SEC. 2. INDEPENDENT AUTHORITY OF THE SECRETARY OF 
VETERANS AFFAIRS TO ENTER INTO LEASES 
FOR MAJOR MEDICAL FACILITIES; ESTAB-
LISHMENT OF VETERANS LEASING FUND. 
(a) INDEPENDENT AUTHORITY.—Section 8103 of 
title 38, United States Code, is amended by adding at the 
end the following new subsections: 
‘‘(i) INDEPENDENT LEASING AUTHORITY.—(1) Not-
withstanding section 3307 of title 40, the Secretary may 
enter into a lease for any major medical facility (as defined 
in section 8104 of this title) without delegation from the 
Administrator of General Services, if the prospectus for 
such a lease has been— 
‘‘(A) approved by the Committees on Veterans’ 
Affairs of the House of Representatives and the Sen-
ate; and 
‘‘(B) transmitted concurrently to— 
‘‘(i) the Committee on Transportation and 
Infrastructure of the House of Representatives; 
and 
‘‘(ii) the Committee on Environment and 
Public Works of the Senate. 
‘‘(2)(A) The firm term of a lease under this sub-
section may not exceed 20 years. No lease under this sub-
section may be extended beyond the firm term unless— 
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‘‘(i) such extension is authorized in the pro-
spectus; or 
‘‘(ii) Congress approves such extension. 
‘‘(B) For purposes of this paragraph, the term ‘firm 
term’ means the initial, non-cancellable lease period ap-
proved in the prospectus. 
‘‘(3) A lease under this subsection— 
‘‘(A) may be executed only to the extent and in 
the amount provided in advance in the Veterans 
Leasing Fund established by subsection (j); and 
‘‘(B) shall be scored and funded in accordance 
with Office of Management and Budget Circular A– 
11. 
‘‘(4)(A) In exercising the authority under this sub-
section, the Secretary shall, for each purpose-built medical 
facility constructed pursuant to a lease awarded under this 
subsection in each locality, submit to Congress accurate, 
market-based cost estimates. Such estimates shall— 
‘‘(i) account for construction costs, material 
costs, and land acquisition costs; and 
‘‘(ii) be informed by qualified sources, including 
licensed appraisers, valuation experts, professional 
estimating firms, or commercial real estate firms. 
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‘‘(B) The Secretary may also request technical assist-
ance from the Administrator of General Services with re-
spect to market surveys, cost estimation, or lease scoring. 
‘‘(C) If, at any point in the procurement process (in-
cluding during cost estimation, the expression of interest 
phase, or upon receipt of pricing from offerors) projected 
costs exceed approved estimates by more than ten percent, 
or exceed any congressional budget authority, the Sec-
retary shall, not later than 30 days after the date on which 
the Secretary is notified of such projected costs, submit 
to the Committees on Veterans’ Affairs of the House of 
Representatives and the Senate, the Committee on Trans-
portation and Infrastructure of the House of Representa-
tives, and the Committee on Environment and Public 
Works a notification that such projected costs exceed ap-
proved estimates or congressional budget authority, as the 
case may be. 
‘‘(j) VETERANS LEASING FUND.—(1) There is estab-
lished in the Treasury a revolving fund to be known as 
the ‘Veterans Leasing Fund’ (in this subsection referred 
to as the ‘Fund’). 
‘‘(2) There shall be deposited in the Fund— 
‘‘(A) amounts appropriated for the purpose of 
carrying out the independent leasing authority under 
subsection (i); and 
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‘‘(B) amounts transferred, on a reimbursable or 
nonreimbursable basis, from the ‘Medical Facilities’ 
account of the Department (or any successor ac-
count) for the payment of annual rent, taxes, or op-
erating costs for leases executed under subsection 
(i). 
‘‘(3) Amounts in the Fund are hereby made available 
as contract authority to enter into obligations to carry out 
subsection (i), including obligations in advance of receipts. 
‘‘(4) The Secretary may obligate amounts in the 
Fund for rental payments, tenant improvements, real-es-
tate taxes, operating expenses, and pre-award due dili-
gence costs, including design, environmental, and profes-
sional service fees associated with leases entered into pur-
suant to subsection (i). 
‘‘(5) The Secretary shall include, in the annual budg-
et justification materials submitted to Congress in support 
of the Department— 
‘‘(A) the projected unobligated balance of the 
Fund; 
‘‘(B) new obligations; and 
‘‘(C) collections for the year covered by such 
budget justification materials and the four fiscal 
years succeeding such year. 
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‘‘(k) ONE-YEAR TARGET FOR LEASE AWARDS; AN-
NUAL REPORT.—(1) The Secretary shall, to the maximum 
extent practicable, award a lease for a major medical facil-
ity not later than not later than the end of the one year 
period beginning on the date on which the Secretary issues 
a solicitation for the lease agreement. 
‘‘(2) The Secretary shall revise internal guidance, 
milestone reviews, and approval workflows to— 
‘‘(A) support the requirement under paragraph 
(1); and 
‘‘(B) eliminate duplicative or sequential reviews 
that delay procurement. 
‘‘(3) A contracting officer may not issue a solicitation 
described in paragraph (1) unless, before the date of 
issuance, the officer has placed in the official contract file 
a written certification that— 
‘‘(A) sufficient funds are obligated to cover all 
due diligence and pre-award professional services 
reasonably anticipated for the project, including en-
vironmental, geotechnical, title, survey, appraisal, 
brokerage, and architectural-engineering services; 
and 
‘‘(B) each such service is available for task- 
order issuance within 30 days under an existing in-
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definite-delivery, 
indefinite-quantity 
contract 
or 
other competitively-awarded vehicle. 
