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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-162

======================================================================

 
      VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 2005

                                _______
                                

 June 30, 2005.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1220]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 1220) to increase, effective as of December 1, 2005, 
the rates of disability compensation for veterans with service-
connected disabilities and the rates of dependency and 
indemnity compensation for survivors of certain service-
connected disabled veterans, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 2005''.

SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND DEPENDENCY AND 
                    INDEMNITY COMPENSATION.

  (a) Rate Adjustment.--The Secretary of Veterans Affairs shall, 
effective on December 1, 2005, increase the dollar amounts in effect 
for the payment of disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in subsection (b).
  (b) Amounts To Be Increased.--The dollar amounts to be increased 
pursuant to subsection (a) are the following:
          (1) Compensation.--Each of the dollar amounts in effect under 
        section 1114 of title 38, United States Code.
          (2) Additional compensation for dependents.--Each of the 
        dollar amounts in effect under section 1115(1) of such title.
          (3) Clothing allowance.--The dollar amount in effect under 
        section 1162 of such title.
          (4) New dic rates.--The dollar amounts in effect under 
        paragraphs (1) and (2) of section 1311(a) of such title.
          (5) Old dic rates.--Each of the dollar amounts in effect 
        under section 1311(a)(3) of such title.
          (6) Additional dic for surviving spouses with minor 
        children.--The dollar amounts in effect under section 1311(b) 
        of such title and paragraph (1) of section 1311(f) of such 
        title (as redesignated by subsection (e) of this section).
          (7) Additional dic for disability.--The dollar amounts in 
        effect under sections 1311(c) and 1311(d) of such title.
          (8) Dic for dependent children.--The dollar amounts in effect 
        under sections 1313(a) and 1314 of such title.
  (c) Determination of Increase.--
          (1) Base for increase.--The increase under subsection (a) 
        shall be made in the dollar amounts specified in subsection (b) 
        as in effect on November 30, 2005.
          (2) Percentage of increase.--Except as provided in paragraph 
        (3), each such amount shall be increased by the same percentage 
        as the percentage by which benefit amounts payable under title 
        II of the Social Security Act (42 U.S.C. 401 et seq.) are 
        increased effective December 1, 2005, as a result of a 
        determination under section 215(i) of such Act (42 U.S.C. 
        415(i)).
          (3) Rounding.--Each dollar amount increased pursuant to 
        paragraph (2) shall, if not a whole dollar amount, be rounded 
        down to the next lower whole dollar amount.
  (d) Special Rule.--The Secretary may adjust administratively, 
consistent with the increases made under subsection (a), the rates of 
disability compensation payable to persons within the purview of 
section 10 of Public Law 85-857 (72 Stat. 1263) who are not in receipt 
of compensation payable pursuant to chapter 11 of title 38, United 
States Code.
  (e) Designation Correction.--Section 1311 of title 38, United States 
Code, is amended by redesignating the second subsection (e) (added by 
section 301(a) of the Veterans Benefits Improvement Act of 2004 (Public 
Law 108-454; 118 Stat. 3610)) as subsection (f).

SEC. 3. PUBLICATION OF ADJUSTED RATES.

  At the same time as the matters specified in section 215(i)(2)(D) of 
the Social Security Act (42 U.S.C. 415(i)(2)(D)) are required to be 
published by reason of a determination made under section 215(i) of 
such Act during fiscal year 2006, the Secretary of Veterans Affairs 
shall publish in the Federal Register the amounts specified in 
subsection (b) of section 2, as increased pursuant to that section.

SEC. 4. CODIFICATION OF FISCAL YEAR 2005 COST-OF-LIVING ADJUSTMENT 
                    PROVIDED IN PUBLIC LAW 108-363.

  (a) Veterans' Disability Compensation.--Section 1114 of title 38, 
United States Code, is amended--
          (1) in subsection (a), by striking ``$106'' and inserting 
        ``$108'';
          (2) in subsection (b), by striking ``$205'' and inserting 
        ``$210'';
          (3) in subsection (c), by striking ``$316'' and inserting 
        ``$324'';
          (4) in subsection (d), by striking ``$454'' and inserting 
        ``$466'';
          (5) in subsection (e), by striking ``$646'' and inserting 
        ``$663'';
          (6) in subsection (f), by striking ``$817'' and inserting 
        ``$839'';
          (7) in subsection (g), by striking ``$1,029'' and inserting 
        ``$1,056'';
          (8) in subsection (h), by striking ``$1,195'' and inserting 
        ``$1,227'';
          (9) in subsection (i), by striking ``$1,344'' and inserting 
        ``$1,380'';
          (10) in subsection (j), by striking ``$2,239'' and inserting 
        ``$2,299'';
          (11) in subsection (k)--
                  (A) by striking ``$82'' both places it appears and 
                inserting ``$84''; and
                  (B) by striking ``$2,785'' and ``$3,907'' and 
                inserting ``$2,860'' and ``$4,012'', respectively;
          (12) in subsection (l), by striking ``$2,785'' and inserting 
        ``$2,860'';
          (13) in subsection (m), by striking ``$3,073'' and inserting 
        ``$3,155'';
          (14) in subsection (n), by striking ``$3,496'' and inserting 
        ``$3,590'';
          (15) in subsections (o) and (p), by striking ``$3,907'' each 
        place it appears and inserting ``$4,012'';
          (16) in subsection (r), by striking ``$1,677'' and ``$2,497'' 
        and inserting ``$1,722'' and ``$2,564'', respectively; and
          (17) in subsection (s), by striking ``$2,506'' and inserting 
        ``$2,573''.
  (b) Additional Compensation for Dependents.--Section 1115(1) of such 
title is amended--
          (1) in subparagraph (A), by striking ``$127'' and inserting 
        ``$130'';
          (2) in subparagraph (B), by striking ``$219'' and ``$65'' and 
        inserting ``$224'' and ``$66'', respectively;
          (3) in subparagraph (C), by striking ``$86'' and ``$65'' and 
        inserting ``$88'' and ``$66'', respectively;
          (4) in subparagraph (D), by striking ``$103'' and inserting 
        ``$105'';
          (5) in subparagraph (E), by striking ``$241''and inserting 
        ``$247''; and
          (6) in subparagraph (F), by striking ``$202'' and inserting 
        ``$207''.
  (c) Clothing Allowance for Certain Disabled Veterans.--Section 1162 
of such title is amended by striking ``$600'' and inserting ``$616''.
  (d) Dependency and Indemnity Compensation for Surviving Spouses.--
          (1) New law dic.--Section 1311(a) of such title is amended--
                  (A) in paragraph (1), by striking ``$967'' and 
                inserting ``$993''; and
                  (B) in paragraph (2), by striking ``$208'' and 
                inserting ``$213''.
          (2) Old law dic.--The table in paragraph (3) of such section 
        is amended to read as follows:



             ``Pay grade                         Monthly rate                   Pay grade          Monthly rate

E-1..................................  $993                              W-4....................          $1,188
E-2..................................  $993                              O-1....................          $1,049
E-3..................................  $993                              O-2....................          $1,084
E-4..................................  $993                              O-3....................          $1,160
E-5..................................  $993                              O-4....................          $1,227
E-6..................................  $993                              O-5....................          $1,351
E-7..................................  $1,027                            O-6....................          $1,523
E-8..................................  $1,084                            O-7....................          $1,645
E-9..................................  $1,1311                           O-8....................          $1,805
W-1..................................  $1,049                            O-9....................          $1,931
W-2..................................  $1,091                            O-10...................         $2,1182
W-3..................................  $1,123                            .......................  ..............


1 If the veteran served as sergeant major of the Army, senior enlisted advisor of the Navy, chief master
  sergeant of the Air Force, sergeant major of the Marine Corps, or master chief petty officer of the Coast
  Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate shall be
  $1,221.
2 If the veteran served as Chairman or Vice-Chairman of the Joint Chiefs of Staff, Chief of Staff of the Army,
  Chief of Naval Operations, Chief of Staff of the Air Force, Commandant of the Marine Corps, or Commandant of
  the Coast Guard, at the applicable time designated by section 1302 of this title, the surviving spouse's rate
  shall be $2,272.''.

