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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2nd Session                                                    105-490
_______________________________________________________________________


 
   AUTHORIZING MAJOR MEDICAL CONSTRUCTION PROJECTS AND MAJOR MEDICAL 
FACILITY LEASES FOR THE DEPARTMENT OF VETERANS AFFAIRS FOR FISCAL YEAR 
                      1999, AND FOR OTHER PURPOSES

_______________________________________________________________________


 April 22, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Stump, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3603]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 3603), to authorize major medical facility 
projects and major medical facility leases for the Department 
of Veterans Affairs for fiscal year 1999, and for other 
purposes, having considered the same reports favorably thereon 
without amendment and recommends that the bill do pass.

                              Introduction

    On February 4, 1998, the Committee received testimony on 
the fiscal year 1999 Department of Veterans Affairs (VA) 
budget, including major construction plans. The Honorable Togo 
D. West, Jr., Acting Secretary of Veterans Affairs, testified 
for the VA. Among those accompanying Mr. West were Dr. Kenneth 
W. Kizer, Under Secretary for Health, and Mr. Mark Catlett, 
Acting Assistant Secretary for Management.
    A second hearing on the FY 1999 Department of Veterans 
Affairs budget was conducted on February 12, 1998. Those 
testifying included Mr. Gordon Mansfield, Executive Director of 
the Paralyzed Veterans of America; Mr. David Gorman, Executive 
Director of the Disabled American Veterans; Mr. Chuck Burns, 
National Service Director for AMVETS; Mr. Kenneth Steadman, 
Executive Director for the Veterans of Foreign Wars; Mr. 
Carroll Williams, Director of the National Veterans Affairs and 
Rehabilitation Commission of The American Legion; and Mr. Larry 
Rhea, Deputy Director of Legislative Affairs, Non Commissioned 
Officers Association.
    The Subcommittee on Health met on March 19, 1998 and 
ordered draft construction legislation reported favorably to 
the full Committee by unanimous voice vote.
    H.R. 3603 was introduced on March 31, 1998.
    The full Committee met on April 1, 1998 and ordered H.R 
3603 reported favorably to the House by unanimous voice vote.

                      Summary of the Reported Bill

    H.R. 3603 would:

    1) LAuthorize the following major medical facility 
projects:

          a) Lclinical consolidation and seismic corrections at 
        the Long Beach, California VA Medical Center;

          b) Lseismic corrections at the San Juan, Puerto Rico 
        VA medical Center;

          c) Loutpatient clinic expansion at the Washington, DC 
        VA Medical Center;

          d) Lconstruction and seismic corrections at the Palo 
        Alto (Menlo Park), California VA Medical Center;

          e) Lambulatory care improvements at the Cleveland 
        (Wade Park), Ohio VA Medical Center;

          f) Lambulatory care addition at the Tucson, Arizona 
        VA Medical Center;

          g) Lpsychiatric care addition at the Dallas, Texas VA 
        Medical Center;

          h) Loutpatient clinic projects at Auburn and Merced, 
        California, as part of the Northern California 
        Healthcare System; and

          i) La parking structure at the Denver, Colorado VA 
        Medical Center.

    2) LAuthorize major medical facility leases in Baton Rouge, 
Louisiana; Daytona Beach, Florida; and Oakland Park, Florida.

    3) LAuthorize appropriations of $205.3 million in the 
Construction, Major Projects account and $8.5 million in the 
Medical Care account for the leases.

    4) LIncrease the threshold for treatment of a parking 
facility project as a major medical facility project from $3 
million to $4 million.

