(2) ALTERNATE FEDERAL COCHAIRPERSON.—
The alternate Federal cochairperson—
(A) shall be compensated by the Federal
Government at the annual rate of basic pay
prescribed for level V of the Executive Schedule
described in paragraph (1); and
(B) when not actively serving as an alter-
nate for the Federal cochairperson, shall per-
form such functions and duties as are delegated
by the Federal cochairperson.
(3) STATE MEMBERS AND ALTERNATES.—
(A) IN
GENERAL.—A State shall com-
pensate each member and alternate member
representing the State on the Authority at the
rate established by State law.
(B) NO ADDITIONAL COMPENSATION.—No
State member or alternate member shall receive
any salary, or any contribution to or sup-
plementation of salary, from any source other
than the State for services provided by the
member or alternate member to the Authority.
(b) DETAILED EMPLOYEES.—
(1) IN GENERAL.—No person detailed to serve
the Authority under section 102(b)(6) shall receive
any salary, or any contribution to or supplemen-
tation of salary, for services provided to the Author-
ity from—
(A) any source other than the State, local,
or intergovernmental department or agency
from which the person was detailed; or
(B) the Authority.
(2) VIOLATION.—Any person that violates this
subsection shall be fined not more than $5,000, im-
prisoned not more than 1 year, or both.
(c) ADDITIONAL PERSONNEL.—
(1) COMPENSATION.—
(A) IN GENERAL.—The Authority may ap-
point and fix the compensation of an executive
director and such other personnel as are nec-
essary to enable the Authority to carry out the
duties of the Authority.
(B) 
EXCEPTION.—Compensation 
under
subparagraph (A) shall not exceed the max-
imum rate of basic pay established for the Sen-
ior Executive Service under section 5382 of title
5, United States Code, including any applicable
locality-based comparability payment that may
be authorized under section 5304(h)(2)(C) of
that title.
(2) 
EXECUTIVE
DIRECTOR.—The 
executive
director—
(A) shall be a Federal employee; and
(B) shall be responsible for—
(i) carrying out the administrative du-
ties of the Authority;
(ii) directing the Authority staff; and
(iii) such other duties as the Author-
ity may assign.
(d) CONFLICTS OF INTEREST.—
(1) IN GENERAL.—Except as provided under
paragraph (2), no State member, State alternate, of-
ficer, employee, or detailee of the Authority shall
participate personally and substantially as a mem-
ber, alternate, officer, employee, or detailee of the
Authority, through decision, approval, disapproval,
recommendation, the rendering of advice, investiga-
tion, or otherwise, in any proceeding, application, re-
quest for a ruling or other determination, contract,
claim, controversy, or other matter in which the
member, alternate, officer, employee, or detailee has
a financial interest.
(2) DISCLOSURE.—Paragraph (1) shall not
apply if the State member, State alternate, officer,
employee, or detailee—
(A) immediately advises the Authority of
the nature and circumstances of the proceeding,
application, request for a ruling or other deter-
mination, contract, claim, controversy, or other
particular matter presenting a potential conflict
of interest;
(B) makes full disclosure of the financial
interest; and
(C) before the proceeding concerning the
matter presenting the conflict of interest, re-
ceives a written determination by the Authority
that the interest is not so substantial as to be
likely to affect the integrity of the services that
the Authority may expect from the State mem-
ber, State alternate, officer, employee, or
detailee.
(3) VIOLATION.—Any person that violates this
subsection shall be fined not more than $10,000, im-
prisoned not more than 2 years, or both.
(e) 
VALIDITY
OF
CONTRACTS, 
LOANS, 
AND
GRANTS.—The Authority may declare void any contract,
loan, or grant of or by the Authority in relation to which
the Authority determines that there has been a violation
of subsection (b), subsection (d), or any of sections 202
through 209 of title 18, United States Code.
(f) APPLICABLE LABOR STANDARDS.—
(1) IN GENERAL.—All laborers and mechanics
employed by contractors or subcontractors in the
construction, alteration, or repair, including painting
and decorating, of projects, buildings, and works
funded by the United States under this Act, shall be
paid wages at not less than the prevailing wages on
similar construction in the locality as determined by
the Secretary of Labor in accordance with the Act
of March 3, 1931 (40 U.S.C. 276a et seq.).
(2) AUTHORITY.—With respect to the deter-
mination of wages under paragraph (1), the Sec-
retary of Labor shall have the authority and func-
tions set forth in Reorganization Plan No. 14 of
1950 (64 Stat. 1267) and section 2 of the Act of
June 13, 1934 (40 U.S.C. 276c).
