cost $3 million in 2005 and $10 million over 
the 2005-2009 period, assuming appropriation of the authorized 
amount.
    Pilot Program Extension. Section 206 would allow VA to 
extend three pilot programs for long-term care through the end 
of calendar year 2005. According to VA, it spent about $5 
million in 2003 on these pilot programs. Thus, CBO estimates 
that implementing section 107 would cost about $5 million in 
2005 and $6 million over the 2005-2006 period, assuming the 
appropriation of the necessary amounts.

Direct spending

    Section 102 would permit both the VBA and the NCA to use 
enhanced-use leasing authority, which is only available to the 
Veterans Health Administration (VHA) under current law. With 
this enhanced-use leasing authority, VHA can lease land to 
private partners for up to 75 years, and in exchange these 
partners renovate or construct facilities on the land for the 
benefit of VHA. Although the partner is allowed to lease the 
facilities to non-VHA tenants, VHA has the priority for 
occupancy. In February 2003, CBO published a study, The 
Budgetary Treatment of Leases and Public/Private Ventures, that 
examined how VHA had used its enhanced-use leasing authority. 
That study found that VHA has used enhanced-use leases to 
acquire office buildings for its regional headquarters, parking 
facilities, nursing homes, and child care centers for its 
employees.
    Under its enhanced-use lease authority, VHA enters into an 
array of long-term agreements with a property developer who 
establishes a limited liability company, partnership, or other 
special-purpose entity, specifically for the purpose of 
renovating, constructing, operating, and maintaining the 
facilities for each project. These agreements establish 
government control over the project, protect the government's 
interests, and ensure that VHA will receive guaranteed access 
to whatever facility is being developed. For example, under its 
enhanced-use leasing authority, VHA was able to obtain a new 
regional headquarters facility in Chicago. Although VHA's 
initial lease was for two years, that lease is automatically 
renewed unless VHA decides to terminate the lease. Furthermore, 
VHA must cover all of the project's financing, as long as it 
maintains any presence in the building. Because agreements and 
leases like the one described in thisexample allow VHA to 
effectively acquire new buildings, CBO believes that the full cost of 
the project should be recorded up front in the budget. We assume that 
VBA and NCA would use enhanced use lease authority in a similar manner 
as VHA. Accordingly, CBO expects that an authorization to use enhanced-
use lease authority would result in new direct spending.
    Over the past 10 years, CBO estimates that VHA has entered 
into enhanced-use leases with a total value of more than $300 
million over that period, though VHA's activity has increased 
significantly in the last few years. Because the value of real 
property owned by both VBA and NCA is much less than VHA, the 
total value of enhanced-use leases for the two agencies would 
be correspondingly lower. Although we do not have information 
on leasing plans for VBA and NCA, we assume that over the next 
10 years VBA and NCA would use this authority to acquire three 
new office buildings and three other projects such as child 
care centers or parking facilities.
    Based on information from the General Services 
Administration, CBO estimates that each additional building 
would cost about $10 million. We assume that the smaller 
projects would cost about $5 million each. Accordingly, CBO 
estimates that enacting section 102 would increase direct 
spending for enhanced-use leases by $16 million over the 2005-
2009 period and about $40 million over the 2005-1014 period, as 
shown in Table 3. The timing of those projects is uncertain. 
Table 3 shows one plausible set of staggered acquisitions; 
actual project commitments could be either faster or slower 
than shown.
    Intergovernmental and private sector impact: S. 2485 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Public academic institutions may benefit from 
grants for research and the state of Kentucky would benefit 
from exclusive rights to negotiate for the Louisville Medical. 
Center if the VA chooses to lease, convey, or dispose of the 
facility; any costs to those institutions or the state would be 
incurred voluntarily.

                               TABLE 3.--CHANGES IN DIRECT SPENDING UNDER S. 2485
----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars--
                                           ---------------------------------------------------------------------
                                             2005   2006   2007   2008   2009   2010   2011   2012   2013   2014
----------------------------------------------------------------------------------------------------------------
Estimated Budget Authority................      0      5     10      0      5     10      0      5     10      0
Estimated Outlays.........................      0      1      5      5      5      5      5      5      5      5
----------------------------------------------------------------------------------------------------------------

    Previous CBO estimates: Many of the provisions in S. 2485 
are similar or identical to provisions in other bills recently 
estimated by CBO and have similar or identical costs. The 
differences in estimated costs between those estimates reflect 
differences in the bills.
    On June 4, 2004, CBO transmitted a cost estimate for H.R. 
4248, the Homeless Veterans Assistance Reauthorization Act of 
2004, as ordered reported by the House Committee on Veterans' 
Affairs on May 19, 2004. Section 3 of H.R. 4248, which would 
permanently extend the authority to provide counseling to 
veterans who suffered from sexual trauma, is almost identical 
to section 202 of S. 2485; the estimated costs for those two 
sections are identical. H.R. 4248 also contains a provision 
that would authorize increased spending for homeless veterans. 
S. 2485 does not contain a similar provision.
    On August 24, 2004, CBO transmitted a cost estimate for 
H.R. 4658, the Service members and Veterans Legal Protections 
Act of 2004, as ordered reported by the House Committee on 
Veterans' Affairs on July 21, 2004. Section 402 of H.R. 4658, 
which would allow VA to provide care to newborn infants when 
the mother is a veteran receiving maternity care from VA, is 
identical to section 204 of S. 2485, as are the estimated 
costs. H.R. 4658 contains other provisions regarding education, 
disability compensation, and pension benefits for veterans, as 
well as VA's fiduciary responsibilities. S. 2485 does not 
contain similar provisions.
    On August 26, 2004, CBO transmitted a cost estimate for 
H.R. 4768, the Veterans Health Programs and Facilities 
Enhancement Act of 2004, as ordered reported by the House 
Committee on Veterans' Affairs on July 21, 2004. section 102 of 
H.R. 4768, which would establish the Capital Asset Fund, is 
different in minor ways from section 101 of S. 2485, though the 
estimated costs are identical for the two sections. In 
addition, section 107 of H.R. 4768, which would extend the 
operation of certain pilot programs for long-term care, is 
similar to section 206 in S. 2485, and the estimated costs are 
the same. H.R. 4758 also contains provisions that would 
authorize the leasing of medical facilities and the creation of 
medical preparedness centers, while S. 2485 does not.
    Finally, S. 2485 contains a provision to create a center 
for the research and study of blast injuries that does not 
appear in any of the above bills.

