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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6599 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6599
To amend title 38, United States Code, to establish an independent
authority of the Secretary of Veterans Affairs to enter into leases for
major medical facilities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 10, 2025
Mr. Smith of Missouri introduced the following bill; which was referred
to the Committee on Veterans' Affairs
_______________________________________________________________________
A BILL
To amend title 38, United States Code, to establish an independent
authority of the Secretary of Veterans Affairs to enter into leases for
major medical facilities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Leasing and Infrastructure Act of
2025''.
SEC. 2. INDEPENDENT AUTHORITY OF THE SECRETARY OF VETERANS AFFAIRS TO
ENTER INTO LEASES FOR MAJOR MEDICAL FACILITIES;
ESTABLISHMENT OF VETERANS LEASING FUND.
(a) Independent Authority.--Section 8103 of title 38, United States
Code, is amended by adding at the end the following new subsections:
``(i) Independent Leasing Authority.--(1) Notwithstanding section
3307 of title 40, the Secretary may enter into a lease for any major
medical facility (as defined in section 8104 of this title) without
delegation from the Administrator of General Services, if the
prospectus for such a lease has been--
``(A) approved by the Committees on Veterans' Affairs of
the House of Representatives and the Senate; and
``(B) transmitted concurrently to--
``(i) the Committee on Transportation and
Infrastructure of the House of Representatives; and
``(ii) the Committee on Environment and Public
Works of the Senate.
``(2)(A) The firm term of a lease under this subsection may not
exceed 20 years. No lease under this subsection may be extended beyond
the firm term unless--
``(i) such extension is authorized in the prospectus; or
``(ii) Congress approves such extension.
``(B) For purposes of this paragraph, the term `firm term' means
the initial, non-cancellable lease period approved in the prospectus.
``(3) A lease under this subsection--
``(A) may be executed only to the extent and in the amount
provided in advance in the Veterans Leasing Fund established by
subsection (j); and
``(B) shall be scored and funded in accordance with Office
of Management and Budget Circular A-11.
``(4)(A) In exercising the authority under this subsection, the
Secretary shall, for each purpose-built medical facility constructed
pursuant to a lease awarded under this subsection in each locality,
submit to Congress accurate, market-based cost estimates. Such
estimates shall--
``(i) account for construction costs, material costs, and
land acquisition costs; and
``(ii) be informed by qualified sources, including licensed
appraisers, valuation experts, professional estimating firms,
or commercial real estate firms.
``(B) The Secretary may also request technical assistance from the
Administrator of General Services with respect to market surveys, cost
estimation, or lease scoring.
``(C) If, at any point in the procurement process (including during
cost estimation, the expression of interest phase, or upon receipt of
pricing from offerors) projected costs exceed approved estimates by
more than ten percent, or exceed any congressional budget authority,
the Secretary shall, not later than 30 days after the date on which the
Secretary is notified of such projected costs, submit to the Committees
on Veterans' Affairs of the House of Representatives and the Senate,
the Committee on Transportation and Infrastructure of the House of
Representatives, and the Committee on Environment and Public Works a
notification that such projected costs exceed approved estimates or
congressional budget authority, as the case may be.
``(j) Veterans Leasing Fund.--(1) There is established in the
Treasury a revolving fund to be known as the `Veterans Leasing Fund'
(in this subsection referred to as the `Fund').
``(2) There shall be deposited in the Fund--
``(A) amounts appropriated for the purpose of carrying out
the independent leasing authority under subsection (i); and
``(B) amounts transferred, on a reimbursable or
nonreimbursable basis, from the `Medical Facilities' account of
the Department (or any successor account) for the payment of
annual rent, taxes, or operating costs for leases executed
under subsection (i).
``(3) Amounts in the Fund are hereby made available as contract
authority to enter into obligations to carry out subsection (i),
including obligations in advance of receipts.
``(4) The Secretary may obligate amounts in the Fund for rental
payments, tenant improvements, real-estate taxes, operating expenses,
and pre-award due diligence costs, including design, environmental, and
professional service fees associated with leases entered into pursuant
to subsection (i).
``(5) The Secretary shall include, in the annual budget
justification materials submitted to Congress in support of the
Department--
``(A) the projected unobligated balance of the Fund;
``(B) new obligations; and
``(C) collections for the year covered by such budget
justification materials and the four fiscal years succeeding
such year.
``(k) One-Year Target for Lease Awards; Annual Report.--(1) The
Secretary shall, to the maximum extent practicable, award a lease for a
major medical facility not later than not later than the end of the one
year period beginning on the date on which the Secretary issues a
solicitation for the lease agreement.
