Conference Agreement Reached on Military Construction & Veterans Affairs, Zika Supplemental Appropriations

WASHINGTON, D.C. – A House-Senate conference committee has reached agreement on the FY2017 Military Construction and Veterans Affairs and Zika Response Appropriations Act (HR.2577).

The agreement, filed in the House of Representatives late Wednesday, reconciles differences between Senate and House legislation to address the Zika public health threat and to provide FY2017 funding for veterans benefits programs, military installation improvements and housing for military personnel and their families.

“We’ve negotiated a conference agreement that will provide additional resources to fight the public health threat of the Zika virus,” said Senate Appropriations Committee Chairman Thad Cochran (R-Miss.).  “I am pleased that the Zika package will be considered along with important funding for veterans and defense facilities.  I commend Chairman Rogers for his stewardship of this conference committee, and encourage the Senate to approve the legislation.”

The Zika supplemental provides $1.1 billion to the U.S. Department of Health and Human Services, U.S. Department of State, and the U.S. Agency for International Development to combat the Zika virus.  When combined with funds already reprogrammed by the Obama administration for the Zika response activities, the United States will have committed a total of $1.6 billion to fighting the Zika virus this year.

The conference agreement also contains a targeted provision to ensure that mosquito control efforts over the next six months using approved pesticides are not encumbered by costly Environmental Protection Agency permitting requirements.

The Military Construction and Veterans Affairs (MilCon-VA) Appropriations section of the bill provides $82.3 billion in FY2017 discretionary funding, $2.5 billion above the FY2016 level.

For the Department of Veterans Affairs (VA), the agreement provides a 4.1 percent funding increase over the FY2016 level, including increases for health care, benefit claims processing, the Board of Veterans Appeals, the VA Inspector General, medical and prosthetic research, and information technology.  In addition to meeting the needs of veterans, the bill will also fund housing for military personnel and their families, and support critical infrastructure and facilities for U.S. military forces.

Conferees agreed to include a provision similar to one adopted by the Senate Appropriations Committee that would allow the VA to cover fertility services, including in-vitro fertilization, for veterans with injuries that cause infertility.  This agreement includes safeguards to prevent three-parent embryos or cloning, and also allows funds to be used for adoption services.

The conference report recommends $7.72 billion for military construction projects, including funds for large and small construction and renovation projects on military bases within the U.S. and around the globe.  The bill also includes $172 million in projects requested for Overseas Contingency Operations and $615 million to fund priority projects from the Service Chiefs’ unfunded list.

The conference report must be passed by the House and Senate before it can be sent to the President for his consideration.

The 32-member conference committee began work on June 15 to reconcile differences between the House and Senate versions of the FY2017 MilCon-VA and FY2016 Zika supplemental legislation.  The conference was chaired by House Appropriations Committee Chairman Hal Rogers (R-Ky.).  The Senate in May voted 89-8 to approve its FY2017 MilCon-VA bill, which also included the FY2017 Transportation, Housing and Urban Development Appropriations Act, and Zika supplemental funding.  In May, the House approved its MilCon-VA bill, 295-129, in addition to a stand-alone Zika Response Appropriations Act, 241-184.

Conference Agreement Highlights

Zika Supplemental – Labor, Health and Human Services (Labor-HHS), Education and Related Agencies

The Labor-HHS title of the Zika supplemental includes $933 million for FY2016-17 to respond to the Zika virus, health conditions related to such virus, and other vector-borne diseases.  When combined with funds transferred recently from unobligated Ebola balances to Zika response activities, excluding $88 million in reimbursements, HHS has available resources of $1.6 billion to combat the Zika virus.

Centers for Disease Control and Prevention (CDC) – $476 million for activities within the United States, Puerto Rico, and U.S. Territories for technical assistance, and international response.  Of this amount, $88 million is to reimburse funding transferred for Zika response activities, including:
•    $38 million to reimburse CDC international funds from the Ebola Supplemental.
•    $44 million to reimburse FY2016 Public Health Emergency Preparedness funding.
•    $6 million to reimburse FY2016 Strategic National Stockpile funding.

National Institutes of Health – $230 million for research related to Zika, other vector-borne diseases, and related health conditions.