                      Regulatory Impact Statement

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

                 Tabulation of Votes Cast by Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its July 22, 2004, meeting. On that date, 
the Committee, by unanimous voice vote, ordered S. 2485, as 
amended, a bill to improve and enhance the authorities of the 
Secretary of Veterans Affairs relating to the management and 
disposal of real property and facilities, and for other 
purposes, as amendment, reported favorably to the Senate.

                             Agency Report

    On June 22, 2004, Deputy Secretary of Veterans Affairs, the 
Honorably Gordon H. Mansfield, appeared before the Committee on 
Veterans' Affairs and submitted testimony on, among other 
things, S. 2486, as introduced, and also on the following 
additional bills from which provisions in S. 2485, as amended, 
are derived: S. 2099, S. 2522, and S. 2534. Excerpts from this 
statement are reprinted below:

   Statement of the Honorable Gordon Mansfield, Deputy Secretary of 
                            Veterans Affairs

    This bill contains provisions designed to improve VA's 
enhanced-use lease program under 38 U.S.C. Sec. Sec. 8161 et 
seq. We acknowledge the need to reform the enhanced-use (EU) 
leasing process to make it more efficient, as recommended by 
the Capital Asset Realignment for Enhanced Services (CARES) 
Commission's February 2004 report to the Secretary, and we 
appreciate the Committee's interest in this subject. We note 
that such interest already has led to inclusion of many of the 
bill's provisions in legislation enacted as Public Law 108-170 
(i.e., requiring only one notice to Congress of VA's intent to 
enter into an EU lease, reducing the congressional notice and 
review period before executing such lease from 90 to 45 days, 
reducing by the same number of days the congressional notice 
and review period regarding a planned disposal of EU leased 
property, giving the Secretary sole discretion and control of 
such property disposal by eliminating GSA involvement in the 
process, and authorizing use of EU lease proceeds to reimburse 
VA appropriations for expenses incurred in developing 
additional EU leases). That legislation, together with other 
initiatives we are pursuing, will help us to significantly 
reduce the time required to consummate these lease 
transactions.
    Mr. Chairman, we also appreciate the provisions that 
recognize our EU lease projects can and do involve initiatives 
not only of the Veterans Health Administration, but also of the 
Veterans Benefits Administration (VBA) and National Cemetery 
Administration (NCA). In this regard, section 3 would authorize 
EU leases implementing VBA and NCA business plans providing for 
applying lease consideration to programs and activities of 
those Administrations. Further, it would direct that net 
proceeds from VBA or NCA EU leases be credited to applicable 
appropriations of the affected Administration. We are studying 
the budgetary impact of the latter provision and, following 
executive-branch review, will advise the Committee of our 
views.
    Finally, should a Capital Asset Fund be established (as 
proposed under this bill), we would support having the proceeds 
from a disposal of EU lease property deposited into such fund 
as provided by this bill.
Disposal of VA Property
    S. 2485 would authorize VA to dispose of its excess real 
property by sale, transfer or exchange to a Federal agency, a 
state or political subdivision of a state or to any public or 
private entity and to retain the proceeds generated by the 
disposals. Under the proposal, the disposal of real property 
would be exempt from GSA's requirements in 40 U.S.C. 
Sec. Sec. 521, 522 and 541-545 and those in the McKinney-Vento 
Homeless Assistance Act (which provides that unused or 
underutilized Federal real property may be used to assist the 
homeless). VA would receive compensation equal to the fair 
market value of the property, and the proceeds would be 
deposited in a Capital Asset Fund (the ``Fund''), as provided 
for by this legislation. The bill would also terminate the 
Nursing Home Revolving Fund and deposit funds therein into the 
Fund.
    Amounts in the Fund would have to be used for the costs of 
actual or planned disposals of real estate, including 
demolition, environmental cleanup, necessary improvement to 
facilitate the sales, transfers or exchanges, and 
administrative expenses. They could also be used for non-
recurring VA capital projects.
    We support S. 2485 because it would eliminate an existing 
disincentive to the disposal of Departmental real property. 
Currently, VA must report all transfers of real property valued 
in excess of $50,000 (to another Federal agency or to a state 
or a political subdivision of a state for fair market value) in 
its annual budget document. This is administratively 
burdensome. Further, absent extension of current appropriations 
law allowing proceeds from the disposal of excessed property to 
be deposited in the Medical Care Collections Fund, provisions 
in title 38, United States Code, require such proceeds to be 
deposited into the Nursing Home Revolving Fund. S. 2485 would 
enhance VA's ability to manage Departmental capital resources, 
while promoting efficiencies and cost savings. However, we 
suggest the proposal be amended to provide that VA receive 
consideration not less than the fair market value of the 
disposed property to maximize the Government's return.
Limits on Disposal Authority
    S. 2485 would also limit VA's authority to dispose of real 
property in excess of the major medical facility project dollar 
limitation unless the disposal has been in the budget 
justification documents for the current fiscal year. The bill 
would also require VA to receive consideration equal to the 
fair market value of the property. Proceeds from disposals 
would be similarly deposited in the Fund.
    VA supports this proposal. However, we again recommend that 
the bill language be amended to require VA receive 
consideration that is not less than the fair market value of 
the property.
Advance Planning Funding for Major Medical Facilities
    S. 2485 would also exempt projects that have already been 
authorized by law from current statutory notice and wait 
requirements that apply to certain major medical facility 
projects. It would also do so for such projects that are 
included in the President's budget. VA supports this proposal.
National Cemetery Administration Property
    We are pleased that S. 2485 also includes VA's proposal to 
permit the leasing of unused or underutilized real property 
that is administered by the National Cemetery Administration. 
These leases would be limited to a maximum term of ten years. 
Leases to a public or non-profit organization would not be 
required to be advertised. Consideration for these leases could 
be monetary or, in whole or in part, maintenance, protection or 
restoration of the leased property. Proceeds would be deposited 
in a special account in the Treasury, The National Cemetery 
Administration Facilities Operation Fund (the ``NCA Fund''), 
and available until expended. The NCA Fund would consist of 
amounts appropriated by law, the proceeds from the leases of 
land or buildings or agricultural licenses, and any other 
amounts authorized by law. Again, we appreciate your inclusion 
of this VA proposal in the bill and strongly urge its 
enactment.
Co-payment Exemption for Hospice Care
    S. 2486 would exempt veterans receiving hospice care under 
VA's extended care services program from the requirement to 
agree to pay co-payments. We support section 311 but recommend 
that its scope be broadened to include hospice care provided in 
any treatment setting. Currently, veterans receiving hospice 
care through the Department may be subject to a co-payment, 
which can vary depending upon the type of VA facility or 
setting in which the care is given.
Permanent Authority for Sexual Trauma Care and Counseling Program
    This bill would also permanently authorize VA's sexual 
trauma care and counseling program. We strongly support this 
proposal, noting that it is identical to a legislative proposal 
we submitted to Congress in 2003. Making this particular 
treatment authority permanent is essential. The number of 
veterans seeking VA counseling and treatment for military 
sexual trauma continues to increase. Likewise, the number of 
women who serve in the Armed Forces, the Reserves, and the 
National Guard continues to grow. VA must be able to provide 
needed sexual trauma counseling and related health care to 
these current and future veterans without any lapse in program 
authority. We estimate there would be no additional costs 
associated with enactment of this section.
S. 2417--Newborn Care
    S. 2417 would authorize VA to provide care to newborn 
children of women veterans for whom VA furnishes maternity and 
delivery care. To receive this benefit, the mother must be 
enrolled in the VA health care system. Currently, VA has no 
authority to provide care to newborns, although VA provides 
maternity benefits as part of its medical benefits package.
    We strongly support this bill, which is identical to a 
legislative proposal we submitted to Congress in 2003. After 
childbirth, some veterans may need this limited benefit to give 
them time to apply for medical assistance. Offering this care 
would also be consistent with the normal pregnancy and delivery 
coverage in the community. The modest cost of the proposal was 
included in the President's Budget submitted earlier this year.
S. 2327--State Home Per Diem Payment--Relation to Medicaid
    For many years, a number of State homes have accepted both 
VA per diem payments for the care of veterans and Medicaid 
payments for those veterans without reducing the Medicaid 
payments by the amount of per diem payments. The Department of 
Health and Human Services (HHS) has determined that this 
practice violates its rules and is investigating whether to 
seek reimbursement. S. 2327 appears aimed at rectifying this 
situation by deeming that VA state home per diem payments 
``shall not be considered a liability of a third party, or 
otherwise be utilized to offset or reduce any other payment 
made to assist veterans.'' Because this bill would primarily 
impact the Medicaid program, we defer to the views of HHS on 
the matter.
S. 2296--Option for Commonwealth of Kentucky for Certain Property
    Mr. Chairman, S. 2296 would grant the Commonwealth of 
Kentucky a first option should the VA decide to convey, lease 
or otherwise dispose of the Louisville, KY Veterans Affairs 
Medical Center. This bill would require the VA to negotiate 
with the Commonwealth of Kentucky and restrict for one year the 
Department from negotiating with any other party.
    Let me note first of all that because VA does not presently 
have direct disposal authority, we do not currently have the 
authority to negotiate with the Commonwealth. However, as 
discussed earlier in my statement, we do support being given 
such disposal authority. Having said that, we, nonetheless, 
oppose this legislation because we believe it could prevent VA 
from achieving maximum value from disposal of the property 
should the property no longer be needed by VA. Achieving best 
value in a property transaction involves market timing and 
competition, and this proposal would remove both of these 
considerations.
S. 2133--Designation of Bronx VAMC
    This bill would designate the Bronx VAMC as the ``James J. 
Peters Department of Veterans Affairs Medical Center.'' We 
defer to Congress in the naming of federal property.

