I 118th CONGRESS 2d Session H. R. 10536 IN THE HOUSE OF REPRESENTATIVES December 19, 2024 Mr. McGarvey (for himself and Mr. Levin ) introduced the following bill; which was referred to the Committee on Veterans' Affairs A BILL To amend title 38, United States Code, to establish a mission of the Veterans Health Administration to innovate, and for other purposes.

1. Short title This Act may be cited as the Innovation for VA Technology and Entrepreneurship Act or the INNOVATE Act . 2. Findings Congress finds the following: (1) The Department of Veterans Affairs offers critical health care services through the Veterans Health Administration (in this section referred to as the VHA ), serving as the largest integrated health care system, largest medical training organization, and one of the largest employers of health care professionals in the United States. (2) Despite its size, assets, and reach, the VHA struggles to engage with private sector entities, particularly early-stage businesses, due to bureaucratic hurdles. (3) If provided new authorities through legislation, the VHA is positioned to create a paradigm shift in health care, revitalizing the way it develops and innovates to improve clinical care and access to health care for veterans, and modeling transformational health care to the private sector, ultimately benefitting all Americans. (4) Establishing a fifth mission of the VHA to innovate will ingrain an innovative mindset across all VHA operations, enhance the existing missions and spearhead a new American way in health care, improving health outcomes for veterans, the health of the Nation, and national security. (5) The Office of Innovation of the VHA will authorize, fund, and streamline processes, enhancing the VHA network of innovation programs and fostering collaboration and partnerships with industry, government, and academia. 3. Innovation in the Veterans Health Administration (a) Mission Section 305(b) of title 38, United States Code, is amended— (1) by inserting (1) before The Under Secretary ; and (2) by adding at the end the following new paragraph: (2) The missions of the Veterans Health Administration are the following: (A) Providing health care to eligible veterans. (B) Supporting research to benefit veterans and the Nation. (C) Providing education to health care providers in training. (D) Supporting emergency response. (E) Fostering innovation to advance health care technology and services for veterans and the Nation. . (b) Office of Innovation (1) Establishment Chapter 73 of title 38, United States Code, is amended by adding at the end the following new subchapter: VI Innovation 7391. Office of Innovation (a) Establishment There is in the Veterans Health Administration an Office of Innovation (in this section referred to as the Office ). The Office shall be a Federal laboratory, as such term is defined in section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 ( Public Law 96–480 ; 15 U.S.C. 3703 ). (b) Function The function of the Office is to foster innovation to advance health care and services for veterans and the Nation by— (1) researching, developing, and implementing innovative technologies and services to deliver the best health care practicable to veterans; (2) assisting, funding, and partnering with non-Department entities that can rapidly accelerate the research, development, commercialization, and implementation of technologies and services described in paragraph (1); and (3) adopting a comprehensive approach that works across traditional silos to effectively and efficiently— (A) use financial and human resources; and (B) expedite the development, commercialization, and deployment, of such technologies and solutions. (c) Chief Innovation Officer The head of the Office is the Chief Innovation Officer. The Chief Innovation Officer shall report directly to the Under Secretary for Health. (d) Organization and personnel The Office shall be organized in such manner, and its personnel shall perform such duties and have such titles, as the Secretary may prescribe pursuant to this subchapter. 7392. Hiring authorities (a) Exemption from civil service laws for certain employees (1) To carry out the function of the Office of Innovation, the Secretary may— (A) appoint not more than 250 professional, clinical, and other employees (which may include permanent, temporary, or term-limited appointments) of the Department, without regard to— (i) any provision of title 5 governing appointments and removals under the civil service laws; or (ii) any provision of chapter 7 of this title; and (B) fix the base pay compensation of an employee appointed under this subsection— (i) without regard to any other provision of law, including the General Schedule under section 5332 of title 5; and (ii) at a rate determined by the Secretary that does not exceed the amount of annual compensation (excluding expenses) established by section 102 of title 3. (2) In carrying out paragraph (1), the Secretary shall— (A) make lawful efforts to recruit a diverse workforce, including individuals under represented in clinical and other relevant technical and non-technical areas of expertise, including racial and ethnic minorities; and (B) recruit employees with a variety of professional experiences and backgrounds, or demonstrated expertise in a wide range of relevant disciplines and management skills. (3) If the Secretary determines that maximum number of positions under paragraph (1) is insufficient, the Secretary shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives a written notification of such determination. (4) The Secretary may enter into an agreement with a private entity to identify and recruit highly qualified candidates for a position described in paragraph (1). (b) Other employees The Secretary may use any other authority under this title to hire administrative, financial, clerical, and other employees necessary to support employees appointed under subsection (a). (c) Waiver of Intergovernmental Personnel Act Mobility Program limits The Secretary may waive the limit on the period and number of assignments required under section 3372(a) of title 5 with respect to an individual who carries out the function established by section 7391(b) of this title under the mobility program under subchapter VI of chapter 33 of such title (commonly referred to as the Intergovernmental Personnel Act Mobility Program ). (d) Authority To accept Federal detailees Upon request of the Secretary, the head of any Federal department or agency may detail, on a reimbursable or nonreimbursable basis (as determined by the Secretary and such head), any personnel of that department or agency to the Department to assist in carrying out the function of the Office of Innovation. Such a detail may not exceed three years. (e) Recordkeeping The Secretary shall keep records regarding the exercise of authorities under this section. Such records shall include the following: (1) the number of appointments made; (2) the types of positions filled, including titles, occupational series, and grade; (3) the number of positions filled for which notices were publicly issued; (4) the number of qualified applicants who applied for such positions; (5) the qualification criteria for such positions; and, (6) the demographic information of individuals hired for such positions. (f) Report Not less than once annually, the Secretary shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives a report on appointments under this section. Such report shall include the number of such appointments and an explanation of how such employees carry out the function established by section 7391(b) of this title. 7393. Acceleration fund (a) Establishment There is established an account, to be known as the Veterans Health Care Innovation Acceleration Fund (in this section referred to as the Fund ), which shall be available to carry out the function of the Office of Innovation, in addition to such amounts that are otherwise available for such purpose. To manage the fund, the Secretary may— (1) accept monies from authorized sources for the Fund; (2) accept and distribute monies within the Department as the Secretary determines necessary; (3) establish a health care franchise function; and (4) pay for expenses (including information technology or acquisition, advisory, or legal services, whether provided by an employee of the Department or pursuant to an agreement with a non-Department entity) that the Secretary determines necessary to carry out the function of the Office of Innovation, without regard to restrictions on funding type. (b) Authorization of appropriations (1) There are authorized to be appropriated to the Fund such sums as may be necessary to carry out the function of the Office of Innovation. Such sums shall remain available until expended or five years after receipt. (2) The budget request for the Fund shall be separate from the rest of the budget of the Department. (3) Appropriations for the Fund shall be separate and distinct from the rest of the budget for the Department and not affect annual operational dollar allocations. (c) Non-Profit corporations To support the administration of the Fund with regard to acceptance of certain types of external funding, the Secretary shall authorize existing nonprofit corporations, established under section 7361 of this title, to carry out the function of the Office of Innovation. (d) Report to Congress The Secretary shall submit to Congress a detailed account, program, and project allocations of the amount recommended for allocation in a fiscal year from amounts in the Fund— (1) for Fiscal Years 2026 and 2027, not later than 60 days after the date of enactment of the Innovation for VA Technology and Entrepreneurship Act; and (2) for each fiscal year thereafter through 2035, as part of the annual budget submission of the President under section 1105(a) of title 31. 7394. Agreements with non-Department entities for access to key assets of the Department (a) Authority The Secretary may enter into an agreement under which the Secretary provides a non-Department entity access to a key asset of the Department so such entity may develop a technology or service that— (1) supports the strategic plan of the Department regarding health care; and (2) addresses a veteran-specific core competency. (b) Fees (1) Subject to paragraphs (2) and (3), the Secretary shall negotiate fees under this section on a case-by-case basis, taking into consideration factors including the costs and benefits to the United States of such agreement. (2) The Secretary shall discount a fee under this section if the entity is a small business concern owned and controlled by a veteran. (3) The Secretary shall not charge a fee under this section if the entity is a small business concern owned and controlled by a veteran with a service-connected disability. (c) Definitions In this section: (1) The term key asset includes the following: (A) Subject matter expertise & perspective. (B) Properly protected data sets. (C) Research evaluations, studies, and trials. (D) Customer feedback and insights. (E) Simulation and production test environments. (F) Health care professionals, students, and trainees. (G) Advanced manufacturing and three-dimensional printing. (H) Engagement from other Federal entities. (I) A network of academic affiliates. (2) The term veteran-specific core competency means a health condition that the Secretary determines disproportionately affects veterans. Such term includes the following: (A) Prostheses. (B) Spinal cord injury. (C) Toxic exposure. (D) Traumatic brain injury. (E) Mental health (including suicide prevention and post-traumatic stress disorder); (F) Diabetes. (G) Heart disease. (H) Obesity. (I) Cancer. 