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115th Congress   ]                                   {    Rept. 115-35
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                   {          Part 1

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

 
 TO IMPROVE THE AUTHORITY OF THE SECRETARY OF VETERANS AFFAIRS TO HIRE 
AND RETAIN PHYSICIANS AND OTHER EMPLOYEES OF THE DEPARTMENT OF VETERANS 
                    AFFAIRS, AND FOR OTHER PURPOSES

                                _______
                                

 March 10, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Roe of Tennessee, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1367]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 1367) to improve the authority of the Secretary 
of Veterans Affairs to hire and retain physicians and other 
employees of the Department of Veterans Affairs, and for other 
purposes, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     9
Subcommittee Consideration.......................................     9
Committee Consideration..........................................     9
Committee Votes..................................................     9
Committee Correspondence.........................................    10
Committee Oversight Findings.....................................    12
Statement of General Performance Goals and Objectives............    12
Earmarks and Tax and Tariff Benefits.............................    12
Committee Cost Estimate..........................................    12
Budget Authority and Congressional Budget Office Estimate........    12
Federal Mandates Statement.......................................    12
Advisory Committee Statement.....................................    13
Constitutional Authority Statement...............................    13
Applicability to Legislative Branch..............................    13
Statement on Duplication of Federal Programs.....................    13
Disclosure of Directed Rulemaking................................    13
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill as Reported.............    20

                          Purpose and Summary

    H.R. 1367 was introduced by Representative Brad Wenstrup of 
Ohio, Chairman of the Committee on Veterans' Affairs 
Subcommittee on Health, on March 6, 2017.
    The bill would make a number of improvements to the 
Department of Veterans Affairs' (VA's) ability to identify 
staffing shortages, recruit and retain high-quality employees, 
and quickly on-board new hires.

                  Background and Need for Legislation


Section 2. Modification to annual determination of staffing shortages 
        in Veterans Health Administration

    Subsection 3304(a) of title 5, United States Code (U.S.C.), 
authorizes Federal agencies to appoint candidates without 
regard to certain hiring preferences and competitive service 
selection requirements directly to positions for which the 
Office of Personnel Management (OPM) has determine there is 
either a severe shortage of candidates or an identified 
critical hiring need. This is referred to as direct hiring 
authority.
    Committee oversight as well as Government Accountability 
Office (GAO) and VA Inspector General (IG) reports have found 
inadequate staffing and gaps in health care professional hiring 
at VA medical facilities nationwide. This can adversely impact 
care to veteran patients by creating or contributing to access 
issues and scheduling delays. In recognition of this, Congress 
acted in section 301 of the Veterans Access, Choice, and 
Accountability Act of 2014 (P.L. 113-146) to require the IG to 
annually identify and publish the five occupations of health 
care providers with the largest staffing shortages and 
authorize VA to utilize direct hiring authority to fill 
shortages for each of the five occupations identified. 
According to the latest such IG report, which was published on 
September 28, 2016, VA's largest critical need occupations are: 
(1) Medical Officer; (2) Nurse; (3) Psychologist and Physician 
Assistant (tied); and, (5) Physical Therapist and Medical 
Technologist (tied).\1\ According to the IG, the top five 
occupations from the two previous reports were identical to the 
2016 ranking with the exception of the addition of Medical 
Technologist.
---------------------------------------------------------------------------
    \1\Report no. 16-00351-453, VA Office of the Inspector General, 
``OIG Determination of VHA Occupational Staffing Shortages,'' September 
28, 2016. https://www.va.gov/oig/pubs/VAOIG-16-00351-453.pdf
---------------------------------------------------------------------------
    Section 2 of the bill would modify the annual determination 
of Veterans Health Administration (VHA) staffing shortages by 
including five clinical occupations and five non-clinical 
occupations within each VA medical center. The Committee 
believes this will allow for the identification of local 
staffing needs--which could vary significantly among VA medical 
facilities and improved utilization of direct hiring authority 
to address those needs, resulting in a VA healthcare staff that 
is better equipped to provide high-quality care to veteran 
patients.

Section 3. Executive Management Fellowship Program

    According to the 2016 Best Places to Work in the Federal 
Government survey--based on the nonpartisan Partnership for 
Public Service's analysis of OPM's Federal Employee Viewpoint 
Survey--VA ranks 17 out of 18 among large agencies in effective 
leadership, with a score of just 48.7 out of 100.\2\ Given that 
concerning fact, the Committee is committed to finding creative 
ways for VA employees with leadership potential to improve 
their skills through leadership development and training 
opportunities that could then be utilized in those employees' 
VA service. Various other Executive agencies have similarly 
sought to promote such opportunities through fellowship 
programs such as the White House Fellows Program and the State 
Department Franklin Fellows Program, which allow employees from 
the private sector to spend a year serving in the Federal 
government while their private sector employer continues to pay 
their salary and benefits. This provides a valuable influx of 
experience and knowledge without diverting resources from other 
priorities. The Committee believes that VA could benefit from 
such a fellowship program that would not only allow private 
sector employees the chance to work in VA but also allow 
emerging VA leaders to hone and enhance their skill sets in 
comparable private sector companies, contingent upon their 
agreement to return to VA employment for at least a certain set 
time period.
---------------------------------------------------------------------------
    \2\Partnership for Public Service, Best Places to Work in the 
Federal Government, http://bestplacestowork.org/BPTW/.
---------------------------------------------------------------------------
    Accordingly, Section 3 of the bill would establish an 
Executive Management Program to allow eligible VHA and Veterans 
Benefit Administration (VBA) employees the opportunity to take 
one-year fellowship positions in comparable private sector 
entities and eligible private sector employees to take one year 
fellowship positions in comparable VHA or VBA sites. The 
Committee believes this program will foster and facilitate a 
mutually-beneficial exchange of people, ideas, knowledge, and 
best practices between VA and comparable private sector 
entities, while providing VA employees with an additional 
leadership development opportunity that is vital to maintaining 
the long-term health of VA's workforce.

Section 4. Accountability of leaders in managing the Department of 
        Veterans Affairs

    As referenced for Section 3 above, VA ranked 17 out of 18 
among large Federal agencies in effective leadership according 
to the 2016 Best Places to Work survey.\3\ Since the 2014 VA 
nationwide access scandal, the Committee's legislative and 
oversight efforts have focused on increasing accountability for 
VA employees as a means of assessing leadership and 
strengthening the Department as a whole. Accordingly, the 
Committee has often reviewed performance plans for VA's many 
Senior Executive Service (SES) employees. However, while 
performance plans are required for career SES employees by 
subchapter II of Chapter 43 of title 5, U.S.C., political 
appointees are not required to undergo performance plans. As 
senior leaders, political appointees play a critical role in 
setting and achieving Departmental priorities and, as such, the 
Committee believes that they should be held accountable as well 
for their performance and achievements.
---------------------------------------------------------------------------
    \3\Partnership for Public Service, ``Best Places to Work Large 
Agency Rankings,'' Accessed March 9, 2017. http://bestplacestowork.org/
BPTW/rankings/overall/large
---------------------------------------------------------------------------
    Section 4 of the bill would require VA to conduct annual 
performance plans for VA political appointees. This would 
ensure that the Department's senior political appointees 
undergo a performance planning and appraisal process similar to 
that of the Department's career senior executives, which the 
Committee believes will assist in establishing a culture of 
accountability throughout VA and in restoring transparency and 
trust in the Department's senior leaders. Each performance plan 
would be required to contain assessments in the following 
areas: recruiting, selecting, and retaining well-qualified 
individuals for VA employment; engaging and motivating 
employees; training and developing employees and preparing them 
for future VA leadership roles; and, holding each manager 
accountable for addressing performance issues for the employees 
under their purview. The goal of the Committee, however, is not 
to provide performance awards to political appointees as a 
result of these new required performance plans. These plans 
would only serve to provide the Secretary and others a way to 
track the performance of these senior employees who are 
critical to the Department's overall mission and management.