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

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

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


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

           *       *       *       *       *       *       *



   Subchapter II--Hospital, Nursing Home, or Domiciliary and Medical 
Treatment

           *       *       *       *       *       *       *



Sec. 1710B. Extended care services

           *       *       *       *       *       *       *


    (c)(1) * * *
    (2)(A) to a veteran whose annual income (determined under 
section 1503 of this title) is less than the amount in effect 
under section 1521(b) of this title; [or]
    (B) to a veteran being furnished hospice care under this 
section; or
    [(B)] (C) with respect to an episode of extended care 
services that a veteran is being furnished by the Department on 
November 30, 1999.

           *       *       *       *       *       *       *


Sec. 1720D. Counseling and treatment for sexual trauma

    (a)(1) [During the period through December 31, 2004, the 
Secretary] The Secretary shall operate a program under which 
the Secretary provides counseling and appropriate care and 
services to veterans who the Secretary determines require such 
counseling and care and services to overcome psychological 
trauma, which in the judgment of a mental health professional 
employed by the Department, resulted from a physical assault of 
a sexual nature, battery of a sexual nature, or sexual 
harassment which occurred while the veteran was serving on 
active duty.
    (2) In operating the program under paragraph (1), the 
Secretary shall also provide counseling and appropriate care 
and services to former members of the Reserves who the 
Secretary determines require such counseling and care and 
services to overcome psychological trauma, which in the 
judgment of such a mental health professional, resulted from a 
physical assault of a sexual nature, battery of a sexual 
nature, or sexual harassment which occurred while such 
individual was a member of the Reserves not serving on active 
duty.
    [(2)] (3) In furnishing counseling to [a veteran] an 
individual underthis subsection, the Secretary may [, during 
the period through December 31, 2004,] provide such counseling pursuant 
to a contract with a qualified mental health professional if (A) in the 
judgment of a mental health professional employed by the Department, 
the receipt of counseling by [that veteran] that individual in 
facilities of the Department would be clinically inadvisable, or (B) 
Department facilities are not capable of furnishing such counseling to 
[that veteran] that individual economically because of geographical 
inaccessibility.

           *       *       *       *       *       *       *

    (c) The Secretary shall provide information on the 
counseling and treatment available to veterans and other 
individuals under this section. Efforts by the Secretary to 
provide such information--
          (1) shall include availability of a toll-free 
        telephone number (commonly referred to as an 800 
        number);
          (2) shall ensure that information about the 
        counseling and treatment available to veterans and 
        other individuals under this section--
                  (A) is revised and updated as appropriate:
                  (B) is made available and visibly posted at 
                appropriate facilities of the Department; and
                  (C) is made available through appropriate 
                public information services; and
          (3) shall include coordination with the Secretary of 
        Defense seeking to ensure that individuals who are 
        being separated from active military, naval, or air 
        service are provided appropriate information about 
        programs, requirements, and procedures for applying for 
        counseling and treatment under this section.

