To authorize the President of the United States to agree to certain amendments to the Agreement between the Government of the United States of America and the Government of the United Mexican States concerning the establishment of a Border Environment Cooperation Commission and a North American Development Bank, and for other purposes.

SECTION 1. AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO THE BORDER 
              ENVIRONMENT COOPERATION AGREEMENT.

    (a) In General.--Part 2 of subtitle D of title V of Public Law 103-
182 (22 U.S.C. 290m--290m-3) is amended by adding at the end the 
following:

``SEC. 545. AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO THE BORDER 
              ENVIRONMENT COOPERATION AGREEMENT.

    ``The President may agree to amendments to the Cooperation 
Agreement that--
            ``(1) enable the Bank to make grants and nonmarket rate 
        loans out of its paid-in capital resources with the approval of 
        its Board; and
            ``(2) amend the definition of `border region' to include 
        the area in the United States that is within 100 kilometers of 
        the international boundary between the United States and 
        Mexico, and the area in Mexico that is within 300 kilometers of 
        the international boundary between the United States and 
        Mexico.''.
    (b) Clerical Amendment.--Section 1(b) of such public law is amended 
in the table of contents by inserting after the item relating to 
section 544 the following:

``Sec. 545. Authority to agree to certain amendments to the Border 
                            Environment Cooperation Agreement.''.

SEC. 2. ANNUAL REPORT.

    The Secretary of the Treasury shall submit annually to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Foreign Relations of the Senate a written report on the 
North American Development Bank, which addresses the following issues:
            (1) The number and description of the projects that the 
        North American Development Bank has approved. The description 
        shall include the level of market-rate loans, non-market-rate 
        loans, and grants used in an approved project, and a 
        description of whether an approved project is located within 
        100 kilometers of the international boundary between the United 
        States and Mexico or within 300 kilometers of the international 
        boundary between the United States and Mexico.
            (2) The number and description of the approved projects in 
        which money has been dispersed.
            (3) The number and description of the projects which have 
        been certified by the Border Environment Cooperation 
        Commission, but yet not financed by the North American 
        Development Bank, and the reasons that the projects have not 
        yet been financed.
            (4) The total of the paid-in capital, callable capital, and 
        retained earnings of the North American Development Bank, and 
        the uses of such amounts.
            (5) A description of any efforts and discussions between 
        the United States and Mexican governments to expand the type of 
        projects which the North American Development Bank finances 
        beyond environmental projects.
            (6) A description of any efforts and discussions between 
        the United States and Mexican governments to improve the 
        effectiveness of the North American Development Bank.
            (7) The number and description of projects authorized under 
        the Water Conservation Investment Fund of the North American 
        Development Bank.

SEC. 3. SENSE OF THE CONGRESS RELATING TO UNITED STATES SUPPORT FOR 
              NADBANK PROJECTS WHICH FINANCE WATER CONSERVATION FOR 
              TEXAS IRRIGATORS AND AGRICULTURAL PRODUCERS IN THE LOWER 
              RIO GRANDE RIVER VALLEY.

    (a) Findings.--The Congress finds that--
            (1) Texas irrigators and agricultural producers are 
        suffering enormous hardships in the lower Rio Grande River 
        valley because of Mexico's failure to abide by the 1944 Water 
        Treaty entered into by the United States and Mexico;
            (2) over the last 10 years, Mexico has accumulated a 
        1,500,000-acre fee water debt to the United States which has 
        resulted in a very minimal and inadequate irrigation water 
        supply in Texas;
            (3) recent studies by Texas A&M University show that water 
        savings of 30 percent or more can be achieved by improvements 
        in irrigation system infrastructure such as canal lining and 
        metering;
            (4) on August 20, 2002, the Board of the North American 
        Development Bank agreed to the creation in the Bank of a Water 
        Conservation Investment Fund, as required by Minute 308 to the 
        1944 Water Treaty, which was an agreement signed by the United 
        States and Mexico on June 28, 2002; and
            (5) the Water Conservation Investment Fund of the North 
        American Development Bank stated that up to $80,000,000 would 
        be available for grant financing of water conservation 
        projects, which grant funds would be divided equally between 
        the United States and Mexico.
    (b) Sense of the Congress.--It is the sense of the Congress that--
            (1) water conservation projects are eligible for funding 
        from the North American Development Bank under the Agreement 
        Between the Government of the United States of America and the 
        Government of the United Mexican States Concerning the 
        Establishment of a Border Environment Cooperation Commission 
        and a North American Development Bank; and
            (2) the Board of the North American Development Bank should 
        support qualified water conservation projects which can assist 
        Texas irrigators and agricultural producers in the lower Rio 
        Grande River Valley.

SEC. 4. SENSE OF THE CONGRESS RELATING TO UNITED STATES SUPPORT FOR 
              NADBANK PROJECTS WHICH FINANCE WATER CONSERVATION IN THE 
              SOUTHERN CALIFORNIA AREA.