Section 5. Modification to veterans preference

    One of the hallmarks of hiring within the civil service 
system is veterans' preference, which, in some form, dates back 
to the Civil War. The purpose of veterans' preference is to 
provide eligible veterans with an advantage when they compete 
with equally qualified non-veteran candidates for Federal 
employment. For decades, Congress has seen the benefit of 
rewarding those who serve by providing them with hiring 
preference in the Federal government. According to OPM, ``. . 
.[v]eterans' preference recognizes the economic loss suffered 
by citizens who have served their country in uniform, restores 
veterans to a favorable competitive position for government 
employment, and acknowledges the larger obligation owed to 
disabled veterans.''\4\ Under current law, there are several 
different categories of preference that are based on a 
veteran's time on active duty service or their disability 
rating.
---------------------------------------------------------------------------
    \4\U.S. Office of Personnel Management, ``VET Guide'' https://
www.opm.gov/policy-data-oversight/veterans-services/vet-guide-for-hr-
professionals/
---------------------------------------------------------------------------
    The Committee believes that the economy and the Federal 
government, as a whole, benefit from having more qualified 
veterans employed within their ranks. Unfortunately, there are 
certain segments of veterans and servicemembers that do not 
qualify for veterans' preference due to an outdated statute 
that does not accurately reflect the current characteristics of 
the U.S. Armed Forces. For example, section 2108 of title 5, 
U.S.C., requires that in order to receive veterans' preference, 
a national guardsman or reservist must have served at least180 
consecutive days on active duty. The Committee believes that 
this requirement is obsolete and does not take into account, 
the reality of the Department of Defense's utilization of the 
National Guard or Reserve components since September 11, 2001. 
In a statement for the record for a March 16, 2016, legislative 
hearing on this section, the Reserve Officers Association (ROA) 
indicated that, ``since September 11, 2001, more than 900,000 
members of our reserve components--the National Guard and 
Reserves of our Army, Navy, Air Force, Marines and Coast 
Guard--have served in support of the war on terrorism. More 
than 1,200 have died in that fight.\5\'' ROA's statement for 
the record also attested to the fact that it was not uncommon 
for individuals in the National Guard and Reserve components to 
serve less than 180 consecutive days on active duty service at 
any given point, therefore making them ineligible for veterans' 
preference benefits. The Committee believes that this is 
important to note, despite the unemployment rate for veterans 
continuing, on average, to be lower than their non-veteran 
counterparts, because there is a concern about the growing 
unemployment rate amongst members of the National Guard and 
Reserve.
---------------------------------------------------------------------------
    \5\Statement for the Record of the Reserve Officers Association for 
the House Committee on Veterans Affairs Subcommittee on Health and 
Subcommittee on Economic Opportunity Hearing, ``Legislative Hearing on 
draft legislation to improve the authority of the Secretary of Veterans 
Affairs to hire and retain physicians and other employees of the 
Department of Veterans Affairs,'' March 16, 2016. http://
docs.house.gov/meetings/VR/VR03/20160316/104606/HHRG-114-VR03-20160316-
SD011.pdf
---------------------------------------------------------------------------
    The Committee is also a concerned that section 2108 of 
title 5, U.S.C., does not allow for retired members of the 
Armed Forces to receive some form of veterans' preference. 
While the Committee agrees that veterans' preference was put in 
place mainly to assist enlisted servicemembers, the Committee 
believes that in today's growing economy, and with the reality 
that many military retirees do not ``retire'' from the 
workforce following their military service, there is no need to 
make the distinction between retirees and other veterans in 
providing veterans' preference eligibility.
    Therefore, to address both of these issues, Section 5 would 
amend section 2108 of title 5, U.S.C., to change the 
requirement that guardsmen and reservists must serve 180 
consecutive days on active duty to require that they instead 
serve 180 cumulative days on active duty to be eligible for 
veterans' preference. Additionally, this Section would further 
amend section 2108 of title 5 U.S.C., to allow retired members 
of the Armed Forces to qualify for veterans' preference. The 
Committee believes that these two changes are necessary to 
modernize this important benefit, bring needed skill sets to 
Federal service unique to those who have served in uniform, and 
potentially reduce the unemployment rates among this population 
of veterans.

Section 6. Reemployment of former employees

    Currently, former Federal employees who have left Federal 
service may be non-competitively reinstated only to a job at or 
below the grade level they last held. As a result, medical and 
other professionals who have left VA employment to gain 
valuable education and/or experience elsewhere cannot be 
considered for non-competitive reinstatement to a position 
above their prior grade level. This creates a disincentive for 
former employees to return to VA employment and utilize new 
skills to benefit veterans and assist in addressing the 
significant access and other challenges facing VA.
    To address this recruitment issue, Section 6 of the bill 
would allow VA to noncompetitively reappoint a former VA 
employee to a position not more than one grade higher than his 
or her former position as long as the employee left voluntarily 
within the prior two years, had a satisfactory performance 
record, and maintained necessary licensures and credentials. 
The Committee believes this will encourage experienced former 
employees to reconsider VA service while providing VA an 
additional recruitment tool and a talented applicant pool that 
can be quickly leveraged to meet immediate hiring needs.

Section 7. Recruiting database

    The Committee has long been concerned about the lack of 
stable leadership at many VA medical facilities. During an 
October 22, 2015, interview on CNN, then VA Deputy Secretary, 
Sloan Gibson, stated that, ``[m]ore than 50 percent of our 
senior leaders in the Veterans Health Administration have 
turned over in the last 24 months.'' When questioned by the 
Committee, VA has been unable to produce a plan to prioritize 
recruitment and retention for medical center leaders to address 
that turnover.
    Section 7 of the bill would require VA to establish a 
recruiting database listing each vacant position that VA 
determines is critical to its mission, is difficult to fill, or 
both. The database would contain information on qualified 
individuals who applied for a position within VA and were not 
chosen but could be qualified for other similar VA positions 
elsewhere. VA would be required to use the database of 
qualified applicants in an effort to fill prolonged vacant 
positions. The Committee believes such a database will assist 
VA in increasing the identification and hiring of qualified 
applicants system-wide for critical medical facility leadership 
positions.