           *       *       *       *       *       *       *


   Subchapter III--Miscellaneous Provisions Relating to Hospital and 
Nursing Home Care and Medical Treatment of Veterans

           *       *       *       *       *       *       *


Sec. 1730A. Annual reports on waiting times for appointments for care 
          and services
     * * * * * * *

Sec. 1730A. Annual reports on waiting times for appointments for care 
                    and services

    (a) Annual Reports.--Not later than January 31 each year, 
the Secretary shall submit to the Committees on Veterans' 
Affairs of the Senate and the House of Representatives a report 
on the waiting times of veterans for appointments for care and 
services from the Department under this chapter during the 
preceding year.
    (b) Report Elements.--Each report under subsection (a) 
shall specify, for the year covered by the report, the 
following:
          (1) A tabulation of the waiting time of veterans for 
        appointments with the Department for each category of 
        primary or specialty care or services furnished by the 
        Department, broken out by particular Department 
        facility and by Veterans Integrated Service Network.
          (2) An identification of the categories of specialty 
        care or services for which there are lengthy delays for 
        appointments at particular Department facilities or 
        throughout particular Veterans Integrated Service 
        Networks, and, for each category so identified, 
        recommendations for the reallocation of personnel, 
        financial, and other resources to address such delays.

           *       *       *       *       *       *       *


                 Subchapter V--Payments to State Homes


Sec. 1741. Criteria for payment

    (a) * * *

           *       *       *       *       *       *       *

    (e) Payments to States pursuant to this section shall not 
be considered a liability of a third party, or otherwise be 
utilized to offset or reduce any other payment made to assist 
veterans.

           *       *       *       *       *       *       *


Subchapter VIII--Health Care of Persons Other Than Veterans

           *       *       *       *       *       *       *


Sec. 1786. Care for newborn children of women veterans receiving 
          maternity care
     * * * * * * *

Sec. 1786. Care for newborn children of women veterans receiving 
                    maternity care

    The Secretary may furnish care to a newborn child of a 
woman veteran who is receiving maternity care furnished by the 
Department for up to 14 days after the birth of the child if 
the veterans delivered the child in a Department facility or in 
a non-Department facility pursuant to a Department contract for 
the delivery services.

CHAPTER 24--NATIONAL CEMETERIES AND MEMORIALS

           *       *       *       *       *       *       *


Sec. 2412. Lease of land and buildings

           *       *       *       *       *       *       *


Sec. 2412. Lease of Land and Buildings

    (a) Lease Authorized.--The Secretary may lease any 
undeveloped land and unused or underutilized buildings, or 
parts and parcels thereof, belonging to the United States and 
part of the National Cemetary Administration.
    (b) Term.--The term of a lease under subsection (a) may not 
exceed 10 years.
    (c) Lease to Public or Nonprofit Organizations.--(1) A 
lease under subsection (a) to any public or nonprofit 
organization may be made without regard to the provisions of 
section 3709 of the Revised Statutes (41 U.S.C. 5).
    (2) Notwithstanding section 1302 of title 40 or any other 
provision of law, a lease under subsection (a) to any public or 
nonprofit organization may provide for the maintenance, 
protection, or restoration of the leased property by the 
lessee, as part or all of the consideration for the lease.
    (d) Notice.--Before entering into a lease under subsection 
(a), the Secretary shall give appropriate public notice of the 
intention of the Secretary to enter into the lease in a 
newspaper of general circulation in the community in which the 
lands or building concerned are located.
    (e) National Cemetery Administration Facilities Operation 
Fund.--
          (1) There is established on the book of the Treasury 
        an account to be known as the ``National Cemetery 
        Administration Facilities Operation Fund'' (in this 
        section referred to as the ``Fund'').
          (2) The Fund shall consist of the following:
                  (A) Amounts authorized to be appropriated to 
                the Fund.
                  (B) Proceeds from the lease of land or 
                buildings under this section.
                  (C) Proceeds of agricultural licenses of 
                lands of the National Cemetery Administration.
                  (D) Any other amounts authorized for deposit 
                in the Fund by law.
          (3) Amounts in the Fund shall be available to cover 
        costs incurred by the National Cemetery Administration 
        in the operation and maintenance of property of the 
        Administration.
          (4) Amounts in the Fund shall remain available until 
        expended.

           *       *       *       *       *       *       *


CHAPTER 73--VETERANS HEALTH ADMINISTRATION--ORGANIZATION AND FUNCTIONS

           *       *       *       *       *       *       *



Subchapter II--General Authority and Administration

           *       *       *       *       *       *       *


Sec. 7327. Centers for research, education, and clinical activities on 
          blast injury
     * * * * * * *

Sec. 7312. Special medical advisory group

    (a) * * *

           *       *       *       *       *       *       *

    (d) Not later than February 1 of each year, the special 
medical advisory group shall submit to the Secretary and the 
Congress a report on the activities of the advisory group 
during the preceding fiscal year. No report shall be required 
under this subsection after [December 31, 2004] December 31, 
2009.

           *       *       *       *       *       *       *


Sec. 7327. Centers for research, education, and clinical activities on 
                    blast injuries

