Term Care to increase, above the level of extended care
services which were provided as of September 30, 1998—
(A) the options and services for home and com-
munity-based care for eligible veterans; and
(B) the percentage of the Department of Vet-
erans Affairs medical care budget dedicated to such
care.
(2) The Secretary shall ensure that the staffing and
level of extended care services provided by the Secretary
nationally in facilities operated by the Secretary during
any fiscal year is not less than the level of such services
provided nationally in facilities operated by the Secretary
during fiscal year 1998.
(c) 
ADULT
DAY
HEALTH
CARE.—Section
1720(f)(1)(A) is amended to read as follows:
‘‘(f)(1)(A) The Secretary may furnish adult day
health care services to a veteran enrolled under section
1705(a) of this title who would otherwise require nursing
home care.’’
(d) RESPITE CARE PROGRAM.—Section 1720B is
amended—
(1) in subsection (a), by striking ‘‘eligible’’ and
inserting ‘‘enrolled’’;
(2) in subsection (b)—
(A) by striking ‘‘the term ‘respite care’
means hospital or nursing home care’’ and in-
serting ‘‘the term ‘respite care services’ means
care and services’’;
(B) by striking ‘‘is’’ at the beginning of
each of paragraphs (1), (2), and (3) and insert-
ing ‘‘are’’; and
(C) by striking ‘‘in a Department facility’’
in paragraph (2); and
(3) by adding at the end the following new sub-
section:
‘‘(c) In furnishing respite care services, the Secretary
may enter into contract arrangements.’’.
(e) CONFORMING AMENDMENTS.—Section 1710 is
amended—
(1) in subsection (a)(1), by striking ‘‘may fur-
nish nursing home care,’’; and
(2) in subsection (a)(4), by inserting ‘‘, and the
requirement in section 1710A of this title that the
Secretary provide a program of extended care serv-
ices,’’ after ‘‘medical services’’.
(f) STATE HOMES.—Section 1741(a)(2) is amended
by striking ‘‘adult day health care in a State home’’ and
inserting ‘‘extended care services described in any of para-
graphs (4) through (6) of section 1710A(a) of this title
under a program administered by a State home’’.
(g) EFFECTIVE DATE.—(1) Except as provided in
paragraph (2), the amendments made by this section shall
take effect on the date of the enactment of this Act.
(2) Subsection (c)(2) of section 1710A(a) of title 38,
United States Code (as added by subsection (a)), shall
take effect on the effective date of regulations prescribed
by the Secretary of Veterans Affairs under subsections
(c)(2) and (d) of such section. The Secretary shall publish
the effective date of such regulations in the Federal Reg-
ister.
(3) The provisions of section 1710(f) of title 38,
United States Code, shall not apply to any day of nursing
home care on or after the effective date of regulations
under paragraph (2).
SEC. 102. REIMBURSEMENT FOR EMERGENCY TREATMENT.
(a) AUTHORITY TO PROVIDE REIMBURSEMENT.—
Chapter 17 is amended by inserting after section 1724 the
following new section:
‘‘§ 1725. Reimbursement for emergency treatment
‘‘(a) GENERAL AUTHORITY.—(1) Subject to sub-
sections (c) and (d), the Secretary may reimburse a vet-
eran described in subsection (b) for the reasonable value
of emergency treatment furnished the veteran in a non-
Department facility.
‘‘(2) In any case in which reimbursement is author-
ized under subsection (a)(1), the Secretary, in the Sec-
retary’s discretion, may, in lieu of reimbursing the vet-
eran, make payment of the reasonable value of the fur-
nished emergency treatment directly—
‘‘(A) to a hospital or other health care provider
that furnished the treatment; or
‘‘(B) to the person or organization that paid for
such treatment on behalf of such veteran.
‘‘(b) ELIGIBILITY.—(1) A veteran referred to in sub-
section (a)(1) is an individual who is an active Department
health-care participant who is personally liable for emer-
gency treatment furnished the veteran in a non-Depart-
ment facility.
‘‘(2) A veteran is an active Department health-care
participant if the veteran—
‘‘(A) is described in any of paragraphs (1)
through (6) of section 1705(a) of this title;
‘‘(B) is enrolled in the health care system estab-
lished under such section; and
‘‘(C) received care under this chapter within the
12-month period preceding the furnishing of such
emergency treatment.
‘‘(3) A veteran is personally liable for emergency
treatment furnished the veteran in a non-Department fa-
cility if the veteran—
‘‘(A) is financially liable to the provider of
emergency treatment for that treatment;
‘‘(B) has no entitlement to care or services
under a health-plan contract;
‘‘(C) has no other contractual or legal recourse
against a third party that would, in whole or in part,
extinguish such liability to the provider; and
‘‘(D) is not eligible for reimbursement for med-
ical care or services under section 1728 of this title.
‘‘(c) LIMITATIONS ON REIMBURSEMENT.—(1) The
Secretary, in accordance with regulations prescribed by
the Secretary, shall—
‘‘(A) establish the maximum amount payable
under subsection (a);
‘‘(B) delineate the circumstances under which
such payments may be made, to include such re-
quirements on requesting reimbursement as the Sec-
retary shall establish; and
‘‘(C) provide that in no event may a payment
under that subsection include any amount for which
the veteran is not personally liable.
‘‘(2) Subject to paragraph (1), the Secretary may
provide reimbursement under this section only after the
veteran or the provider of emergency treatment has ex-
hausted without success all claims and remedies reason-
ably available to the veteran or provider against a third
party for payment of such treatment.
‘‘(3) Payment by the Secretary under this section, on
behalf of a veteran described in subsection (b), to a pro-
vider of emergency treatment, shall, unless rejected and
refunded by the provider within 30 days of receipt, extin-
guish any liability on the part of the veteran for that treat-
ment. Neither the absence of a contract or agreement be-
tween the Secretary and the provider nor any provision
of a contract, agreement, or assignment to the contrary
shall operate to modify, limit, or negate the requirement
in the preceding sentence.
‘‘(d) INDEPENDENT RIGHT OF RECOVERY.—(1) In
accordance with regulations prescribed by the Secretary,
the United States shall have the independent right to re-
cover any amount paid under this section when, and to
the extent that, a third party subsequently makes a pay-
ment for the same emergency treatment.
‘‘(2) Any amount paid by the United States to the
veteran (or the veteran’s personal representative, suc-
cessor, dependents, or survivors) or to any other person
or organization paying for such treatment shall constitute
a lien in favor of the United States against any recovery
the payee subsequently receives from a third party for the
same treatment.
