A bill to amend title 38, United States Code, to improve the capability of the Department of Veterans Affairs health-care facilities to provide the most effective and appropriate services possible to veterans suffering from mental illness, especially conditions which are service-related, through the designation of up to five of its facilities as centers of mental illness research, education, and clinical activities and for other purposes.

Directs the Secretary of Veterans Affairs to establish and operate up to five Department of Veterans Affairs health-care facilities as centers of mental illness research, education, and clinical activities, taking into account appropriate geographic distribution of such facilities.

Precludes the Secretary from designating any health-care facility as a center unless the facility has (or may reasonably be anticipated to develop): (1) an arrangement with an accredited medical school and graduate school of psychology which provides education and training in psychiatry and psychology through regular rotation through such center so as to provide training in the diagnosis and treatment of mental illness; (2) an arrangement under which nurses, social workers, or other allied health personnel receive education and training in mental health care through regular rotation through such facility; (3) the ability to attract the participation of scientists who are capable of ingenuity and creativity in research into the causes, treatment, and prevention of mental illness and into models for furnishing care and treatment to veterans suffering from mental illness; (4) a policymaking advisory committee to advise the directors of such facility and center on policy matters pertaining to the activities of such center; and (5) the capability to conduct effectively evaluations of the activities of such center.

Authorizes appropriations.

Declares that activities of clinical and scientific investigation at each center shall be eligible to compete for the award of funding from funds appropriated for the Department's medical and prosthetics research account and shall receive priority insofar as funds are awarded to projects for mental illness.

Requires the Chief Medical Director to ensure that: (1) research activities carried out through such centers include an appropriate emphasis on the psychosocial dimension of mental illness and on models for furnishing care and treatment to veterans suffering from mental illness; and (2) useful information produced by the centers is disseminated throughout the Veterans' Health Services and Research Administration.

Requires the Secretary to submit to the House and Senate Committees on Veterans Affairs an annual report on the activities and effectiveness of the centers.