                       Background and Discussion

                      Major Construction Projects

    The Administration's major construction budget for fiscal 
year 1999 seeks funds for only two medical construction 
projects. These two projects aim to remedy seismic problems, 
and to provide modern settings for furnishing care, at two 
tertiary hospitals. These two proposals are among a series of 
pending construction projects to which VA has assigned a high 
priority under the prioritization scoring methodology that it 
employs. But the budget submission ignores many other equally 
high-ranking projects.
    While the two requested projects are important, VA's 
construction budget for fiscal year 1999 fails to support 
priorities reflected in its medical care budget. Specifically, 
in limiting its request to two projects that focus on inpatient 
care needs, the construction budget ignores the high priority 
VA is otherwise giving to outpatient care in its medical care 
budget. The medical care budget, for example, envisions 
closures of additional hospital wards in FY 1999 and further 
expansion in the numbers of episodes of outpatient treatment.
    Notwithstanding the limited amounts actually requested for 
construction funding, VA planners have certainly seen the need 
to renovate, or add ambulatory additions to, decades-old 
hospital buildings. Many of these institutions simply lack 
adequate capacity to furnish outpatient care efficiently. 
Accordingly, while wholly silent on the matter in its major 
construction budget submission, VA, in reporting to Congress on 
its strategic plans, has identified several ambulatory care 
projects among its highest priority construction projects.
    With constrained major construction budgets, many 
ambulatory care and other high priority projects have been ``on 
hold'' for some time; they have undergone repeated scrutiny and 
reassessment. Given the very limited impact the 
Administration's major construction budget would have on VA's 
infrastructure needs, the Committee believes it is essential 
that Congress look beyond the Administration's budget proposal. 
The reported bill provides a foundation for such action.
    At the same time, while confident that the projects which 
the Committee has recommended represent long overdue 
infrastructure needs, the Committee is concerned about one 
aspect of the Department's prioritization process. The 
Committee learned that in developing its budget recommendations 
for fiscal year 1999 and identifying its highest priority major 
construction needs (in accordance with the requirements of 
section 8107(d) of title 38, United States Code), the 
Department conveyed to its network directors that it would 
largely limit the pool of projects it would consider to a 
single project from each of VHA's 22 networks. While that 
approach may in general be seen as fostering regional parity, 
it does not ensure that from a national perspective the 
Department's highest priorities are actually identified. By way 
of illustration, the Committee in 1989 and again in 1992 
recommended that funds be appropriated for a new spinal cord 
injury center at the Tampa, Florida VA Medical Center. While 
Congress appropriated funds for the first phase of that project 
(for working drawings and the construction of a new energy 
plant), the Tampa project was not among those included in VA's 
list, submitted in accordance with section 8107. Department 
officials have acknowledged, however, that while the Tampa 
project remains a high priority, the Director of the particular 
network identified a construction need at another hospital in 
the network as his highest priority. Accordingly, under its 
prioritization process, VA did not even consider the Tampa 
project in identifying its ``highest needs''. Such a policy 
places the Congress at a disadvantage in its consideration of 
construction needs.
    Of the construction projects that are included on VA's list 
of highest priorities, the Committee would authorize the 
following projects.
    The Committee proposes the authorization of clinical 
consolidations and seismic corrections at the Long Beach VA 
Medical Center for an amount not to exceed $23.2 million. One 
seismically and structurally unsound building will be 
demolished and services performed there will be consolidated 
into other buildings that will undergo needed renovations. This 
move will improve the health care environment for veterans 
using the facility and increase treatment efficiencies.
    The Committee would also authorize a seismic correction 
project at the San Juan VA Medical Center for an amount up to 
$50 million. The top six stories of the main hospital building, 
built in the 1950s and well below the recommended seismic 
safety standards, would be taken down and a new two story 
medical and surgical building would be constructed. The 
remaining floors of the original building would undergo seismic 
strengthening.
    As mentioned earlier, the Committee is mindful of the 
current backlog of VA construction projects and has added a 
number of projects that it believes to be well justified. This 
legislation would authorize an outpatient clinic expansion at 
the Washington, D.C. VA Medical Center for up to $29.7 million. 
The project would provide a building addition for the expansion 
of a number of specialties such as primary care services and 
outpatient radiology. The main building of the facility was 
built thirty years ago with an emphasis on inpatient care. As 
health care delivery has changed, so has the need to renovate 
the facility to adapt to the shift to ambulatory care.
    The Committee proposes an ambulatory care addition and 
renovation project at the Cleveland (Wade Park) VA Medical 
Center for an amount not to exceed $28.3 million, of which $7.5 
million would come from previously appropriated funds. This 
project would include the construction of an ambulatory care 
addition and renovation of existing space for ambulatory care, 
which is housed in a 40-year old building and is not well-
designed to handle the increasing numbers of outpatient visits. 
Overcrowding has resulted in the need to locate outpatient 
clinics on virtually every floor of the facility.
    An ambulatory care addition at the Tucson VA Medical Center 
would be authorized under this legislation for an amount up to 
$35 million. This project was previously authorized--but funds 
were never appropriated--in Public Law 104-262. The project 
would add two stories to an already-existing ambulatory care 
building at the facility. Currently, outpatient care is 
dispersed among several buildings, some of which are almost 70 
years old. The main ambulatory care building, built 20 years 
ago, was intended to provide services for 105,000 outpatient 
visits. In fiscal year 1996, Tucson provided more than 223,000 
visits.
    In 1996, Congress authorized a seismic correction project 
at the Palo Alto (Menlo Park) VA Medical Center. Monies for 
that project, however, were not appropriated. There remains a 
need to carry out this project, which would involve demolition 
of a seismically deficient building and construction of a one-
story, 120-bed psychogeriatric nursing home care building.
    The legislation would authorize construction of a new 
multi-level mental health addition on top of an already-
existing ambulatory care building at the Dallas VA Medical 
Center in an amount not to exceed $24.2 million. The current 
mental health program at the facility is dispersed across the 
campus; the VAMC's primary mental health structure was built in 
1939 and has major deficiencies that render it virtually 
obsolete. This construction project would consolidate the 
outpatient and inpatient mental health units into space that 
meets VA criteria and improves health care delivery for mental 
health patients.
    The reported bill would also authorize construction of a 
parking facility at the Denver VA Medical Center. Limited 
parking capacity at the facility limits ready access of 
patients and staff to the building. The proposed multi-level 
parking structure would provide 700 parking spaces and would 
include a horizontal connection to the medical center.
    Pursuant to a Congressional directive during the 105th 
Congress, VA undertook a study of the Northern California VA 
health care system to determine how best to provide care to 
veterans in that region. Among its findings, the study 
identified a need for outpatient improvements at Mare Island 
and Martinez, California and four additional community-based 
outpatient clinics. Last year, the Committee initiated 
legislation eventually signed into law to authorize the Mare 
Island and Martinez projects. Also last year, the VA determined 
that the least costly means of establishing the remaining 
clinics was to lease two of them--in Eureka and Chico--and 
purchase and renovate clinics at Auburn and Merced. The 
Committee thus recommends the authorization of the Auburn and 
Merced clinics.