          (3) Additional dic for children or disability.--Section 1311 
        of such title is amended--
                  (A) in subsection (b), by striking ``$241'' and 
                inserting ``$247'';
                  (B) in subsection (c), by striking ``$241'' and 
                inserting ``$247''; and
                  (C) in subsection (d), by striking ``$115'' and 
                inserting ``$118''.
  (e) Dependency and Indemnity Compensation for Children.--
          (1) Dic when no surviving spouse.--Section 1313(a) of such 
        title is amended--
                  (A) in paragraph (1), by striking ``$410'' and 
                inserting ``$421'';
                  (B) in paragraph (2), by striking ``$590'' and 
                inserting ``$605'';
                  (C) in paragraph (3), by striking ``$767'' and 
                inserting ``$787''; and
                  (D) in paragraph (4), by striking ``$767'' and 
                ``$148'' and inserting ``$787'' and ``$151'', 
                respectively.
          (2) Supplemental dic for certain children.--Section 1314 of 
        such title is amended--
                  (A) in subsection (a), by striking ``$241'' and 
                inserting ``$247'';
                  (B) in subsection (b), by striking ``$410'' and 
                inserting ``$421''; and
                  (C) in subsection (c), by striking ``$205'' and 
                inserting ``$210''.

SEC. 5. DEMONSTRATION PROJECT TO IMPROVE BUSINESS PRACTICES OF VETERANS 
                    HEALTH ADMINISTRATION.

  (a) Demonstration Project Required.--
          (1) In general.--The Secretary of Veterans Affairs shall 
        conduct a demonstration project under this section for the 
        improvement of business practices of the Veterans Health 
        Administration.
          (2) Performance-based contract.-- To carry out the 
        demonstration project, the Secretary shall enter into a 
        performance-based contract for a contractor to carry out the 
        functions specified in subsection (e).
          (3) Cost limitation.--The total amount paid to the contractor 
        under the contract may not exceed $10,000,000.
  (b) Commencement and Duration of Project.--The demonstration project 
shall be conducted during the two-year period beginning on the first 
day of the first month beginning more than 120 days after the date of 
the enactment of this Act.
  (c) Sites for Conduct of Project.--The Secretary shall conduct the 
demonstration project at two facilities, at least one of which shall be 
a medical center, of the Veterans Health Administration within the same 
service area (referred to as a Veterans Integrated Service Network) of 
the Veterans Health Administration. The two facilities at which the 
project is conducted shall be selected by the Secretary from among 
facilities that the Secretary determines have relatively low 
performance for recovery or collection of indebtedness from third-party 
payors under section 1729 of title 38, United States Code.
  (d) Selection of Contractor.--The Secretary shall carry out the 
process for selection of the contractor for the demonstration project 
so that the contractor to perform the contract is selected, and the 
contract is awarded, not later than three months after the date of the 
enactment of this Act. The contractor shall be an entity or 
organization that has significant experience in the administrative 
processing of health care charges and claims.
  (e) Functions of Contractor.--The Secretary shall provide in the 
contract for the following functions of the contractor with respect to 
each facility at which the demonstration project is conducted:
          (1) Detailed specification of existing business processes 
        that the contractor determines are relevant to the capability 
        of the facility to recover or collect indebtedness from third-
        party payors under section 1729 of title 38, United States 
        Code.
          (2) Reengineering of the business processes identified under 
        paragraph (1), including provision for standardized application 
        of such reengineered processes throughout the facility.
          (3) Establish and implement a plan to transition from the 
        business processes identified under paragraph (1) to the 
        reengineered and standardized businesses established pursuant 
        to paragraph (2).
          (4) Establishment of a comprehensive database containing 
        third-party payor information for veterans receiving health 
        care and services at the facility.
  (f) VHA Project Manager.--As part of the demonstration project, the 
Secretary shall ensure that a Veterans Health Administration employee 
is designated to be the full-time project manager for the project and 
that such employee's duty station is at one of the facilities at which 
the project is conducted, with provision for visits as needed to the 
other facility at which the project is conducted.
  (g) Employee Protection.--The Secretary shall administer the 
demonstration project so that during the period of the conduct of the 
demonstration project there is no reduction in active full-time 
equivalent employees of the Department of Veterans Affairs at the 
facilities at which the project is conducted that is attributable to 
the conduct of the demonstration project.
  (h) Reports to Congress.--
          (1) Periodic progress reports on project implementation.--
                  (A) Reports required.--The Secretary shall submit to 
                Congress progress reports on the implementation of the 
                demonstration project.
                  (B) Time for progress reports.-- Such reports shall 
                be submitted as expeditiously as feasible after the end 
                of--
                          (i) the 60-day period and the 90-day period 
                        beginning on the date of the enactment of this 
                        Act; and
                          (ii) the 60-day period, the 90-day period, 
                        and the 180-day period beginning on the date of 
                        the award of the contract under subsection (d).
                  (C) Matter to be included.--Each report under this 
                paragraph shall set out the progress to date of the 
                demonstration project, including--
                          (i) before the contractor has been selected, 
                        progress toward selection of the contractor 
                        (identified by the steps in the acquisition 
                        process that have been accomplished and that 
                        remain to be accomplished); and
                          (ii) after the contractor has been selected--
                                  (I) the contractor's progress in 
                                initiating and carrying out the 
                                demonstration project in accordance 
                                with the requirements of this section; 
                                and
                                  (II) a copy of each contract under 
                                the demonstration project and any 
                                change order or modification to any 
                                such contract.
          (2) Interim reports on project operation.--After the 
        completion of the first 12 months, and after the completion of 
        the first 18 months, of the demonstration project, the 
        Secretary shall submit to Congress an interim report on the 
        operation of the demonstration project to that date. Each such 
        report shall include the following:
                  (A) The assessment of the Secretary as to whether the 
                rate of recovery or collection of indebtedness owed the 
                United States from third-party payors has improved by 
                reason of the project.
                  (B) The assessment of the Secretary as to the 
                performance of the contractor.
          (3) Final report.--
                  (A) Requirement.--After the conclusion of the 
                demonstration project, the Secretary shall submit to 
                Congress a final report on the project.
                  (B) Content.--The Secretary shall include in that 
                report--
                          (i) the matters specified in paragraph (2);
                          (ii) the Secretary's estimate of cost savings 
                        to the Department attributable to the 
                        reengineered business processes implemented 
                        under the demonstration project, with 
                        supporting evidence and documentation for such 
                        estimate; and
                          (iii) the Secretary's recommendation for 
                        implementing on a permanent basis the recovery 
                        or collection system demonstrated in the 
                        project and expanding the project to other 
                        facilities of the Veterans Health 
                        Administration.
                  (C) Submission.--The final report shall be submitted 
                not later than 90 days after the conclusion of the 
                demonstration project.
  (i) Comptroller General Review and Reports.--
          (1) Review.--The Comptroller General shall review the 
        demonstration project on an ongoing basis.
          (2) Reports.--The Comptroller General shall submit to 
        Congress a report on the Comptroller General's findings and 
        recommendations concerning the demonstration project--
                  (A) after the operation of the demonstration project 
                for a period of one year; and
                  (B) after the operation of the demonstration project 
                for a period of two years.
  (j) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Veterans Affairs for the conduct of 
the demonstration project under this section the sum of $10,000,000.

SEC. 6. PARKINSON'S DISEASE RESEARCH, EDUCATION, AND CLINICAL CENTERS.

  (a) Requirement for Establishment of Centers.--
          (1) 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. 7329. Parkinson's Disease research, education, and clinical 
                    centers

