Summary 

S. 1407, the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2010, would provide $133.9 billion for military construction, military family housing, and veterans’ affairs programs for Fiscal Year 2010, including $76.7 billion in discretionary funding and $1.4 billion in funding for overseas contingency operations. Total discretionary funding in the bill, including overseas contingency funding, is $2.5 billion above the Fiscal Year 2009 enacted level, excluding $4.5 billion in stimulus and emergency funding. The bill is $429.1 million above the President’s budget request. 

The bill would provide a total of $109 billion for the Department of Veterans Affairs (VA), including $53.2 billion in discretionary funding, to meet the growing needs of our nation’s veterans, improve VA services and facilities, and provide for the emerging and long term needs of veterans of the Iraq and Afghanistan wars, including critical programs for research and treatment of post-traumatic stress disorder and traumatic brain injury. The vast majority of the discretionary funding – $44.7 billion – is provided for the Medical Care accounts for Fiscal Year 2010, which represents an increase of $4.2 billion over last year’s funding level, excluding stimulus. 

For the first time, the bill includes advance appropriations to fund medical programs for the Department of Veterans Affairs to ensure a stable and uninterrupted source of funding for medical care for veterans. S. 1407would provide a total of $48.2 billion for VA Medical Services, Medical Support and Compliance, and Medical Facilities for Fiscal Year 2011. 

In addition, S. 1407 would provide $23.2 billion for military construction and family housing for Fiscal Year 2010 to support America’s military forces and military families at home and overseas. This funding level is $1.9 billion below the Fiscal Year 2009 level, excluding stimulus, and $286.3 million above the President’s budget request. The funding includes $7.9 billion allocated for base realignment and closure activities (BRAC); $373 million for the expansion of mortgage relief to military families; and $225 million for energy efficiency and energy security initiatives at U.S. military facilities. The remainder of the proposed funding supports the construction of mission critical and quality of life facilities, including family housing, barracks, and child care centers. 

Additionally, the bill would provide $1.4 billion in military construction funding for overseas contingency operations in Afghanistan. 

This Legislative Bulletin draws from a summary prepared by the Senate Appropriations Committee staff, the Committee report, (111-40), as well as the bill language.

Major Provisions

Title I: Military Construction

The title includes a total of $23.2 billion in Fiscal Year 2010 funding for military construction andfamily housing.

Military Construction: Active Duty

The bill would provide a total of $11.309 billion for Active Duty construction, as follows: 

• $3.478 billion for Army construction, $183.1 million below the requested amount.
• $3.549 billion for Navy and Marine Corps construction, $214.5 million below the requested amount.
• $1.214 billionfor Air Force construction, $68.1 million above the President’s request.
• $3.069 billion for defense-wide construction projects, which is $28.4 million below the budget request. 

Energy Conservation Investment Program (ECIP).As part of defense-wide funding allocations, the bill includes $225 million, $135 million above the President’s request, for ECIP to enhance energy security at U.S. military installations and promote energy conservation and efficiency, including investment in renewable and alternate energy resources. 

Military Construction: National Guard and Reserve.S. 1407 would provide $1.285 billion for National Guard and Reserve construction, $264.2 million above the President’s budget request, including: 

• $497.2 million for Army National Guard projects, $70.7 million above the requested amount;
• $297.7 million for Air National Guard construction, $169.4 million above the President’s budget:
• $379 million for Army Reserve construction, $4.2 million above the requested amount;
• $64.1 million for Navy Reserve projects, which is equal to the requested amount; and
• $47.4 million for Air Force Reserve projects, which is $19.9 million above the President’s request. 

North Atlantic Treaty Organization Security Investment Program (NSIP).S. 1407 would provide $276.3 million for the U.S. share of the North Atlantic Treaty Organization (NATO) security investment program, including acquisition and construction of facilities and other expenses related to the defense of the North Atlantic Treaty Area. This amount is equal to the President’s budget request. 