                     Major Medical Facility Leases

    H.R. 3603 would authorize the VA to enter into three major 
medical leases and authorizes funding for sums representing the 
estimated annual rent and one-time cost of converting space for 
medical use. Specifically, this legislation would authorize 
funds for the lease of satellite outpatient clinics in Baton 
Rouge, Louisiana in an amount up to $1.8 million; Daytona 
Beach, Florida in an amount up to $2.6 million; and Oakland 
Park, Florida in an amount up to $4.1 million. There is special 
urgency associated with leasing space for clinic operations at 
Daytona Beach in that it would be an emergency acquisition to 
replace an existing clinic that has exhibited a number of 
deficiencies, including problems with heating, ventilation, and 
architecture.

                    Authorization of Appropriations

    H.R. 3603 would authorize the appropriation of $205.3 
million from the Construction, Major Projects account for the 
major medical facility projects.
    The bill would also authorize appropriations in the amount 
of $8.5 from the Medical Care account for the major medical 
facility leases.
    Funds for the California outpatient clinics were 
appropriated last year in the fiscal year 1998 Appropriations 
bill. Likewise, the money to build the parking structure in 
Denver would come from current unobligated balances and parking 
receipts available in the parking revolving fund, and not 
through newly authorized appropriations.

                   Parking Facility Project Threshold

    The Committee recognizes that costs of VA construction 
projects have risen with inflation over the years, and that 
many projects, which in the past would have been considered 
minor in scope, could no longer be accomplished within the 
then-applicable minor project threshold of $3 million. Such 
projects, therefore, would be deemed major construction--and in 
need of authorization--because of rising costs. Public Law 104-
262 included a provision that raised the threshold of a major 
medical construction project from $3 million to $4 million. 
Through an oversight, however, that law did not amend section 
8109 (i)(2) of title 38, United States Code, which set the 
threshold for treatment of a parking facility project as a 
major medical facility project at $3 million. H.R. 3603 would 
increase that threshold from $3 million to $4 million.

                      Section-By-Section Analysis

    Section 1(a)(1) would authorize clinical consolidation and 
seismic corrections at the Long Beach VA Medical Center in an 
amount not to exceed $23.2 million.

    Section 1(a)(2) would authorize construction and seismic 
work at the San Juan VA Medical Center in an amount not to 
exceed $50 million.