    (a) Purpose.--The purpose of this section is to provide for 
the improvement of the provision of health care services and 
related rehabilitation and education services to eligible 
veterans suffering from multiple traumas associated with a 
blast injury through--
          (1) the conduct of research to support the provision 
        of such services in accordance with the most current 
        evidence on blast injuries;
          (2) the education and training of health care 
        personnel of the Department; and
          (3) the development of improved models and systems 
        for the furnishing of services by the Department for 
        blast injuries
    (b) Establishment.--(1) The Secretary shall establish and 
operate at lease one, but not more than three, centers for 
research, education, and clinical activities on blast injuries.
    (2) Each center shall function as a center for--
          (A) research on blast injury to support the provision 
        of services in accordance with the most current 
        evidence on blast injuries, with such research to 
        specifically address injury epidemiology and cost 
        functional outcomes, blast injury taxonomy and 
        measurement system, and longitudinal outcomes;
          (B) the development of a rehabilitation program for 
        blast injuries, including referral protocol, post-acute 
        assessment, and coordination of comprehensive treatment 
        service;
          (C) the development of protocols to optimize linkages 
        between the Department and the Department of Defense on 
        matters relating to research, education, and clinical 
        activities on blast injuries;
          (D) the creation of innovative models for education 
        and outreach on healthcare and related rehabilitation 
        and education services on blast injuries, with such 
        education and outreach to target those who have 
        sustained a blast injury and health care providers and 
        researchers in the Veterans Health Administration, the 
        Department of Defense, and the Department of Homeland 
        Security;
          (E) the development of educational tools and products 
        on blast injuries, and the maintenance of such tools 
        and products in a resource clearinghouse that can serve 
        as resources for the Veterans Health Administration, 
        the Department of Defense, the Department of Homeland 
        Security, and other departments and agencies of the 
        federal government:
          (F) the development of interdisciplinary training 
        programs on the provision of health care and 
        rehabilitation care services for blast injuries that 
        provide an integrated understanding of the continuum of 
        care for such injuries to the broad range of providers 
        of such services, including first responders, acute 
        care providers, and rehabilitation service providers; 
        and
          (G) the implementation of strategies for improving 
        the medical diagnostic coding of blast injuries in the 
        Department to reliably identify veterans with blast 
        injuries and track outcomes over time,
    (3) The Secretary may designate a center on this section 
only if--
          (A) the proposal submitted for the designation of the 
        center meets the requirements of subsection (c);
          (B) the Secretary makes the findings described in 
        subsection (d); and
          (C) the peer review panel established under 
        subsection (e) makes the determination specified in 
        subsection (e)(3) with respect to that proposal.
    (c) Proposal Requirements.--A proposal submitted for the 
designation of a center under this subsection shall--
          (1) provide for close collaboration in the 
        establishment and operation of the center, and for the 
        provision of care and the conduct of research and 
        education at the center, by a Department facility or 
        facilities (in this subsection referred to as 
        `collaborating facilities') in the same geographic area 
        that have a mission centered on the care of individuals 
        with blast injuries and a Department facility in that 
        area which has a mission of providing tertiary care;
          (2) provide that not less than 50 percent of the 
        funds appropriated for the center for support of 
        clinical care, research, and education will be provided 
        to the collaborating facilities with respect to the 
        center; and
          (3) provide for a governance arrangement among the 
        facilities described in paragraph (1) with respect to 
        the center that ensures that the center will be 
        established and operated in a manner aimed at improving 
        the quality of care for blast injuries at the 
        collaborating facilities with respect to the center.
    (d) Finding Related to Proposals.--The finding referred to 
in subsection (b)(4)(B) with respect to a proposal for the 
designation of a site as a location of a center under this 
section is a finding by the Secretary, upon the recommendation 
of the Under Secretary for Health, that the facilities 
submitting the proposal have developed (or may reasonably be 
anticipated to develop) each of the following:
          (1) An arrangement with an affiliated accredited 
        medical school or university that provides education 
        and training in disaster preparedness, homeland 
        security, and bio-defense.
          (2) Comprehensive and effective treatment services 
        for head injury, spinal cord injury, audiology, 
        amputation, gait and balance, and mental health.
          (3) The ability to attract scientists who have 
        demonstrated achievement in research--
                  (A) into the evaluation of innovative 
                approaches to the rehabilitation of blast 
                injuries; or
                  (B) into the treatment of blast injuries
          (4) The capability to evaluate effectively the 
        activities of the center, including activities relating 
        to the evaluation of specific efforts to improve the 
        quality and effectiveness of services on blast injuries 
        that are provided by the Department at or through 
        individual facilities.
    (e) Department Support on Evaluation of Center Proposals.--
(1) In order to provide advice to assist the Secretary or Under 
Secretary for Health to carry out their responsibilities under 
this section, the official within the central office of the 
Veterans Health Administration responsible for blast injury 
matters shall establish a peer review panel to assess the 
scientific and clinical merit of proposals that are submitted 
to the Secretary for the designation of centers under this 
section.
    (2) The panel shall consist of experts in the fields of 
research, education and training, and clinical care on blast 
injuries. Members of the panel shall serve as consultants to 
the Department.
    (3) The panel shall review each proposal submitted to the 
panel by the official referred to in paragraph (1`) and shall 
submit to that official its views on the relative scientific 
and clinical merit of each such proposal. The panel shall 
specifically determine with respect to each such proposal 
whether or not that proposal is among those proposals which 
have met the highest competitive standards of scientific and 
clinical merit.
    (4) The panel shall not be subject to the Federal Advisory 
Committee Act (5 U.S.C. App.).
    (f) Award of Funding.--Clinical and scientific 
investigation activities at each center established under this 
section--
          (1) may compete for the award of funding from amount 
        appropriated for the Department for medical and 
        prosthetic research; and
          (2) shall receive priority in the award of funding 
        from such amounts insofar as funds are awarded from 
        such amounts to projects and activities relating to 
        blast injuries.
    (g) Dissemination of Information.--(1) The Under Secretary 
for Health shall ensure that information produced by the 
centers established under this section that may be useful for 
other activities of the Veterans Health Administration is 
disseminated throughout the Administration.
    (2) Information shall be disseminated under this subsection 
through publications, through programs of continuing medical 
and related education provided through regional medical 
education centers under subchaper VI of chapter 74 of this 
title, and through other means. Such programs of continuing 
medical education shall receive priority in the award of 
funding.
    (h) Supervision.--The official within the central office of 
the Veterans Health Administration responsible for blast injury 
mattersshall be responsible for supervising the operation of 
the centers established under this section and shall provide for 
ongoing evaluation of the centers and their compliance with the 
requirements of the section.
    (i) Authorization of Appropriations--(1) There are 
authorized to be appropriated to the Department of Veterans 
Affairs for the centers established under this section amounts 
as follows:
          (A) $3,125,000 for fiscal year 2005.
          (B) $6,250,000 for each of fiscal years 2006 through 
        2008.
    (2) In addition to amounts authorized to be appropriated by 
paragraph (1) for a fiscal year, the Under Secretary for Health 
shall allocate to each center established under this section, 
from other funds authorized to be appropriated for such fiscal 
year for the Department generally for medical and prosthetics 
research, such additional amounts as the Under Secretary 
determines appropriate to carry out the purpose of this section

           *       *       *       *       *       *       *


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


Subchapter I--Acquisition and Operation of Medical Facilities

           *       *       *       *       *       *       *


[Sec. 8816. Nursing Home Revolving Fund]
     * * * * * * *

Sec. 8104. Congressional approval of certain medical facility 
                    acquisitions

    (a) * * *

           *       *       *       *       *       *       *

    (g) The limitation specified in subsection (f) shall not 
apply to projects for which funds have already been authorized 
by law in accordance with subsection (a)(2).

