Native American and Native Hawaiian Veterans, the National Association for Uniformed Services, the Vietnam Veterans of America, the Southern California Veterans Council, Inc., the National Home Study Council, Mr. Oliver E. Meadows, Chairman of the VA Advisory Committee on Education and a member of the Commission to Assess Veterans' Education Policy, and John W. Davis, James A. Kiser, Jr., and Julie Harden on behalf of 250 North and South Carolina colleges.

On June 14, 1989, the Committee held a hearing, chaired by Chairman Cranston, to receive testimony on mental health legislation-part A of title II of S. 13, S. 86, S. 192, S. 405, S. 846, and Amendment No. 124 to S. 13. Testimony was received from Dr. John Gronvall, Chief Medical Director of the Department of Veterans Affairs; Dr. Spencer Falcon, Assistant Director, National Association of VA Chiefs of Psychiatry; Dr. Kenneth Klauck, President, National Association of VA Chiefs of Psychology; and representatives of The American Legion, the Veterans of Foreign Wars, the Disabled American Veterans, the Paralyzed Veterans of America, and the Vietnam Veterans of America.

On June 14, 1989, the Committee held a hearing, chaired by Chairman Cranston, to receive testimony on home loan guaranty and Agent Orange legislation and health-facility-security legislation and oversight-section 221 of S. 13, S. 404, S. 898, S. 1153, S. 1158, and H.R. 1415; and one Administration proposal-S. 898. Testimony was received from Senators Daschle and Kerry; Deputy Secretary of Veterans Affairs Anthony J. Principi; Ms. Nina Shepherd, Congressional Budget Office; Mr. Brian Hawkins, Chief of Security Service, West Los Angeles VA Medical Center (VAMC); Mr. John Taylor, Chief of Security Service, Dallas VAMC; Mr. Frank Watts, Chief of Security Service, Kansas City VAMC; Mr. Angelo R. Mozilo, representing the Mortgage Bankers Association of America; Mr. Jim Irvine, Chairman, Federal Government Affairs Committee, National Association of Home Builders; and representatives of The American Legion, the Veterans of Foreign Wars, the Disabled American Veterans, the Paralyzed Veterans of America, and the Vietnam Veterans of America. Testimony was also submitted by the National Academy of Sciences, the Centers for Disease Control, the Office of Technology Assessment, the Government National Mortgage Association, the National Association of Realtors, and The First Boston Corporation.

Also, in connection with this hearing, Chairman Cranston asked the Administration and various organizations to submit their views on certain bills and draft measures then planned to be introduced. The Chairman asked VA for comments on S. 505, S. 860, S. 1145, S. 1146, S. 1211, S. 1243, and drafts of measures later introduced as S. 1346 and S. 1315. Chairman Cranston also asked the Government National Mortgage Association; the National Association of Realtors, the Mortgage Bankers Association, and the National Association of Home Builders to submit their views on S. 1146; asked the VA Advisory Committee on Native American and Native Hawaiian Veterans to submit views on that bill and S. 1145; and asked the Manufactured Housing Institute to submit views on S. 898, S. 1146, and S. 1158. In addition, he asked The American Legion, the Veterans of Foreign Wars, the Disabled American Veterans, the

AMVETS, the Paralyzed Veterans of America, and the Vietnam Veterans of America to submit views on S. 505, S. 613, S. 860, S. 1110, S. 1141, S. 1145.

S. 1146, S. 1147, S. 1195, S. 1211, and S. 1243, and the two draft measures later introduced as S. 1346 and S. 1315.

COMMITTEE MEETING

After carefully reviewing the testimony from the foregoing hearings, the Committee met in open session on July 27, 1989, and voted unanimously to report S. 13 favorably to the Senate with an amendment in the nature of a substitute which incorporated provisions from virtually all of the bills the introduction of which is noted above, as well as from original proposals by Chairman Cranston and Ranking Minority Member Murkowski.