    Section 1(a)(3) would authorize clinic expansion at the 
Washington (D.C.) VA Medical Center in an amount not to exceed 
$29.7 million.

    Section 1(a)(4) would authorize construction of a 
psychogeriatric care building and seismic corrections at the 
Palo Alto (Menlo Park) VA Medical Center in an amount not to 
exceed $22.4 million.

    Section 1(a)(5) would authorize improvements in the 
ambulatory care department at the Cleveland (Wade Park) VA 
Medical Center in an amount not to exceed $28.3 million, of 
which $7.5 million would come from previously appropriated 
funds.

    Section 1(a)(6) would authorize an ambulatory care addition 
at the Tucson VA Medical Center in an amount not to exceed $35 
million.

    Section 1(a)(7) would authorize a psychiatric care addition 
at the Dallas VA Medical Center in an amount not to exceed 
$24.2 million.

    Section 1(a)(8) would authorize outpatient clinic projects 
at Auburn and Merced, California in an amount not to exceed $3 
million in previously appropriated funds.

    Section 1(b) would authorize a parking structure at the 
Denver VA Medical Center in an amount not to exceed $13 
million, of which $11.9 million would come from funds already 
in the Parking Revolving Fund.

    Section 2(1) would authorize the lease of a satellite 
outpatient clinic in Baton Rouge, Louisiana in an amount not to 
exceed $1.8 million.

    Section 2(2) would authorize the lease of a satellite 
outpatient clinic in Daytona Beach, Florida in an amount not to 
exceed $2.6 million.

    Section 2(3) would authorize the lease of a satellite 
outpatient clinic in Oakland Park, Florida in an amount not to 
exceed $4.1 million.

    Section 3(a)(1) would authorize $205.3 million in the 
Construction, Major Projects account for the major medical 
facility projects.

    Section 3(a)(2) would authorize $8.5 million in the Medical 
Care account for the major medical facility leases.

    Section 3(b)(1) would specify that the projects authorized 
in section 1(a) may only be carried out using funds 
appropriated in section 1(a); already appropriated, non-
obligated Construction, Major Projects funds; and unspecified 
pre-fiscal year 1999 Construction, Major Projects funds.

    Section 3(b)(2) would specify that the parking structure 
project at the Denver VA Medical Center may only be carried out 
using pre-fiscal year 1999 funds from the Parking Revolving 
Funds and unspecified Construction, Major Projects funds.

    Section 4 would increase the threshold for treatment of a 
parking facility project as a major medical facility project 
from $3 million to $4 million.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 2, 1998.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has prepared the enclosed cost estimate for H.R. 3603, a bill 
to authorize major medical facility projects and major medical 
facility leases for the Department of Veterans Affairs for 
fiscal year 1999, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them.
    The CBO staff contact is Shawn Bishop, who can be reached 
at 226-2840.
            Sincerely,
                                           June E. O'Neill,
                                                           Director

    Enclosure

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

  H.R. 3603--A bill to authorize major medical facility projects and 
 major medical facility leases for the Department of Veterans Affairs 
              for fiscal year 1999, and for other purposes

    As ordered reported by the House Committee on Veterans ' 
Affairs on April 1, 1998

    Summary. --H.R. 3603 would authorize appropriations for 
construction projects and leases at medical facilities of the 
Department of Veterans Affairs (VA). CBO estimates that 
enacting the bill would result in outlays of about $9 million 
in 1999 and $203 million over the 1999-2003 period, assuming 
appropriation of the authorized amounts. Because the bill would 
not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. The bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 (UMRA) and would not 
affect the budgets of state, local, or tribal governments.

    Estimated cost to the Federal Government. --The bill would 
authorize appropriations of $205.3 million to complete several 
projects that are specifed in the bill. The bill would also 
authorize appropriations of $8.5 million for leasing agreements 
for three satellite outpatient clinics. The following table 
shows CBO's estimate of the budgetary impact of the bill over 
the 1999-2003 period, assuming appropriation of the authorized 
amounts. The costs of this legislation would fall within budget 
function 700 (veterans affairs).