``(2) The Secretary shall revise internal guidance, milestone
reviews, and approval workflows to--
``(A) support the requirement under paragraph (1); and
``(B) eliminate duplicative or sequential reviews that
delay procurement.
``(3) A contracting officer may not issue a solicitation described
in paragraph (1) unless, before the date of issuance, the officer has
placed in the official contract file a written certification that--
``(A) sufficient funds are obligated to cover all due
diligence and pre-award professional services reasonably
anticipated for the project, including environmental,
geotechnical, title, survey, appraisal, brokerage, and
architectural-engineering services; and
``(B) each such service is available for task-order
issuance within 30 days under an existing indefinite-delivery,
indefinite-quantity contract or other competitively-awarded
vehicle.
``(4) Obligations under paragraph (3) may be made from the Veterans
Leasing Fund established in subsection (j) or from other appropriations
for medical facilities that are available for the applicable fiscal
year.
``(5)(A) As part of the public notice during the expression of
interest phase of the acquisition process, the Secretary shall require
each prospective developer to provide price estimates, including the
cost of land, to enable the Department to evaluate whether projected
costs are at or below the unserviced shell rent authorized in the
approved prospectus.
``(B)(i) If such estimates exceed such amount authorized, the
Secretary shall, not later than 14 days after the date on which the
Secretary completes such evaluation, submit to Congress a notification
that such estimates exceed such authorized amount.
``(ii) Not later than 45 days after the date on which the Secretary
submits the notification under clause (i), the Department shall
finalize a plan to address the discrepancy between such estimates and
such authorized amount, which may include--
``(I) reducing the scope of the project;
``(II) requesting additional budget authority; or
``(III) postponing, or canceling the project, as
appropriate.
``(C) To the maximum extent practicable, the Secretary shall, not
later than 60 days after the date on which the Secretary submits the
notification under subparagraph (B), notify prospective offerors of the
potential effect to procurement timelines, including the estimated
release date of the request for lease proposals.
``(6) The Secretary shall include, in any request for a lease
proposal made pursuant to the leasing authority under subsection (i)--
``(A) a summary of the procurement milestones applicable to
such request; and
``(B) a statement that a reimbursement under paragraph (7)
would become effective on the date that is one year after the
date on which the Secretary issued such request.
``(7)(A) If the Secretary does not award a lease pursuant to a
request for a lease proposal before the date that is one year after the
date on which the Secretary issued such request, the Secretary shall be
required to reimburse each prospective lessor in the competitive range
for costs directly associated with the delay in awarding the lease.
``(B) Any reimbursement under subparagraph (A) shall be calculated
based on one percent annually (paid in equal monthly installments of
one-twelfth of one percent) of the average land acquisition cost, as
proposed by all offerors remaining in the competitive range under the
request.
``(C) Payment of such reimbursements under this paragraph shall
cease--
``(i) immediately upon the award of the lease; or
``(ii) the date on which the project is cancelled, if
applicable.
``(D) The Secretary shall issue guidance establishing documentation
requirements and procedures for administering reimbursements under this
paragraph.
``(8) Not later than March 1 of each year, the Secretary shall
submit to the Committees on Veterans' Affairs of the House of
Representatives and the Senate a report that includes--
``(A) a list of each major medical facility lease for which
a request was issued during the preceding calendar year;
``(B) a statement of whether the lease was awarded within
the one year period described in paragraph (1); and
``(C) for any lease not awarded within such period, an
explanation of the reasons the lease was not awarded during
such period.
``(9) Not later than 90 days after the date of the enactment of
this subsection, the Secretary shall issue internal guidance that
establishes the policies and thresholds the Secretary determines
necessary to administer the requirements of this subsection.
``(l) Revisions To Design Guides.--(1) Not later than 180 days
after the date of enactment of this subsection, and not less frequently
than once every five years thereafter, the Secretary shall revise the
design guides of the Department applicable to outpatient clinics and
other leased medical facilities.
``(2) In carrying out paragraph (1), the Secretary shall consult
with subject matter experts, including health care professionals and
representatives of the private health care industry.
``(3) Any revision to design guides conducted pursuant to this
section shall not be over-engineered or unnecessarily prescriptive
specifications unless required for clinical safety, functional
performance, or applicable building codes.
``(m) Mitigation of Risk Premiums.--(1) The Secretary may include
in a lease agreement under this chapter terms that mitigate risk
premiums to the Department, including--
``(A) post-occupancy self-insurance arrangements by the
Department;
``(B) reimbursement to a prospective lessor for reasonable
holding costs incurred as a result of delays attributable to
the Department in excess of established procurement milestones;
``(C) authorization to structure major medical facility
leases as triple-net leases (NNN) or modified-gross leases, as
appropriate, to align with prevailing commercial market
practices; and
``(D) definitions of the terms `shell work' and `tenant
improvements' to ensure cost allocation is consistent with
prevailing commercial market standards.