SUMMARY OF S. 13 AS REPORTED

TITLE I-COMPENSATION AND PENSION

This title contains freestanding provisions and amendments to title 38 that would:

1. Require the Secretary of Veterans Affairs to increase, effective December 1, 1989, the rates and limitations for compensation paid to veterans with service-connected disabilities and the rates of dependency and indemnity compensation (DIC) paid to certain service-connected-disabled veterans' survivors by the same percentage (estimated at this time by the Congressional Budget Office to be 5.2 percent) as that which will be provided to Social Security recipients and VA pension beneficiaries effective on that same date, with the increased rates rounded down to the nearest dollar for those with 10- and 20-percent disability ratings and rounded to the nearest dollar for those with ratings of 30-percent and higher. The basic increase would apply to:

(a) basic compensation rates for service-connected-disabled veterans and the rates payable for certain severe disabilities; (b) the allowances for spouses, children, and dependent parents paid to service-connected-disabled veterans rated 30-percent or more disabled;

(c) the annual clothing allowance paid to veterans whose compensable disability requires the use of a prosthetic or orthopedic appliance (including a wheelchair) that tends to tear or wear out clothing; and

(d) the DIC rates paid to:

(i) surviving spouses of veterans whose deaths were service connected;

(ii) surviving spouses for dependent children and surviving spouses who are so disabled as to be in need of aid and attendance or to be permanently housebound; and

(iii) the children of veterans whose deaths were service connected where no surviving spouse is entitled to DIC, the child is age 18 through 22 and attending an approved educational institution, or the child is age 18 or over and became permanently incapable of self-support prior to reaching age 18 (section 101).

2. Expand the clothing allowance to include cases in which medication prescribed for a veteran's service-connected skin condition stains or otherwise damages the veteran's clothing (section 102).

3. Provide that monthly VA pension payments to veterans who are being furnished hospital care by VA and have no spouse or dependent children would be reduced when the veteran has been hospitalized for eight months (rather than the current three months), with the Secretary authorized to extend that period if VA's Chief Medical Director determines that the veteran is likely to be released from the hospital in a reasonable period of time (section 103(a)).

4. Raise from $60 to $105 the limit on monthly pension payments for veterans being furnished institutional care (section 103(b)).

5. Increase from $1,500 to $6,000 the maximum value of the estate of an incompetent veteran who has no dependents and is being furnished institutional care at government expense that is allowed before VA suspends the veteran's compensation or pension benefits; and increase from $500 to $2,000 the amount to which the veteran's estate must be reduced before suspended compensation or pension payments are resumed (section 103(c)).

TITLE II-HEALTH CARE

Part A-Mental Health

Part A of this title includes amendments to chapters 17 and 73 of title 38 that would:

1. Require VA (1) to provide treatment for post-traumatic stress disorder (PTSD) once (a) a diagnosis of the PTSD related to the veteran's service in a combat theater has been made by a mentalhealth professional designated by the Chief Medical Director, and (b) the veteran's combat-theater service has been verified, with verification required by the most rapid means possible; and (2) to accomplish an evaluation of a veteran within 7 days after the referral of the veteran to a VA medical center by a Vet Center (section 201).

2. Authorize VA to expand eligibility, currently provided to only Vietnam-era veterans, for readjustment counseling and follow-up mental health care to include veterans of service in theaters of operations of any prior periods of war and veterans of service in areas in which United States personnel were subjected to danger from armed conflict comparable to that of battle with an enemy during a period of war (section 202).

3. Remove the pilot program designation of VA's homeless chronically mentally ill program; extend the program for three years; and expand eligibility to include chronically mentally ill veterans with service-connected disabilities rated at 50 percent or more (section 203).

4. (1) Require the Secretary to designate not more than 5 healthcare facilities as the locations for centers of mental illness research, education, and clinical activities (MIRECCs), with at least one to be designated by July 1, 1990; (2) provide that, to qualify for designation, a facility must maintain arrangements with an accredited medical school, graduate school of psychology, or nursing, social work, or other allied-health personnel school, under which

residents or students would regularly rotate through the VA facility; and (3) authorize the appropriation of $3.125 million in fiscal year 1990 and $6.25 million for each of fiscal years 1991, 1992, and 1993 for MIRECCS (section 204).

5. Extend for 3 years the reporting requirements of VA's Special Committee on PTSD and require the reports to be submitted concurrently to VA and the Congressional Committees on Veterans' Affairs (section 205).

6. Require the National Center on PTSD to provide for a study of the extent to which, and the degree of effectiveness with which, VA reaches out to, and furnishes treatment to, Vietnam veterans who are Asian Americans, Native Americans, Native Hawaiians, other Native-American Pacific Islanders, Alaska Natives, black, or Hispanic Americans, and who suffer from PTSD or other psychological problems in adjusting to civilian life (section 206).

