SECTION 1. CENTERS OF EXCELLENCE FOR RURAL HEALTH RESEARCH, EDUCATION, 
              AND CLINICAL ACTIVITIES.

    (a) In General.--Subchapter II of chapter 73 of title 38, United 
States Code, is amended by adding at the end the following new section:
``Sec. 7330B. Centers of excellence for rural health research, 
              education, and clinical activities
    ``(a) Establishment of Centers.--The Secretary, through the 
Director of the Office of Rural Health, shall establish and operate not 
less than one and not more than five centers of excellence for rural 
health research, education, and clinical activities, which shall--
            ``(1) conduct research on the provision of health services 
        in rural areas;
            ``(2) develop specific models to be used by the Department 
        in furnishing health services to veterans in rural areas;
            ``(3) provide education and training for health care 
        professionals of the Department on the furnishing of health 
        services to veterans in rural areas; and
            ``(4) develop and implement innovative clinical activities 
        and systems of care for the Department for the furnishing of 
        health services to veterans in rural areas.
    ``(b) Geographic Dispersion.--The Secretary shall ensure that the 
centers established under this section are located at health care 
facilities that are geographically dispersed throughout the United 
States.
    ``(c) Selection Criteria.--The Secretary may not designate a health 
care facility as a location for a center under this section unless--
            ``(1) the peer review panel established under subsection 
        (d) determines that the proposal submitted by such facility 
        meets the highest competitive standards of scientific and 
        clinical merit; and
            ``(2) the Secretary determines that such facility has, or 
        may reasonably be anticipated to develop, the following:
                    ``(A) An arrangement with an accredited medical 
                school to provide residents with education and training 
                in health services for veterans in rural areas.
                    ``(B) The ability to attract the participation of 
                scientists who are capable of ingenuity and creativity 
                in health care research efforts.
                    ``(C) A policymaking advisory committee, composed 
                of appropriate health care and research representatives 
                of the facility and of the affiliated school or 
                schools, to advise the directors of such facility and 
                such center on policy matters pertaining to the 
                activities of such center during the period of the 
                operation of such center.
                    ``(D) The capability to conduct effectively 
                evaluations of the activities of such center.
    ``(d) Panel To Evaluate Proposals.--(1) The Director of the Office 
of Rural Health shall establish a panel--
                    ``(A) to evaluate the scientific and clinical merit 
                of proposals submitted to establish centers under this 
                section; and
                    ``(B) to provide advice to the Director regarding 
                the implementation of this section.
            ``(2) The panel shall review each proposal received from 
        the Secretary and shall submit its views on the relative 
        scientific and clinical merit of each such proposal to the 
        Secretary.
            ``(3) The panel established under paragraph (1) shall be 
        comprised of experts in the fields of public health research, 
        education, and clinical care.
            ``(4) Members of the panel shall serve as consultants to 
        the Department for a period not to exceed two years.
            ``(5) The panel shall not be subject to the Federal 
        Advisory Committee Act (5 U.S.C. App.).
    ``(e) Reports.--Not later than April 1 of each year, the Secretary 
shall submit to Congress a report on the centers established under this 
section. Such report shall include--
            ``(1) the results of research conducted under subsection 
        (a)(1);
            ``(2) an evaluation of models related to furnishing health 
        services to veterans in rural areas developed under subsection 
        (a)(2);
            ``(3) an evaluation of the education and training provided 
        under subsection (a)(3); and
            ``(4) an evaluation of clinical activities or systems of 
        care related to furnishing health services to veterans in rural 
        areas developed under subsection (a)(4).
    ``(f) Funding.--(1) There are authorized to be appropriated to the 
Medical Care Account and the Medical and Prosthetics Research Account 
of the Department of Veterans Affairs such sums as may be necessary for 
the support of the research and education activities of the centers 
operated under this section.
            ``(2) There shall be allocated to the centers operated 
        under this section, from amounts authorized to be appropriated 
        to the Medical Care Account and the Medical and Prosthetics 
        Research Account by paragraph (1), such amounts as the Under 
        Secretary of health considers appropriate for such centers. 
        Such amounts shall be allocated through the Director of the 
        Office of Rural Health.
            ``(3) Activities of clinical and scientific investigation 
        at each center operated under this section--
                    ``(A) shall be eligible to compete for the award of 
                funding from funds appropriated for the Medical and 
                Prosthetics Research Account; and
                    ``(B) shall receive priority in the award of 
                funding from such account to the extent that funds are 
                awarded to projects for research in the care of rural 
                veterans.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 73 of such title is amended by inserting after the item 
relating to section 7330A the following new item:

``7330B. Centers of excellence for rural health research, education, 
                            and clinical activities.''.
Output: Directs the Secretary of Veterans Affairs (VA) to establish and operate at least one, and up to five, centers of excellence for rural health research, education, and clinical activities. Requires the submission of annual reports on those centers.