``(2) Not later than 180 days after the date of enactment of this
subsection, the Secretary shall issue guidance with respect to the use
of such terms in lease agreements under this chapter. In such guidance,
the Secretary shall ensure--
``(A) heating, ventilation, and air conditioning system
capacity is included in the definition of `shell work'; and
``(B) heating, ventilation, and air conditioning
distribution and controls required to meet tenant-specific
needs are included in the definition of `tenant improvements',
unless otherwise negotiated.
``(3) For purposes of this subsection, the term `triple-net lease'
means a lease under which the lessee is responsible for payment of real
estate taxes, insurance, utilities, janitorial services, and routine
operating costs.
``(n) Consolidation of Documentation.--The Secretary shall
consolidate internal documentation required to support lease decisions
under this chapter into a single decision memorandum, to the maximum
extent practicable. Such memorandum shall include project
justification, site selection rationale, estimated costs, design
summary, and other information necessary for internal approval and
submission to Congress.''.
(b) Conforming Amendment.--Section 8104(a)(3)(B)(i) of title 38,
United States Code, is amended by striking ``through the General
Services Administration under section 3307(a) of title 40''.
(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Veterans Leasing Fund established under section 8103 of
title 38, United States Code, (as amended by this Act), such
amounts as may be specifically authorized for lease obligations
under subsection (i) of such section (as added by this Act).
(2) Deposit of future appropriations.--Any amounts
appropriated for lease obligations for a fiscal year shall be
deposited in the Veterans Leasing Fund.
SEC. 3. COST ESTIMATION REQUIREMENTS FOR MAJOR MEDICAL FACILITY LEASES.
Section 8104(b)(2) of such title is amended--
(1) by striking ``Whenever'' and inserting ``(A)
Whenever'';
(2) by redesignating subparagraphs (A) through (E) as
clauses (i) through (v), respectively;
(3) in subparagraph (A), as designated by paragraph (1)--
(A) in clause (v), as so redesignated--
(i) by redesignating clauses (i) through
(iii) as subclauses (I) through (III),
respectively; and
(ii) by striking the period at the end and
inserting ``; and''; and
(B) by adding at the end the following new clause:
``(vi) A market-based cost estimate for the
facility to be leased that includes an evaluation of--
``(I) local land values;
``(II) applicable construction costs; and
``(III) other cost factors the Secretary
determines relevant to build-to-suit
facilities.''; and
(4) by adding at the end the following new subparagraph:
``(B)(i) The Secretary shall adopt and apply a standardized
methodology for estimating the full life-cycle cost of major
medical facility leases and prospectus-level leases.
``(ii) Such methodology shall include, at a minimum--
``(I) base rent projections over the full lease
term;
``(II) tenant improvement and buildout costs based
on current medical facility standards;
``(III) estimated operating expenses, including
utilities, maintenance, and security;
``(IV) annual escalation factors tied to
construction cost indices, labor rates, and market
trends;
``(V) cost assumptions for option periods or
potential renewal terms; and
``(VI) geographic adjustments using current
regional market data to reflect location-specific
construction and leasing conditions.
``(iii) To reflect inflation and market escalation, the
Secretary shall annually adjust each cost estimate for a lease
submitted to Congress for authorization or prospectus approval
during the period beginning on the date on which the Secretary
submits the first cost estimate for the lease and ending on the
projected award date for the lease. In adjusting a cost
estimate pursuant to this subparagraph, the Secretary shall use
such medical construction or real estate indices as the
Secretary determines appropriate.
``(iv) If the Secretary does not award a lease during the
one year period beginning on the date on which the Secretary
completes a cost estimate for the lease pursuant to this
paragraph, the Secretary shall update and revalidate such cost
estimate prior to obligating any funds for the lease or
submitting such cost estimate to Congress.''.
SEC. 4. DEVELOPMENT OF STREAMLINED PROCUREMENT MODEL; REPORT.
Not later than 180 days after the date of enactment of this Act,
the Secretary of Veterans Affairs, in consultation with the Comptroller
General of the United States, the Director of the Office of Management
and Budget, and private sector stakeholders, shall develop a revised
process for the procurement of major medical facility leases under
chapter 81 of title 38, United States Code, and submit to the
Committees on Veterans' Affairs of the House of Representatives and the
Senate a report that includes a description of such revised process.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Veterans' Affairs.
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