To provide for funding for construction and major rehabilitation for projects located on inland and intracoastal waterways of the United States, and for other purposes.

Summary: Waterways Are Vital for the Economy, Energy, Efficiency, and Environment Act of 2012 or WAVE4 Act - Directs the Secretary of the Army, acting through the Chief of Engineers, to require certain delivery process reforms for qualifying construction and major rehabilitation projects for navigation infrastructure of inland and intracoastal waterways.

Directs the Secretary, working in conjunction with the Inland Waterways Users Board, to submit to Congress a 20-year program for making capital investments on inland and intracoastal waterways. Authorizes such program to be based on the 20-year capital investment strategy contained in the Inland Marine Transportation System (IMTS) Capital Projects Business Model, Final Report published on April 13, 2010, as approved by the Board.

Amends the Internal Revenue Code to limit expenditures from the Inland Waterways Trust Fund to 50% of the total cost of the construction or rehabilitation project. Prohibits expenditures from the Fund for: (1) construction or rehabilitation of dams, or (2) rehabilitation expenditures equal to or exceeding $100 million.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Waterways Are Vital for the Economy, 
Energy, Efficiency, and Environment Act of 2012'' or the ``WAVE4 Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The inland waterways navigation system is vital to the 
        economic well-being of the Nation.
            (2) Energy reliability and conservation are the 
        cornerstones of the inland waterways navigation system.
            (3) The efficiency of the inland waterways navigation 
        system creates the optimum transportation mode for bulk 
        commodities in the United States.
            (4) The inland waterways navigation system provides for 
        environmental protection and ecosystem sustainability.

SEC. 3. PURPOSES.

    In order to ensure continued safe, dependable, highly cost-
effective, and environmentally sustainable navigation on the inland and 
intracoastal waterways of the United States, the purposes of this Act 
are to--
            (1) improve program and project management applicable to 
        the construction and major rehabilitation of navigation 
        projects on such waterways;
            (2) optimize inland waterways navigation system 
        reliability;
            (3) minimize the size and scope of inland waterways 
        navigation project completion schedules;
            (4) eliminate preventable delays in inland waterways 
        navigation project completion schedules; and
            (5) make inland waterways navigation capital investments 
        through use of prioritization criteria that seek to maximize 
        system-wide benefits and minimize overall system risk.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Qualifying project.--The term ``qualifying project'' 
        means any construction or major rehabilitation project for 
        navigation infrastructure of the inland and intracoastal 
        waterways that is--
                    (A) authorized before, on, or after the date of 
                enactment of this Act;
                    (B) not completed on the date of enactment of this 
                Act; and
                    (C) funded at least in part from the Inland 
                Waterways Trust Fund.
            (2) Major rehabilitation project.--The term ``major 
        rehabilitation project'' means a project for the restoration of 
        a major project or major project feature that has an estimated 
        cost greater than $100,000,000.

SEC. 5. PROJECT DELIVERY PROCESS REFORMS.

    The Secretary of the Army, acting through the Chief of Engineers, 
shall require the following:
            (1) Formal project management training and certification 
        for project managers of a qualifying project.
            (2) Assignment as project managers for a qualifying project 
        only of personnel fully certified by the Chief of Engineers.
            (3) Cost estimation that is risk-based and has a confidence 
        level of at least 80 percent for a qualifying project.
            (4) Independent external peer review and submission to 
        Congress (in the case of a feasibility report) or the Secretary 
        (in the case of a rehabilitation evaluation report) for any 
        qualifying project--
                    (A) that--
                            (i) has an estimated total project cost 
                        greater than $45,000,000;
                            (ii) is subject to public safety concerns, 
                        as determined by the Chief of Engineers;
                            (iii) involves a high level of complexity 
                        or novel or precedent-setting approaches, as 
                        determined by the Chief of Engineers; or
                            (iv) is identified by the Chief of 
                        Engineers as a matter of significant 
                        interagency interest; or
                    (B) for which such a review has been requested by 
                the Governor of any State affected by the project.
            (5) Appointment to a project development team for a 
        qualifying project of a member of the Inland Waterways Users 
        Board, selected by the Chairman of the Users Board.
            (6) Communication quarterly to the Inland Waterways Users 
        Board of the status of a qualifying project that is under 
        construction.
            (7) Inclusion of the Chairman of the Inland Waterways Users 
        Board and the project development team appointee under 
        paragraph (5) as signatories of the project management plan for 
        a qualifying project.
            (8) Establishment of a system to identify and apply on a 
        continuing basis lessons learned from prior or ongoing projects 
        so as to improve the likelihood of on-time and on-budget 
        completion of qualifying projects.
            (9) Evaluation, including through use of one or more pilot 
        projects, of early contractor involvement acquisition 
        procedures to improve on-time and on-budget project delivery 
        performance.
            (10) Such additional measures that the Secretary determines 
        will achieve the purposes of this Act, including, as determined 
        appropriate by the Secretary--
                    (A) implementation of applicable practices and 
                procedures drawn from the Secretary's management of the 
                military construction program;
                    (B) creation of one or more centers of expertise 
                for the design and review of qualifying projects;
                    (C) development and use of a portfolio of standard 
                designs for inland navigation locks;
                    (D) use of full-funding contracts or formulation of 
                a revised continuing contracts clause; and
                    (E) establishment of procedures for recommending 
                new project construction starts using a capital 
                projects business model.