7395. Advance market commitments (a) Authority The Secretary may enter into an advance market commitment, under which the Secretary shall guarantee to purchase, for a predetermined price, a technology or service provided by an entity that addresses an unmet need in the provision of health care to veterans. (b) Requirements An advanced market commitment under this section shall include the following: (1) Clearly defined and transparent rules. (2) Clear definition of the technology or service to ensure safety, effectiveness, and feasible delivery. (3) Dispute settlement mechanisms. (4) The ability to modify the terms of the agreement on the basis of new information regarding the number of veterans to be served with such technology or service. (c) Report Not later than 120 days after executing an advance market agreement, the Secretary shall submit to the House and Senate Committees on Veterans Affairs an annual report on the status and efficacy of such agreement. 7396. Other transactional authorities (a) Authority The Secretary may enter into an agreement, other than a contract, cooperative agreement, or grant agreement, with a non-Department entity that principally operates in the United States, to conduct activities associated with basic or applied research, prototyping, or production deployment, if— (1) the Senior Procurement Executive of the Department has determined that a contract, cooperative agreement, or grant agreement is not feasible or appropriate; and (2) the cost to the United States to carry out such agreement does not exceed— (A) $10,000,000 (including all options); or (B) a greater amount that the Senior Procurement Executive determines appropriate. (b) Limitation The only kinds of research on human embryonic stem cells that may be conducted pursuant to an agreement under this section are the following: (1) Research involving the derivation and use of human embryonic germ cells from fetal tissue that complies with— (A) sections 498, 498A, and 498B of the Public Health Service Act ( 42 U.S.C. 289g , 289g–1, 289–2); (B) title 45, Code of Federal Regulations, part 46, subpart B; (C) applicable regulations of the Food and Drug Administration; and (D) any other applicable Federal, State, or local law. (2) Research on existing human embryonic stem cell lines in accordance with criteria established by the Director of the National Institutes of Health. (c) Reimbursement Any amounts received by the Secretary under this section shall be used to reimburse the accounts from which funds were used to incur the expenses of carrying out this section. (d) Reporting; transparency The Secretary shall— (1) submit to the appropriate congressional committees— (A) a copy of each determination under subsection (a)(1); (B) not less than twice each year, a report on agreements made under this section; and (C) upon request, any information regarding an agreement made under this section; and (2) ensure that the terms of an agreement under this section permit the Comptroller General of the United States to examine the records relating to such agreement of— (A) an entity that enters into such an agreement; or (B) an entity that otherwise participates in the performance of such agreement. (e) Guidance The Senior Procurement Executive shall issue guidance regarding an agreement under this section. (f) Definitions In this section: (1) The term appropriate congressional committees means the following: (A) The Committees on Veterans’ Affairs of the House of Representatives and the Senate. (B) The Subcommittees on Military Construction, Veterans’ Affairs, and Related Agencies of the Committees on Appropriations of the House of Representatives and the Senate. (2) The term Senior Procurement Executive means the official of the Department designated under section 1702(c) of title 41. . (2) Clerical amendment The table of sections at the beginning of such chapter is amended by adding at the end the following: SUBCHAPTER VI—INNOVATION Sec. 7391. Office of Innovation. Sec. 7392. Hiring authorities. Sec. 7393. Acceleration fund. Sec. 7394. Agreements with non-Department entities for access to key assets of the Department. Sec. 7395. Advance market commitments. Sec. 7396. Other transactional authorities. (c) Conforming amendment Section 7361 of title 38, United States Code, is amended— (1) in subsection (a), by striking either research or education or both research and education and inserting research, education, or innovation under subchapter VI of this chapter, or any combination thereof ; and (2) in subsection (b)(1), by striking research, education, or both and inserting research, education, or innovation under subchapter VI of this chapter, or any combination thereof . (d) Implementation Not later than 120 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall carry out the amendments made by this section.