Sec. 8109. Parking facilities

    (a) * * *

           *       *       *       *       *       *       *

    (j) Funds in a construction account or capital account that 
are available for a construction project or non-recurring 
maintenance project may be used for the construction or 
relocation of a surface parking lot incidental to such a 
project.

Sec. 8110. Operation of medical facilities

    (a) * * *

           *       *       *       *       *       *       *

    (e)(1) The Secretary may not implement a mission change for 
a medical facility (other than a mission change prescribed by 
the Secretary of the Capital Asset Realignment for Enhanced 
Services (CARES) initiative) until 90 days after the date on 
which the Secretary submits to the committees written notice of 
the mission change.
    (2) For purposes of this subsection, a mission change for a 
medical facility shall consist of any of the following:
          (A) Closure of the facility.
          (B) Consolidation of the facility.
          (C) An administration reorganization of the facility 
        covered by section 510(b) of this title.
    (3) Written notice of a mission change for a medical 
facility under paragraph (1) shall include--
          (A) an assessment of the impact of the mission change 
        on the population of veterans served by the facility;
          (B) a description of the availability and quality of 
        health care, including long-term care, mental health 
        care, and substance abuse programs, available in the 
        area served by the facility;
          (C) an assessment of the impact of the mission change 
        on the economy of the community in which the facility 
        is located; and
          (D) an analysis of any alternatives to the mission 
        change proposed by the community in which the facility 
        is located, organizations recognized by the Secretary 
        under section 5902 of this title, organizations that 
        represent Department employees in such community, or 
        the Department.
    (4) In the case of a mission change covered by paragraph 
(1) that is also an administrative reorganization covered by 
section 510(b) of this title, both this subsection and such 
section 510(b) shall apply with respect to the implementation 
of such mission change.
    [(e)] (f) The Secretary shall submit to the Committee on 
Veterans' Affairs of the Senate and the House of 
Representatives, not later than January 20 of each year, a 
report documenting by network for the preceding fiscal year the 
following:
          (1) The number of medical service and surgical 
        service beds, respectively, that were closed during 
        that fiscal year and, for each such closure, a 
        description of the changes in delivery of services that 
        allowed such closure to occur.
          (2) The number of nursing home beds that were the 
        subject of a mission change during that fiscal year and 
        the nature of each such mission change.
    [(f)] (g) For purposes of this section:
          (1) The term ``closure'', with respect to beds in a 
        medical center,means ceasing to provide staffing for, 
and to operate, those beds. Such term includes converting the provision 
of such bed care from care in a Department facility to care under 
contract arrangements.
          (2) The term ``bed section'', with respect to a 
        medical center, means psychiatric beds (including beds 
        for treatment of substance abuse and post-traumatic 
        stress disorder), intermediate, neurology, and 
        rehabilitation medicine beds, extended care (other than 
        nursing home) beds, and domiciliary beds.
          (3) The term ``justification'', with respect to 
        closure of beds, means a written report that includes 
        the following:
                  (A) An explanation of the reasons for the 
                determination that the closure is appropriate 
                and advisable.
                  (B) A description of the changes in the 
                functions to be carried out and the means by 
                which such care and services would continue to 
                be provided to eligible veterans.
                  (C) A description of the anticipated effects 
                of the closure on veterans and on their access 
                to care.

           *       *       *       *       *       *       *


[Sec. 8116. Nursing home revolving fund

    [(a)(1) Amounts realized from a transfer pursuant to 
section 8122(a)(2)(C) of this title shall be administered as a 
revolving fund and shall be available without fiscal year 
limitation.
    [(2) The revolving fund shall be deposited in a checking 
account with the Treasurer of the United States.
    [(b)(1) The expenditure of funds from the revolving fund 
may be made only for the construction, alteration, and 
acquisition (including site acquisition) of nursing home 
facilities and may be made only as provided for in 
appropriation Acts.
    [(2) For the purpose of section 8104(a)(2) of this title, a 
bill, resolution, or amendment which provides that funds in the 
revolving fund may be expended for a project involving a total 
expenditure of more than $2,000,000 for the construction, 
alteration, or acquisition (including site acquisition) of a 
nursing home facility shall be considered to be a bill, 
resolution, or amendment making an appropriation which may be 
expended for a major medical facility project.]

Sec. 8122. Authority to procure [and dispose of] property and to 
                    negotiate for common services