‘‘(3) Any amount paid by the United States to the
provider that furnished the veteran’s emergency treatment
shall constitute a lien against any subsequent amount the
provider receives from a third party for the same emer-
gency treatment for which the United States made pay-
ment.
‘‘(4) The veteran (or the veteran’s personal rep-
resentative, successor, dependents, or survivors) shall en-
sure that the Secretary is promptly notified of any pay-
ment received from any third party for emergency treat-
ment furnished to the veteran. The veteran (or the vet-
eran’s personal representative, successor, dependents, or
survivors) shall immediately forward all documents relat-
ing to such payment, cooperate with the Secretary in the
investigation of such payment, and assist the Secretary
in enforcing the United States right to recover any pay-
ment made under subsection (c)(3).
‘‘(e) WAIVER.—The Secretary, in the Secretary’s dis-
cretion, may waive recovery of a payment made to a vet-
eran under this section that is otherwise required by sub-
section (d)(1) when the Secretary determines that such
waiver would be in the best interest of the United States,
as defined by regulations prescribed by the Secretary.
‘‘(f) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘emergency treatment’ means
medical care or services furnished, in the judgment
of the Secretary—
‘‘(A) when Department or other Federal
facilities are not feasibly available and an at-
tempt to use them beforehand would not be rea-
sonable;
‘‘(B) when such care or services are ren-
dered in a medical emergency of such nature
that delay would be hazardous to life or health;
and
‘‘(C) until such time as the veteran can be
transferred safely to a Department facility or
other Federal facility.
‘‘(2) The term ‘health-plan contract’ includes
any of the following:
‘‘(A) An insurance policy or contract, med-
ical or hospital service agreement, membership
or subscription contract, or similar arrangement
under which health services for individuals are
provided or the expenses of such services are
paid.
‘‘(B) An insurance program described in
section 1811 of the Social Security Act (42
U.S.C. 1395c) or established by section 1831 of
such Act (42 U.S.C. 1395j).
‘‘(C) A State plan for medical assistance
approved under title XIX of such Act (42
U.S.C. 1396 et seq.).
‘‘(D) A workers’ compensation law or plan
described in section 1729(a)(2)(A) of this title.
‘‘(E) A law of a State or political subdivi-
sion described in section 1729(a)(2)(B) of this
title.
‘‘(3) The term ‘third party’ means any of the
following:
‘‘(A) A Federal entity.
‘‘(B) A State or political subdivision of a
State.
‘‘(C) An employer or an employer’s insur-
ance carrier.
‘‘(D) An automobile accident reparations
insurance carrier.
‘‘(E) A person or entity obligated to pro-
vide, or to pay the expenses of, health services
under a health-plan contract.’’.
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section
1729A(b) is amended—
(A) by redesignating paragraph (6) as para-
graph (7); and
(B) by inserting after paragraph (5) the fol-
lowing new paragraph:
‘‘(6) Section 1725 of this title.’’.
(2) The table of sections at the beginning of chapter
17 is amended by inserting after the item relating to sec-
tion 1724 the following new item:
‘‘1725. Reimbursement for emergency treatment.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect 180 days after the date of
the enactment of this Act.
(d) IMPLEMENTATION REPORTS.—The Secretary of
Veterans Affairs shall include with the budget justification
materials submitted to Congress in support of the Depart-
ment of Veterans Affairs budget for fiscal year 2002 and
for fiscal year 2003 a report on the implementation of sec-
tion 1725 of title 38, United States Code, as added by
subsection (a). Each such report shall include information
on the experience of the Department under that section
and the costs incurred, and expected to be incurred, under
that section.
SEC. 103. ELIGIBILITY FOR CARE OF COMBAT-INJURED
VETERANS.
(a) PRIORITY OF CARE.—Chapter 17 is amended —
(1) in section 1710(a)(2)(D), by inserting ‘‘or
who was injured in combat’’ after ‘‘former prisoner
of war’’; and
(2) in section 1705(a)(3), by inserting ‘‘or who
were injured in combat’’ after ‘‘former prisoners of
war’’.
(b) DEFINITION OF INJURED IN COMBAT.—Section
1701 is amended by adding at the end the following new
paragraph:
‘‘(10) The term ‘injured in combat’ means
wounded in action as the result of an act of an
enemy of the United States or otherwise wounded in
action by weapon fire while directly engaged in
armed conflict (other than as the result of willful
misconduct by the wounded individual).’’.
SEC. 104. ACCESS TO CARE FOR MILITARY RETIREES.
(a) IMPROVED ACCESS.—(1) Section 1710(a)(2) is
amended—
(A) by striking ‘‘or’’ at the end of subpara-
graph (F);
(B) by striking the period at the end of sub-
paragraph (G) and inserting ‘‘; or’’; and
(C) by adding at the end the following new sub-
paragraph:
‘‘(H) who has retired from active military,
naval, or air service in the Army, Navy, Air Force,
or Marine Corps, is eligible for care under the
TRICARE program established by the Secretary of
Defense, and is not otherwise described in paragraph
(1) or in this paragraph.’’.
(2) Section 1705(a) is amended—
(A) by redesignating paragraph (7) as para-
graph (8);
(B) by inserting after paragraph (6) the fol-
lowing new paragraph (7):
‘‘(7) Veterans who are eligible for hospital care,
medical services, and nursing home care under sec-
tion 1710(a)(2)(H) of this title.’’; and
(C) in paragraph (6), by inserting ‘‘(other than
subparagraph (H) of such section)’’ before the pe-
riod at the end.
(b) INTERAGENCY AGREEMENT.—(1) The Secretary
of Defense shall enter into an agreement (characterized
as a memorandum of understanding or otherwise) with the
Secretary of Veterans Affairs with respect to the provision
of medical care by the Secretary of Veterans Affairs to
eligible military retirees in accordance with the amend-
ments made by subsection (a). That agreement shall in-
clude provisions for reimbursement of the Secretary of
Veterans Affairs by the Secretary of Defense for medical
care provided by the Secretary of Veterans Affairs to an
eligible military retiree and may include such other provi-
sions with respect to the terms and conditions of such care
as may be agreed upon by the two Secretaries.
(2) Reimbursement under that agreement shall be in
accordance with rates agreed upon by the Secretary of De-
fense and the Secretary of Veterans Affairs. Such reim-
bursement may be made by the Secretary of Defense or
by the appropriate TRICARE Managed Care Support con-
tractor, as determined in accordance with that agreement.