Public Health and Social Services Emergency Fund
•    $85 million for the Biomedical Advanced Research and Development Authority for research, advanced development, and commercialization of new vaccines and diagnostic tests for Zika virus.
•    $95 million for the Social Services Block Grant, a flexible pot of funding to support efforts to address health and social services in areas with active Zika transmission.  Of this funding, $80 million is specifically for U.S territories with active Zika transmission.
•    $40 million for community health centers in Puerto Rico and U.S. Territories.
•    $6 million for National Health Service Corps in Puerto Rico and U.S. Territories.

General Provisions
•    Provides authority to hire personal service contractors to respond to Zika.
•    Provides transfer authority for funds appropriated by the Labor-HHS title, and requires notification prior to any transfer of funds.
•    Requires a spend plan not later than 30 days after the enactment of the Act.
•    Provides $1 million for oversight activities related to funding in the Act.

•    No funding or authority is provided to increase the Federal Medical Assistance Percentage (FMAP) provisions for Puerto Rico and other U.S. territories from 55 percent to 65 percent.
•    No funding is provided for construction for the CDC (long-term authority).
•    No funding is provided for a government-wide contingency fund.
•    No authority is provided to expand the definition of security countermeasure for procurement under BioShield.

Zika Supplemental – State, Foreign Operations (SFOPS) and Related Programs

The SFOPS title of the Zika supplemental includes $175.1 million to support response efforts related to the Zika virus and related health conditions, and other vector-borne diseases.  When combined with funds recently transferred from Ebola for Zika, a total of $312.1 million is available to the U.S. Department of State and U.S. Agency for International Development (USAID) for Zika-related activities.

Diplomatic and Consular Programs – $14.6 million for operational support to address the Zika virus.

Emergencies in the Diplomatic and Consular Service – $4 million to support potential costs of evacuation of U.S. citizens from Zika-affected countries.

Repatriation Loan Program – $1 million to enable financing of $1.9 million in repatriation loans to U.S. citizens who seek to leave Zika-affected areas or who have been exposed to or contracted Zika.

Operating Expenses – $10 million for additional operating costs to support USAID response efforts, with a rescission of $10 million from unobligated Ebola funding.

Global Health Programs (GHP) – $145.5 million to support the ability of affected countries to implement vector management and control programs to reduce transmission of the Zika virus.  Authority is provided to use GHP funds to make contributions to support the response efforts of the World Health Organization and its regional arm—Pan American Health Organization (PAHO), the United Nations Children's Emergency Fund (UNICEF), the UN Food and Agriculture Organization, and the International Atomic Energy Agency.

Other Provisions
•    Prohibits Zika funds from being used for the USAID Grand Challenges program.
•    Provides transfer authority for funds appropriated by the SFOPS title, and requires notification prior to any transfer of funds.
•    Requires notification at least 15 days prior to the obligation of funds provided by the SFOPS title.
•    Provides authority for the Department of State and USAID to hire personal service contractors to respond to Zika.
•    Requires a consolidated report from the Department of State and USAID not later than 45 days after the enactment of the Act
•    Provides $500,000 for the GAO and $500,000 to the USAID Inspector General to provide additional oversight of the administration’s Zika response efforts.

Military Construction, Veterans Affairs, and Related Agencies Appropriations

The FY2017 MilCon-VA Appropriations Bill totals $82.3 billion in discretionary funding, $2.5 billion above the FY2016 level and $372 million below the President’s budget request.

Military Construction – $7.72 billion for more than 200 military construction projects, $445 million below the FY2016 level and $282 million above the President’s request.  The bill funds $172 million in projects requested for Overseas Contingency Operations, and $615 million to fund priority projects from the Service Chiefs’ unfunded list.

