To amend title 38, United States Code, to establish within the Department of Veterans Affairs a program to assist the States in hiring and retaining nurses at State veterans homes.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``State Veterans Home Nurse 
Recruitment Act of 2004''.

SEC. 2. ASSISTANCE FOR HIRING AND RETENTION OF NURSES AT STATE VETERANS 
              HOMES.

    (a) In General.--(1) Chapter 17 of title 38, United States Code, is 
amended by inserting after section 1743 the following new section:
``Sec. 1744. Hiring and retention of nurses: payments to assist States
    ``(a) Payment Program.--The Secretary shall make payments to States 
under this section for the purpose of assisting State homes in the 
hiring and retention of nurses and the reduction of nursing shortages 
at State homes.
    ``(b) Eligible Recipients.--Payments to a State for a fiscal year 
under this section shall, subject to submission of an application, be 
made to any State that during that year--
            ``(1) receives per diem payments under this subchapter for 
        that fiscal year; and
            ``(2) has in effect an employee incentive scholarship 
        program or other employee incentive program at a State home 
        designed to promote the hiring and retention of nursing staff 
        and to reduce nursing shortages at that home.
    ``(c) Use of Funds Received.--A State may use an amount received 
under this section only to provide funds for a program described in 
subsection (b)(2). Any program shall meet such criteria as the 
Secretary may prescribe. In prescribing such criteria, the Secretary 
shall take into consideration the need for flexibility and innovation.
    ``(d) Limitations on Amount of Payment.--(1) A payment under this 
section may not be used to provide more than 50 percent of the costs 
for a fiscal year of the employee incentive scholarship or other 
incentive program for which the payment is made.
    ``(2) The amount of the payment to a State under this section for 
any fiscal year is, for each State home in that State with a program 
described in subsection (b)(2), the amount equal to 2 percent of the 
amount of payments estimated to be made to that State, for that State 
home, under section 1741 of this title for that fiscal year.
    ``(e) Applications.--A payment under this section for any fiscal 
year with respect to any State home may only be made based upon an 
application submitted by the State seeking the payment with respect to 
that State home. Any such application shall describe the nursing 
shortage at the State home and the employee incentive scholarship 
program or other incentive program described in subsection (c) for 
which the payment is sought.
    ``(f) Source of Funds.--Payments under this section shall be made 
from funds available for other payments under this subchapter.
    ``(g) Disbursement.--Payments under this section to a State home 
shall be made as part of the disbursement of payments under section 
1741 of this title with respect to that State home.
    ``(h) Use of Certain Receipts.--The Secretary shall require as a 
condition of any payment under this section that, in any case in which 
the State home receives a refund payment made by an employee in breach 
of the terms of an agreement for employee assistance that used funds 
provided under this section, the payment shall be returned to the State 
home's incentive program account and credited as a non-Federal funding 
source.
    ``(i) Annual Report From Payment Recipients.--Any State home 
receiving a payment under this section for any fiscal year, shall, as a 
condition of the payment, be required to agree to provide to the 
Secretary a report setting forth in detail the use of funds received 
through the payment, including a descriptive analysis of how effective 
the incentive program has been on nurse staffing in the State home 
during that fiscal year. The report for any fiscal year shall be 
provided to the Secretary within 60 days of the close of the fiscal 
year and shall be subject to audit by the Secretary. Eligibility for a 
payment under this section for any later fiscal year is contingent upon 
the receipt by the Secretary of the annual report under this subsection 
for the previous year in accordance with this subsection.
    ``(j) Regulations.--The Secretary shall prescribe regulations to 
carry out this section. The regulations shall include the establishment 
of criteria for the award of payments under this section.''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after section 1743 the following new item:

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

Summary: State Veterans Home Nurse Recruitment Act of 2004 - Amends Federal veterans' benefits provisions to direct the Secretary of Veterans Affairs to make payments to States for assisting State veterans' homes in the hiring and retention of nurses and the reduction of nursing shortages at such homes. Makes eligible for such assistance State homes that: (1) currently receive per diem payments from the Secretary for the care of veterans; and (2) have in effect an employee incentive scholarship or other program designed to promote the hiring and retention of nursing staff and reduce nursing shortages. Limits such assistance to no more than 50 percent of the fiscal year costs of such a program.

Requires the assistance program to be implemented as expeditiously as possible, so that payments are made to eligible States commencing no later than January 1, 2005.