(3) In entering into the agreement under paragraph
(1), particularly with respect to determination of the rates
of reimbursement under paragraph (2), the Secretary of
Defense shall consult with TRICARE Managed Care Sup-
port contractors.
(4) The Secretary of Veterans Affairs may not enter
into an agreement under paragraph (1) for the provision
of care in accordance with the amendments made by sub-
section (a) with respect to any geographic service area,
or a part of any such area, of the Veterans Health Admin-
istration unless—
(A) in the judgment of that Secretary, the De-
partment of Veterans Affairs will recover the costs
of providing such care to eligible military retirees;
and
(B) that Secretary has certified and docu-
mented, with respect to any geographic service area
in which the Secretary proposes to provide care in
accordance with the amendments made by sub-
section (a), that such geographic service area, or
designated part of any such area, has adequate ca-
pacity (consistent with the requirements in section
1705(b)(1) of title 38, United States Code, that care
to enrollees shall be timely and acceptable in quality)
to provide such care.
(5) The agreement under paragraph (1) shall be en-
tered into by the Secretaries not later than nine months
after the date of the enactment of this Act. If the Secre-
taries are unable to reach agreement, they shall jointly re-
port, by that date or within 30 days thereafter, to the
Committees on Armed Services and the Committees on
Veterans’ Affairs of the Senate and House of Representa-
tives on the reasons for their inability to reach an agree-
ment and their mutually agreed plan for removing any im-
pediments to final agreement.
(c) DEPOSITING
OF REIMBURSEMENTS.—Amounts
received by the Secretary of Veterans Affairs under the
agreement under subsection (b) shall be deposited in the
Department of Veterans Affairs Health Services Improve-
ment Fund established under section 1729B of title 38,
United States Code, as added by section 202.
(d) PHASED IMPLEMENTATION.—(1) The Secretary
of Defense shall include in each TRICARE contract en-
tered into after the date of the enactment of this Act pro-
visions to implement the agreement under subsection (b).
(2) The amendments made by subsection (a) and the
provisions of the agreement under subsection (b)(2) shall
apply to the furnishing of medical care by the Secretary
of Veterans Affairs in any area of the United States only
if that area is covered by a TRICARE contract that was
entered into after the date of the enactment of this Act.
(e) ELIGIBLE MILITARY RETIREES.—For purposes
of subsection (b), an eligible military retiree is a member
of the Army, Navy, Air Force, or Marine Corps who—
(1) has retired from active military, naval, or
air service;
(2) is eligible for care under the TRICARE pro-
gram established by the Secretary of Defense;
(3) has enrolled for care under section 1705 of
title 38, United States Code; and
(4) is not described in paragraph (1) or (2) of
section 1710(a) of such title (other than subpara-
graph (H) of such paragraph (2)), as amended by
subsection (a).
SEC. 105. BENEFITS FOR PERSONS DISABLED BY PARTICI-
PATION IN COMPENSATED WORK THERAPY
PROGRAM.
Section 1151(a)(2) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘proximately
caused’’; and
(2) by inserting before the period at the end the
following: ‘‘, or (B) by participation in a program
(known as a ‘compensated work therapy program’)
under section 1718 of this title’’.
SEC. 106. PILOT PROGRAM OF MEDICAL CARE FOR CER-
TAIN 
DEPENDENTS 
OF 
ENROLLED 
VET-
ERANS.
(a) IN GENERAL.—(1) Chapter 17 is amended by in-
serting after section 1713 the following new section:
‘‘§ 1713A. Medical care for certain dependents of en-
rolled veterans: pilot program
‘‘(a) The Secretary may, during the program period,
carry out a pilot program to provide primary health care
services for eligible dependents of veterans in accordance
with this section.
‘‘(b) For purposes of this section:
‘‘(1) The term ‘program period’ means the pe-
riod beginning on the first day of the first month be-
ginning more than 180 days after the date of the en-
actment of this section and ending three years after
that day.
‘‘(2) The term ‘eligible dependent’ means an in-
dividual who—
‘‘(A) is the spouse or child of a veteran
who is enrolled in the system of patient enroll-
ment established by the Secretary under section
1705 of this title; and
‘‘(B) is determined by the Secretary to
have the ability to pay for such care or services
either directly or through reimbursement or in-
demnification from a third party.
‘‘(c) The Secretary may furnish health care services
to an eligible dependent under this section only if the de-
pendent (or, in the case of a minor, the parent or guardian
of the dependent) agrees—
‘‘(1) to pay to the United States an amount
representing the reasonable charges for the care or
services furnished (as determined by the Secretary);
and
‘‘(2) to cooperate with and provide the Sec-
retary an appropriate assignment of benefits, au-
thorization to release medical records, and any other
executed documents, information, or evidence rea-
sonably needed by the Secretary to recover the De-
partment’s charges for the care or services furnished
by the Secretary.
‘‘(d)(1) The health care services provided under the
pilot program under this section may consist of such pri-
mary hospital care services and such primary medical
services as may be authorized by the Secretary. The Sec-
retary may furnish those services directly through a De-
partment medical facility or, subject to paragraphs (2)
and (3), pursuant to a contract or other agreement with
a non-Department facility (including a health-care pro-
vider, as defined in section 8152(2) of this title).
‘‘(2) The Secretary may enter into a contract or
agreement to furnish primary health care services under
this section in a non-Department facility on the same basis
as provided under subsections (a) and (b) of section 1703
of this title or may include such care in an existing or
new agreement under section 8153 of this title when the
Secretary determines it to be in the best interest of the
prevailing standards of the Department medical care pro-
gram.
‘‘(3) Primary health care services may not be author-
ized to be furnished under this section at any medical fa-
cility if the furnishing of those services would result in
the denial of, or a delay in providing, access to care for
any enrolled veteran at that facility.
‘‘(e)(1) In the case of an eligible dependent who is
furnished primary health care services under this section
and who has coverage under a health-plan contract, as de-
fined in section 1729(i)(1) of this title, the United States
shall have the right to recover or collect the reasonable
charges for such care or services from such health-plan
contract to the extent that the individual or the provider
of the care or services would be eligible to receive payment
for such care or services from such health-plan contract
if the care or services had not been furnished by a depart-
ment or agency of the United States.
‘‘(2) The right of the United States to recover under
paragraph (1) shall be enforceable with respect to an eligi-
ble dependent in the same manner as applies under sub-
sections (a)(3), (b), (c)(1), (c)(2), (d), (f), (h), and (i) of
section 1729 of this title with respect to a veteran.