SEC. 6. 20-YEAR CAPITAL INVESTMENT PROGRAM.

    (a) Program Required.--Not later than one year after the date of 
enactment of this Act, the Secretary of the Army, working in 
conjunction with the Inland Waterways Users Board, shall submit to 
Congress a 20-year program for making capital investments on the inland 
and intracoastal waterways based on application of objective national 
project-selection prioritization criteria, as developed by the 
Secretary. Such program may be based on the 20-year capital investment 
strategy contained in the Inland Marine Transportation System (IMTS) 
Capital Projects Business Model, Final Report published on April 13, 
2010, as approved by the Inland Waterways Users Board.
    (b) Annual Review and Update.--Beginning not later than one year 
after the date on which a 20-year program is submitted to Congress 
under subsection (a), and each year thereafter, the Secretary of the 
Army, working in conjunction with the Inland Waterways Users Board, 
shall submit to Congress an updated 20-year program. Such updated 
program shall include identification and explanation of any changes 
that were made to the prior year's project-specific recommendations, 
including any changes that were made to the objective national project-
selection prioritization criteria that were used to develop the updated 
recommendations.
    (c) Strategic Review and Update.--Not later than 5 years after the 
date of enactment of this Act, and every 5 years thereafter, the 
Secretary of the Army, working in conjunction with the Inland Waterways 
Users Board, shall submit to Congress a strategic review of the capital 
investment program for the Inland Marine Transportation System and make 
such revisions to the program as the Secretary and Users Board jointly 
consider appropriate.

SEC. 7. COST SHARING FOR QUALIFYING PROJECTS.

    (a) General Rule.--Notwithstanding any other provision of law, and 
subject to subsection (b), one-half of the cost of construction of a 
qualifying project shall be paid only from amounts appropriated from 
the general fund of the Treasury, and one-half of such costs shall be 
paid only from amounts appropriated from the Inland Waterways Trust 
Fund.
    (b) Special Rule for Dams.--Notwithstanding subsection (a), the 
cost of construction of a dam shall be paid only from amounts 
appropriated from the general fund of the Treasury.

SEC. 8. LIMITATION ON EXPENDITURES FROM THE INLAND WATERWAYS TRUST 
              FUND.

    Section 9506 of the Internal Revenue Code of 1986 is amended--
            (1) in subsection (c)(1), by--
                    (A) inserting ``and subject to subsection (d),'' 
                after ``Except as provided in paragraph (2),'';
                    (B) striking ``, as in effect on the date of the 
                enactment of this section'' and inserting ``, provided 
                that such expenditures may not exceed 50 percent of the 
                total cost of the construction or rehabilitation''; and
            (2) by inserting at the end the following:
    ``(d) Limitation on Expenditures From Trust Fund.--(1) Amounts in 
the Inland Waterways Trust Fund shall not be available for expenditures 
for--
            ``(A) construction or rehabilitation of dams; or
            ``(B) any rehabilitation expenditure that does not equal or 
        exceed $100,000,000.
    ``(2) Amounts in the Inland Waterways Trust Fund may not be used to 
pay for any part of the cost to construct an authorized Federal project 
that exceeds the sum of--
            ``(A) the total authorized cost to construct the Federal 
        project as specified in the Public Law that authorized 
        construction of the project or, in the case of a rehabilitation 
        project, in the relevant rehabilitation evaluation report;
            ``(B) an adjustment for inflation for the time that elapses 
        between the date of the project's authorization and the date on 
        which construction of the project begins; and
            ``(C) an additional amount, if any, jointly agreed to by 
        the Secretary and the Inland Waterways Users Board as 
        appropriate to the project.''.

SEC. 9. REVISION TO INLAND WATERWAYS USER FEE.

    Section 4042(b)(2)(A) of the Internal Revenue Code of 1986 is 
amended to read as follows:
                    ``(A) The Inland Waterways Trust Fund financing 
                rate is the rate determined in accordance with the 
                following table:

                                                            The tax per
``If the use occurs:                                         gallon is:
        During 2012........................................   20 cents 
        After 2012......................................... 26 cents''.