•    Missile Defense – $155 million to fully fund the first phase construction of the Long Range Discrimination Radar in Clear, Alaska.
•    European Reassurance Initiative – $113.6 million to fully fund construction projects in support of U.S. allies through the European Reassurance Initiative.
•    Military Family Housing – $1.3 billion for construction, operation and maintenance of military family housing for FY2017, $128 million below the FY2016 level.  The funding will ensure quality housing is sustained for the nearly 1.4 million military families currently served by the program.
•    Military Medical Facilities – $349.8 million for construction or alteration of military medical facilities.  This funding will allow for continued support and care for 9.8 million eligible beneficiaries, including wounded U.S. troops abroad.
•    Department of Defense (DoD) Education Facilities – $272 million for essential safety improvements and infrastructure work at four military school facilities located within the United States and overseas.
•    Guard and Reserve – $673 million to support the construction needs of the Guard and Reserve, an increase of $122 million above the FY2016 enacted level.
•    NATO Security Investment Program (NSIP) – $178 million for infrastructure necessary for wartime, crisis, and peace support and deterrence operations, and training requirements.  The funds will support responses to the challenges posed by Russia and to the risks and threats emanating from the Middle East and North Africa.

Veterans Affairs (VA) – The legislation includes $176.9 billion in both discretionary and mandatory funding for the Department of Veterans Affairs, an increase of $14.2 billion above the FY2016 level.  These resources will provide the services and care earned by veterans through their loyal and dedicated service to the nation.

Discretionary funding for VA programs totals $74.4 billion, $2.9 billion or 4 percent above the FY2016 enacted level.  The bill makes an additional $1.3 billion in medical care funding available FY2017 to improve patient access to care, and to support additional health care services including hepatitis C treatments, veterans’ caregiver services, and homeless veterans’ assistance.

•    VA Medical Care – $65 billion to support treatment and care for approximately 9.2 million patients in FY2017.  The bill outlines:  $7.2 billion for the new Medical Community Care account to provide non-VA care; $1.5 billion for the treatment of Hepatitis C; $675 million for medical and prosthetic research; $535 million for health care specifically for women veterans; $5.7 billion to care for Iraq and Afghanistan veterans; $284 million for traumatic brain injury treatment; $735 million for the Caregivers Program; and $250 million for rural health initiatives.
•    VA Electronic Health Record – $260 million for continued modernization of the VA electronic health record system.  The bill includes language restricting the use of this funding until the VA demonstrates functional improvements in the interoperability of a system to seamlessly exchange veterans’ medical data among the VA, DOD and the private sector.
•    Disability Claims Processing – $180 million for the paperless claims processing system, $143 million for digital scanning of health records, and $27 million for centralized mail.  To prompt greater national and regional progress in reducing VA claims backlogs, the bill maintains strict reporting requirements.
•    Construction – $900 million for major and minor construction associated with VA hospital replacement, continued correction of seismic deficiencies, scores of projects to improve access to VA health care, and the VA’s National Cemeteries.
•    VA Mandatory Funding – $103.9 billion in advance FY2018 funding for veterans’ mandatory benefits.  The bill fulfills mandatory funding requirements such as:  veteran disability compensation programs for 4.4 million veterans and 405,000 survivors; education benefits for nearly 1.1 million veterans; guaranteed home loans for 429,000 veterans; and vocational rehabilitation and employment training for more than 141,000 veterans.
•    Advance Appropriations – $66.4 billion in advance FY2018 funding for veterans’ medical programs, the same level as the President’s request, to support VA medical services, medical community care, medical support and compliance, and medical facilities.

Related Agencies – The legislation also includes $241.1 million in funding for:
•    American Battle Monuments Commission – $75.1 million
•    US Court of Appeals for Veterans Claims – $30.9 million
•    Arlington National Cemetery – $70.8 million
•    Armed Forces Retirement Home – $64.3 million

Rescissions of Funds

The legislation includes $750 million in rescissions of previously appropriated funds, including:
•    $107 million from the Economic Support Fund provided in the Ebola supplemental.  These funds are in excess of currently identified requirements. Of the $5.4 billion appropriated for Ebola response in 2014, approximately $2.08 billion remains unobligated as of April after the administration transferred $589 million from unobligated Ebola funds to Zika response efforts.
•    $100 million from the Nonrecurring Expenses Fund of the Department of Health and Human Services.
•    $543 million from amounts provided in the Patient Protection and Affordable Care Act for U.S. territories to establish health care exchanges.  These funds are on longer required due to territories’ election to expand Medicaid.