H. R. 254

One Hundred Eighth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twentieth day of January, two thousand and four

An Act

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION. 1. AUTHORITY TO AGREE TO CERTAIN AMENDMENTS TO

THE BORDER ENVIRONMENT COOPERATION AGREEMENT; GRANT AUTHORITY.

(a) AMENDMENT AUTHORITY.—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) GRANT AUTHORITY.—Part 2 of subtitle D of title V of Public

Law 103–182 (22 U.S.C. 290m–290m–3), as amended by subsection

(a), is amended by adding at the end the following:

‘‘SEC. 546. GRANTS OUT OF PAID-IN CAPITAL RESOURCES.

‘‘(a) IN GENERAL.—The President shall instruct the United

States Federal Government representatives on the Board of Directors of the North American Development Bank to oppose any proposal where grants out of the Bank’s paid-in capital resources,

except for grants from paid-in capital authorized for the community

adjustment and investment program under the Bank’s charter of

1993, would—

‘‘(1) be made to a project that is not being financed, in

part, by loans; or

‘‘(2) account for more than 50 percent of the financing

of any individual project.

‘‘(b) EXCEPTION.—
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‘‘(1) GENERAL RULE.—The requirements of subsection (a)

shall not apply in cases where—

‘‘(A) the President determines there are exceptional

economic circumstances for making the grant and consults

with the Committee on Foreign Relations of the Senate

and the Committee on Financial Services of the House

of Representatives; or

‘‘(B)(i) the grant is being made for a project that is

so small that obtaining a loan is impractical; and

‘‘(ii) the grant does not exceed $250,000.

‘‘(2) LIMITATION.—Not more than an aggregate of

$5,000,000 in grants may be made under this subsection.’’.

(c) 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. 546. Grants out of paid-in capital resources.’’.

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-marketrate 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.
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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
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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. SENSE OF THE CONGRESS REGARDING FINANCING OF

PROJECTS.

(a) IN GENERAL.—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, that address coastal issues
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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) AIR POLLUTION.—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.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.