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 Develop-
ment 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 AGREE-
MENT; 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 Direc-
tors of the North American Development Bank to oppose any pro-
posal 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 descrip-
tion 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 Commis-
sion, 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 SUP-
PORT FOR NADBANK PROJECTS WHICH FINANCE WATER
CONSERVATION FOR TEXAS IRRIGATORS AND AGRICUL-
TURAL 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 improve-
ments 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 Commis-
sion 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 SUP-
PORT 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 conserva-
tion, 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 sea-
water 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 SUP-
PORT FOR NADBANK PROJECTS FOR WHICH FINANCE
WATER CONSERVATION FOR IRRIGATORS AND AGRICUL-
TURAL PRODUCERS IN THE SOUTHWEST UNITED STATES.
(a) FINDINGS.—The Congress finds as follows:
(1) Irrigators and agricultural producers are suffering enor-
mous hardships in the southwest United States. The border
States of California, Arizona, New Mexico, and Texas are suf-
fering 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 south-
west 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 replen-
ished, 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 Commis-
sion 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 environ-
mental 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.