SECTION 1. CHESAPEAKE BAY ENVIRONMENTAL RESTORATION AND PROTECTION 
              PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of the Army (referred to in 
        this section as the ``Secretary'') shall establish a pilot 
        program to provide environmental assistance to non-Federal 
        interests in the Chesapeake Bay watershed.
            (2) Form.--The assistance shall be in the form of design 
        and construction assistance for water-related environmental 
        infrastructure and resource protection and development projects 
        affecting the Chesapeake Bay estuary, including projects for 
        sediment and erosion control, protection of eroding shorelines, 
        protection of essential public works, wastewater treatment and 
        related facilities, water supply and related facilities, and 
        beneficial uses of dredged material, and other related projects 
        that may enhance the living resources of the estuary.
    (b) Public Ownership Requirement.--The Secretary may provide 
assistance for a project under this section only if the project is 
publicly owned, and will be publicly operated and maintained.
    (c) Local Cooperation Agreement.--
            (1) In general.--Before providing assistance under this 
        section, the Secretary shall enter into a local cooperation 
        agreement with a non-Federal interest to provide for design and 
        construction of the project to be carried out with the 
        assistance.
            (2) Requirements.--Each local cooperation agreement entered 
        into under this subsection shall provide for the following:
                    (A) Plan.--Development by the Secretary, in 
                consultation with appropriate Federal, State, and local 
                officials, of a facilities or resource protection and 
                development plan, including appropriate engineering 
                plans and specifications and an estimate of expected 
                resource benefits.
                    (B) Legal and institutional structures.--
                Establishment of such legal and institutional 
                structures as are necessary to ensure the effective 
                long-term operation and maintenance of the project by 
                the non-Federal interest.
    (d) Cost Sharing.--
            (1) Federal share.--Except as provided in paragraph (2)(B), 
        the Federal share of the total project costs of each local 
        cooperation agreement entered into under this section shall be 
        75 percent.
            (2) Non-federal share.--
                    (A) Value of lands, easements, rights-of-way, and 
                relocations.--In determining the non-Federal 
                contribution toward carrying out a local cooperation 
                agreement entered into under this section, the 
                Secretary shall provide credit to a non-Federal 
                interest for the value of lands, easements, rights-of-
                way, and relocations provided by the non-Federal 
                interest, except that the amount of credit provided for 
                a project under this paragraph may not exceed 25 
                percent of total project costs.
                    (B) Operation and maintenance costs.--The non-
                Federal share of the costs of operation and maintenance 
                of carrying out the agreement under this section shall 
                be 100 percent.
    (e) Applicability of Other Federal and State Laws and Agreements.--
            (1) In general.--Nothing in this section waives, limits, or 
        otherwise affects the applicability of any provision of Federal 
        or State law that would otherwise apply to a project carried 
        out with assistance provided under this section.
            (2) Cooperation.--In carrying out this section, the 
        Secretary shall cooperate fully with the heads of appropriate 
        Federal agencies, including--
                    (A) the Administrator of the Environmental 
                Protection Agency;
                    (B) the Secretary of Commerce, acting through the 
                Administrator of the National Oceanic and Atmospheric 
                Administration;
                    (C) the Secretary of the Interior, acting through 
                the Director of the United States Fish and Wildlife 
                Service; and
                    (D) the heads of such other Federal agencies and 
                departments and agencies of a State or political 
                subdivision of a State as the Secretary determines to 
                be appropriate.
    (f) Demonstration Project.--The Secretary shall establish at least 
one project under this section in each of the States of Maryland, 
Virginia, and Pennsylvania. A project established under this section 
shall be carried out using such measures as are necessary to protect 
environmental, historic, and cultural resources.
    (g) Report.--Not later than December 31, 1998, the Secretary shall 
transmit to Congress a report on the results of the program carried out 
under this section, together with a recommendation concerning whether 
or not the program should be implemented on a national basis.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 1996, 1997, and 1998, to remain available until expended.
Directs the Secretary of the Army to establish a pilot program to provide environmental assistance to non-Federal interests in the Chesapeake Bay watershed for water-related environmental infrastructure and resource protection and development projects. Requires any project receiving such assistance to be publicly owned, operated, and maintained. 
Requires local cooperation agreements with non-Federal interests before the provision of such assistance.  Places at 75 percent the Federal share of total project costs. 
Requires the Secretary to establish at least one project for the receipt of such assistance in each of Maryland, Virginia, and Pennsylvania.  Requires a report on program results.  Authorizes appropriations.
To authorize the establishment of a pilot program to provide environmental assistance to non-Federal interests in the Chesapeake Bay watershed, and for other purposes.