TITLE II—GRANTS AND
DEVELOPMENT PLANNING
SEC. 201. INFRASTRUCTURE DEVELOPMENT AND IMPROVE-
MENT.
The Authority may approve grants to States, local
governments, and public and nonprofit organizations in
the region for projects, approved in accordance with sec-
tion 302, to develop and improve the transportation, water
and wastewater, public health, and telecommunications in-
frastructure of the region.
SEC. 202. TECHNOLOGY DEVELOPMENT.
The Authority may approve grants to small busi-
nesses, universities, national laboratories, and nonprofit
organizations in the region to research, develop, and dem-
onstrate technology that addresses—
(1) water quality;
(2) water quantity;
(3) pollution;
(4) transportation;
(5) energy consumption;
(6) public health;
(7) border and port security; and
(8) any other related matter that stimulates job
creation or enhances economic development, as de-
termined by the Authority.
SEC. 203. COMMUNITY DEVELOPMENT AND ENTREPRE-
NEURSHIP.
The Authority may approve grants to States, local
governments, and public or nonprofit entities for projects,
approved in accordance with section 302—
(1) to create dynamic local economies by—
(A) recruiting businesses to the region;
and
(C) the provision of assistance for strategic
planning and organization development.
SEC. 204. EDUCATION AND WORKFORCE DEVELOPMENT.
The Authority, in coordination with State and local
workforce development boards, may approve grants to
States, local governments, and public or nonprofit entities
for projects, approved in accordance with section 302—
(1) to assist the region in obtaining the job
training, employment-related education, and busi-
ness development (with an emphasis on entrepre-
neurship) that are needed to build and maintain
strong local economies; and
(2) to supplement in-plant training programs
offered by State and local governments to attract
new businesses to the region.
SEC. 205. FUNDING.
(a) IN GENERAL.—Funds for grants under sections
201 through 204 may be provided—
(1) entirely from appropriations to carry out
this Act;
(2) in combination with funds available under
another Federal grant program or other Federal
program; or
(3) in combination with funds from any other
source, including—
(A) State and local governments, nonprofit
organizations, and the private sector in the
United States;
(B) the federal and local government of,
and private sector in, Mexico; and
(C) the North American Development
Bank.
(b) PRIORITY OF FUNDING.—The Authority shall
award funding to each State in the region for activities
in accordance with an order of priority to be determined
by the State.
(c) BINATIONAL PROJECTS.—
(1) PROHIBITION ON PROVISION OF FUNDING
TO NON-UNITED STATES ENTITIES.—The Authority
shall not award funding to any entity that is not in-
corporated in the United States.
(2) FUNDING OF BINATIONAL PROJECTS.—The
Authority may award funding to a project in which
an entity that is incorporated outside the United
States participates if, for any fiscal year, the entity
matches with an equal amount, in cash or in-kind,
the assistance received under this Act for the fiscal
year.
SEC. 206. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.
(a) FINDING.—Congress finds that certain States
and local communities of the region, including local devel-
opment districts, may be unable to take maximum advan-
tage of Federal grant programs for which the States and
communities are eligible because—
(1) they lack the economic resources to provide
the required matching share; or
(2) there are insufficient funds available under
the Federal law authorizing the Federal grant pro-
gram to meet pressing needs of the region.
(b) FEDERAL GRANT PROGRAM FUNDING.—Not-
withstanding any provision of law limiting the Federal
share, the areas eligible for assistance, or the authoriza-
tions of appropriations, under any Federal grant program,
and in accordance with subsection (c), the Authority, with
the approval of the Federal cochairperson and with respect
to a project to be carried out in the region, may—
(1) increase the Federal share of the costs of a
project under any Federal grant program to not
more than 90 percent (except as provided in section
209(b)); and
(2) use amounts made available to carry out
this Act to pay all or a portion of the increased Fed-
eral share.
(c) CERTIFICATIONS.—
(1) IN GENERAL.—In the case of any project
for which all or any portion of the basic Federal
share of the costs of the project is proposed to be
paid under this section, no Federal contribution
shall be made until the Federal official admin-
istering the Federal law that authorizes the Federal
grant program certifies that the project—
(A) meets (except as provided in subsection
(b)) the applicable requirements of the applica-
ble Federal grant program; and
(B) could be approved for Federal con-
tribution under the Federal grant program if
funds were available under the law for the
project.