Section 8. Human resources academy

    In late 2016, GAO found that, between the end of fiscal 
year 2011 and the end of fiscal year 2015, VHA lost 1,904 human 
resources (HR) staff to attrition, which is a reflection of a 
government-wide struggle to recruit and retain HR 
professionals.\6\ In VA's case, the Committee believes that VHA 
HR personnel are at an increased likelihood of departure due to 
burnout resulting from a failure to properly train HR officials 
on the intricacies of VHA hiring practices. VHA currently 
utilizes two personnel systems one for title 5 U.S.C., 
competitive service and another one for title 38, U.S.C. 
excepted service. Of the two, hiring authorities under title 
38, U.S.C., are unique to VHA and can be complex. In an effort 
to increase the retention of needed HR professionals and also 
increase the efficiency of hiring across VHA, Section 8 of the 
bill would require VA to train VHA HR professionals after their 
initial hire and annually thereafter on how to recruit and 
retain VHA employees, in general, and on recruitment and 
retention matters that are unique to VHA under title 38, 
U.S.C., specifically.
---------------------------------------------------------------------------
    \6\GAO-17-30, December 2016, ``Management Attention is Needed to 
Address Systemic, Long-standing Human Capital Challenges,'' http://
www.gao.gov/assets/690/681805.pdf
---------------------------------------------------------------------------

Section 9. Promotional opportunities for technical experts

    The Committee has a demonstrated interest in seeing VA 
retain high-quality employees and recognizes that many 
positions throughout the Department require a high-level of 
technical expertise. However, according to testimony from the 
Partnership for Public Service in 2016, ``[t]he rigid structure 
of the GS system requires employees to move into supervisory 
and management roles, even in cases where the employee may not 
have the skills or desire to perform as a manager but must take 
on such duties in order to advance in their career.''\7\ 
Requiring highly technical employees to either leave VA 
employment, remain in their current position indefinitely, or 
take on managerial roles for which they may be ill-suited and 
uninterested is not an effective recruitment or retention tool.
---------------------------------------------------------------------------
    \7\Testimony from the Partnership for Public Service, March 16, 
2016, ``Legislative Hearing on draft legislation to improve the 
authority of the Secretary of Veterans Affairs to hire and retain 
physicians and other employees of the Department of Veterans Affairs,'' 
https://veterans.house.gov/hearings/legislative-hearing-draft-
legislation-improve-authority-secretary-veterans-affairs-hire-0.
---------------------------------------------------------------------------
    To address this issue and create a pathway to promotion for 
high-performing employees in highly-technical positons, Section 
9 of the bill would require VA to establish a promotional track 
for technical experts that does not require transition to a 
managerial position. The Committee believes this will allow VA 
to retain needed, high-quality employees who desire to advance 
in their career without taking on management role within VA.

Section 10. Comptroller general study on succession planning

    Succession planning is a process for identifying and 
developing new leaders to replace those retiring or otherwise 
vacating their current roles. According to testimony from the 
Partnership for Public Service before the Subcommittees on 
Health and Economic Opportunity in March 2016, VA's 
considerable recruitment and retention issues are worsened by 
an aging workforce that is becoming increasingly retirement-
eligible.\8\ Given that, succession planning is particularly 
critical for VA to prevent gaps or a reduction in the quality 
of services provided to veterans as current employees depart. 
However, the Committee believes that VA's succession planning 
efforts across VHA, VBA, and the National Cemetery 
Administration (NCA) is in need of greater study.
---------------------------------------------------------------------------
    \8\Ibid.
---------------------------------------------------------------------------
    Section 10 of the bill would require GAO to study and 
report on succession planning for each medical facility within 
VHA as well as mission-critical positions within VBA and NCA. 
This study would include: a determination of the mission-
critical positions and the vacancy risk of such positions; an 
analysis of the future needs for the identified positions; and, 
strategies to fill gaps through training for existing staff, 
targeted recruitment and hiring.

Section 11. Information on hiring effectiveness

    In December 2016, GAO released a report, which found that 
VHA fell short of Federal standards for effective internal 
controls to support HR functions, compromising VHA's ability to 
deliver HR services and effectively serve veteran patients.\9\ 
This finding is consistent with the Committee's findings that 
VA and VHA HR employees in the field and in leadership often 
lack information regarding key measures that could indicate 
weaknesses in HR practices. GAO subsequently recommended that 
VA develop a plan to collect and apply leading HR practices 
within the Department, a finding with which the Committee 
concurs.
---------------------------------------------------------------------------
    \9\GAO-17-30, December 2016, ``Management Attention is Needed to 
Address Systemic, Long-standing Human Capital Challenges,'' http://
www.gao.gov/assets/690/681805.pdf 
---------------------------------------------------------------------------
    As such, Section 11 of the bill would require VA to collect 
information, indicators, and measurements on hiring 
effectiveness and employee satisfaction and submit an annual 
report to Congress on the information collected for each 
Veterans Integrated Service Network. Some of these indicators 
include: recruiting and hiring well-qualified talent from 
diverse talent pools, the use and impact of special hiring 
authorities and flexibilities to recruit the most qualified 
applicants (including the use of student internships as a 
talent pool for future hires), and the use and impact of 
special hiring authorities and flexibilities to recruit diverse 
candidates (including veteran, minority and disabled 
candidates). The Committee believes that this requirement will 
assist VA leaders and HR professionals in identifying 
shortcomings and targeting improvements as well as provide 
needed transparency to Congress, allowing the Committee to 
conduct better oversight of VA's HR functions.

Section 12. Employment of students and recent graduates

    As noted in Section 10 above, VA's existing workforce is 
aging and increasingly retirement eligible, creating concerns 
about the Department's ability to continue providing high-
quality benefits and services to future generations of 
veterans. Worryingly, in 2015, GAO found that 42% of VHA's 
overall senior leadership was eligible to retire and, by fiscal 
year 2019, one in five VA nurses would be eligible to 
retire.\10\ The Committee believes that improving the 
recruitment and retention of younger employees is critical to 
the Department's continued success. However, VA has 
historically performed poorly in comparison to other Federal 
agencies in hiring younger employees. According to OPM, in 
2015, 25.2% of new hires government-wide were under the age of 
30 compared to just 15.7% of VA's new hires. While VA has an 
important medical professional training mission that could be 
leveraged to recruit young providers to VA service, just 0.68% 
of VA's total workforce were under the age of 25 and just 5.35% 
were under the age of 30 in 2015.\11\
---------------------------------------------------------------------------
    \10\GAO-15-794, September 2015, ``Oversight Improvements Needed for 
Nurse Recruitment and Retention Initiatives,'' http://www.gao.gov/
assets/680/672839.pdf
    \11\Testimony from the Partnership for Public Service, March 16, 
2016, ``Legislative Hearing on draft legislation to improve the 
authority of the Secretary of Veterans Affairs to hire and retain 
physicians and other employees of the Department of Veterans Affairs,'' 
https://veterans.house.gov/hearings/legislative-hearing-draft-
legislation-improve-authority-secretary-veterans-affairs-hire-0
---------------------------------------------------------------------------
    To assist VA in bringing needed young employees on-board, 
Section 12 of the bill would require VA to promulgate 
regulations to allow for excepted service appointments for 
students and recent graduates leading to conversion to career 
or career conditional employment. The Committee is hopeful that 
this authority will be useful in creating a pipeline of younger 
professionals that will offset staffing shortages as the 
current VA workforce retires.