Military Construction: Family Housing.The bill would appropriate $2.3 billion for family housing for Fiscal Year 2010. This amount is $350 million above the President’s request. Specifically, S. 1407 would appropriate: 

• to the Army, $273.2 million for construction and $523.4 million for operations and maintenance, equal to the President’s request;
• to the Navy and Marine Corps, $146.6 million for construction and $368.5 million for operations and maintenance, equal to the request;
• to the Air Force, $66.1 million for construction and $502.9 million for operations and maintenance, equal to the requested amount;
• for Defense agencies, $2.859 million for construction and $49.2 million for operations and maintenance, equal to the requested amount;
• to the Department of Defense Family Housing Improvement Fund, $2.6 million which is equal to the President’s budget request; and
• to the Homeowners Assistance Program Fund, $373 million, which is $350 million above the President’s request to complete the funding requirement for the expansion of the HAP mortgage relief program to military families required to relocate, including wounded warriors and surviving spouses of deceased service members, who have suffered losses on home sales due to the mortgage crisis. 

Chemical Demilitarization. The bill would provide $151.5 million for chemical demilitarization construction projects, which is $5 million above the President’s request. 

Base Realignment and Closure Accounts.The bill would deposit $421.8 million into the 1990 Base Realignment and Closure (BRAC) account, $25 million above the President’s request, and $7.5 billion into the 2005 BRAC account, as requested. The BRAC 2005 funding level is $1.3 billion below the Fiscal Year 2009 enacted level, reflecting reduced construction requirements. 

Title II: Department of Veterans Affairs

Title II of S. 1407 would appropriate $109 billion for the Department of Veterans Affairs (VA), including $55.8 billion for mandatory spending and $53.2 billion in discretionary appropriations. This amount represents an increase of $150 million above the President’s request. 

Veterans Benefits Administration (VBA).The bill would provide $55.988 billion for the VBA, which is equal to the President’s request. This amount includes funding as follows for mandatory programs: 

• $47.218 billion for compensation and pensions;
• $8.663 billion for readjustment benefits;
• $49.3 million for veterans insurance and indemnities;
• $23.6 million for the veterans housing benefit program fund and $165.1 million for administrative expenses;
• $29,000 for the vocational rehabilitation loans program account and $328,000 for administrative expenses; and
• $664,000 for the Native American veteran housing program account.

Veterans Health Administration (VHA).The bill would provide $45.234 billion for the VHA, which is $156.9 million more than the President’s request. This allocation includes funding for the following programs: 

• Medical services.The bill would provide $34.7 billion for VHA medical services for Fiscal Year 2010, which is equal to the requested amount and represents an increase of $3.735 billion over Fiscal Year 2009 funding. Medical services funding includes allocations for investments in polytrauma rehabilitation programs, mental health services, post-traumatic stress disorder treatments, traumatic brain injury programs, readjustment counseling, and other critical programs.
   
• Medical support and compliance. S. 1407would allocate $5.1 billion for medical support and compliance for Fiscal Year 2010, which is equal to the President’s request and $650 million above Fiscal Year 2009 funding. The increased funding would be used to address cost increases in the administration of outpatient, acute, psychiatric, and nursing home care, due in part to the VA’s change in its eligibility requirements to increase the income threshold for Priority 8 veterans.
   
• Medical facilities. The bill would provide $4.85 billion for the operation and maintenance of the VA healthcare system’s infrastructure to ensure that VA medical facilities are maintained at the highest level possible. This amount is $156.9 million above the President’s request. It includes $1.3 billion ($300 million above the President’s request) for medical facilities infrastructure for the VA to address critical non-recurring maintenance and the backlog of code violations at VA hospitals and clinics.
   
• Medical and prosthetic research. S. 1407would provide $580 million for research in mental health, traumatic brain injury, spinal cord injury, polytrauma injuries, and sensory loss. This amount is equal to the President’s budget request and is $70 million above Fiscal Year 2009 levels.
   