  ``(a) The Secretary, upon the recommendation of the Under Secretary 
for Health and pursuant to the provisions of this section, shall 
designate six Department health-care facilities as the locations for 
centers of Parkinson's Disease research, education, and clinical 
activities and (subject to the appropriation of sufficient funds for 
such purpose) shall establish and operate such centers at such 
locations in accordance with this section.
  ``(b) In designating locations for centers under subsection (a), the 
Secretary, upon the recommendation of the Under Secretary for Health, 
shall--
          ``(1) designate each Department health-care facility that as 
        of January 1, 2005, was operating a Parkinson's Disease 
        research, education, and clinical center unless (on the 
        recommendation of the Under Secretary for Health) the Secretary 
        determines that such facility does not meet the requirements of 
        subsection (c) or has not demonstrated effectiveness in 
        carrying out the established purposes of such center or the 
        potential to carry out such purposes effectively in the 
        reasonably foreseeable future; and
          ``(2) assure appropriate geographic distribution of such 
        facilities.
  ``(c) The Secretary may not designate a health-care facility as a 
location for a center under subsection (a) unless the peer review panel 
established under subsection (d) has determined under that subsection 
that the proposal submitted by such facility as a location for a new 
center under subsection (a) is among those proposals which have met the 
highest competitive standards of scientific and clinical merit, and the 
Secretary (upon the recommendation of the Under Secretary for Health) 
determines that the facility has (or may reasonably be anticipated to 
develop) each of the following:
          ``(1) An arrangement with an accredited medical school which 
        provides education and training in neurology and with which 
        such facility is affiliated under which residents receive 
        education and training in innovative diagnosis and treatment of 
        chronic neurodegenerative diseases and movement disorders, 
        including Parkinson's disease.
          ``(2) The ability to attract the participation of scientists 
        who are capable of ingenuity and creativity in health-care 
        research efforts.
          ``(3) 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.
          ``(4) The capability to conduct effectively evaluations of 
        the activities of such center.
          ``(5) The capability to coordinate, as part of an integrated 
        national system, education, clinical, and research activities 
        within all facilities with such centers.
          ``(6) The capability to jointly develop a consortium of 
        providers with interest in treating neurodegenerative diseases, 
        including Parkinson's Disease, and other movement disorders, at 
        facilities without such centers in order to ensure better 
        access to state-of-the-art diagnosis, care, and education for 
        neurodegenerative disorders throughout the health care system.
          ``(7) The capability to develop a national repository for the 
        collection of data on health services delivered to veterans 
        seeking care for neurodegenerative diseases, including 
        Parkinson's Disease, and other movement disorders in the health 
        care system.
  ``(d)(1) The Under Secretary for Health shall establish a panel to 
assess the scientific and clinical merit of proposals that are 
submitted to the Secretary for the establishment of new centers under 
this section.
  ``(2)(A) The membership of the panel shall consist of experts in 
neurodegenerative diseases, including Parkinson's Disease, and other 
movement disorders.
  ``(B) Members of the panel shall serve as consultants to the 
Department for a period of no longer than two years except in the case 
of panelists asked to serve on the initial panel as specified in 
subparagraph (C).
  ``(C) In order to ensure panel continuity, half of the members of the 
first panel shall be appointed for a period of three years and half for 
a period of two years.
  ``(3) The panel shall review each proposal submitted to the panel by 
the Under Secretary and shall submit its views on the relative 
scientific and clinical merit of each such proposal to the Under 
Secretary.
  ``(4) The panel shall not be subject to the Federal Advisory 
Committee Act.
  ``(e) Before providing funds for the operation of any such center at 
a health-care facility other than a health-care facility designated 
under subsection (b)(1), the Secretary shall assure that the center at 
each facility designated under such subsection is receiving adequate 
funding to enable such center to function effectively in the areas of 
Parkinson's Disease research, education, and clinical activities.
  ``(f) There are authorized to be appropriated such sums as may be 
necessary for the support of the research and education activities of 
the centers established pursuant to subsection (a). The Under Secretary 
for Health shall allocate to such centers from other funds appropriated 
generally for the Department medical services account and medical and 
prosthetics research account, as appropriate, such amounts as the Under 
Secretary for Health determines appropriate.
  ``(g) Activities of clinical and scientific investigation at each 
center established under subsection (a) shall be eligible to compete 
for the award of funding from funds appropriated for the Department 
medical and prosthetics research account and shall receive priority in 
the award of funding from such account insofar as funds are awarded to 
projects for research in Parkinson's disease and other movement 
disorders.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 7328 the following new item:

``7329. Parkinson's Disease research, education, and clinical 
centers.''.
  (b) Effective Date.--Section 7329 of title 38, United States Code, as 
added by subsection (a), shall take effect on October 1, 2005.

                              Introduction

    On March 10, 2005, the Chairman and Ranking Member of the 
Veterans' Affairs Committee, Honorable Steve Buyer and 
Honorable Lane Evans, respectively, along with the Chairman and 
Ranking Member of the Subcommittee on Disability Assistance and 
Memorial Affairs, Honorable Jeff Miller and Honorable Shelley 
Berkley, respectively, introduced H.R. 1220, the Veterans' 
Compensation Cost-of-Living Adjustment Act of 2005, which would 
provide a cost-of-living adjustment (COLA) in the rates of 
service-connected disability compensation and dependency and 
indemnity compensation, effective December 1, 2005.
    On June 9, 2005, the Subcommittee on Disability Assistance 
and Memorial Affairs met and ordered H.R. 1220 reported 
favorably to the full Committee by unanimous voice vote.
    On June 16, 2005, Honorable Lane Evans introduced H.R. 
2959, which would provide for the establishment of Parkinson's 
Disease Research Education and Clinical Centers in the Veterans 
Health Administration of the Department of Veterans Affairs.
    On June 20, 2005, Honorable Michael Bilirakis, Honorable 
Steve Buyer, and Honorable Terry Everett introduced H.R. 2988, 
the Veterans Medical Care Revenue Enhancement Act of 2005, 
which would direct the Secretary of Veterans Affairs to conduct 
a demonstration project for the improvement of business 
practices of the Veterans Health Administration.
    On June 21, 2005, the Subcommittee on Oversight and 
Investigations met and ordered H.R. reported favorably to the 
full Committee by unanimous voice vote.
    On June 23, 2005, the full Committee met and ordered H.R. 
1220 reported favorably, as amended, to the House by voice 
vote.

                      Summary of the Reported Bill

    H.R. 1220, as amended, would:
    1. Provide effective December 1, 2005, a cost-of-living 
adjustment to the rates of disability compensation for veterans 
with service-connected disabilities and to the rates of 
dependency and indemnity compensation for survivors of certain 
service-connected disabled veterans. The percentage amount 
would be equal to the increase for benefits provided under the 
Social Security Act, which is calculated based upon changes in 
the Consumer Price Index.
    2. Codify the current dollar amounts of disability 
compensation and dependency and indemnity compensation, as 
provided for in Public Law 108-363.
    3. Authorize a 2-year demonstration project for improvement 
of business practices in the Veterans Health Administration 
relating to standardization and coordination of activities 
related to billing, reengineering of billing and accounts 
receivable, application of commercial-industry standards, 
establishment of a database for third-party payor information, 
and such other requirements as the Secretary of Veterans 
Affairs may specify.
    4. Permanently authorize, subject to appropriations, six 
Department of Veterans Affairs Parkinson's Disease Research 
Education and Clinical Centers to be centers of excellence in 
clinical care, scientific research, educational outreach and 
training.