Section 13. Exit surveys

    Voluntary, anonymous exit surveys are an important tool to 
inform HR professionals and agency leaders about why departing 
employees choose to leave their current positions and, thus, 
how to better retain others in the workforce. While VHA has an 
existing exit survey process, the Committee believes that VHA 
currently does a lackluster job at administering exit surveys 
and often fails to request the completion of a survey from a 
departing employee, thus denying VHA the opportunity to improve 
retention moving forward. This is evidenced by a 2016 GAO 
finding that only an average of 30 percent of all clinical 
employees who leave have completed VHA's exit survey over the 
last five years.\12\ This is particularly concerning given that 
GAO also found that voluntary resignations accounted for an 
average of 54 percent of losses from VA's top five most 
critical shortage occupations from 2011 to 2015.\13\ Factors 
that lead to employee resignations cannot be addressed if they 
are not identified. To address this shortcoming, Section 13 of 
the bill would require VA to develop and conduct a 
standardized, anonymous exit survey to be voluntarily completed 
by VA employees who voluntarily elect to terminate their 
employment with the Department. The results of these surveys 
are to be compiled and shared with Congress in an annual 
report.
---------------------------------------------------------------------------
    \12\GAO-16-666R, July 29, 2016, ``Personnel Data Show Losses 
Increased for Clinical Occupations from Fiscal Year 2011 through 2015, 
Driven by Voluntary Resignations and Retirements,'' http://www.gao.gov/
products/GAO-16-666R.
    \13\Ibid.
---------------------------------------------------------------------------

                                Hearings

    There were no Subcommittee or Full Committee hearings held 
on H.R. 1367.

                       Subcommittee Consideration

    There was no Subcommittee consideration of H.R. 1367.

                        Committee Consideration

    On March 8, 2017, the Full Committee met in open markup 
session, a quorum being present, and ordered H.R. 1367 to be 
reported favorably to the House of Representatives by voice 
vote. A motion by Representative Tim Walz of Minnesota, Ranking 
Member of the Committee on Veterans' Affairs, to report H.R. 
1367 favorably to the House of Representatives was agreed to by 
voice vote.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, there were no recorded votes 
taken on amendments or in connection with ordering H.R. 1367 
reported to the House.


                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are to improve VA's ability to identify 
staffing shortages and recruit, retain, and quickly on-board 
high-quality employees to serve veteran patients and 
beneficiaries.

                  Earmarks and Tax and Tariff Benefits

    H.R. 1367 does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
this bill. However, clause 3(d)(3)(B) of that Rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974. The Committee has requested but not received a cost 
estimate for this bill from the Director of the Congressional 
Budget Office. The Committee believes that enactment of this 
bill would result in no additional direct spending over the 
2018-2022 period. Assuming the appropriation of authorized 
amounts, the Committee estimates that the legislation would 
also have a discretionary cost of $33 million over the 2018-
2022 period.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has requested 
but not received a cost estimate for this bill from the 
Director of Congressional Budget Office. The Committee has 
requested but not received from the Director of the 
Congressional Budget Office a statement as to whether this bill 
contains any new budget authority, spending authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures.

                       Federal Mandates Statement

    With respect to the requirements of Section 423 of the 
Congressional Budget and Impoundment Control Act (as amended by 
Section 101(a)(2) of the Unfunded Mandate Reform Act, P.L. 104-
4), the Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether the provisions of the reported bill include unfunded 
mandates.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
1367.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, H.R. 1367 is authorized by Congress' power to 
``provide for the common Defense and general Welfare of the 
United States.''

                  Applicability to Legislative Branch

    The Committee finds that H.R. 1367 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that no provision 
of H.R. 1367 establishes or reauthorizes a program of the 
Federal Government known to be duplicative of another Federal 
program, a program that was included in any report from the 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017), 
H.R. 1367 would require the Secretary of Veterans Affairs to 
prescribe regulations pursuant to Section 12 of the bill that 
would allow for excepted service appointments of students and 
recent graduates of qualifying educational institutions leading 
to conversion to career or career conditional employment at the 
Department of Veterans Affairs.

             Section-by-Section Analysis of the Legislation


Section 1. Table of contents

    Section 1 of the bill would establish the table of 
contents.

Section 2. Modification to annual determination of staffing shortages 
        in Veterans Health Administration

    Section 2 of the bill would amend section 7412(a) of title 
38 U.S.C. by striking ``five occupations'' and inserting ``the 
five clinical occupations and the five nonclinical 
occupations'' and striking ``throughout the Department'' and 
inserting ``with respect to each medical center of the 
Department.''

