To amend title 38, United States Code, to authorize the Secretary of Veterans Affairs to make grants (in conjunction with the Secretary of Defense) for the establishment of research centers at qualifying medical schools to carry out medical research in areas of interest to the Department of Veterans Affairs.

Authorizes the Secretaries of Veterans Affairs and Defense to make joint grants to qualifying medical schools to assist in the establishment of new medical research centers. Outlines qualifications for medical schools eligible for such grants, including: (1) being primarily State-supported; (2) having no established research center in the field for which application is made; (3) being located in proximity to a Department of Veterans Affairs medical facility which has an affiliation with a medical facility of the Department of Defense; and (4) having demonstrable potential for successful development of such a new research center. Requires the Secretaries to ensure that centers for which grants are made are geographically dispersed within the United States.

Requires the Secretaries to establish an advisory committee to advise a medical school with respect to activities of the center for which a grant is made. Prohibits the Secretaries from entering into an agreement to make a grant unless the Secretaries find that the school will maintain arrangements with the Department medical facility with which it is affiliated as to be mutually beneficial in carrying out the mission of the respective medical facilities and the school. Requires facilities of such research centers to be made available on a competitive basis.

Requires the Secretaries to ensure that Federal funding for such centers is acknowledged in the activities and publications of the center. Requires one half of the grant amounts to be provided by each Secretary. Specifies fund sources which may be used for such grants.

Requires an agreement for such grants to include certain assurances with respect to the sufficiency of non-Federal funding for such research centers. Authorizes the Secretaries to increase grant amounts due to cost increases, within specified limits.

Sets forth application requirements for medical schools desiring to receive such grants. Requires the Secretaries, in considering such applications, to give priority to applications which emphasize research in one or more of the following areas: (1) diabetes and metabolic diseases; (2) prosthetics and rehabilitation medicine; (3) mental health, behavioral medicine, and neurological disease; (4) acquired immune deficiency syndrome (AIDS) and related diseases; (5) Alzheimer and dementia; (6) degenerative cardiopulmonary disease; (7) cancer; (8) technology assessment; and (9) toxicology. Requires the Secretaries to use a merit review process in considering applications and awarding grants under this Act.

Authorizes appropriations for FY 1991 through 1994.

Entitles the Secretaries to recover from grant recipients any amount not used for appropriate grant purposes.