                       Background and Discussion

    Increase in rates of disability compensation and dependency 
and indemnity compensation.--Section 2 of the bill would 
increase, effective December 1, 2005, the rates of compensation 
for service-connected disabilities and the rates of dependency 
and indemnity compensation (DIC) for surviving spouses and 
children of veterans who die of service-connected causes, as 
well as the additional amounts for dependents and survivors, 
and clothing allowances for certain veterans. Congress has 
provided annual increases in these rates for every fiscal year 
since 1976.
    The Committee is following its longstanding practice of 
setting the cost-of-living adjustment (COLA) by reference to 
the yet-to-be-determined Social Security increase. At the time 
of the filing of this report, the increase is expected to be 
2.3 percent, but it may be higher or lower depending on changes 
in the Consumer Price Index; the exact percentage is calculated 
as of September 30, 2005. Last year's increase was 2.7 percent.
    The basic purpose of the disability compensation program is 
to provide relief from the impaired earning capacity of 
veterans disabled as the result of their military service. The 
amount of compensation payable varies according to the degree 
of disability. This amount in turn is required by law to 
represent, to the extent practicable, the average impairment in 
earning capacity in civilian occupations resulting from such 
disability or combination of disabilities.
    To be eligible to receive disability compensation, a 
veteran must have a disability incurred or aggravated during 
military service, which is not the result of willful 
misconduct, and have been discharged under other than 
dishonorable conditions. The responsibility for determining a 
veteran's entitlement to service-connection for a disability 
rests with the Department of Veterans Affairs (VA). More than 
2.6 million veterans were receiving service-connected 
disability compensation as of May 2005.
    Surviving spouses and dependent children of veterans who 
died of disabilities determined by VA to be service-connected 
(including veterans who died while on active duty) or who had a 
service-connected disability rated at 100 percent for certain 
periods of time prior to death are entitled to receive monthly 
dependency and indemnity compensation (DIC) benefits. 
Additional amounts are paid to survivors who are housebound, in 
need of aid and attendance, or have minor children. The purpose 
of DIC benefits authorized under chapter 13 of title 38, United 
States Code, is to provide partial compensation to the 
appropriate survivors for the loss in financial support due to 
the service-connected death. Income and need are not factors in 
determining a survivingspouse's or child's entitlement because 
the Nation in part assumes the legal and moral obligation of the 
veteran to support the spouse and children. As of May 2005, there were 
more than 307,000 surviving spouses and more than 29,000 children 
receiving DIC.
    Public Law 108-454 authorized an additional DIC payment of 
$250 a month provided for the first 2 years of DIC eligibility 
to surviving spouses with minor children. This new benefit is 
aimed at easing the transition following the death of the 
servicemember/veteran. Payment is based on the family unit, not 
per child, and terminates prior to the end of the 2-year period 
if there are no longer children under the age of 18. H.R. 1220, 
as amended, would provide a cost-of-living adjustment to the 
new 2-year transitional DIC benefit.
    Codification of cost-of-living adjustment provided in 
Public Law 108-147.--Section 4 of the bill would codify the 
current dollar amounts of compensation for service-connected 
disabilities and the rates of DIC for surviving spouses and 
children of veterans who die of service-connected causes, as 
well as the additional amounts for dependents and survivors, 
and clothing allowances for certain veterans. These rates went 
into effect on December 1, 2004, pursuant to Public Law 108-
363, which was signed by President Bush on October 25, 2004.
    Demonstration project to improve business practices of 
Veterans Health Administration.--Section 5 of the bill would 
establish a demonstration project to improve the Department of 
Veterans Affairs' (VA) collections from third-party payers. VA 
provides health care to eligible veterans through medical 
facilities managed by the Veterans Health Administration (VHA). 
Under certain circumstances, VA is authorized to collect 
reasonable charges from a veteran's health insurance company to 
offset the cost of medical care and medications for treatment 
of nonservice-connected conditions. Specifically, VA may bill 
insurance companies for treatment of conditions that are not a 
result of injuries or illnesses incurred or aggravated during 
military service. VA is not authorized to bill for health care 
conditions that result from military service, nor is it 
generally authorized to collect from Medicare and Medicaid. 
Despite improvements in VA's third-party collections, there 
continues to be weaknesses in the billings and collections 
processes that impair VA's ability to maximize the amount of 
dollars paid by third-party insurance companies.
    The Committee's view is that site selection for the new 
demonstration project should assure geographic separation from 
Veterans Integrated Service Network (VISN) 10, the host site of 
the demonstration project authorized by Public Law 108-357. The 
current demonstration project is preparing the Patient 
Financial Services System (PFSS) for deployment to implement 
certain VA business practices relating to third-party 
collections as a precursor to developing an integrated and 
automated financial system for VHA. The Committee believes that 
geographic separation is necessary to avoid duplications of 
process and to gain the cultural distance necessary to see how 
other parts of VHA perform their business practices.
    The Committee is also concerned how VA measures the 
performance of the Medical Care Collection Fund (MCCF) cycle. 
VA should ascertain the universe of possible collections for 
the MCCF to comprehensively assess the performance of its 
particular parts. Currently, the Committee can only rely on 
previous performance and rate improvements. However, VA's 
efforts to determine the universe of collections should in no 
way delay or interfere with implementation of the new 
demonstration project.
    The Committee expects that all revenue collected from the 
pilot project would be returned to the VHA medical centers 
where the demonstration takes place, and would not be subjected 
to appropriations offsets.
    Finally, the Committee expects that no VA FTEE associated 
with the demonstration project would be terminated during its 
2-year period of operation, except for purposes of personnel 
actions relating to employee misconduct or unsatisfactory 
performance, in accordance with existing labor-management 
agreements and the personnel authorities of titles 5 and 38, 
United State Code, as applicable. The Committee further expects 
that vacancies due to personnel actions would be expeditiously 
filled so that the number of active FTEE associated with the 
demonstration pilot would remain unchanged during the period of 
the pilot project.
    Parkinson's disease research, education, and clinical 
centers.--Section 6 of the bill would permanently authorize six 
Parkinson's Disease Research Education and Clinical Centers 
(PADRECCs), subject to appropriations, and give priority to the 
existing PADRECCs for medical care and research dollars, 
insofar as such funds are awarded to projects for research in 
Parkinson's disease and other movement disorders.
    Parkinson's disease is a serious health problem which 
affects up to 1.5 million Americans. By 2010, an estimated 
39,000 veterans who are age 85 and older will have this 
progressive neurological disorder. Treatments exist for 
Parkinson's, but medical research continues in search of a 
cure.
    In 2001, VA took an important step toward eradicating this 
disease by establishing six PADRECCs, located at VA medical 
centers in Houston, West Los Angeles, Philadelphia, Portland-
Seattle, Richmond, and San Francisco. These centers provide an 
opportunity for researchers to see their results rapidly and 
directly applied to improve patient care. Through the PADRECCs 
and the National VA Parkinson's Disease Consortium, a network 
of 200 VA clinicians with expertise or interest in the fields 
of Parkinson's disease and related movement disorders, VA is 
able to treat 42,000 veterans with Parkinson's disease.
    In just a brief time since their inception, the six 
PADRECCs have made significant contributions to the care and 
research of Parkinson's disease, and training of health care 
professionals. The PADRECCs, including the VA hospitals in 
Albuquerque, Las Vegas, Lorna Linda, Long Beach, Phoenix, San 
Diego, and Tucson, which are affiliated with the Southwestern 
PADRECC located at the West Los Angeles VA Medical Center, put 
VA at the forefront of the landmark multi-site study assessing 
effectiveness of surgical implantation of deep brain 
stimulators in reducing the symptoms of the disease. 
TheCommittee recognizes the efforts of the PADRECCs as a model of 
innovation in the delivery of health care and research for chronic 
disease in the veteran population, which deserve continued support. The 
American Legion, Disabled American Veterans, and Parkinson's Action 
Network are in support of this provision.