Section 3. Executive Management Fellowship Program

    Section 3(a) of the bill would amend chapter 7 of title 38 
U.S.C. by adding at the end the following new subchapter, 
``SUBCHAPTER III--EXECUTIVE MANAGEMENT FELLOWSHIP PROGRAM 
Sec. 741. Executive Management Fellowship Program''.
    Section 741(a) would establish an Executive Management 
Fellowship Program within VA with the purpose of providing 
eligible VHA and VBA employees with training and experience in 
the private sector and eligible private sector employees with 
training and experience in VA.
    Section 741(b) would stipulate that the fellowship 
established pursuant to section 741(b) would last for one year. 
The VA participant would receive training and experience at a 
private sector entity that is engaged in the administration and 
delivery of health care or other services similar to the 
benefits administered by the Secretary of Veterans Affairs. The 
private sector participant would receive training and 
experience at VBA or VHA. Section 741(b) would also require VA 
to enter into agreements with private-sector entities as are 
necessary to carry out this Section.
    Section 741(c) would require the Secretary, in August of 
each year, to select not fewer than 18 and not more than 30 
eligible employees of VBA and VHA and not fewer than 18 and not 
more than 30 eligible employees of private-sector entities to 
receive a fellowship pursuant to section 741(a). Section 741(c) 
would also require the Secretary, to the extent practicable, to 
select eligible employee to participate in the fellowship from 
among employees who are veterans in a manner that is reflective 
of the demographics of the veteran population of the United 
States.
    Section 741(d) would define an eligible employee with 
respect to a VBA or VBA employee, as an employee who: is 
compensated at a rate of basic pay not less than the minimum 
rate of basic pay payable for grade GS-14 of the General 
Schedule and not more than either the minimum rate of basic pay 
payable to a member of the Senior Executive Service under 
section 5382 of title 5 U.S.C. or the minimum rate of basic pay 
payable pursuant to chapter 74 of title 38 U.S.C. as the case 
may be; enters into an agreement with the Secretary under 
section 741(e); and, submits to the Secretary an application 
containing such information and assurances as the Secretary may 
require. Section 741(d) would define an eligible employee with 
respect to an employee of a private sector entity as an 
employee who: is employed in a position whose duties and 
responsibilities are commensurate with an eligible VA employee; 
enters into an agreement with the Secretary under section 
741(e); and, submits to the Secretary an application containing 
such information and assurances as the Secretary may require.
    Section 741(e) would require an agreement between the 
Secretary and a VA participant in the fellowship program 
established pursuant to section 741(a) to be in writing, to be 
signed by the participant, and to include the following: the 
Secretary's agreement to provide the participant with a 
fellowship agreement; the participant's agreement to accept the 
fellowship and to serve as a full-time employee in VBA or VHA 
for at least two years after completion of the fellowship as 
specified in the agreement and, that, during the two-year 
period beginning on the last day of the fellowship, the 
participant will not accept employment in the same industry of 
the private sector entity at which the participant accepts the 
fellowship; a statement of the damages to which the United 
States is entitled under this subchapter for the participant's 
breach of this agreement; and, such other terms as the 
Secretary determines are required to be included in the 
agreement. Section 741(e) also requires an agreement between 
the Secretary and a private sector participant to be in 
writing, to be signed by the participant, and to include the 
following provisions: the Secretary's agreement to provide the 
participant with a fellowship, the participant's agreement to 
accept the fellowship, and such other terms as the Secretary 
determines are required to be included in the agreement.
    Section 741(f) would require a VA participant to be 
considered a VA employee for all purposes, including for 
purposes of receiving a salary and benefits, and to remain 
eligible for all promotion and incentive programs otherwise 
available to such employee. Section 741(f) would also require a 
private sector participant to be considered an employee of the 
private sector entity that employs the participant for all 
purposes, including for purposes of receiving a salary and 
benefits, and to be treated as a VA contractor during the 
fellowship.
    Section 741(g) would, not later than 60 days after 
completing a fellowship, require the Secretary to submit a 
report on the fellowship describing the duties of the 
fellowship participants and any recommendations of the 
participant for the Secretary of industry processes, 
technologies, and best practices and to submit such report 
without change to the Committees on Veterans' Affairs of the 
House of Representatives and of the Senate no later than seven 
days after receiving such report.
    Section 741(h) would define the term ``Department 
participant'' as an employee of VBA or VHA who is participating 
in the fellowship pursuant to section 741 (a) and the term 
``private sector participant'' as an employee of a private 
sector entity who is participating in the fellowship pursuant 
to section 741 (a).
    Section 3(b) of the bill would require the Secretary to 
implement the Executive Management Fellowship Program required 
under section 741 of title 38 U.S.C. as added by Section 3(a) 
of the bill not later than 90 days after the date of enactment.
    Section 3(c) of the bill would amend the table of sections 
at the beginning of chapter 7 of title 38 U.S.C. by adding at 
the end the following new items, ``SUBCHAPTER III--EXECUTIVE 
MANAGEMENT FELLOWSHIP PROGRAM Sec. 741. Executive Management 
Fellowship Program''.

Section 4. Accountability of leaders in managing the Department of 
        Veterans Affairs

    Section 4(a) of the bill would amend chapter 7 of title 38 
U.S.C. by inserting after section 717 the following new 
section, ``Sec. 719. Annual performance plan for political 
appointees''.
    Section 719(a) would require the Secretary of Veterans 
Affairs to conduct an annual performance plan for each VA 
political appointee that is similar to the annual performance 
plan conducted for a VA employee who is appointed as a career 
appointee (as that term is defined in section 3132(a)(4) of 
title 5 U.S.C. within the VA Senior Executive Service.
    Section 719(b) would require each performance plan pursuant 
to section 719(a) to include an assessment of whether the 
appointee is meeting the following goals: recruiting, 
selecting, and retaining well-qualified individuals at VA; 
engaging and motivating employees; training and developing 
employees and preparing those employees for future leadership 
roles within VA; and, holding each VA employee that is a 
manager accountable for addressing issues relating to 
performance, in particular issues relating to the performance 
of employees that relate to the manager.
    Section 719(c) would define the term ``political 
appointee'' as a VA employee who holds a position which has 
been excepted from the competitive service by reason of its 
confidential policy-determining, policy-making, or policy-
advocating character or a position in the Senior Executive 
Service as a noncareer appointee as such term is defined in 
section 3132(a) of title 5 U.S.C.
    Section 4(b) of the bill would amend the table of sections 
at the beginning of chapter 7 of title 38 U.S.C. by amending 
after the item relating to section 717 the following new item, 
``Sec. 719. Annual performance plan for political appointees''.

Section 5. Modification to veterans preference

    Section 5(a) of the bill would amend section 2108(1)(B) and 
(D) of title 5 U.S.C. by striking ``consecutive'' and inserting 
``cumulative'' in every instance.
    Section 5(b) of the bill would amend section 2108(4) of 
title 5 U.S.C. to read as follows: ``(4) `preference eligible' 
includes a retired member of the armed forces; and''.

Section 6. Reemployment of former employees

    Section 6(a) of the bill would allow the Secretary of 
Veterans Affairs to noncompetitively appoint a qualified former 
employee to any position within the competitive service or any 
excepted service position under chapter 74 of title 38 U.S.C. 
at VA that is one grade higher than the grade of the position 
at VA most recently occupied by the employee.
    Section 6(b) of the bill would prohibit the Secretary from 
appointing a qualified former employee to a position that is 
more than one grade (or equivalent) higher than the position at 
VA most recently occupied by the employee.
    Section 6(c) of the bill would define the term ``qualified 
former employee'' to mean any individual who: formerly occupied 
any position at VA within two years of applying for 
reemployment at VA; voluntarily left such position or was 
subject to a reduction in force and had a satisfactory 
performance record; and, since leaving, has maintained 
licensing requirements related to the position, if any, and 
gained skill, knowledge, or other factors related to the 
position.

Section 7. Recruiting database

    Section 7(a) of the bill would establish a single database 
that lists each vacant position at VA that the Secretary of 
Veterans Affairs determines is critical to VA's mission, 
difficult to fill, or both.
    Section 7(b) of the bill would require the Secretary, at 
the election of the applicant, to consider the applicant for 
other similar vacant positions listed in the database 
established under Section 7(a) of the bill if the Secretary 
determines that the applicant for a vacant position listed in 
the database is qualified for such position but does not select 
the applicant for same.
    Section 7(c) of the bill would stipulate that, if the 
Secretary does not fill a vacant positon listed in the database 
established under Section 7(a) of the bill after a period 
determined appropriate by the Secretary, the Secretary is 
required to ensure that applicants described in Section 7(b) of 
the bill are considered for such position and are required to 
use the database established under Section 7(a) of the bill to 
assist in filling such position.
    Section 7(d) of the bill would require the Secretary to 
submit a report to Congress on the use and efficacy of the 
database established under Section 7(a) of the bill not later 
than one year after the date of enactment.