    (a)[(1)] The Secretary may lease for a term not exceeding 
three years lands or buildings, or parts or parcels thereof, 
belonging to the United States under the Secretary's control. 
Any lease made pursuant to this subsection to any public or 
nonprofit organization may be made without regard to the 
provisions of section 3709 of the Revised Statutes (41 U.S.C. 
5). Notwithstanding section 1302 of title 40, or any other 
provision of law, a lease made pursuant to this subsection to 
any public or nonprofit organization may provide for the 
maintenance, protection, or restoration, by the lessee, of the 
property leased, as a part or all of the consideration for the 
lease. Prior to the execution of any such lease, the Secretary 
shall give appropriate public notice of the Secretary's 
intention to do so in the newspaper of the community in which 
the lands or buildings to be leased are located. The proceeds 
from such leases, less expenses for maintenance, operation, and 
repair of buildings leased for living quarters, shall be 
covered into the Treasury of the United States as miscellaneous 
receipts.
    [(2)(A) Except as provided in paragraph (3) of this 
subsection, the Secretary may not during any fiscal year 
transfer to another Federal agency or to a State (or any 
political subdivision of a State) any interest in real property 
described in subparagraph (B) of this paragraph unless (i) the 
transfer (as proposed) was described in the budget for that 
fiscal year submitted to Congress pursuant to section 1105 of 
title 31, and (ii) the Department receives compensation equal 
to the fair market value of the property.
    [(B) An interest in real property described in this 
subparagraph is an interest in real property that is owned by 
the United States and administered by the Department and that 
has an estimated value in excess of $50,000.
    [(C) Amounts realized from the transfer of any interest in 
real property described in subparagraph (B) of this paragraph 
shall be deposited in the nursing-home revolving fund 
established under section 8116 of this title.
    [(3)(A) Subject to subparagraph (B) of this paragraph, the 
Secretary may, without regard to paragraph (2) of this 
subsection or any other provision of law relating to the 
disposition of real property by the United States, transfer to 
a State for use as the site of a State nursing-home or 
domiciliary facility real property described in subparagraph 
(E) of this paragraph which the Secretary determines to be 
excess to the needs of the Department.
    [(B) A transfer of real property may not be made under this 
paragraph unless--
          [(i) the Secretary has determined that the State has 
        provided sufficient assurance that it has the resources 
        (including any resources which are reasonably likely to 
        be available to the State under subchapter III of 
        chapter 81 of this title and section 1741 of this 
        title) necessary to construct and operate a State home 
        nursing or domiciliary care facility; and
          [(ii) the transfer is made subject to the conditions 
        (I) that the property be used by the State for a 
        nursing-home or domiciliary care facility in accordance 
        with the conditions and limitations applicable to State 
        home facilities constructed with assistance under 
        subchapter III of chapter 81 of this title, and (II) 
        that, if the property is used at any time for any other 
        purpose, all right, title, and interest in and to the 
        property shall revert to the United States.
    [(C) A transfer of real property may not be made under this 
paragraph until--
          [(i) the Secretary submits to the Committees on 
        Veterans' Affairs of the Senate and House of 
        Representatives, not laterthan June 1 of the year in 
which the transfer is proposed to be made (or the year preceding that 
year), a report providing notice of the proposed transfer; and
          [(ii) a period of 90 consecutive days elapses after 
        the report is received by those committees.
    [(D) A transfer under this paragraph shall be made under 
such additional terms and conditions as the Secretary considers 
appropriate to protect the interests of the United States.
    [(E) Real property described in this subparagraph is real 
property that is owned by the United States and administered by 
the Secretary.]

           *       *       *       *       *       *       *

    [(d) Real property under the jurisdiction of the Secretary 
may not be declared excess by the Secretary and disposed of by 
the General Services Administration or any other entity of the 
Federal Government unless the Secretary determines that the 
property is no longer needed by the Department in carrying out 
its functions and is not suitable for use for the provision of 
services to homeless veterans by the Department or by another 
entity under an enhanced-use lease of such property under 
section 8162 of this title.]

Sec. 8122A. Disposal of real property

    (a) Authority To Dispose of Real Property.--To the extent 
provided in advance in appropriations Acts, the Secretary may 
dispose of real property of the Department, including land and 
structures and equipment associated with such property, that is 
under the jurisdiction or control of the Secretary by--
          (1) transfer to or exchange with another department 
        or agency of the Federal Government;
          (2) conveyance to or exchange with a State or a 
        political subdivision of a State, an Indian tribe, or 
        another public entity; or
          (3) conveyance to or exchange with any private person 
        or entity.
    (b) Inapplicability of Certain Disposal Requirements.--The 
Secretary may exercise the authority in subsection (a) without 
regard to the following provisions of law:
          (1) Sections 521, 522, and 541 through 545 of title 
        40.
          (2) Section 501 of the McKinney-Vento Homeless 
        Assistance Act (42 U.S.C. 11411).
    (c) Limitation on Determination of Property To Be Excess.--
Real property under the jurisdiction of the Secretary may not 
be declared excess by the Secretary and disposed of by the 
General Services Administration or any other entity of the 
Federal Government unless the Secretary determines that the 
property is no longer needed by the Department in carrying out 
its functions and is not suitable for use for the provision of 
services to homeless veterans by the Department or by another 
entity under an enhanced-use lease of such property under 
section 8162 of this title.
    (d) Disposal Procedures.--(1) Except as provided in 
paragraph (3), the Secretary may not during any fiscal year 
dispose of real property (including land and structures and 
equipment associated with such property) owned by the United 
States and administered by the Secretary that has an estimated 
value in excess of the major medical facility project threshold 
specified in section 8104(a)(3)(A) of this title unless--
          (A) the disposal is described in the budget 
        justification documents submitted to Congress with the 
        budget of the President for the fiscal year beginning 
        in such year (as submitted pursuant to section 1105 of 
        title 31);
          (B) the Secretary--
                  (i) notifies the Administrator of General 
                Services of an intent to dispose of the 
                property;
                  (ii) publishes in the Federal Register notice 
                of an intent to dispose of the property; and
                  (iii) notifies the committees of an intent to 
                dispose of the property;
          (C) a period of 30 days elapses after notice under 
        subparagraph (B)(i) during which period no other 
        department or agency of the Federal Government 
        expresses an interest in assuming jurisdiction of the 
        property under the condition of paying the Secretary 
        the fair market value of the property, as determined by 
        the Secretary, of the property; and
          (D) a period of 60 days elapses after notice under 
        subparagraph (B)(iii).
    (2) Except as provided in paragraph (3), the Secretary may 
dispose of real property (including land structures and 
equipment associated with such property) owned by the United 
States and administered by the Secretary that has an estimated 
value less than the major medical facility project threshold 
specified in section 8104(a)(3)(A) of this title if--
          (A) the Secretary notifies the committees and the 
        Administrator of General Services of an intent to 
        dispose of the property;
          (B) the Secretary publishes a notice of sale in the 
        real estate section of a local newspaper of general 
        circulation serving the market in which the property is 
        located; and
          (C) a period of 30 days elapses after notice under 
        subparagraph (A) during which period no other 
        department or agency of the Federal Government 
        expresses an interest in assuming jurisdiction of the 
        property under the condition of paying the Secretary 
        the fair market value of the property, as determined by 
        the Secretary, of the property.
    (3)(A) Notwithstanding paragraphs (1) and (2) or any other 
provision of law relating to the disposition of real property 
by the United States and subject to subparagraph (B), the 
Secretary may transfer to a State for use as the site of a 
State nursing-home or domiciliary facility real property owned 
by the United States and administered by the Secretary that the 
Secretary determines to be excess to the needs of the 
Department.
    (B) A transfer of real property may not be made under this 
paragraph unless--
          (i) the Secretary has determined that the State has 
        provided sufficient assurance that it has the resources 
        (including any resources which are reasonably likely to 
        be available to the State under subchapter III of 
        chapter 81 of this title and section 1741 of this 
        title) necessary to construct and operate a State home 
        nursing or domiciliary care facility; and
          (ii) the transfer is made subject to the conditions 
        that--
                  (I) the property be used by the State for a 
                nursing home or domiciliary care facility in 
                accordance with the conditions and limitations 
                applicable to State home facilities constructed 
                with assistance under subchapter III of chapter 
                81 of this title; and
                  (II) if the property is used at any time for 
                any other purpose, all right, title, and 
                interest in and to the property shall revert to 
                the United States.
    (C) A transfer of real property may not be made under this 
paragraph until--
          (i) the Secretary submits to the committees, not 
        later than June 1 of the year in which the transfer is 
        proposed to be made (or the year preceding that year), 
        a report providing notice of the proposed transfer; and
          (ii) a period of 90 consecutive days elapses after 
        the report is received by the committees.
    (D) A transfer under this paragraph shall be made under 
such additional terms and conditions as the Secretary considers 
appropriate to protect the interests of the United States.
    (e) Consideration.--In any transfer, exchange, or 
conveyance under the authority in this section (other than a 
transfer described in subsection (d)(3)), the Secretary shall 
obtain consideration in an amount equal to the fair market 
value of the property, as determined by the Secretary.
    (f) Treatment of Proceeds.--Proceeds from the transfer, 
exchange, or conveyance of real property under this section 
shall be deposited in the Capital Asset Fund under section 
8122B of this title.
    (g) Reports.--The Secretary shall include with the budget 
justification documents submitted to Congress each year with 
the budget of the President for the fiscal year beginning in 
such year (as submitted pursuant to section 1105 of title 31) a 
report setting forth the following:
          (1) A statement of each disposal of real property to 
        be undertaken in such fiscal year that is valued in 
        excess of the major medical facility project threshold 
        specified in section 8104(a)(3)(A) of this title.
          (2) A description of each disposal of real property 
        that was completed in the fiscal year ending in the 
        year before such report is submitted.