• Medical Care Collection Fund.The bill includes authority to retain co-payments and third-party collections, estimated at $2.954 billion for Fiscal Year 2010, which is consistent with the President’s budget estimate.

Highlights of VHA funding include:
 

• Rural Healthcare. S. 1407includes $250 million, as requested, to continue the Rural Health Initiative, providing a total of $440 million in Fiscal Year 2010 for medical care for rural and highly rural areas, including Native American populations. The bill alsoprovides an additional $50 million for the VA to open new Community Based Outpatient Clinics (CBOCs) in rural areas that are currently underserved by VA healthcare facilities.
   
• Mental Health. The bill fully funds the President’s request of $4.6 billion for mental health treatment and programs to treat the “invisible wounds” of returning combat veterans.
   
• Operation Enduring Freedom and Operation Iraq Freedom (OEF/OIF) Veterans. S. 1407 allocates $2.1 billion, as requested, to meet the healthcare needs of veterans who have served in Iraq and Afghanistan, a $463 million increase over last year’s funding level. This funding includes research and treatment programs for mental health issues, including traumatic brain injury (TBI) and post-traumatic stress disorder (PTSD). According to VA estimates, the number of OEF/OIF veterans in the VA healthcare system will reach 419,000 in 2010, which is an increase of 61 percent since 2008.
   
• Women Veterans Programs.The legislation includes $183 million, which is equal to the President’s request, to meet the unique needs of women veterans.
   
• Long Term Care. S. 1407would provide $5.9 billion for long term care for aging veterans as well as severely wounded combat veterans from the wars in Iraq and Afghanistan. The funding would support both institutional and home-based care programs.
   
• Homeless veterans.The bill would provide $3.2 billion for healthcare and support services for homeless veterans, including $500 million in direct programs to assist homeless veterans. Examples of these programs include $26 million devoted to a new initiative to combat homelessness through a collaborative pilot program with non-profits and other federal agencies; $172 million for the Homeless Grant Per Diem Program and Program Liaisons; and, $75 million for the HUD/VASH program.
   
• Newly qualified veterans. S. 1407includes funding to further expand eligibility for VA healthcare to non-service-disabled veterans earning modest incomes (Priority 8 veterans). The VA has estimated that an additional 266,000 veterans will enroll in the healthcare system due to the change in policy.
   
• VA/Indian Health Service collaboration.The legislation includes report language that directs the VA to report to Congress on efforts it undertook in Fiscal Year 2009 to expand healthcare access and services to Native American Veterans.
   
• Community reintegration. S. 1407includes report language that directs the VA to develop a community reintegration demonstration project for service members and veterans with disabilities.
   
• Next generation prosthetics.The bill includes report language that calls on the VA to submit to Congress a report on clinical testing of prosthetic arms, under development in the Defense Advanced Research Projects Agency (DARPA). 

National Cemetery Administration.S. 1407 would provide $250 million for the National Cemetery Administration, which is $8 million above the requested amount.

Departmental Administration.The legislationwould provide $7.538 billion for Departmental Administration, which is $15.2 million below the President’s request. The funding includes: 

• General operating expenses. S. 1407would provide $2.086 billion for general operating expenses, which is $132.2 million below the President’s request. The bill includes language directing the VA to spend no less than $1.689 billion on administrative expenses associated with the Veterans Benefits Administration (VBA). This funding is critical to ensuring that the VBA has the resources, staffing levels, training, and technology necessary to work toward eliminating the pending claims backlog and decreasing the average adjudication time for veterans’ claims. It would allow the VBA to hire 1,200 additional claims processors, which would effectively bring the Compensation and Pensions workforce level to 14,549 in 2010 as compared to 7,550 in 2005.
   
• Information technology (IT).The legislation would provide $3.3 billion for information and technology systems, which is equal to the President’s request. These funds would support initiatives to develop electronic healthcare records, paperless claims systems, and seamless integration of medical and service records with the Department of Defense.
   