    It is the sense of the Congress that the Board of the North 
American Development Bank should support--
            (1) the development of qualified water conservation 
        projects in southern California and other eligible areas in the 
        4 United States border States, including the conjunctive use 
        and storage of surface and ground water, delivery system 
        conservation, the re-regulation of reservoirs, improved 
        irrigation practices, wastewater reclamation, regional water 
        management modeling, operational and optimization studies to 
        improve water conservation, and cross-border water exchanges 
        consistent with treaties; and
            (2) new water supply research and projects along the Mexico 
        border in southern California and other eligible areas in the 4 
        United States border States to desalinate ocean seawater and 
        brackish surface and groundwater, and dispose of or manage the 
        brines resulting from desalination.

SEC. 5. SENSE OF THE CONGRESS RELATING TO UNITED STATES SUPPORT FOR 
              NADBANK PROJECTS FOR WHICH FINANCE WATER CONSERVATION FOR 
              IRRIGATORS AND AGRICULTURAL PRODUCERS IN THE SOUTHWEST 
              UNITED STATES.

    (a) Findings.--The Congress finds as follows:
            (1) Irrigators and agricultural producers are suffering 
        enormous hardships in the southwest United States. The border 
        States of California, Arizona, New Mexico, and Texas are 
        suffering from one of the worst droughts in history. In 
        Arizona, this is the second driest period in recorded history 
        and the worst since 1904.
            (2) In spite of decades of water conservation in the 
        southwest United States, irrigated agriculture uses more than 
        60 percent of surface and ground water.
            (3) The most inadequate water supplies in the United States 
        are in the Southwest, including the lower Colorado River basin 
        and the Great Plains River basins south of the Platte River. In 
        these areas, 70 percent of the water taken from the stream is 
        not returned.
            (4) The amount of water being pumped out of groundwater 
        sources in many areas is greater than the amount being 
        replenished, thus depleting the groundwater supply.
            (5) On August 20, 2002, the Board of the North American 
        Development Bank agreed to the creation in the bank of a Water 
        Conservation Investment Fund.
            (6) The Water Conservation Investment Fund of the North 
        American Development Bank stated that up to $80,000,000 would 
        be available for grant financing of water conservation 
        projects, which grant funds would be divided equally between 
        the United States and Mexico.
    (b) Sense of the Congress.--It is the sense of the Congress that--
            (1) water conservation projects are eligible for funding 
        from the North American Development Bank under the Agreement 
        Between the Government of the United States of America and the 
        Government of the United Mexican States Concerning the 
        Establishment of a Border Environment Cooperation Commission 
        and a North American Development Bank;
            (2) the Board of the North American Development Bank should 
        support qualified water conservation projects that can assist 
        irrigators and agricultural producers; and
            (3) the Board of the North American Development Bank should 
        take into consideration the needs of all of the border states 
        before approving funding for water projects, and strive to fund 
        water conservation projects in each of the border states.

SEC. 6. ADDITIONAL SENSES OF THE CONGRESS.

    (a) It is the sense of the Congress that the Board of the North 
American Development Bank should support the financing of projects, on 
both sides of the international boundary between the United States and 
Mexico, which address coastal issues and the problem of pollution in 
both countries having an environmental impact along the Pacific Ocean 
and Gulf of Mexico shores of the United States and Mexico.
    (b) It is the sense of the Congress that the Board of the North 
American Development Bank should support the financing of projects, on 
both sides of the international boundary between the United States and 
Mexico, which address air pollution.

            Passed the House of Representatives October 10, 2002.

            Attest:

                                                                 Clerk.

Summary: Amends the North American Free Trade Agreement Implementation Act to authorize the President to agree to amendments to the Border Environment Cooperation Agreement that: (1) enable the North American Development Bank to make grants and non-market rate loans out of its paid-in capital resources with the approval of its Board of Directors for qualified water conservation projects. And (2) amend the definition of border region as it relates to such projects to include the area in the United States within 100 kilometers of the international boundary and the area in Mexico within 300 kilometers of the international boundary between the two countries. Requires the Secretary of the Treasury to report annually to specified congressional committees on the North American Development Bank. Expresses the sense of Congress that water conservation projects are eligible for funding from the Bank under the Cooperation Agreement. Expresses the sense of Congress that the Board of Directors of the Bank should support with financing: (1) qualified water conservation projects which can assist Texas irrigators and agricultural producers in the lower Rio Grande River Valley. (2) conservation as well as new water supply research and desalination projects in the border States of California, Arizona, New Mexico, and Texas. And (3) projects which address coastal and water and air pollution issues on both sides of the international boundary between the United States and Mexico, including along the Pacific Ocean and Gulf of Mexico shores of both countries.