                      Section-by-Section Analysis

    Section 1 of the bill would provide that this Act may be 
cited as the ``Veterans' Compensation Cost-of-Living Adjustment 
Act of 2005''.
    Section 2(a) of the bill would require the Secretary of 
Veterans Affairs to increase, effective December 1, 2005, the 
dollar amounts in effect for the payment of disability 
compensation and dependency and indemnity compensation.
    Section 2(b) of the bill would specify the programs to 
receive increased dollar amounts: compensation in effect under 
section 1114 of title 38, United States Code; additional 
compensation for dependents in effect under section 1115(1) of 
title 38, United States Code; clothing allowance in effect 
under section 1162 of title 38, United States Code; new DIC 
rates in effect under paragraphs (1) and (2) of section 1311(a) 
of title 38, United States Code; old DIC rates in effect under 
section 1311(a)(3) of title 38, United States Code; additional 
DIC for surviving spouses with minor children in effect under 
section 1311(b) and paragraph (1) of section 1311(f) of title 
38, United States Code; additional DIC for disability in effect 
under sections 1311(c) and (d) of title 38, United States Code; 
and DIC for dependent children in effect under sections 1313(a) 
and 1314 of title 38, United States Code.
    Section 2(c)(1) of the bill would increase the dollar 
amounts for those programs specified in subsection (b) based on 
the amount in effect on November 30, 2005.
    Section 2(c)(2) of the bill would specify that each amount 
shall be increased by the same percentage by which benefits are 
increased under title II of the Social Security Act (42 U.S.C. 
401 et seq.).
    Section 2(c)(3) of the bill would round down to the next 
lower dollar amount all compensation and DIC benefits, when the 
amount is not a whole dollar amount.
    Section 2(d) of the bill would provide a special rule 
authorizing the Secretary of Veterans Affairs to adjust 
administratively, consistent with the increases made under 
subsection (a), the rates of disability compensation payable to 
persons within the purview of section 10 of Public Law 85-857 
(72 Stat. 1263), who are not in receipt of compensation payable 
pursuant to chapter 11 of title 38, United States Code.
    Section 2(e) of the bill would redesignate the second 
subsection (e) of section 1311, title 38, United States Code 
(added by section 301(a) of the Veterans Benefits Improvement 
Act of 2004 (Public Law 108-454: 118 Stat. 3610)) as subsection 
(f).
    Section 3 of the bill would require the Secretary of 
Veterans Affairs to publish in the Federal Register the amounts 
specified in subsection (b), as increased pursuant to that 
section.
    Section 4 of the bill would codify the cost-of-living 
adjustments provided in Public Law 108-363.
    Section 5(a)(1) through subsection (a)(3) of the bill would 
authorize an amount not to exceed $10 million in funding to 
initiate a performance based contract for a contractor to carry 
out the functions specified in subsection (e).
    Section 5(b) of the bill would authorize the demonstration 
project for a 2-year period to begin on the first day of the 
month beginning more than 120 days after the date of enactment 
of the bill.
    Section 5(c) of the bill would direct the Secretary of 
Veterans Affairs to select two sites from among medical centers 
located in Veterans Health Administration service areas that 
the Secretary determines have relatively low rates of recovery 
or collection.
    Section 5(d) of the bill would require the Secretary of 
Veterans Affairs to select and award a contractor within 3 
months after enactment of the bill that is an entity or 
organization with significant experience in administrative 
processing of health care charges and claims.
    Section 5(e)(I) through subsection (5)(e)(4) of the bill 
would establish the following functions of the contract with 
respect to each facility: detailed specification of existing 
processes that the contractor determines are relevant to the 
capability of the facility to recover or collect indebtedness 
from third-party payors; reengineering of the business 
processes mentioned above, including provisions for 
standardization application of such reengineered process 
throughout the facility; establish and implement a plan to 
transition from the business process identified to reengineered 
and standardized business as mentioned above; establishment of 
a database containing third-party payor information for 
veterans receiving health care and services.
    Section 5(f) of the bill would require the Secretary of 
Veterans Affairs to ensure that a VHA employee is designated as 
a full-time project manager for the project and that the 
project manager's place of duty is one of the medical centers 
at which the project is conducted.
    Section 5(g) of the bill would authorize the Secretary of 
Veterans Affairs to administer the demonstration project so 
that during the period of the project there would be no 
reduction in full-time equivalent employees (FTEE) attributable 
to the project at the VA medical centers where the project is 
conducted.
    Section 5(h)(1) through subsection (h)(3) of the bill would 
require VA to provide regular reports to Congress on the status 
of project implementation, to include any changes or 
modifications to the contract.
    Section 5(i) through subsection (i)(2) of the bill would 
require the Comptroller General to review the demonstration 
project on an ongoing basis, and require the Comptroller 
General to submit to Congress a report of its findings and 
recommendations after operation of the demonstration project 
for a period of 1 year and after the operations of the 
demonstration project for a period of 2 years.
    Section 5(j) of the bill would authorize to be appropriated 
to the Secretary of Veterans Affairs a sum of $10 million.
    Section 6(a)(1) of the bill would amend subchapter II of 
chapter 73 of title 38, United States Code, to add a new 
section 7329, to establish requirements for Parkinson's Disease 
Research, Education, and Clinical Centers (PADRECC).
    New section 7329(a) of title 38, United States Code, would 
authorize the Secretary to designate six VA health-care 
facilities as the locations for PADRECC activities, upon 
recommendation of the Under Secretary for Health and subject to 
appropriations.
    New section 7329(b) of title 38, United States Code, would 
provide that each PADRECC in operation as of January 1, 2005, 
would be designated unless the Secretary determines that such 
facility has not demonstrated effectiveness in carrying out the 
established purposes or the potential to carry out such 
purposes in the future.
    New section 7329(c) of title 38, United States Code, would 
require that a healthcare facility designated as a location for 
a Center meet the highest competitive standards of scientific 
and clinical merit as determined by the peer review panel 
established under new section 7329(d), title 38, United States 
Code, and be determined by the Secretary to meet criteria 
established under this subsection to develop the necessary 
capacity to function as a center of excellence in research, 
education, diagnosis and treatment of neurodegenerative 
disorders, including Parkinson's disease.
    New section 7329(d) of title 38, United States Code, would 
require the Secretary to establish an expert panel to assess 
the scientific and clinical merit of proposals that are 
submitted to the Secretary for the establishment of new centers 
under new section 7329 of title 38, United States Code.
    New section 7329(e) of title 38, United States Code, would 
require the Secretary to assure that each facility is receiving 
adequate funding to function in the areas of Parkinson's 
disease research, education, and clinical activities before 
providing funds for operating a center at a new facility 
location other than centers in operation before January I, 
2005.
    New section 7329(f) of title 38, United States Code, would 
authorize such sums as may be necessary to be appropriated for 
the support of the PADRECCs and would require the Under 
Secretary to allocate funds generally appropriated for medical 
care and medical research to the PADRECCs as appropriate.
    New section 7329(g) of title 38, United States Code, would 
provide that clinical and scientific activities at each PADRECC 
shall be eligible to compete for awards of funds from the 
Department's appropriated medical and prosthetics research 
account, insofar as funds are awarded for research in 
Parkinson's disease and other movement disorders.
    Section 6(a)(2) of the bill would amend the table of 
sections of chapter 73, title 38, United States Code, to add 
the following new item: ``7329. Parkinson's disease research, 
education, and clinical centers.''.
    Section 6(b) of the bill would require new section 7329 to 
take effect on October 1, 2005.

                    Performance Goals and Objectives

    The reported bill would authorize benefits and program 
enhancements under laws administered by the Secretary of 
Veterans Affairs. The Department of Veterans Affairs' 
performance goals and objectives are established in annual 
performance plans and are subject to the Committee's regular 
oversight and evaluation by the U.S. Government Accountability 
Office. VA also publishes a performance and accountability 
report for each fiscal year.

             Statements of the Views of the Administration

    The Administration's fiscal year 2006 budget request, 
submitted in February 2005, recommended a cost-of-living 
adjustment based on the change in the Consumer Price Index 
(CPI) be given to all compensation beneficiaries, including DIC 
recipients, effective December 1, 2005. The estimated increase 
in the CPI is 2.3 percent.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 29, 2005.
Hon. Steve Buyer,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1220, the 
Veterans' Compensation Cost-of-Living Adjustment Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1220--Veterans' Compensation Cost-of-Living Adjustment Act of 2005

    Summary: H.R. 1220 would increase the amounts paid to 
veterans for disability compensation and to survivors for 
dependency and indemnity compensation (DIC) by the same cost-
of-living adjustment (COLA) payable to Social Security 
recipients. The bill also would increase the amount of 
additional assistance paid to surviving spouses with dependent 
children under age 18 by that same COLA. In addition, H.R. 1220 
would authorize $10 million for the Department of Veterans 
Affairs (VA) to conduct a demonstration project to improve 
business practices within the Veterans Health Administration 
(VHA) for recovering payments from third-party payors. Finally, 
the bill would authorize VA to establish six centers to conduct 
Parkinson's disease research, education, and clinical 
activities.
    CBO estimates that enacting this legislation would increase 
direct spending for veterans disability compensation by less 
than $200,000 in 2006, $1 million over the 2006-2010 period, 
and $2 million over the 2006-2015 period. In addition, CBO 
estimates that discretionary spending resulting from 
implementation of H.R. 1220 would total $2 million in 2006 and 
$10 million over the 2006-2008 period, assuming appropriation 
of the authorized amount.
    H.R. 1220 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1220 is shown in the following table. 
The costs of this legislation fall within budget function 700 
(veterans benefits and services).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        2005      2006      2007      2008      2009      2010
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION


Spending under current law for VA medical services:
    Budget authority \1\............................    21,860    22,710    23,415    23,627    24,355    25,099
    Estimated outlays...............................    21,658    22,285    23,072    23,439    24,086    24,769
Proposed changes:
    Authorization level.............................         0        10         0         0         0         0
    Estimated outlays...............................         0         2         5         3         0         0
Spending under H.R. 1220 for VA medical services:
    Estimated authorization level \1\...............    21,860    22,720    23,415    23,627    24,355    25,099
    Estimated outlays...............................    21,658    22,287    23,077    23,442    24,086    24,769


                                           CHANGES IN DIRECT SPENDING


Estimated budget authority..........................         *         *         *         *         *         *
Estimated outlays...................................         *         *         *         *         *         *
----------------------------------------------------------------------------------------------------------------
\1\ The 2005 level is the amount appropriated for that year for VA medical services.
Note: * = less than $500,000.

    Basis of estimate: This estimate assumes that the bill will 
be enacted near the start of fiscal year 2006. Almost all of 
the budgetary impact would be associated with discretionary 
spending for veterans medical programs. In total, CBO estimates 
that discretionary spending resulting from implementation of 
H.R. 1220 would total $2 million in 2006 and $10 million over 
the 2006-2010 period, assuming appropriation of the authorized 
amount. Enacting this legislation would also increase direct 
spending for veterans' disability compensation by less than 
$500,000 in 2006, $1 million over the 2006-2010 period, and $2 
million over the 2006-2015 period, CBO estimates.

Spending subject to appropriation

    Demonstration Project for Recovery Payments from Third 
Parties. Section 5 would direct VA to conduct a two-year 
demonstration project to improve business practices within the 
VHA for recovering payments from third-party payors. Under 
current law, VA is entitled to seek reimbursement from 
insurance companies for treatment of veterans for 
nonserviceconnected injuries and illnesses. Under the bill, VHA 
would be required to hire a contractor to evaluate the current 
business practices at two VHA facilities, to recommend and 
implement improvements to those practices aimed at increasing 
payments from third-party payors, and to establish a database 
of third-party payor information for veterans receiving health 
care and services at these two facilities. The bill would 
authorize the appropriation of $10 million for this activity. 
Based on the requirements in the legislation regarding 
deadlines for contractor selection and information from VA 
about their typical payment schedules for such contractors, CBO 
estimates that implementing this provision would cost $2 
million in 2006 and $10 million over the 2006-2008 period, 
assuming appropriation of the necessary amounts.
    Parkinson's Disease Centers. Section 6 would codify the 
establishment of six Parkinson's Disease Centers within VHA to 
perform research, education, and clinical activities focusing 
on that illness. According to VA, it used authority available 
under current law to establish these centers beginning in 2001. 
CBO estimates that implementing this provision would have no 
cost since the bill would not create any centers beyond the six 
currently in operation.