‘‘(f)(1) Subject to paragraphs (2) and (3), the pilot
program under this section shall be carried out during the
program period in not more than four veterans integrated
service networks, as designated by the Secretary. In desig-
nating networks under the preceding sentence, the Sec-
retary shall favor designation of networks that are suited
to serve dependents of veterans because of—
‘‘(A) the capability of one or more medical fa-
cilities within the network to furnish primary health
care services to eligible dependents while assuring
that veterans continue to receive priority for care
and services;
‘‘(B) the demonstrated success of such medical
facilities in billings and collections;
‘‘(C) support for initiating such a pilot program
among veterans in the network; and
‘‘(D) such other criteria as the Secretary con-
siders appropriate.
‘‘(2) In implementing the pilot program, the Sec-
retary may not provide health care services for dependents
who are children—
‘‘(A) in more than one of the participating net-
works during the first year of the program period;
and
‘‘(B) in more than two of the participating net-
works during the second year of the program period.
‘‘(3) In implementing the pilot program, the Sec-
retary shall give priority to facilities which operate women
veterans’ clinics.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1713 the following new item:
‘‘1713A. Medical care for certain dependents and enrolled veterans: pilot pro-
gram.’’.
(b) GAO REVIEW AND RECOMMENDATIONS.—(1) Be-
ginning six months after the commencement of the pilot
program, the Comptroller General, in consultation with
the Under Secretary for Health of the Department of Vet-
erans Affairs, shall monitor the conduct of the pilot pro-
gram.
(2) Not later than 14 months after the commence-
ment of the pilot program, the Comptroller General shall
submit to the Secretary of Veterans Affairs a report set-
ting forth the Comptroller General’s findings and rec-
ommendations with respect to the first 12 months of oper-
ation of the pilot program.
(3)(A) The report under paragraph (2) shall include
the findings of the Comptroller General regarding—
(i) whether the collection of reasonable charges
for the care or services provided reasonably covers
the costs of providing such care and services; and
(ii) whether the Secretary, in carrying out the
program, is in compliance with the limitation in sub-
section (d)(3) of section 1713A of title 38, United
States Code, as added by subsection (a).
(B) The report shall include the recommendations of
the Comptroller General regarding any remedial steps that
the Secretary should take in the conduct of the program
or in the billing and collection of charges under the pro-
gram.
(4) The Secretary, in consultation with, and following
receipt of the report of, the Comptroller General, shall
take such steps as may be needed to ensure that any rec-
ommendations of the Comptroller General in the report
under paragraph (2) with respect to billings and collec-
tions, and with respect to compliance with the limitation
in subsection (d)(3) of such section, are carried out.
(5) For purposes of this subsection, the term ‘‘com-
mencement of the pilot program’’ means the date on which
the Secretary of Veterans Affairs begins to furnish serv-
ices to eligible dependents under the pilot program under
section 1713A of title 38, United States Code, as added
by subsection (a).
SEC. 107. ENHANCED SERVICES PROGRAM AT DESIGNATED
MEDICAL CENTERS.
(a) FINDINGS.—Congress makes the following find-
ings:
(1) Historically, health care facilities under the
jurisdiction of the Department of Veterans Affairs
have not consistently been located in proximity to
veteran population concentrations.
(2) Hospital occupancy rates at numbers of De-
partment medical centers are at levels substantially
below a level needed for efficient operation and opti-
mal quality of care.
(3) The costs of maintaining highly inefficient
medical centers, which were designed and con-
structed decades ago to standards no longer consid-
ered acceptable, substantially diminish the avail-
ability of resources which could be devoted to the
provision of needed direct care services.
(4) Freeing resources currently devoted to high-
ly inefficient provision of hospital care could,
through contracting for acute hospital care and es-
tablishing new facilities for provision of outpatient
care, yield improved access and service to veterans.
(b) ENHANCED SERVICES PROGRAM AT DESIGNATED
MEDICAL CENTERS.—The Secretary of Veterans Affairs,
in carrying out the responsibilities of the Secretary to fur-
nish hospital care and medical services through network-
based planning, shall establish an enhanced service pro-
gram at Department medical centers (hereinafter in this
section referred to as ‘‘designated centers’’) that are des-
ignated by the Secretary for the purposes of this section.
Medical centers shall be designated to improve access, and
quality of service provided, to veterans served by those
medical centers. The Secretary may designate a medical
center for the program only if the Secretary determines,
on the basis of a market and data analysis (which shall
include a study of the cost-effectiveness of the care pro-
vided at such center), that the medical center—
(1) can, in whole or in part, no longer be oper-
ated in a manner that provides hospital or other
care efficiently and at optimal quality because of
such factors as—
(A) the current and projected need for hos-
pital or other care capacity at such center;
(B) the extent to which the facility is func-
tionally obsolete; and
(C) the cost of operation and maintenance
of the physical plant; and
(2) is located in proximity (A) to one or more
community hospitals which have the capacity to pro-
vide primary and secondary hospital care of appro-
priate quality to veterans under contract arrange-
ments with the Secretary which the Secretary deter-
mines are advantageous to the Department, or (B)
to another Department medical center which is capa-
ble of absorbing some or all of the patient workload
of such medical center.
(c) MEDICAL CENTER PLAN.—The Secretary shall,
with respect to each designated center, develop a plan
aimed at improving the accessibility and quality of service
provided to veterans. Each plan shall be developed in ac-
cordance with the requirements for strategic network-
based planning described in section 8107 of title 38,
United States Code. In the plan for a designated center,
the Secretary shall describe a program which, if imple-
mented, would allow the Secretary to do any of the fol-
lowing:
(1) Provide for a Department facility described
in subsection (b)(2)(B) to absorb some or all of the
patient workload of the designated center.
(2) Contract, under such arrangements as the
Secretary determines appropriate, for needed pri-
mary and secondary hospital care for veterans—
(A) who reside in the catchment area of
each designated center;
(B) who are described in paragraphs (1)
through (6) of section 1705(a) of title 38,
United States Code; and
(C) whom the Secretary has enrolled for
care pursuant to section 1705 of title 38,
United States Code.
(3) Cease to provide hospital care, or hospital
care and other medical services, at such center.
(4) If practicable, lease, under subchapter V of
chapter 81 of title 38, United States Code, land and
improvements which had been dedicated to providing
care described in paragraph (3).