7. Require VA to specify in its FY 1991 and FY 1992 budget documents the type and amount of resources that are proposed to be spent in the coming fiscal year on PTSD-related activities (section 207).

Part B-General Health

Part B of this title includes amendments to chapters 17 and 81 of title 38 that would:

1. Require VA (1) to furnish services to a service-connected-disabled veteran or the spouse of such a veteran to achieve pregnancy in cases in which the veteran's service-connected disability impairs procreative ability; (2) to establish an interdisciplinary task force to advise the CMD on the implementation of this provision; and (3) to furnish these services on a fee-care basis only (section 211).

2. Authorize VA compensated work therapy (CWT) programs to contract with elements of VA, as well as other private or governmental sources, to provide for the work involved (section 212 (a)).

3. Authorize the use of funds from the Special Therapeutic and Rehabilitation Activities Fund (STRAF), which is used for the operation of CWT programs, to defray the costs of travel and related expenses necessary to train and educate VA employees to administer CWT programs (section 212(b)).

4. Require VA to conduct a 5-year, two-part CWT and therapeutic residence (TR) pilot program at not more than 25 VA healthcare facilities, under which VA would be required (1) at not less than 10 nor more than 15 of these sites, to promote and participate in the establishment of nonprofit corporations with which VA would contract to run CWT programs as long as the nonprofit runs a TR, and (2) directly to acquire and operate TRS for veterans participating in CWT programs at not less than 10 nor more than 15 of these sites.

(A) As to VA's contracting with nonprofit corporations for the operation of a CWT program in conjunction with a TR, provide for the following:

(i) Authorize VA to make demand-note loans to the nonprofit corporation in the amounts of (a) either 25 percent of the purchase price or the total of one year's rent in the case where the property is to be leased and, (b) the esti

mated cost of operating the TR for 6 months; provided that the loans would not bear interest for the first five years, and thereafter would bear a rate of interest specified by the Secretary, in consultation with the Secretary of the Treasury; provide for the loans to be made from unobligated funds in the STRAF; make the security for the note subordinate to any purchase-money mortgage; and require that, if the corporation sells the residence, the proceeds of the sale be used to repay the unpaid balance of the loan and to pay VA 50 percent of any profit realized from the sale.

(ii) Require VA to deposit the loan in an escrow account and permit the funds to be disbursed to the corporation only upon its demonstrating to VA's satisfaction that at least 25 percent of its annual operating expenses for running the TR (over and above the expenses anticipated to be paid from VA patients' rental payments) would be paid from non-VA sources (either in cash or in in-kind services). (iii) Authorize VA to provide in-kind services (including technical and clinical expertise, building-rehabilitation supervision, and minor maintenance and repairs to the residence) to the corporation; and provide that services would be considered as "pass through" expenses and, accordingly, would not be subject to adjustment by VA's Resources Allocation Methodology or any other methodology VA uses in allocating funding to its health-care facilities.

(iv) Require the corporation, when it ceases to operate the TR, to return to the STRAF out of the proceeds from the sale of the property any loan amount it owes to VA plus 50 percent of any profits from the sale.

(v) Direct the Secretary to transfer to the Veterans Health Services and Research Administration (VHS&RA) not less than ten properties acquired by VA as a result of defaults on loans under its home-loan guaranty program, for VHS&RA to lease to nonprofit corporations, which have CWT contracts and agree to use the properties as TRs, for terms of 1 to 3 years, with renewal options permissible for up to another 3 years; require the corporation to pay to the VA health-care facility 60 percent of the rent collected from veteran residents, for subsequent transfer by VA into the appropriate loan guaranty program revolving fund; and require the corporation, upon termination of the lease, to return the property to the Secretary for disposition in accordance with loan guaranty program procedures.

(vi) Direct that any existing nonprofit corporation carrying out a CWT program be grandfathered in its CWT operations without regard to the provisions in the bill.

(vii) Provide for the structure of the CWT/TR nonprofit corporations to be similar to that of the research nonprofit corporations, which are currently authorized in subchapter VI of chapter 73 of title 38, in terms of their general powers, the structure of their boards of directors (but with VA employees limited to being a minority of board mem