                                       Table 1. Budgetary Impact of H.R.3603 on Spending Subject to Appropriations                                      
                                                        [By fiscal year, in millions of dollars]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           1998             1999             2000             2001             2002             2003    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
                                                                 Major Construction                                                                     
Spending for Major Construction                                                                                                                         
 Under Current Law                                                                                                                                      
  Budget authority 1..............................            209                0                0                0                0                0  
  Estimated outlays...............................            328              287              209              121               51                8  
Proposed Changes                                                                                                                                        
  Authorization level.............................              0              205                0                0                0                0  
  Estimated outlays...............................              0                1               33               64               60               37  
Spending Under H.R. 3603                                                                                                                                
  Authorization level 1...........................            209              205                0                0                0                0  
  Estimated outlays...............................            328              288              241              185              111               46  
                                                                                                                                                        
                                                                 Leasing Agreements                                                                     
Spending for Medical Care                                                                                                                               
 Under Current Law                                                                                                                                      
  Budget authority 2..............................         17,739           17,739           17,739           17,739           17,739           17,739  
  Estimated outlays...............................         17,615           18,122           17,763           17,739           17,739           17,739  
Proposed Changes                                                                                                                                        
  Authorization level.............................              0                9                0                0                0                0  
  Estimated outlays...............................              0                8                1                0                0                0  
Spending Under H.R. 3603                                                                                                                                
  Authorization level 1...........................         17,739           17,748           17,739           17,739           17,739           17,739  
  Estimated outlays...............................         17,615           18,130           17,764           17,739           17,739           17,739  
                                                                                                                                                        
                                                               Total Proposed Changes                                                                   
  Authorization level.............................              0              214                0                0                0                0  
  Estimated outlays...............................              0                9               34               64               60               37  
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: Details may not add to totals because of rounding.                                                                                                
                                                                                                                                                        
1 The 1998 level is the amount appropriated for that year.                                                                                              
2 The current law amounts shovn here assume that appropriations remain at the 1998 level. If they are adjusted for inflation, the base amounts would    
  rise by about S600 nillion a year, but the estimated changes would remain as shovn.                                                                   


    In addition, the bill would authorize other projects that 
would not require new appropriations. First, the bill would 
authorize VA to spend $13 million to construct a parking 
structure at the medical center in Denver, Colorado. For this 
project, VA would be required to use $12 million from balances 
in the Parking Revolving Fund and $1 million from certain 
appropriations provided prior to 1999 for major construction 
projects. Second, the bill would authorize VA to use $10.5 
million in unobligated balances to build ambulatory care 
facilities. The funding would be derived from amounts 
appropriated for fiscal years beginning before 1999 and that 
remain available for obligation. CBO estimates that these 
authorizations would have no budgetary impact because the 
annual spending for the newly authorized projects would not 
differ significantly from spending for the projects that were 
funded originally.

    Pay-as-you-go considerations. --None.

    Intergovernmental and private-sector impact. --The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of State, 
Local, or Tribal governments.

    Estimate prepared by:
          Federal Costs: Shawn Bishop
          Impact on State, Local, and Tribal Governments: Marc 
        Nicole
          Impact on the Private Sector: Rachel Schmidt

    Estimate approved by:
          Robert A. Sunshine, Deputy Assistant Director for 
        Budget Analysis

                     Inflationary Impact Statement

    The enactment of the reported bill would have no 
inflationary impact.

                  Applicability to Legislative Branch

    The reported bill would not be applicable to the 
legislative branch under the Congressional Accountability Act, 
Public Law 104-1, because it would apply only to certain 
Department of Veterans Affairs programs and facilities.

                            Roll Call Votes

    There were no roll call votes in connection with Committee 
action on H.R. 3603.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, the reported bill would be authorized by 
Congress' power to ``provide for the common Defence and general 
Welfare of the United States.''

                     Statement of Federal Mandates

    The reported bill would not establish a federal mandate 
under the Unfunded Mandates Reform Act, Public Law 104-4.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

              SECTION 8109 OF TITLE 38, UNITED STATES CODE

Sec. 8109. Parking facilities

  (a) * * *

           *       *       *       *       *       *       *

  (i)(1) * * *
  (2) For the purpose of section 8104(a)(2) of this title, a 
bill, resolution, or amendment which provides that funds in the 
revolving fund (including any funds proposed in such bill, 
resolution, or amendment to be appropriated to the revolving 
fund) may be expended for a project involving a total 
expenditure of more than [$3,000,000] $4,000,000 for the 
construction, alteration, or acquisition (including site 
acquisition) of a parking facility or facilities at a medical 
facility shall be considered to be a bill, resolution, or 
amendment making an appropriation which may be expended for a 
major medical facility project.