(5) Establish, through reallocation of oper-
ational funds and through appropriate lease arrange-
ments or renovations, facilities for—
(A) delivery of outpatient care; and
(B) services which would obviate a need for
nursing home care or other long-term institu-
tional care.
(d) EMPLOYEE PROTECTIONS.—(1) In entering into
any contract or lease under subsection (c), the Secretary
shall attempt to ensure that employees of the Secretary
who would be displaced under this section be given priority
in hiring by such contractor, lessee, or other entity.
(2) In carrying out subsection (c)(5), the Secretary
shall give preference to providing services through em-
ployee-based delivery models.
(e) REQUIRED CONSULTATION.—In developing a
plan under subsection (c), the Secretary shall obtain the
views of veterans organizations, exclusive employee rep-
resentatives, and other interested parties and provide for
such organizations and parties to participate in the devel-
opment of the plan.
(f) SUBMISSION OF PLAN TO CONGRESS.—The Sec-
retary may not implement a plan described in subsection
(c) with respect to a medical center unless the Secretary
has first submitted a report containing a detailed plan and
justification to the appropriate committees of Congress.
No action to carry out such plan may be taken after the
submission of such report until the end of a 45-day period
following the date of the submission of the report, not less
than 30 days of which shall be days during which Con-
gress shall have been in continuous session. For purposes
of the preceding sentence, continuity of a session of Con-
gress is broken only by adjournment sine die, and there
shall be excluded from the computation of any period of
continuity of session any day during which either House
of Congress is not in session during an adjournment of
more than three days to a day certain.
(g) IMPLEMENTATION OF PLAN.—In carrying out the
plan described in subsection (c), or a modification to that
plan following the submission of such plan to the appro-
priate committees of Congress, the Secretary—
(1) may, without regard to any limitation under
section 1703 of title 38, United States Code, con-
tract for hospital care for veterans who are—
(A) described in paragraphs (1) through
(6) of section 1705(a) of title 38, United States
Code; and
(B) enrolled under subsection (a) of such
section 1705;
(2) may enter into any contract under section
8153 of title 38, United States Code;
(3) shall, in exercising the authority of the Sec-
retary under this section to contract for hospital
care, provide for ongoing oversight and management,
by employees of the Department, of the hospital care
furnished such veterans; and
(4) shall, in the case of a designated center
which 
ceases 
to 
provide 
services 
under 
the
program—
(A) ensure a reallocation of funds as pro-
vided in subsection (h); and
(B) provide reemployment assistance to
employees.
(h) FUNDS ALLOCATION.—In carrying out subsection
(g)(4), the Secretary shall ensure that not less than 90
percent of the funds that would have been made available
to a designated center to support the provision of services,
but for such mission change, shall be made available to
the appropriate health care region of the Veterans Health
Administration to ensure that the implementation of the
plan under subsection (g) will result in demonstrable im-
provement in the accessibility, and quality of service pro-
vided, to veterans in the catchment area of such center.
(i) SPECIALIZED SERVICES.—The provisions of this
section do not diminish the obligations of the Secretary
under section 1706(b) of title 38, United States Code.
(j) REPORT.—Not later than 12 months after imple-
mentation of any plan under subsection (b), the Secretary
shall submit to Congress a report on the implementation
of the enhanced service program.
(k) RESIDUAL AUTHORITY.—Nothing in this section
may be construed to diminish the authority of the Sec-
retary to—
(1) consolidate, eliminate, abolish, or redis-
tribute the functions or missions of facilities in the
Department;
(2) revise the functions or missions of any such
facility or activity; or
(3) create new facilities or activities in the De-
partment.
SEC. 108. COUNSELING AND TREATMENT FOR VETERANS
WHO HAVE EXPERIENCED SEXUAL TRAUMA.
(a) EXTENSION
OF PERIOD
OF PROGRAM.—Sub-
section (a) of section 1720D is amended—
(1) in paragraph (1), by striking ‘‘December
31, 2001’’ and inserting ‘‘December 31, 2002’’; and
(2) in paragraph (3), by striking ‘‘December
31, 2001’’ and inserting ‘‘December 31, 2002’’.
(b) MANDATORY NATURE OF PROGRAM.—(1) Sub-
section (a)(1) of such section is further amended by strik-
ing ‘‘may provide counseling to a veteran who the Sec-
retary determines requires such counseling’’ and inserting
‘‘shall operate a program under which the Secretary pro-
vides counseling and appropriate care and services to vet-
erans who the Secretary determines require such coun-
seling and care and services’’.
(2) Subsection (a) of such section is further
amended—
(A) by striking paragraph (2); and
(B) by redesignating paragraph (3) (as amend-
ed by subsection (a)(2)) as paragraph (2).
(c) OUTREACH EFFORTS.—Subsection (c) of such
section is amended—
(1) by inserting ‘‘and treatment’’ in the first
sentence and in paragraph (2) after ‘‘counseling’’;
(2) by striking ‘‘and’’ at the end of paragraph
(1);
(3) by redesignating paragraph (2) as para-
graph (3); and
(4) by inserting after paragraph (1) the fol-
lowing new paragraph (2):
‘‘(2) shall ensure that information about the
counseling and treatment available to veterans under
this section—
‘‘(A) is revised and updated as appro-
priate;
‘‘(B) is made available and visibly posted
at appropriate facilities of the Department; and
‘‘(C) is made available through appropriate
public information services; and’’.
(d) REPORT ON IMPLEMENTATION OF OUTREACH
ACTIVITIES.—Not later than six months after the date of
the enactment of this Act, the Secretary of Veterans Af-
fairs shall submit to the Committees on Veterans’ Affairs
of the Senate and House of Representatives a report on
the Secretary’s implementation of paragraph (2) of section
1720D(c) of title 38, United States Code, as added by
subsection (c). Such report shall include examples of the
documents and other means of communication developed
for compliance with that paragraph.
(e) STUDY OF EXPANDING ELIGIBILITY FOR COUN-
SELING AND TREATMENT.—(1) The Secretary of Veterans
Affairs, in consultation with the Secretary of Defense,
shall conduct a study to determine—
(A) the extent to which former members of the
reserve components of the Armed Forces experienced
physical assault of a sexual nature or battery of a
sexual nature while serving on active duty for train-
ing;
(B) the extent to which such former members
have sought counseling from the Department of Vet-
erans Affairs relating to those incidents; and
(C) the additional resources that, in the judg-
ment of the Secretary, would be required to meet the
projected need of those former members for such
counseling.