Section 8. Human Resources Academy

    Section 8(a) of the bill would require the Secretary of 
Veterans Affairs to provide VHA HR professionals training on 
how to best recruit and retain VHA employees, including with 
respect to any recruitment and retention matters that are 
unique to VHA pursuant to chapter 74 of title 38 U.S.C. or 
other provisions of law. Section 8(a) of the bill would also 
provide such training in manner in which the Secretary 
determines appropriate in light of budget, travel, and other 
constraints.
    Section 8(b) of the bill would require the Secretary to 
ensure that each VHA HR professional receives the training 
described in Section 8(a) of the bill as soon as practicable 
after being hired by the Secretary as a HR professional and 
annually thereafter.
    Section 8(c) of the bill would require the Secretary to 
ensure that each VHA HR professional, upon completion of the 
training described in Section 8(a) of the bill, certifies that 
the professional received the training and understands the 
information provided by the training.
    Section 8(d) of the bill would require the Secretary to 
submit the Committees on Veterans' Affairs of the House of 
Representatives and the Senate an annual report on the training 
described in Section 8(a) of the bill, including the cost of 
providing such training and the number of human resources 
professionals who received such training during the year 
covered by the report.

Section 9. Promotional opportunities for technical experts

    Section 9 of the bill would, not later than one year after 
the date of enactment, require the Secretary of Veterans 
Affairs to establish a promotional track system for VA 
employees that the Secretary determines are technical experts 
pursuant to regulations prescribed by the Secretary for 
purposes of carrying out this Section. The promotional track 
system is required to provide any such employee the opportunity 
to advance within VA without being required to transition to a 
management system and, for the purposes of achieving career 
advancement, provide for the establishment of new positions 
within VA and provide for increases in pay for any such 
employee, notwithstanding any other provision of law.

Section 10. Comptroller General study on succession planning

    Section 10(a) of the bill would require the Comptroller 
General of the United States to conduct a study on the 
succession planning conducted at each VA medical facility as 
well as the succession planning at VBA and NCA.
    Section 10(b) of the bill would require the study mandated 
under Section 10(a) of the bill to include, for each entity, 
the following: a determination of the mission-critical 
positions within the entity and the vacancy risk of such 
positions; an analysis of the future needs for mission-critical 
positions and gaps within the existing talent pool of the 
entity; a description of strategies to close skill gaps through 
the use of training for existing staff, targeted recruitment, 
and hiring; a plan to regularly evaluate progress of staff and 
update existing succession plans using clear and measurable 
metrics and benchmarks; a demonstration of the capacity of the 
entity to execute succession plans with successful succession 
management strategies; and, any other matters the Comptroller 
General determines appropriate.
    Section 10(c) of the bill would, not later than one year 
after the date of enactment, require the Comptroller General to 
submit to the Committees on Veterans' Affairs of the House of 
Representatives and of the Senate a report containing each 
study conducted under section 10(a) of the bill.

Section 11. Information on hiring effectiveness

    Section 11(a) of the bill would require the Secretary of 
Veterans Affairs to measure and collect the following 
information on indicators of hiring effectiveness: (1) with 
respect to recruiting and hiring, (A) the ability to reach and 
recruit well-qualified talent from diverse talent pools, 
including sources of candidates for mission-critical 
occupations, (B) the use and impact of special hiring 
authorities and flexibilities to recruit most qualified 
applicants, including the use of student internships as a 
talent pool for permanent hires, (C) the use and impact of 
special hiring authorities and flexibilities to recruit diverse 
candidates including veteran, minority, and disabled 
candidates, (D) the use and impact of special hiring 
authorities to recruit candidates for mission-critical 
occupations and occupations with shortages, (E) the age, 
educational level, and source of applicants, (F) the length of 
time between the date on which a position is advertised and the 
date on which a first offer of employment is made, (G) the 
length of time between the date on which a first offer of 
employment for a position is made and the date on which a new 
hire starts in that position, (H) the number of internal and 
external applicants for positions, (I) and the number of offers 
accepted compared to the number of offers made for permanent 
positions; (2) with respect to hiring authority, the 
satisfaction of the hiring authority with the quality of new 
hires, the match between the skills of newly hired individuals 
and the needs of VA, the hiring process and hiring outcomes 
after the first year of the new hire's employment, the length 
of time that elapses to fill a position for a new hire to begin 
working in a new positon, and mission-critical deficiencies 
filled by new hires and the connection between mission-critical 
deficiencies and annual agency performance; (3) satisfaction of 
employment applicants with the hiring process, including with 
respect to the clarity of the job announcement, reasons for 
withdrawal of applications, user-friendliness of the 
application process, communication regarding status of 
applications, and timeliness of hiring decisions; (4) with 
respect to a newly hired employee, (A) the satisfaction of the 
employee with the hiring process, (B) the satisfaction with the 
process of joining and becoming oriented with VA, including 
with respect to timeliness, the orientation process, and being 
provider with timely and useful new employee information and 
assistance after the hire is made but before the new hire 
starts and after the new hire has begun, (C) attrition and 
reasons for leaving, (D) investment in training and development 
for the employee during the first year of employment, (E) and 
significant barriers to effective recruitment, selection, 
joining, and becoming oriented with VA and retention of 
employees.
    Section 11(b) of the bill would, to the extent practicable 
and in a manner which protects personally identifiable 
information of applicants and employees, require the Secretary 
to collect and report the data collected pursuant to Section 
11(a) of the bill disaggregated by facility or Veterans 
Integrated Service Network.
    Section 11(c) of the bill would require the Secretary to 
submit to the Committees on Veterans' Affairs of the House of 
Representatives and Senate a report on the information 
collected pursuant to Section 11(a) of the bill on an annual 
basis. Section 11(c) of the bill would also require the 
Secretary to make publicly available the information collected 
pursuant to Section 11(a) of the bill in a consistent and 
machine-readable format to allow for a comparison of hiring 
effectiveness and experience by Veterans Integrated Service 
Network or comparable public or private sector organization.

Section 12. Employment of students and recent graduates

    Section 12(a) of the bill would require the Secretary to 
prescribe regulations to allow for excepted service 
appointments of students and recent graduates leading to 
conversion to career or career conditional employment of a 
student or recent graduate of a qualifying educational 
institution, as defined by the Department.
    Section 12(b) of the bill would require the conversion 
authority described in Section 12(a) of the bill to be 
applicable to individuals in good standing who are employed in 
a qualifying internship or fellowship program at VA; are 
employed by VA in a volunteer capacity and performing 
substantive duties comparable to those individuals in 
internships or fellowship programs and meet the required number 
of hours for conversion; or are employed by VA under a contract 
or agreement with an external non-profit organization and 
performing substantive duties comparable to those of 
individuals in internship or fellowship programs.
    Section 12(c) of the bill would, for the purposes of 
Section 12(b) of the bill, require the hours of work performed 
by an individual to be considered equal to those performed by 
an individual employed in a qualifying internship or fellowship 
program of VA.

