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[House Report 107-720]
[From the U.S. Government Publishing Office]

107th Congress                                            Rept. 107-720
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2

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AUTHORIZING 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

                                _______
                                

                October 7, 2002.--Ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                          SUPPLEMENTAL REPORT

                        [To accompany H.R. 5400]

    This supplemental report shows the cost estimate of the 
Congressional Budget Office with respect to the bill (H.R. 
5400), as reported, which was not included in part 1 of the 
report submitted by the Committee on Financial Services on 
October 3, 2002 (H. Rept. 107-720, pt. 1).
    This supplemental report is submitted in accordance with 
clause 3(a)(2) of rule XIII of the Rules of the House of 
Representatives.
    In addition to containing the cost estimate provided by the 
Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974, this supplemental report 
updates those sections of H. Rept. 107-415, part 1 relevant to 
that cost estimate. Any section appearing in this part should 
be deemed to supersede the same section in part 1 of this 
report.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 3, 2002.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5400, a bill 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.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Joseph C. 
Whitehill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 5400--A bill 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

    H.R. 5400 would authorize the President to agree to a 
change in the North American Development Bank's (NADBank's) 
charter that would permit the bank to use its capital to make 
grants and below-market-rate loans to finance environmental 
infrastructure projects. The bill also would expand NADBank's 
regional focus to include the area in Mexico within 300 
kilometers of the United States/Mexican border. CBO estimates 
that enacting the bill would not affect federal spending or 
receipts.
    The NADBank was established as a multilateral development 
bank by an agreement between the governments of the United 
States and Mexico in 1993. It has a mandate to finance 
environmental infrastructure projects in the U.S./Mexican 
border region with a particular focus on potable water, 
wastewater treatment, municipal solid waste, and related 
projects. Capitalized by appropriations of $225 million from 
each government, NADBank began operations in November 1994. In 
addition to the paid-in capital, NADBank has the authority to 
borrow an additional $2.55 billion, an amount sufficient to 
support lending operations of up to $3 billion.
    In the eight years of its existence however, NADBank has 
financed few projects. Of the $450 million in appropriated 
funds for NADBank, 10 percent was earmarked for grant 
assistance in the two countries; the rest of the funds were 
invested in government and other income generating securities. 
As of March 31, 2001, the bank had outstanding loans of $8 
million--an amount slightly less than its annual operating 
expenses. H.R. 5400 would authorize the bank to make grants and 
below-market-rate loans. NADBank has announced plans to use the 
authority to provide $80 million in grants for a water 
conservation fund and $50 million in below-market-rate loans. 
We estimate that expanding its regional focus would not greatly 
increase the demand for NADBank financing. Given the relative 
inactivity of the bank and the fact that it has no outstanding 
debt, CBO estimates that using its capital base in this manner 
would likely have no impact on its other financing operations 
or credit rating.
    H.R. 5400 contains no intergovernmental or private-sector 
mandates as defined by the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact is Joseph C. Whitehill. This estimate 
was approved by Peter H. Fontaine, Deputy Assistant Director 
for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                                  
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