(2) Not later than 16 months after the date of the
enactment of this Act, the Secretary of Veterans Affairs
shall submit to the Committees on Veterans’ Affairs of
the Senate and House of Representatives a report on the
results of the study conducted under paragraph (1).
(f) OVERSIGHT
OF OUTREACH ACTIVITIES.—Not
later than 14 months after the date of the enactment of
this Act, the Secretary of Veterans Affairs and the Sec-
retary of Defense shall submit to the appropriate congres-
sional committees a joint report describing in detail the
collaborative efforts of the Department of Veterans Affairs
and the Department of Defense to ensure that members
of the Armed Forces, upon separation from active mili-
tary, naval, or air service, are provided appropriate and
current information about programs of the Department of
Veterans Affairs to provide counseling and treatment for
sexual trauma that may have been experienced by those
members while in the active military, naval, or air service,
including information about eligibility requirements for,
and procedures for applying for, such counseling and
treatment. The report shall include proposed recommenda-
tions from both the Secretary of Veterans Affairs and the
Secretary of Defense for the improvement of their collabo-
rative efforts to provide such information.
(g) REPORT
ON
IMPLEMENTATION
OF
SEXUAL
TRAUMA TREATMENT PROGRAM.—Not later than 14
months after the date of the enactment of this Act, the
Secretary of Veterans Affairs shall submit to the Commit-
tees on Veterans’ Affairs of the Senate and House of Rep-
resentatives a report on the use made of the authority pro-
vided under section 1720D of title 38, United States Code,
as amended by this section. The report shall include the
following with respect to activities under that section since
the enactment of this Act:
(1) The number of veterans who have received
counseling under that section.
(2) The number of veterans who have been re-
ferred to non-Department mental health facilities
and providers in connection with sexual trauma
counseling and treatment.
TITLE II—PROGRAM
ADMINISTRATION
SEC. 201. MEDICAL CARE COLLECTIONS.
(a) LIMITED AUTHORITY TO SET COPAYMENTS.—
(1) Section 1722A is amended—
(A) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively;
(B) by inserting after subsection (a) the fol-
lowing new subsection (b):
‘‘(b) The Secretary, pursuant to regulations which
the Secretary shall prescribe, may—
‘‘(1) increase the copayment amount in effect
under subsection (a);
‘‘(2) establish a maximum annual pharma-
ceutical copayment amount under subsection (a) for
veterans who have multiple outpatient prescriptions;
and
‘‘(3) require a veteran, other than a veteran de-
scribed in subsection (a)(3), to pay to the United
States a reasonable copayment for sensori-neural
aids, electronic equipment, and any other costly item
or equipment furnished the veteran for a nonservice-
connected condition, other than a wheelchair or arti-
ficial limb.’’; and
(C) in subsection (c), as redesignated by sub-
paragraph (A)—
(i) by striking ‘‘this section’’ and inserting
‘‘subsection (a)’’; and
(ii) by adding at the end the following new
sentence: ‘‘Amounts collected through use of
the authority under subsection (b) shall be de-
posited in Department of Veterans Affairs
Health Services Improvement Fund.’’.
(2)(A) The heading of such section is amended to
read as follows:
‘‘§ 1722A. Copayments for medications and certain
costly items and equipment’’.
(B) The item relating to such section in the table of
sections at the beginning of chapter 17 is amended to read
as follows:
‘‘1722A. Copayments for medications and certain costly items and equipment.’’.
(b) OUTPATIENT TREATMENT OF CATEGORY C VET-
ERANS.—(1) Section 1710(g) is amended—
(A) in paragraph (1), by striking ‘‘the amount
under paragraph (2) of this subsection’’ and insert-
ing ‘‘in the case of each outpatient visit the applica-
ble amount or amounts established by the Secretary
by regulation’’; and
(B) in paragraph (2), by striking all after ‘‘for
an amount’’ and inserting ‘‘which the Secretary shall
establish by regulation.’’.
SEC. 202. HEALTH SERVICES IMPROVEMENT FUND.
(a) ESTABLISHMENT
OF FUND.—Chapter 17 is
amended by inserting after section 1729A the following
new section:
‘‘§ 1729B. Health Services Improvement Fund
‘‘(a) There is established in the Treasury of the
United States a fund to be known as the ‘Department of
Veterans Affairs Health Services Improvement Fund’.
‘‘(b) Amounts received or collected after the date of
the enactment of this section under any of the following
provisions of law shall be deposited in the fund:
‘‘(1) Section 1713A of this title.
‘‘(2) Section 1722A(b) of this title.
‘‘(3) Section 8165(a) of this title.
‘‘(4) Section 104(c) of the Veterans’ Millennium
Health Care Act.
‘‘(c) Amounts in the fund are hereby available, with-
out fiscal year limitation, to the Secretary for the purposes
stated in subparagraphs (A) and (B) of section
1729A(c)(1) of this title.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
after the item relating to section 1729A the following new
item:
‘‘1729B. Health Services Improvement Fund.’’.
SEC. 203. VETERANS TOBACCO TRUST FUND.
(a) FINDINGS.—Congress finds the following:
(1) Smoking related illnesses, including cancer,
heart disease, and emphysema, are highly prevalent
among the more than 3,000,000 veterans who use
the Department of Veterans Affairs health care sys-
tem annually.
(2) The Department of Veterans Affairs esti-
mates that it spent $3,600,000,000 in 1997 to treat
smoking-related illnesses and that over the next five
years it will spend $20,000,000,000 on such care.
(3) Congress established the Department of
Veterans Affairs in furtherance of its constitutional
power to provide for the national defense in order to
provide benefits and services to veterans of the uni-
formed services.
(4) There is in the Department of Veterans Af-
fairs a health care system which has as its primary
function to provide a complete medical and hospital
service for the medical care and treatment of such
veterans as can be served through available appro-
priations.
(5) The Federal Government, including the De-
partment of Veterans Affairs, has lacked the means
to prevent the onset of smoking-related illnesses
among veterans and has had no authority to deny
needed treatment to any veteran on the basis that
an illness is or might be smoking-related.
(6) With some 20 percent of its health care
budget absorbed in treating smoking-related ill-
nesses, the Department of Veterans Affairs health
care system has lacked resources to provide needed
nursing home care, home care, community-based
ambulatory care, and other services to tens of thou-
sands of other veterans.
(7) The network of academically affiliated med-
ical centers of the Department of Veterans Affairs
provides a unique system within which outstanding
medical research is conducted and which has the po-
tential to expand significantly ongoing research on
tobacco-related illnesses.