Direct spending

    Cost-of-Living Adjustment for Veterans' Disability 
Compensation and DIC. Section 2 would increase the amounts paid 
to veterans for disability compensation and to their survivors 
for dependency and indemnity compensation by the same cost-of-
living adjustment payable to Social Security recipients. The 
increase would take effect on December 1, 2005, and the results 
of the adjustment would be rounded to the next lower dollar.
    The COLA that would be authorized by this bill is assumed 
in CBO's baseline, pursuant to section 257 of the Balanced 
Budget and Emergency Deficit Control Act, and savings from 
rounding it down were achieved by the Balanced Budget Act of 
1997 (Public Law 105-33) and extended to 2013 by the Veterans 
Benefits Act of 2003 (Public Law 108-183).
    Because the COLA is assumed in CBO's baseline, the COLA 
provision would have no budgetary effect relative to that 
baseline. Relative to current law, CBO estimates that enacting 
this provision would increase spending for these programs by 
$538 million in 2006.(The annualized cost would be about $720 
million in subsequent years.) This estimate assumes that the COLA 
effective on December 1, 2005, would be 2.3 percent.
    Cost-of-Living Adjustment to Surviving Spouses with 
Children Under Age 18. Under current law, surviving spouses who 
are eligible for DIC and have one or more children under age 18 
have their monthly DIC payment increased by $250 for up to two 
years from the date that the survivor becomes eligible for DIC. 
Section 2 would increase the $250 benefit by the same cost-of-
living adjustment payable to Social Security recipients 
effective December 1, 2005. Based on an assumed COLA of 2.3 
percent, CBO estimates that this monthly benefit would increase 
to $255 (after rounding down to the next lowest dollar) for 
2006 and each subsequent year relative to current law and CBO's 
baseline. Therefore, CBO estimates that enacting this provision 
would increase direct spending for veterans compensation by 
less than $200,000 in 2006, $1 million over the 2006-2010 
period, and $2 million over the 2006-2015 period.
    Intergovernmental and private-sector impact: H.R. 1220 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Previous CBO estimate: On June 2, 2005, CBO transmitted an 
estimate for H.R. 1220, as introduced on March 10, 2005. H.R. 
1220, as ordered reported by the House Committee on Veterans 
Affairs on June 23, 2005, contains provisions that were not 
included in the introduced version of the bill--specifically, 
provisions that would increase the amount of additional 
assistance paid to surviving spouses with dependent children 
under age 18; direct VA to conduct a demonstration project to 
improve business practices within VHA for recovering payments 
from third-party payors; and authorize VA to establish six 
centers to conduct Parkinson's disease research, education, and 
clinical activities. The differences in the estimated costs 
reflect the differences in the two versions of the bill.
    Estimate prepared by: Veterans' Disability Compensation and 
DIC: Dwayne M. Wright, Veterans' Health Programs: Michelle S. 
Patterson, Impact on State, Local, and Tribal Governments: 
Melissa Merrell, Impact on the Private Sector: Joshua Lee.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                     Statement of Federal Mandates

    The preceding Congressional Budget Office cost estimate 
states that the bill contains no intergovernmental or private 
sector mandates as defined in the Unfunded Mandates Reform Act.

                 Statement of Constitutional Authority

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

      ADDITIONAL VIEWS--OFFERED BY HONORABLE TED STRICKLAND (D-OH)

    The subject demonstration project omits instructions for VA 
actions should the project be terminated early or if the 
project runs its full course but a determination is made not to 
align other VA sites with the recommendations and processes of 
the contractor. An exit strategy is required. The minority view 
is that VA should reserve sufficient funds of the $10 million 
authorized and appropriated for the demonstration project so as 
to retain the ability to revert back to the original MCCF 
system or to align with nationally standardized MCCF processes 
without using funds available for health care for the 
reversion. The minority view is that $750,000 should prove 
adequate for any necessary reversion.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 italic, existing law in which no change is 
proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *



PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *



CHAPTER 11--COMPENSATION FOR SERVICE-CONNECTED DISABILITY OR DEATH

           *       *       *       *       *       *       *



SUBCHAPTER II--WARTIME DISABILITY COMPENSATION

           *       *       *       *       *       *       *



Sec. 1114. Rates of wartime disability compensation

  For the purposes of section 1110 of this title--
          (a) if and while the disability is rated 10 percent 
        the monthly compensation shall be [$106] $108;
          (b) if and while the disability is rated 20 percent 
        the monthly compensation shall be [$205] $210;
          (c) if and while the disability is rated 30 percent 
        the monthly compensation shall be [$316] $324;
          (d) if and while the disability is rated 40 percent 
        the monthly compensation shall be [$454] $466;
          (e) if and while the disability is rated 50 percent 
        the monthly compensation shall be [$646] $663;
          (f) if and while the disability is rated 60 percent 
        the monthly compensation shall be [$817] $839;
          (g) if and while the disability is rated 70 percent 
        the monthly compensation shall be [$1,029] $1,056;
          (h) if and while the disability is rated 80 percent 
        the monthly compensation shall be [$1,195] $1,227;
          (i) if and while the disability is rated 90 percent 
        the monthly compensation shall be [$1,344] $1,380;
          (j) if and while the disability is rated as total the 
        monthly compensation shall be [$2,239] $2,299;
          (k) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of one or more creative organs, or one 
        foot, or one hand, or both buttocks, or blindness of 
        one eye, having only light perception, has suffered 
        complete organic aphonia with constant inability to 
        communicate by speech, or deafness of both ears, having 
        absence of air and bone conduction, or, in the case of 
        a woman veteran, has suffered the anatomical loss of 25 
        percent or more of tissue from a single breast or both 
        breasts in combination (including loss by mastectomy or 
        partial mastectomy) or has received radiation treatment 
        of breast tissue, the rate of compensation therefor 
        shall be [$82] $84 per month for each such loss or loss 
        of use independent of any other compensation provided 
        in subsections (a) through (j) or subsection (s) of 
        this section but in no event to exceed [$2,785] $2,860 
        per month; and in the event the veteran has suffered 
        one or more of the disabilities heretofore specified in 
        this subsection, in addition to the requirement for any 
        of the rates specified in subsections (l) through (n) 
        of this section, the rate of compensation shall be 
        increased by [$82] $84 per month for each such loss or 
        loss of use, but in no event to exceed [$3,907] $4,012 
        per month;
          (l) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both feet, or of one hand and one 
        foot, or is blind in both eyes, with 5/200 visual 
        acuity or less, or is permanently bedridden or so 
        helpless as to be in need of regular aid and 
        attendance, the monthly compensation shall be [$2,785] 
        $2,860;
          (m) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both hands, or of both legs at a 
        level, or with complications, preventing natural knee 
        action with prostheses in place, or of one arm and one 
        leg at levels, or with complications, preventing 
        natural elbow and knee action with prostheses in place, 
        or has suffered blindness in both eyes having only 
        light perception, or has suffered blindness in both 
        eyes, rendering such veteran so helpless as to be in 
        need of regular aid and attendance, the monthly 
        compensation shall be [$3,073] $3,155;
          (n) if the veteran, as the result of service-
        connected disability, has suffered the anatomical loss 
        or loss of use of both arms at levels, or with 
        complications, preventing natural elbow action with 
        prostheses in place, has suffered the anatomical loss 
        of both legs so near the hip as to prevent the use of 
        prosthetic appliances, or has suffered the anatomical 
        loss of one arm and one leg so near the shoulder and 
        hip as to prevent the use of prosthetic appliances, or 
        has suffered the anatomical loss of both eyes, or has 
        suffered blindness without light perception in both 
        eyes, the monthly compensation shall be [$3,496] 
        $3,590;
          (o) if the veteran, as the result of service-
        connected disability, has suffered disability under 
        conditions which would entitle such veteran to two or 
        more of the rates provided in one or more subsections 
        (l) through (n) of this section, no condition being 
        considered twice in the determination, or if the 
        veteran has suffered bilateral deafness (and the 
        hearing impairment in either one or both ears is 
        service connected) rated at 60 percent or more 
        disabling and the veteran has also suffered service-
        connected total blindness with \5/200\ visual acuity or 
        less, or if the veteran has suffered service-connected 
        total deafness in one ear or bilateral deafness (and 
        the hearing impairment in either one or both ears is 
        service connected) rated at 40 percent or more 
        disabling and the veteran has also suffered service-
        connected blindness having only light perception or 
        less, or if the veteran has suffered the anatomical 
        loss of both arms so near the shoulder as to prevent 
        the use of prosthetic appliances, the monthly 
        compensation shall be [$3,907] $4,012;
          (p) in the event the veteran's service-connected 
        disabilities exceed the requirements for any of the 
        rates prescribed in this section, the Secretary may 
        allow the next higher rate or an intermediate rate, but 
        in no event in excess of [$3,907] $4,012. In the event 
        the veteran has suffered service-connected blindness 
        with 5/200 visual acuity or less and (1) has also 
        suffered bilateral deafness (and the hearing impairment 
        in either one or both ears is service connected) rated 
        at no less than 30 percent disabling, the Secretary 
        shall allow the next higher rate, or (2) has also 
        suffered service-connected total deafness in one ear or 
        service-connected anatomical loss or loss of use of one 
        hand or one foot, the Secretary shall allow the next 
        intermediate rate, but in no event in excess of 
        [$3,907] $4,012. In the event the veteran has suffered 
        service-connected blindness, having only light 
        perception or less, and has also suffered bilateral 
        deafness (and the hearing impairment in either one or 
        both ears is service connected) rated at 10 or 20 
        percent disabling, the Secretary shall allow the next 
        intermediate rate, but in no event in excess of 
        [$3,907] $4,012. In the event the veteran has suffered 
        the anatomical loss or loss of use, or a combination of 
        anatomical loss and loss of use, of three extremities, 
        the Secretary shall allow the next higher rate or 
        intermediate rate, but in no event in excess of 
        [$3,907] $4,012. Any intermediate rate under this 
        subsection shall be established at the arithmetic mean, 
        rounded down to the nearest dollar, between the two 
        rates concerned;
          (r) Subject to section 5503(c) of this title, if any 
        veteran, otherwise entitled to compensation authorized 
        under subsection (o) of this section, at the maximum 
        rate authorized under subsection (p) of this section, 
        or at the intermediate rate authorized between the 
        rates authorized under subsections (n) and (o) of this 
        section and at the rate authorized under subsection (k) 
        of this section, is in need of regular aid and 
        attendance, then, in addition to such compensation--
                  (1) the veteran shall be paid a monthly aid 
                and attendance allowance at the rate of 
                [$1,677] $1,722; or
                  (2) if the veteran, in addition to such need 
                for regular aid and attendance, is in need of a 
                higher level of care, such veteran shall be 
                paid a monthly aid and attendance allowance at 
                the rate of [$2,497] $2,564, in lieu of the 
                allowance authorized in clause (1) of this 
                subsection, if the Secretary finds that the 
                veteran, in the absence of the provision of 
                such care, would require hospitalization, 
                nursing home care, or other residential 
                institutional care.