Sec. 8122B. Capital Asset Fund

    (a) Capital Asset Fund.--There is established on the books 
of the Treasury of the United States a revolving fund known as 
the Capital Asset Fund (in this section referred to as the 
``Fund'').
    (b) Elements of Fund.--The Fund shall consist of the 
following:
          (1) Amounts authorized to be appropriated to the 
        Fund.
          (2) Proceeds from the transfer, exchange, or 
        conveyance of real property under subsection (a) of 
        section 8122A of this title that are deposited in the 
        Fund under subsection (f) of such section.
          (3) Funds to be deposited in the Fund under section 
        8165(a)(3) of this title.
          (4) Any other amounts specified for transfer to or 
        deposit in the Fund by law.
    (c) Use of Amounts in Fund.--Subject to the provisions of 
appropriations Acts, amounts in the Fund shall be available for 
purposes as follows and in the following order of priority:
          (1) For costs of the Department in disposing of real 
        property under sections 8122A and 8164 of this title, 
        including costs associated with demolition, 
        environmental clean-up, maintenance and repair, 
        improvements to facilitate disposal, and associated 
        administrative expenses.
          (2) For costs of the Department associated with 
        proposed disposals of real property of the Department 
        under such sections.
          (3) For costs of non-recurring capital projects of 
        the Department.

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Sec. 8162. Enhanced-use leases

    (a)(1) * * *
    (2) * * *
          (B) the Secretary determines that the implementation 
        of a business plan proposed by [the Under Secretary for 
        Health for applying the consideration under such a 
        lease to the provision of medical care and services] 
        one of the Under Secretaries for applying the 
        consideration under such a lease to the programs and 
        activities of the Department would result in a 
        demonstrable improvement of services to eligible 
        veterans in the geographic service-delivery area within 
        which the property is located.

           *       *       *       *       *       *       *

    (b)(1) * * *
    (4)(A) obtain facilities, space, or services [on the leased 
property]; and
    (B) use minor construction funds for capital contribution 
payments.

           *       *       *       *       *       *       *


Sec. 8164. Authority for disposition of leased property

    (a) If, during the term of an enhanced-use lease or within 
30 days after the end of the term of the lease, the Secretary 
determines that the leased property is no longer needed by the 
Department, the Secretary may initiate action for the transfer 
to the lessee of all right, title, and interest of the United 
States in the property. A disposition of property may not be 
made under this section unless the Secretary determines that 
the disposition under this section rather than under [section 
8122] section 8122A of this title is in the best interests of 
the Department.
    (b) The Secretary may dispose of property under this 
section without regard to the following provisions of law:
        (1) Sections 521, 522, and 541 through 545 of title 40.
        (2) Section 501 of the McKinney-Vento Homeless 
        Assistance Act (42 U.S.C. 11411).
    [(b)] (c) A disposition under this section may be made for 
such consideration as the Secretary determines is in the best 
interest of the United States and upon such other terms and 
conditions as the Secretary considers appropriate.
    [(c)] (d) Not less than 45 days before a disposition of 
property is made under this section, the Secretary shall notify 
the congressional veterans' affairs committees of the 
Secretary's intent to dispose of the property and shall publish 
notice of the proposed disposition in the Federal Register. The 
notice shall describe the background of, rationale for, and 
economic factors in support of, the proposed disposition 
(including a cost-benefit analysis summary) and the method, 
terms, and conditions of the proposed disposition.

Sec. 8165. Use of proceeds

    (a)(1) [Funds received] Except as provided in paragraph 
(2), funds received by the Department under an enhanced-use 
lease and remaining after any deduction from those funds under 
subsection (b) shall be deposited in the Department of Veterans 
Affairs Medical Care Collections Fund established under section 
1729A of this title.
    (2) Funds received by the Department under an enhanced-use 
lease implementing a business plan proposed by the Under 
Secretary for Benefits or the Under Secretary for Memorial 
Affairs and remaining after any deduction from such funds under 
subsection (b) shall be credited to applicable appropriations 
of the Veterans Benefits Administration or National Cemetery 
Administration, as the case may be.
    [(2)] (3) Funds received by the Department from a disposal 
of leased property under section 8164 of this title shall be 
deposited in the [nursing home revolving fund] Capital Asset 
Fund under section 8122B of this title.

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Sec. 1710B note. Pilot programs relating to Long Term Care

    (a) * * *

           *       *       *       *       *       *       *

    (h) Duration of Programs.--The authority of the Secretary 
to provide services under a pilot program under this section 
shall cease on [the date that is three years after the date of 
the commencement of that pilot program] December 31, 2005.

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