(b) ESTABLISHMENT OF TRUST FUND.—(1) Chapter
17 is amended by inserting after section 1729B, as added
by section 202(a), the following new section:
‘‘§ 1729C. Veterans Tobacco Trust Fund
‘‘(a) There is established in the Treasury of the
United States a trust fund to be known as the ‘Veterans
Tobacco Trust Fund’, consisting of such amounts as may
be appropriated, credited, or donated to the trust fund.
‘‘(b) If the United States pursues recovery (other
than a recovery authorized under this title) from a party
or parties specifically for health care costs incurred or to
be incurred by the United States that are attributable to
tobacco-related illnesses, there shall be credited to the
trust fund from the amount of any such recovery by the
United States, without further appropriation, the amount
that bears the same ratio to the amount recovered as the
amount of the Department’s costs for health care attrib-
utable to tobacco-related illnesses for which recovery is
sought bears to the total amount sought by the United
States.
‘‘(c) After September 30, 2004, amounts in the trust
fund shall be available, without fiscal year limitation, to
the Secretary for the following purposes:
‘‘(1) Furnishing medical care and services
under this chapter, to be available during any fiscal
year for the same purposes and subject to the same
limitations (other than with respect to the period of
availability for obligation) as apply to amounts ap-
propriated from the general fund of the Treasury for
that fiscal year for medical care.
‘‘(2) Conducting medical research, rehabilita-
tion research, and health systems research, with par-
ticular emphasis on research relating to prevention
and treatment of, and rehabilitation from, tobacco
addiction and diseases associated with tobacco use.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 1729B, as added by section 202(b), the fol-
lowing new item:
‘‘1729C. Veterans Tobacco Trust Fund.’’.
SEC. 204. AUTHORITY TO ACCEPT FUNDS FOR EDUCATION
AND TRAINING.
(a) ESTABLISHMENT OF NONPROFIT CORPORATIONS
AT MEDICAL CENTERS.—Section 7361(a) is amended—
(1) by inserting ‘‘and education’’ after ‘‘re-
search’’; and
(2) by adding at the end the following: ‘‘Such
a corporation may be established to facilitate either
research or education or both research and edu-
cation.’’.
(b) PURPOSE OF CORPORATIONS.—Section 7362 is
amended—
(1) in the first sentence, by inserting ‘‘and edu-
cation and training as described in sections 7302,
7471, 8154, and 1701(6)(B) of this title’’ after ‘‘of
this title’’; and
(2) in the second sentence—
(A) by inserting ‘‘or education’’ after ‘‘re-
search’’; and
(B) by striking ‘‘that purpose’’ and insert-
ing ‘‘these purposes’’.
(c) BOARD
OF DIRECTORS.—Section 7363(a) is
amended—
(1) in subsection (a)(1), by striking all after
‘‘medical center, and’’ and inserting ‘‘as appropriate,
the assistant chief of staff for research for the med-
ical center and the associate chief of staff for edu-
cation for the medical center, or, in the case of a fa-
cility at which such positions do not exist, those offi-
cials who are responsible for carrying out the re-
sponsibilities of the medical center director, chief of
staff, and, as appropriate, the assistant chief of staff
for research and the assistant chief for education;
and’’;
(2) in subsection (a)(2), by inserting ‘‘or edu-
cation, as appropriate’’ after ‘‘research’’; and
(3) in subsection (c), by inserting ‘‘or edu-
cation’’ after ‘‘research’’.
(d) APPROVAL OF EXPENDITURES.—Section 7364 is
amended by adding at the end the following new sub-
section:
‘‘(c)(1) A corporation established under this sub-
chapter may not spend funds for an education activity un-
less the activity is approved in accordance with procedures
prescribed by the Under Secretary for Health.
‘‘(2) The Under Secretary for Health shall prescribe
policies and procedures to guide the expenditure of funds
by corporations under paragraph (1) consistent with the
purpose of such corporations as flexible funding mecha-
nisms.’’.
SEC. 205. EXTENSION AND REVISION OF CERTAIN AU-
THORITIES.
(a) READJUSTMENT COUNSELING PROGRAM.—Sec-
tion 1712A(a)(1)(B)(ii) is amended by striking ‘‘2000’’
and inserting ‘‘2003’’.
(b) COMMITTEE ON MENTALLY ILL VETERANS.—
Section 7321(d)(2) is amended by striking ‘‘three’’ and
inserting ‘‘five’’.
(c) COMMITTEE ON POST-TRAUMATIC STRESS DIS-
ORDER.—Section 110 of Public Law 98–528 (38 U.S.C.
1712A note) is amended—
(1) in subsection (e)(1), by striking ‘‘March 1,
1985’’ and inserting ‘‘March 1, 2000’’; and
(2) in subsection (e)(2), by striking ‘‘February
1, 1986’’ and inserting ‘‘February 1, 2001’’.
(d) 
EXTENSION
OF
AUTHORITY
TO
MAKE
GRANTS.—Section 3(a)(2) of the Homeless Veterans Com-
prehensive Service Programs Act of 1992 (38 U.S.C. 7721
note) is amended by striking ‘‘September 30, 1999’’ and
inserting ‘‘September 30, 2002’’.
(e) AUTHORITY TO MAKE GRANTS FOR HOMELESS
VETERANS.—Section 3(b)(2) of the Homeless Veterans
Comprehensive Service Programs Act of 1992 (38 U.S.C.
7721 note) is amended by striking ‘‘and no more than 20
programs which incorporate the procurement of vans as
described in paragraph (1)’’.
SEC. 206. STATE HOME GRANT PROGRAM.
(a) GENERAL
REGULATIONS.—Section 8134 is
amended—
(1) by redesignating subsection (b) as sub-
section (c);
(2) by striking the matter in subsection (a) pre-
ceding paragraph (2) and inserting the following:
‘‘(a)(1) The Secretary shall prescribe regulations for
the purposes of this subchapter.
‘‘(2) In those regulations, the Secretary shall pre-
scribe for each State the number of nursing home and
domiciliary beds for which assistance under this sub-
chapter may be furnished. Such regulations shall be based
on projected demand for such care 10 years after the date
of the enactment of the Veterans’ Millennium Health Care
Act by veterans who at such time are 65 years of age or
older and who reside in that State. In determining such
projected demand, the Secretary shall take into account
travel distances for veterans and their families.