           *       *       *       *       *       *       *

          (s) If the veteran has a service-connected disability 
        rated as total, and (1) has additional service-
        connected disability or disabilities independently 
        ratable at 60 percent or more, or, (2) by reason of 
        such veteran's service-connected disability or 
        disabilities, is permanently housebound, then the 
        monthly compensation shall be [$2,506] $2,573. For the 
        purpose of this subsection, the requirement of 
        ``permanently housebound'' will be considered to have 
        been met when the veteran is substantially confined to 
        such veteran's house (ward or clinical areas, if 
        institutionalized) or immediate premises due to a 
        service-connected disability or disabilities which it 
        is reasonably certain will remain throughout such 
        veteran's lifetime.

Sec. 1115. Additional compensation for dependents

  Any veteran entitled to compensation at the rates provided in 
section 1114 of this title, and whose disability is rated not 
less than 30 percent, shall be entitled to additional 
compensation for dependents in the following monthly amounts:
          (1) If and while rated totally disabled and--
                  (A) has a spouse but no child, [$127] $130;
                  (B) has a spouse and one or more children, 
                [$219] $224 plus [$65] $66 for each child in 
                excess of one;
                  (C) has no spouse but one or more children, 
                [$86] $88 plus [$65] $66 for each child in 
                excess of one;
                  (D) has a parent dependent upon such veteran 
                for support, then, in addition to the above 
                amounts, [$103] $105 for each parent so 
                dependent;
                  (E) notwithstanding the other provisions of 
                this paragraph, the monthly payable amount on 
                account of a spouse who is (i) a patient in a 
                nursing home or (ii) helpless or blind, or so 
                nearly helpless or blind as to need or require 
                the regular aid and attendance of another 
                person, shall be [$241] $247 for a totally 
                disabled veteran and proportionate amounts for 
                partially disabled veterans in accordance with 
                paragraph (2) of this section; and
                  (F) notwithstanding the other provisions of 
                this paragraph, the monthly amount payable on 
                account of each child who has attained the age 
                of eighteen years and who is pursuing a course 
                of instruction at an approved educational 
                institution shall be [$202] $207 for a totally 
                disabled veteran and proportionate amounts for 
                partially disabled veterans in accordance with 
                paragraph (2) of this section.

           *       *       *       *       *       *       *


SUBCHAPTER VI--GENERAL COMPENSATION PROVISIONS

           *       *       *       *       *       *       *



Sec. 1162. Clothing allowance

  The Secretary under regulations which the Secretary shall 
prescribe, shall pay a clothing allowance of [$600] $616 per 
year to each veteran who--
          (1) * * *

           *       *       *       *       *       *       *


CHAPTER 13--DEPENDENCY AND INDEMNITY COMPENSATION FOR SERVICE-CONNECTED 
DEATHS

           *       *       *       *       *       *       *



          SUBCHAPTER II--DEPENDENCY AND INDEMNITY COMPENSATION


Sec. 1311. Dependency and indemnity compensation to a surviving spouse

  (a)(1) Dependency and indemnity compensation shall be paid to 
a surviving spouse at the monthly rate of [$967] $993.
  (2) The rate under paragraph (1) shall be increased by [$208] 
$213 in the case of the death of a veteran who at the time of 
death was in receipt of or was entitled to receive (or but for 
the receipt of retired pay or retirement pay was entitled to 
receive) compensation for a service-connected disability that 
was rated totally disabling for a continuous period of at least 
eight years immediately preceding death. In determining the 
period of a veteran's disability for purposes of the preceding 
sentence, only periods in which the veteran was married to the 
surviving spouse shall be considered.
  (3) In the case of dependency and indemnity compensation paid 
to a surviving spouse that is predicated on the death of a 
veteran before January 1, 1993, the monthly rate of such 
compensation shall be the amount based on the pay grade of such 
veteran, as set forth in the following table, if the amount is 
greater than the total amount determined with respect to that 
veteran under paragraphs (1) and (2):

      

                                  Monthly                       Monthly
[Pay grade                           rate   Pay grade              rate
    E-1......................        $967   W-4............      $1,157
    E-2......................        $967   O-1............      $1,022
    E-3......................        $967   O-2............      $1,056
    E-4......................        $967   O-3............      $1,130
    E-5......................        $967   O-4............      $1,195
    E-6......................        $967   O-5............      $1,316
    E-7......................      $1,000   O-6............      $1,483
    E-8......................      $1,056   O-7............      $1,602
    E-9......................    $1,102 1   O-8............      $1,758
    W-1......................      $1,022   O-9............      $1,881
    W-2......................      $1,063   O-10...........    $2,063 2
    W-3......................      $1,094


1 If the veteran served as sergeant major of the Army, senior enlisted
  advisor of the Navy, chief master sergeant of the Air Force, sergeant
  major of the Marine Corps, or master chief petty officer of the Coast
  Guard, at the applicable time designated by section 1302 of this
  title, the surviving spouse's rate shall be $1,189.
2 If the veteran served as Chairman or Vice-Chairman of the Joint Chiefs
  of Staff, Chief of Staff of the Army, Chief of Naval Operations, Chief
  of Staff of the Air Force, Commandant of the Marine Corps, or
  Commandant of the Coast Guard, at the applicable time designated by
  section 1302 of this title, the surviving spouse's rate shall be
  $2,213.]

      

                                  Monthly                       Monthly
Pay grade                            rate   Pay grade              rate
    E-1......................        $993   W-4............      $1,188
    E-2......................        $993   O-1............      $1,049
    E-3......................        $993   O-2............      $1,084
    E-4......................        $993   O-3............      $1,160
    E-5......................        $993   O-4............      $1,227
    E-6......................        $993   O-5............      $1,351
    E-7......................      $1,027   O-6............      $1,523
    E-8......................      $1,084   O-7............      $1,645
    E-9......................     $1,1311   O-8............      $1,805
    W-1......................      $1,049   O-9............      $1,931
    W-2......................      $1,091   O-10...........     $2,1182
    W-3......................      $1,123


1 If the veteran served as sergeant major of the Army, senior enlisted
  advisor of the Navy, chief master sergeant of the Air Force, sergeant
  major of the Marine Corps, or master chief petty officer of the Coast
  Guard, at the applicable time designated by section 1302 of this
  title, the surviving spouse's rate shall be $1,221.
2 If the veteran served as Chairman or Vice-Chairman of the Joint Chiefs
  of Staff, Chief of Staff of the Army, Chief of Naval Operations, Chief
  of Staff of the Air Force, Commandant of the Marine Corps, or
  Commandant of the Coast Guard, at the applicable time designated by
  section 1302 of this title, the surviving spouse's rate shall be
  $2,272.