Section 13. Exit surveys

    Section 13(a) of the bill would require VA to develop and 
carry out a standardized exit survey to be voluntarily 
completed by career and noncareer employees and executives at 
VA who voluntarily separate from VA. Section 13(a) would also 
require the exit survey to be developed in consultation with an 
appropriate non-VA entity with experience developing such 
surveys.
    Section 13(b) of the bill would require the survey to 
contain, at a minimum, the: reasons for leaving VA; efforts 
made by the supervisor of the employee to retain the 
individual; extent of job satisfaction and engagement during 
the employment; intent of the employee to either remain 
employed within the Federal government or to leave employment 
with the Federal government; and other matters the Secretary 
determines appropriate.
    Section 13(d) of the bill would require the Secretary to 
ensure that the results of the survey required by Section 13(a) 
of the bill are shared on an annual basis with directors and 
managers of VA and Veterans Integrated Service Network 
facilities.
    Section 13(e) of the bill would, not later than one year 
after the date of enactment, require the Secretary to submit to 
the Committees on Veterans' Affairs of the House of 
Representatives and the Senate a report containing aggregate 
results of the exit survey under Section 13(a) of the bill 
covering the year prior to the report and containing: an 
analysis of the most common reasons employees choose to leave 
VA; steps the Secretary is taking to improve retention, 
particularly for mission-critical occupations; the demographic 
characteristics of employees choosing to leave VA; any 
legislative barriers to improving employee retention; and the 
number of employees who took the exit survey under Section 
13(a) of the bill.

         Changes in Existing Law Made by the Bill, as Reported

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

                      TITLE 38, UNITED STATES CODE




           *       *       *       *       *       *       *
PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                          CHAPTER 7--EMPLOYEES


                 SUBCHAPTER I --GENERAL EMPLOYEE MATTERS

Sec.
701. Placement of employees in military installations.
     * * * * * * *
719. Annual performance plan for political appointees.
     * * * * * * *

         SUBCHAPTER III--EXECUTIVE MANAGEMENT FELLOWSHIP PROGRAM

741. Executive Management Fellowship Program.

           *       *       *       *       *       *       *


SUBCHAPTER I--GENERAL EMPLOYEE MATTERS

           *       *       *       *       *       *       *


Sec. 719. Annual performance plan for political appointees

  (a) In General.--The Secretary shall conduct an annual 
performance plan for each political appointee of the Department 
that is similar to the annual performance plan conducted for an 
employee of the Department who is appointed as a career 
appointee (as that term is defined in section 3132(a)(4) of 
title 5) within the Senior Executive Service at the Department.
  (b) Elements of Plan.--Each annual performance plan conducted 
under subsection (a) with respect to a political appointee of 
the Department shall include an assessment of whether the 
appointee is meeting the following goals:
          (1) Recruiting, selecting, and retaining well-
        qualified individuals for employment at the Department.
          (2) Engaging and motivating employees.
          (3) Training and developing employees and preparing 
        those employees for future leadership roles within the 
        Department.
          (4) Holding each employee of the Department that is a 
        manager accountable for addressing issues relating to 
        performance, in particular issues relating to the 
        performance of employees that report to the manager.
  (c) Definition of Political Appointee.--In this section, the 
term ``political appointee'' means an employee of the 
Department who holds--
          (1) a position which has been excepted from the 
        competitive service by reason of its confidential, 
        policy-determining, policy-making, or policy-advocating 
        character; or
          (2) a position in the Senior Executive Service as a 
        noncareer appointee (as such term is defined in section 
        3132(a) of title 5).

           *       *       *       *       *       *       *


        SUBCHAPTER III--EXECUTIVE MANAGEMENT FELLOWSHIP PROGRAM

Sec. 741. Executive Management Fellowship Program

  (a) Fellowship Program.--There is in the Department an 
Executive Management Fellowship Program. The purpose of the 
program shall be to provide--
          (1) eligible employees of the Veterans Benefits 
        Administration and the Veterans Health Administration 
        with training and experience in the private sector; and
          (2) eligible employees of a private-sector entity 
        with training and experience in the Department of 
        Veterans Affairs.
  (b) Fellowship.--(1) A fellowship provided under this section 
is a one-year fellowship during which--
          (A) with respect to a Department participant, the 
        participant receives training and experience at a 
        private-sector entity that is engaged in the 
        administration and delivery of health care or other 
        services similar to the benefits administered by the 
        Secretary; and
          (B) with respect to a private-sector participant, the 
        participant receives training and experience at the 
        Veterans Benefits Administration or the Veterans Health 
        Administration.
  (2) The Secretary shall enter into such agreements with 
private-sector entities as are necessary to carry out this 
section.
  (c) Selection of Recipients.--(1) In August of each year, the 
Secretary shall select--
          (A) not fewer than 18 and not more than 30 eligible 
        employees of the Veterans Benefits Administration and 
        the Veterans Health Administration to receive a 
        fellowship under this section; and
          (B) not fewer than 18 and not more than 30 eligible 
        employees of private-sector entities to receive a 
        fellowship under this section.
  (2) To the extent practicable, the Secretary shall select 
eligible employees under subparagraphs (A) and (B) of paragraph 
(1) from among eligible employees who are veterans in a manner 
that is reflective of the demographics of the veteran 
population of the United States.
  (d) Eligible Employees.--For the purposes of this section, an 
eligible employee is--
          (1) with respect to an employee of the Veterans 
        Benefits Administration or the Veterans Health 
        Administration, an employee who--
                  (A) is compensated at a rate of basic pay not 
                less than the minimum rate of basic pay payable 
                for grade GS-14 of the General Schedule and not 
                more than either the minimum rate of basic pay 
                payable to a member of the Senior Executive 
                Service under section 5382 of title 5, United 
                States Code, or the minimum rate of basic pay 
                payable pursuant to chapter 74 of this title, 
                as the case may be;
                  (B) enters into an agreement with the 
                Secretary under subsection (e); and
                  (C) submits to the Secretary an application 
                containing such information and assurances as 
                the Secretary may require; and
          (2) with respect to an employee of a private-sector 
        entity, an employee who--
                  (A) is employed in a position whose duties 
                and responsibilities are commensurate with an 
                employee of the Department described in 
                paragraph (1);
                  (B) enters into an agreement with the 
                Secretary under subsection (e); and
                  (C) submits to the Secretary an application 
                containing such information and assurances as 
                the Secretary may require.
  (e) Agreements.--(1) An agreement between the Secretary and a 
Department participant shall be in writing, shall be signed by 
the participant, and shall include the following provisions:
          (A) The Secretary's agreement to provide the 
        participant with a fellowship under this section;
          (B) The participant's agreement--
                  (i) to accept the fellowship;
                  (ii) after completion of the fellowship, to 
                serve as a full-time employee in the Veterans 
                Benefits Administration or the Veterans Health 
                Administration for at least two years as 
                specified in the agreement; and
                  (iii) that, during the two-year period 
                beginning on the last day of the fellowship, 
                the participant will not accept employment in 
                the same industry as the industry of the 
                private-sector entity at which the participant 
                accepts the fellowship.
          (C) A provision that any financial obligation of the 
        United States arising out of an agreement entered into 
        under this subchapter, and any obligation of the 
        participant which is conditioned on such agreement, is 
        contingent upon funds being appropriated.
          (D) A statement of the damages to which the United 
        States is entitled under this subchapter for the 
        participant's breach of the agreement.
          (E) Such other terms as the Secretary determines are 
        required to be included in the agreement.
  (2) An agreement between the Secretary and a private-sector 
participant shall be in writing, shall be signed by the 
participant, and shall include the following provisions:
          (A) The Secretary's agreement to provide the 
        participant with a fellowship under this section.
          (B) The participant's agreement to accept the 
        fellowship.
          (C) Such other terms as the Secretary determines are 
        required to be included in the agreement.
  (f) Treatment of Recipients.--(1) A Department participant 
shall be considered an employee of the Department for all 
purposes, including for purposes of receiving a salary and 
benefits, and shall remain eligible for all promotion and 
incentive programs otherwise available to such an employee.
  (2) A private-sector participant shall be considered an 
employee of the private-sector entity that employs the 
participant for all purposes, including for purposes of 
receiving a salary and benefits, and during the fellowship 
shall be treated as a contractor of the Department.
  (g) Reports.--Not later than 60 days after completing a 
fellowship under this section, a recipient of the fellowship 
shall submit to the Secretary a report on the fellowship. Each 
such report shall describe the duties of the recipient during 
the fellowship and any recommendations of the recipient for the 
application by the Secretary of industry processes, 
technologies, and best practices. Not later than seven days 
after receiving each such report, the Secretary shall submit to 
the Committees on Veterans' Affairs of the Senate and House of 
Representatives such report without change.
  (h) Definitions.--In this section:
          (1) The term ``Department participant'' means an 
        employee of the Veterans Benefits Administration or the 
        Veterans Health Administration who is participating in 
        the fellowship under this section.
          (2) The term ``private-sector entity'' includes an 
        entity operating under a public-private partnership.
          (3) The term ``private-sector participant'' means an 
        employee of a private-sector entity who is 
        participating in the fellowship under this section.