‘‘(3)(A) In those regulations, the Secretary shall es-
tablish criteria under which the Secretary shall determine,
with respect to an application for assistance under this
subchapter for a project described in subparagraph (B)
which is from a State that has a need for additional beds
as determined under subsections (a)(2) and (d)(1), wheth-
er the need for such beds is most aptly characterized as
great, significant, or limited. Such criteria shall take into
account the availability of beds already operated by the
Secretary and other providers which appropriately serve
the needs which the State proposes to meet with its appli-
cation.
‘‘(B) This paragraph applies to a project for the con-
struction or acquisition of a new State home facility, to
a project to increase the number of beds available at a
State home facility, and a project to replace beds at a
State home facility.
‘‘(4) The Secretary shall review and, as necessary, re-
vise regulations prescribed under paragraphs (2) and (3)
not less often than every four years.
‘‘(b) The Secretary shall prescribe the following by
regulation:’’;
(3) by redesignating paragraphs (2) and (3) of
subsection (b), as designated by paragraph (2), as
paragraphs (1) and (2);
(4) in subsection (c), as redesignated by para-
graph (1), by striking ‘‘subsection (a)(3)’’ and in-
serting ‘‘subsection (b)(2)’’; and
(5) by adding at the end the following new sub-
section:
‘‘(d)(1) In prescribing regulations to carry out this
subchapter, the Secretary shall provide that in the case
of a State that seeks assistance under this subchapter for
a project described in subsection (a)(3)(B), the determina-
tion of the unmet need for beds for State homes in that
State shall be reduced by the number of beds in all pre-
vious applications submitted by that State under this sub-
chapter, including beds which have not been recognized
by the Secretary under section 1741 of this title.
‘‘(2)(A) Financial assistance under this subchapter
for a renovation project may only be provided for a project
for which the total cost of construction is in excess of
$400,000 (as adjusted from time to time in such regula-
tions to reflect changes in costs of construction).
‘‘(B) For purposes of this paragraph, a renovation
project is a project to remodel or alter existing buildings
for which financial assistance under this subchapter may
be provided and does not include maintenance and repair
work which is the responsibility of the State.’’.
(b) APPLICATIONS WITH RESPECT TO PROJECTS.—
Section 8135 is amended—
(1) in subsection (a)—
(A) by striking ‘‘set forth—’’ in the matter
preceding paragraph (1) and inserting ‘‘set
forth the following:’’;
(B) by capitalizing the first letter of the
first word in each of paragraphs (1) through
(9);
(C) by striking the comma at the end of
each of paragraphs (1) through (7) and insert-
ing a period; and
(D) by striking ‘‘, and’’ at the end of para-
graph (8) and inserting a period;
(2) by redesignating subsections (b), (c), (d),
and (e) as subsections (c), (d), (e), and (f), respec-
tively;
(3) by inserting after subsection (a) the fol-
lowing new subsection (b):
‘‘(b)(1) Any State seeking to receive assistance under
this subchapter for a project that would involve construc-
tion or acquisition of either nursing home or domiciliary
facilities shall include with its application under subsection
(a) the following:
‘‘(A) Documentation (i) that the site for the
project is in reasonable proximity to a sufficient con-
centration and population of veterans who are 65
years of age and older, and (ii) that there is a rea-
sonable basis to conclude that the facilities when
complete will be fully occupied.
‘‘(B) A financial plan for the first three years
of operation of such facilities.
‘‘(C) A five-year capital plan for the State home
program for that State.
‘‘(2) Failure to provide adequate documentation
under paragraph (1)(A) or to provide an adequate finan-
cial plan under paragraph (1)(B) shall be a basis for dis-
approving the application.’’; and
(4) in subsection (c), as redesignated by para-
graph (2)—
(A) in paragraph (1), by striking ‘‘for a
grant under subsection (a) of this section’’ in
the matter preceding subparagraph (A) and in-
serting ‘‘under subsection (a) for financial as-
sistance under this subchapter’’;
(B) in paragraph (2)—
(i) by striking ‘‘the construction or ac-
quisition of’’ in subparagraph (A); and
(ii) by striking subparagraphs (B),
(C), and (D) and inserting the following:
‘‘(B) An application from a State for a project
at an existing facility to remedy a condition or con-
ditions that have been cited by an accrediting insti-
tution, by the Secretary, or by a local licensing or
approving body of the State as being threatening to
the lives or safety of the patients in the facility.
‘‘(C) An application from a State that has not
previously applied for award of a grant under this
subchapter for construction or acquisition of a State
nursing home.
‘‘(D) An application for construction or acquisi-
tion of a nursing home or domiciliary from a State
that the Secretary determines, in accordance with
regulations under this subchapter, has a great need
for the beds to be established at such home or facil-
ity.
‘‘(E) An application from a State for renova-
tions to a State home facility other than renovations
described in subparagraph (B).
‘‘(F) An application for construction or acquisi-
tion of a nursing home or domiciliary from a State
that the Secretary determines, in accordance with
regulations under this subchapter, has a significant
need for the beds to be established at such home or
facility.
‘‘(G) An application that meets other criteria as
the Secretary determines appropriate and has estab-
lished in regulations.
‘‘(H) An application for construction or acquisi-
tion of a nursing home or domiciliary from a State
that the Secretary determines, in accordance with
regulations under this subchapter, has a limited
need for the beds to be established at such home or
facility.’’; and
(C) in paragraph (3), by striking subpara-
graph (A) and inserting the following:
‘‘(A) may not accord any priority to a project
for the construction or acquisition of a hospital;
and’’.
(c) TRANSITION.—The provisions of sections 8134
and 8135 of title 38, United States Code, as in effect on
June 1, 1999, shall continue in effect after such date with
respect to applications described in section 8135(b)(2)(A)
of such title, as in effect on that date, that are identified
on the list that (1) is described in section 8135(b)(4) of
such title, as in effect on that date, and (2) was estab-
lished by the Secretary of Veterans Affairs on October 29,
1998.
(d) EFFECTIVE DATE FOR INITIAL REGULATIONS.—
The Secretary of Veterans Affairs shall prescribe the ini-
tial regulations under subsection (a) of section 8134 of
title 38, United States Code, as added by subsection (a),
not later than April 30, 2000.
SEC. 207. EXPANSION OF ENHANCED-USE LEASE AUTHOR-
ITY.
(a) AUTHORITY.—Section 8162(a)(2) is amended—
(1) by striking ‘‘only if the Secretary’’ and in-
serting ‘‘only if—
‘‘(A) the Secretary’’;