‘‘(4) Obligations under paragraph (3) may be made 
from the Veterans Leasing Fund established in subsection 
(j) or from other appropriations for medical facilities that 
are available for the applicable fiscal year. 
‘‘(5)(A) As part of the public notice during the ex-
pression of interest phase of the acquisition process, the 
Secretary shall require each prospective developer to pro-
vide price estimates, including the cost of land, to enable 
the Department to evaluate whether projected costs are 
at or below the unserviced shell rent authorized in the ap-
proved prospectus. 
‘‘(B)(i) If such estimates exceed such amount author-
ized, the Secretary shall, not later than 14 days after the 
date on which the Secretary completes such evaluation, 
submit to Congress a notification that such estimates ex-
ceed such authorized amount. 
‘‘(ii) Not later than 45 days after the date on which 
the Secretary submits the notification under clause (i), the 
Department shall finalize a plan to address the discrep-
ancy between such estimates and such authorized amount, 
which may include— 
‘‘(I) reducing the scope of the project; 
‘‘(II) requesting additional budget authority; or 
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‘‘(III) postponing, or canceling the project, as 
appropriate. 
‘‘(C) To the maximum extent practicable, the Sec-
retary shall, not later than 60 days after the date on which 
the Secretary submits the notification under subparagraph 
(B), notify prospective offerors of the potential effect to 
procurement timelines, including the estimated release 
date of the request for lease proposals. 
‘‘(6) The Secretary shall include, in any request for 
a lease proposal made pursuant to the leasing authority 
under subsection (i)— 
‘‘(A) a summary of the procurement milestones 
applicable to such request; and 
‘‘(B) a statement that a reimbursement under 
paragraph (7) would become effective on the date 
that is one year after the date on which the Sec-
retary issued such request. 
‘‘(7)(A) If the Secretary does not award a lease pur-
suant to a request for a lease proposal before the date 
that is one year after the date on which the Secretary 
issued such request, the Secretary shall be required to re-
imburse each prospective lessor in the competitive range 
for costs directly associated with the delay in awarding 
the lease. 
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‘‘(B) Any reimbursement under subparagraph (A) 
shall be calculated based on one percent annually (paid 
in equal monthly installments of one-twelfth of one per-
cent) of the average land acquisition cost, as proposed by 
all offerors remaining in the competitive range under the 
request. 
‘‘(C) Payment of such reimbursements under this 
paragraph shall cease— 
‘‘(i) immediately upon the award of the lease; 
or 
‘‘(ii) the date on which the project is cancelled, 
if applicable. 
‘‘(D) The Secretary shall issue guidance establishing 
documentation requirements and procedures for admin-
istering reimbursements under this paragraph. 
‘‘(8) Not later than March 1 of each year, the Sec-
retary shall submit to the Committees on Veterans’ Affairs 
of the House of Representatives and the Senate a report 
that includes— 
‘‘(A) a list of each major medical facility lease 
for which a request was issued during the preceding 
calendar year; 
‘‘(B) a statement of whether the lease was 
awarded within the one year period described in 
paragraph (1); and 
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‘‘(C) for any lease not awarded within such pe-
riod, an explanation of the reasons the lease was not 
awarded during such period. 
‘‘(9) Not later than 90 days after the date of the en-
actment of this subsection, the Secretary shall issue inter-
nal guidance that establishes the policies and thresholds 
the Secretary determines necessary to administer the re-
quirements of this subsection. 
‘‘(l) REVISIONS TO DESIGN GUIDES.—(1) Not later 
than 180 days after the date of enactment of this sub-
section, and not less frequently than once every five years 
thereafter, the Secretary shall revise the design guides of 
the Department applicable to outpatient clinics and other 
leased medical facilities. 
‘‘(2) In carrying out paragraph (1), the Secretary 
shall consult with subject matter experts, including health 
care professionals and representatives of the private health 
care industry. 
‘‘(3) Any revision to design guides conducted pursu-
ant to this section shall not be over-engineered or unneces-
sarily prescriptive specifications unless required for clin-
ical safety, functional performance, or applicable building 
codes. 
‘‘(m) MITIGATION
OF RISK PREMIUMS.—(1) The 
Secretary may include in a lease agreement under this 
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chapter terms that mitigate risk premiums to the Depart-
ment, including— 
‘‘(A) post-occupancy self-insurance arrange-
ments by the Department; 
‘‘(B) reimbursement to a prospective lessor for 
reasonable holding costs incurred as a result of 
delays attributable to the Department in excess of 
established procurement milestones; 
‘‘(C) authorization to structure major medical 
facility leases as triple-net leases (NNN) or modi-
fied-gross leases, as appropriate, to align with pre-
vailing commercial market practices; and 
‘‘(D) definitions of the terms ‘shell work’ and 
‘tenant improvements’ to ensure cost allocation is 
consistent with prevailing commercial market stand-
ards. 
‘‘(2) Not later than 180 days after the date of enact-
ment of this subsection, the Secretary shall issue guidance 
with respect to the use of such terms in lease agreements 
under this chapter. In such guidance, the Secretary shall 
ensure— 
‘‘(A) heating, ventilation, and air conditioning 
system capacity is included in the definition of ‘shell 
work’; and 
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