           *       *       *       *       *       *       *


PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

           *       *       *       *       *       *       *


         CHAPTER 74--VETERANS HEALTH ADMINISTRATION - PERSONNEL

SUBCHAPTER I--APPOINTMENTS

           *       *       *       *       *       *       *


Sec. 7412. Annual determination of staffing shortages; recruitment and 
                    appointment for needed occupations

  (a) In General.--Not later than September 30 of each year, 
the Inspector General of the Department shall determine, and 
the Secretary shall publish in the Federal Register, [the five 
occupations] the five clinical occupations and the five 
nonclinical occupations of personnel of this title of the 
Department covered under section 7401 of this title for which 
there are the largest staffing shortages [throughout the 
Department] with respect to each medical center of the 
Department, as calculated over the five-year period preceding 
the determination.
  (b) Recruitment and Appointment.--Notwithstanding sections 
3304 and 3309 through 3318 of title 5, the Secretary may, upon 
a determination by the Inspector General under subsection (a) 
that there is a staffing shortage throughout the Department 
with respect to a particular occupation, recruit and directly 
appoint, during the fiscal year after the fiscal year during 
which such determination is made, qualified personnel to serve 
in that particular occupation for the Department.

           *       *       *       *       *       *       *

                              ----------                              


                      TITLE 5, UNITED STATES CODE



           *       *       *       *       *       *       *
PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART A--GENERAL PROVISIONS

           *       *       *       *       *       *       *


CHAPTER 21--DEFINITIONS

           *       *       *       *       *       *       *


Sec. 2108. Veteran; disabled veteran; preference eligible

   For the purpose of this title--
          (1) ``veteran'' means an individual who--
                  (A) served on active duty in the armed forces 
                during a war, in a campaign or expedition for 
                which a campaign badge has been authorized, or 
                during the period beginning April 28, 1952, and 
                ending July 1, 1955;
                  (B) served on active duty as defined by 
                section 101(21) of title 38 at any time in the 
                armed forces for a period of more than 180 
                [consecutive] cumulative days any part of which 
                occurred after January 31, 1955, and before 
                October 15, 1976, not including service under 
                section 12103(d) of title 10 pursuant to an 
                enlistment in the Army National Guard or the 
                Air National Guard or as a Reserve for service 
                in the Army Reserve, Navy Reserve, Air Force 
                Reserve, Marine Corps Reserve, or Coast Guard 
                Reserve;
                  (C) served on active duty as defined by 
                section 101(21) of title 38 in the armed forces 
                during the period beginning on August 2, 1990, 
                and ending on January 2, 1992; or
                  (D) served on active duty as defined by 
                section 101(21) of title 38 at any time in the 
                armed forces for a period of more than 180 
                [consecutive] cumulative days any part of which 
                occurred during the period beginning on 
                September 11, 2001, and ending on the date 
                prescribed by Presidential proclamation or by 
                law as the last date of Operation Iraqi 
                Freedom;
        and, except as provided under section 2108a, who has 
        been discharged or released from active duty in the 
        armed forces under honorable conditions;
          (2) ``disabled veteran'' means an individual who has 
        served on active duty in the armed forces, (except as 
        provided under section 2108a) has been separated 
        therefrom under honorable conditions, and has 
        established the present existence of a service-
        connected disability or is receiving compensation, 
        disability retirement benefits, or pension because of a 
        public statute administered by the Department of 
        Veterans Affairs or a military department;
          (3) ``preference eligible'' means, except as provided 
        in paragraph (4) of this section or section 2108a(c)--
                  (A) a veteran as defined by paragraph (1)(A) 
                of this section;
                  (B) a veteran as defined by paragraph (1)(B), 
                (C), or (D) of this section;
                  (C) a disabled veteran;
                  (D) the unmarried widow or widower of a 
                veteran as defined by paragraph (1)(A) of this 
                section;
                  (E) the wife or husband of a service-
                connected disabled veteran if the veteran has 
                been unable to qualify for any appointment in 
                the civil service or in the government of the 
                District of Columbia;
                  (F) the parent of an individual who lost his 
                or her life under honorable conditions while 
                serving in the armed forces during a period 
                named by paragraph (1)(A) of this section, if--
                          (i) the spouse of that parent is 
                        totally and permanently disabled; or
                          (ii) that parent, when preference is 
                        claimed, is unmarried or, if married, 
                        legally separated from his or her 
                        spouse;
                  (G) the parent of a service-connected 
                permanently and totally disabled veteran, if--
                          (i) the spouse of that parent is 
                        totally and permanently disabled; or
                          (ii) that parent, when preference is 
                        claimed, is unmarried or, if married, 
                        legally separated from his or her 
                        spouse; and
                  (H) a veteran who was discharged or released 
                from a period of active duty by reason of a 
                sole survivorship discharge (as that term is 
                defined in section 1174(i) of title 10);
        but does not include applicants for, or members of, the 
        Senior Executive Service, the Defense Intelligence 
        Senior Executive Service, the Senior Cryptologic 
        Executive Service, or the Federal Bureau of 
        Investigation and Drug Enforcement Administration 
        Senior Executive Service;
          [(4) except for the purposes of chapters 43 and 75 of 
        this title, ``preference eligible'' does not include a 
        retired member of the armed forces unless--
                  [(A) the individual is a disabled veteran; or
                  [(B) the individual retired below the rank of 
                major or its equivalent; and]
          (4) ``preference eligible'' includes a retired member 
        of the armed forces; and
          (5) ``retired member of the armed forces'' means a 
        member or former member of the armed forces who is 
        entitled, under statute, to retired, retirement, or 
        retainer pay on account of service as a member.

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