  (b) If there is a surviving spouse with one or more children 
below the age of eighteen of a deceased veteran, the dependency 
and indemnity compensation paid monthly to the surviving spouse 
shall be increased by [$241] $247 for each such child.
  (c) The monthly rate of dependency and indemnity compensation 
payable to a surviving spouse shall be increased by [$241] $247 
if the spouse is (1) a patient in a nursing home or (2) 
helpless or blind, or so nearly helpless or blind as to need or 
require the regular aid and attendance of another person.
  (d) The monthly rate of dependency and indemnity compensation 
payable to a surviving spouse shall be increased by [$115] $118 
if the surviving spouse is, by reason of disability, 
permanently housebound but does not qualify for the aid and 
attendance allowance under subsection (c) of this section. For 
the purposes of this subsection, the requirement of 
``permanently housebound'' will be considered to have been met 
when the surviving spouse is substantially confined to such 
surviving spouse's home (ward or clinical areas, if 
institutionalized) or immediate premises by reason of a 
disability or disabilities which it is reasonably certain will 
remain throughout such surviving spouse's lifetime.
          * * * * * * *
  [(e)] (f)(1) * * *
          * * * * * * *

Sec. 1313. Dependency and indemnity compensation to children

  (a) Whenever there is no surviving spouse of a deceased 
veteran entitled to dependency and indemnity compensation, 
dependency and indemnity compensation shall be paid in equal 
shares to the children of the deceased veteran at the following 
monthly rates:
          (1) one child, [$410] $421;
          (2) two children, [$590] $605;
          (3) three children, [$767] $787; and
          (4) more than three children, [$767] $787, plus 
        [$148] $151 for each child in excess of three.
          * * * * * * *

Sec. 1314. Supplemental dependency and indemnity compensation to 
                    children

  (a) In the case of a child entitled to dependency and 
indemnity compensation who has attained the age of eighteen and 
who, while under such age, became permanently incapable of 
self-support, the dependency and indemnity compensation paid 
monthly to such child shall be increased by [$241] $247.
  (b) If dependency and indemnity compensation is payable 
monthly to a person as a surviving spouse and there is a child 
(of such person's deceased spouse) who has attained the age of 
eighteen and who, while under such age, became permanently 
incapable of self-support, dependency and indemnity 
compensation shall be paid monthly to each such child, 
concurrently with the payment of dependency and indemnity 
compensation to the surviving spouse, in the amount of [$410] 
$421.
  (c) If dependency and indemnity compensation is payable 
monthly to a person as a surviving spouse and there is a child 
(of such person's deceased spouse), who has attained the age of 
eighteen and who, while under the age of twenty-three, is 
pursuing a course of instruction at an educational institution 
approved under section 104 of this title, dependency and 
indemnity compensation shall be paid monthly to each such 
child, concurrently with the payment of dependency and 
indemnity compensation to the surviving spouse, in the amount 
of [$205] $210.
          * * * * * * *

             PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

          * * * * * * *

                 CHAPTER 73--ORGANIZATION AND FUNCTIONS

                       SUBCHAPTER I--ORGANIZATION

Sec.
7301.  Functions of Veterans Health Administration: in general.
     * * * * * * *

           SUBCHAPTER II--GENERAL AUTHORITY AND ADMINISTRATION

7311.  Quality assurance.
     * * * * * * *
7329. Parkinson's Disease research, education, and clinical centers.

           *       *       *       *       *       *       *


SUBCHAPTER II--GENERAL AUTHORITY AND ADMINISTRATION

           *       *       *       *       *       *       *


Sec. 7329. Parkinson's Disease research, education, and clinical 
                    centers

  (a) The Secretary, upon the recommendation of the Under 
Secretary for Health and pursuant to the provisions of this 
section, shall designate six Department health-care facilities 
as the locations for centers of Parkinson's Disease research, 
education, and clinical activities and (subject to the 
appropriation of sufficient funds for such purpose) shall 
establish and operate such centers at such locations in 
accordance with this section.
  (b) In designating locations for centers under subsection 
(a), the Secretary, upon the recommendation of the Under 
Secretary for Health, shall--
          (1) designate each Department health-care facility 
        that as of January 1, 2005, was operating a Parkinson's 
        Disease research, education, and clinical center unless 
        (on the recommendation of the Under Secretary for 
        Health) the Secretary determines that such facility 
        does not meet the requirements of subsection (c) or has 
        not demonstrated effectiveness in carrying out the 
        established purposes of such center or the potential to 
        carry out such purposes effectively in the reasonably 
        foreseeable future; and
          (2) assure appropriate geographic distribution of 
        such facilities.
  (c) The Secretary may not designate a health-care facility as 
a location for a center under subsection (a) unless the peer 
review panel established under subsection (d) has determined 
under that subsection that the proposal submitted by such 
facility as a location for a new center under subsection (a) is 
among those proposals which have met the highest competitive 
standards of scientific and clinical merit, and the Secretary 
(upon the recommendation of the Under Secretary for Health) 
determines that the facility has (or may reasonably be 
anticipated to develop) each of the following:
          (1) An arrangement with an accredited medical school 
        which provides education and training in neurology and 
        with which such facility is affiliated under which 
        residents receive education and training in innovative 
        diagnosis and treatment of chronic neurodegenerative 
        diseases and movement disorders, including Parkinson's 
        disease.
          (2) The ability to attract the participation of 
        scientists who are capable of ingenuity and creativity 
        in health-care research efforts.
          (3) 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.
          (4) The capability to conduct effectively evaluations 
        of the activities of such center.
          (5) The capability to coordinate, as part of an 
        integrated national system, education, clinical, and 
        research activities within all facilities with such 
        centers.
          (6) The capability to jointly develop a consortium of 
        providers with interest in treating neurodegenerative 
        diseases, including Parkinson's Disease, and other 
        movement disorders, at facilities without such centers 
        in order to ensure better access to state-of-the-art 
        diagnosis, care, and education for neurodegenerative 
        disorders throughout the health care system.
          (7) The capability to develop a national repository 
        for the collection of data on health services delivered 
        to veterans seeking care for neurodegenerative 
        diseases, including Parkinson's Disease, and other 
        movement disorders in the health care system.
  (d)(1) The Under Secretary for Health shall establish a panel 
to assess the scientific and clinical merit of proposals that 
are submitted to the Secretary for the establishment of new 
centers under this section.
  (2)(A) The membership of the panel shall consist of experts 
in neurodegenerative diseases, including Parkinson's Disease, 
and other movement disorders.
  (B) Members of the panel shall serve as consultants to the 
Department for a period of no longer than two years except in 
the case of panelists asked to serve on the initial panel as 
specified in subparagraph (C).
  (C) In order to ensure panel continuity, half of the members 
of the first panel shall be appointed for a period of three 
years and half for a period of two years.
  (3) The panel shall review each proposal submitted to the 
panel by the Under Secretary and shall submit its views on the 
relative scientific and clinical merit of each such proposal to 
the Under Secretary.
  (4) The panel shall not be subject to the Federal Advisory 
Committee Act.
  (e) Before providing funds for the operation of any such 
center at a health-care facility other than a health-care 
facility designated under subsection (b)(1), the Secretary 
shall assure that the center at each facility designated under 
such subsection is receiving adequate funding to enable such 
center to function effectively in the areas of Parkinson's 
Disease research, education, and clinical activities.
  (f) There are authorized to be appropriated such sums as may 
be necessary for the support of the research and education 
activities of the centers established pursuant to subsection 
(a). The Under Secretary for Health shall allocate to such 
centers from other funds appropriated generally for the 
Department medical services account and medical and prosthetics 
research account, as appropriate, such amounts as the Under 
Secretary for Health determines appropriate.
  (g) Activities of clinical and scientific investigation at 
each center established under subsection (a) shall be eligible 
to compete for the award of funding from funds appropriated for 
the Department medical and prosthetics research account and 
shall receive priority in the award of funding from such 
account insofar as funds are awarded to projects for research 
in Parkinson's disease and other movement disorders.

           *       *       *       *       *       *       *