• Office of the Inspector General (IG). S. 1407includes $109 million for the IG to ensure effective oversight of VA programs and operations. This amount is $20.1 million above the Fiscal Year 2009 level and $2 million over the request in order to allow the IG’s office to provide increased oversight of VBA regional offices by evaluating disability compensation claims. The bill includes a provision that directs the IG to undertake a comprehensive review of the VA’s quality assurance programs in response to recent reports involving patient safety and improper cleaning of medical equipment.
   
• Major construction projects.The bill would provide $1.194 billion for major construction projects, which is equal to the President’s request.
   
• Minor construction projects. S. 1407includes $685 million for minor construction projects, which is $85 million above the requested amount.
   
• State extended care facilities. The legislation would provide $115 million for grants for the construction of state extended care facilities, which is $30 million above the President’s requested amount.

State Veterans’ Cemeteries. S. 1407includes $42 million for grants for the construction of state veterans’cemeteries, which is equal to the requested amount.

Title III: Related Agencies

The bill includes a total of $279 million for related agencies. 

American Battle Monuments Commission (ABMC). S. 1407would provide $80.6 million for the ABMC for the maintenance and construction of U.S. monuments and memorials overseas commemorating the achievements of the Armed Forces. This amount is $3.2 million above the budget request. 

U.S. Court of Appeals for Veterans Claims.The bill would allocate $27.1 million for salaries and expenses for the U.S. Court of Appeals for Veterans Claims, to review decisions of the Board of Veterans’ appeals. This amount is equal to the President’s request. 

Department of Defense – Civil. S. 1407would provide $37.2 million for Army cemeterial expenses, to fund the administration, operation, and maintenance of Arlington National Cemetery. This amount is equal to the requested amount. 

Armed Services Retirement Home.The bill would provide $134 million, as requested, to operate and maintain the Armed Forces Retirement Homes in Washington, DC and Gulfport, MS.

Title IV: Overseas Contingency Operations

Military Construction

S. 1407would provide $1.4 billion, equal to the request, to fund military construction projects in Afghanistan to support the realignment of U.S. forces into and within Afghanistan. The funding includes $924 million for Army construction and $474.5 million for Air Force construction.

Title V: Veterans Health Administration

This title includes advance appropriations for VA medical care accounts for Fiscal Year 2011. Funding levels in the bill are based on VA programmatic projections, including the VA Enrollee Health Care Projection Model, which incorporates the initiative of providing additional access for over 500,000 previously ineligible Priority Group 8 veterans by 2013. The projected funding would provide for the continuation of program increases provided in Fiscal Years 2009 and 2010, long term care, as well as the Civilian Health and Medical Program. The bill includes language that would allow for adjustments to be made in funding levels during the Fiscal Year 2011 budget cycle.

S. 1407would provide the following advance appropriations for Fiscal Year 2011: 

• $37.14 billion for Medical Services, which is $2.4 billion over the Fiscal Year 2010 funding recommendation;
• $5.31 billion for Medical Support and Compliance, which is $207 million above the Fiscal Year 2010 recommendation; and
• $5.74 billion for Medical Facilities, which is $890 million above the Fiscal Year 2010 recommendation.

Legislative History

On July 7, 2009, the Senate Appropriations Committee voted 30 to 0 to favorably reportS. 1407, the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2010. 

On July 10, 2009, the House of Representatives voted 415-3 to pass its version of the bill,H.R. 3082. 

Statement of Administration Policy

No Statement of Administration Policy (SAP) has been issued by the White House regarding the Senate version of S. 1407. On July 9, 2009, the White House issued a SAP citing its strong support for the passage of the House of Representatives’ version of the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2010, H.R. 3082. The SAP can be viewed at the White House Office of Management and Budget website (http://www.senate.gov/cgi-bin/exitmsg?url=http://www.whitehouse.gov/omb/assets/sap_111/saphr3082r_20090709.pdf). 

Amendments

Information on amendments to S. 1407 will be distributed by the DPC as it becomes available.