(2) CERTIFICATION BY AUTHORITY.—
(A) IN GENERAL.—The certifications and
determinations required to be made by the Au-
thority for approval of projects under this Act
in accordance with section 302—
(i) shall be controlling; and
(ii) shall be accepted by the Federal
agencies.
(B) ACCEPTANCE BY FEDERAL COCHAIR-
PERSON.—In the case of any project described
in paragraph (1), any finding, report, certifi-
cation, or documentation required to be sub-
mitted with respect to the project to the head
of the department, agency, or instrumentality of
the Federal Government responsible for the ad-
ministration of the Federal grant program
under which the project is carried out shall be
accepted by the Federal cochairperson.
SEC. 207. DEMONSTRATION PROJECTS.
(a) IN GENERAL.—For each fiscal year, the Author-
ity may approve not more than 10 demonstration projects
to carry out activities described in sections 201 through
204, of which not more than 3 shall be carried out in any
1 State.
(b) REQUIREMENTS.—A demonstration project car-
ried out under this section shall—
(1) be carried out on a multistate or multi-
county basis; and
(2) be developed in accordance with the regional
development plan prepared under section 210(d).
SEC. 208. LOCAL DEVELOPMENT DISTRICTS; CERTIFI-
CATION AND ADMINISTRATIVE EXPENSES.
(a) GRANTS TO LOCAL DEVELOPMENT DISTRICTS.—
(1) IN
GENERAL.—The Authority may make
grants to local development districts to pay the ad-
ministrative expenses of the local development dis-
tricts.
(2) CONDITIONS FOR GRANTS.—
(A) MAXIMUM AMOUNT.—The amount of
any grant awarded under paragraph (1) shall
not exceed 80 percent of the administrative ex-
penses of the local development district receiv-
ing the grant.
(B) MAXIMUM
PERIOD.—No grant de-
scribed in paragraph (1) shall be awarded for a
period greater than 3 years to a State agency
certified as a local development district.
(C) LOCAL SHARE.—The contributions of
a local development district for administrative
expenses may be in cash or in kind, fairly evalu-
ated, including space, equipment, and services.
(b) DUTIES OF LOCAL DEVELOPMENT DISTRICTS.—
A local development district shall—
(1) operate as a lead organization serving
multicounty areas in the region at the local level;
and
(2) serve as a liaison between State and local
governments, 
nonprofit 
organizations 
(including
community-based groups and educational institu-
tions), the business community, and citizens that—
(A) are involved in multijurisdictional plan-
ning;
(B) provide technical assistance to local ju-
risdictions and potential grantees; and
(C) provide leadership and civic develop-
ment assistance.
SEC. 209. DISTRESSED COUNTIES AND AREAS AND ECO-
NOMICALLY STRONG COUNTIES.
(a) DESIGNATIONS.—At the initial meeting of the
Authority and annually thereafter, the Authority, in ac-
cordance with such criteria as the Authority may establish,
shall designate—
(1) distressed counties;
(2) economically strong counties;
(3) attainment counties;
(4) competitive counties; and
(5) isolated areas of distress.
(b) DISTRESSED COUNTIES.—
(1) IN GENERAL.—For each fiscal year, the Au-
thority shall allocate at least 40 percent of the
amounts made available under section 306 for pro-
grams and projects designed to serve the needs of
distressed counties and isolated areas of distress in
the region.
(2) FUNDING LIMITATIONS.—The funding limi-
tations under section 206(b) shall not apply to a
project to provide transportation or basic public
services to residents of 1 or more distressed counties
or isolated areas of distress in the region.
(c) ECONOMICALLY STRONG COUNTIES.—
(1) ATTAINMENT
COUNTIES.—Except as pro-
vided in paragraph (3), the Authority shall not pro-
vide funds for a project located in a county des-
ignated as an attainment county under subsection
(a)(2)(A).
(2) COMPETITIVE COUNTIES.—Except as pro-
vided in paragraph (3), the Authority shall not pro-
vide more than 30 percent of the total cost of any
project carried out in a county designated as a com-
petitive county under subsection (a)(2)(B).
(3) EXCEPTIONS.—
(A) IN
GENERAL.—The funding prohibi-
tion under paragraph (1) and the funding limi-
tation under paragraph (2) shall not apply to
grants to fund the administrative expenses of
local 
development 
districts 
under 
section
208(a).
(B) MULTICOUNTY PROJECTS.—If the Au-
thority determines that a project could bring
significant benefits to areas of the region out-
side an attainment or competitive county, the
Authority may waive the application of the
funding prohibition under paragraph (1) and
the funding limitation under paragraph (2)
to—
(i) a multicounty project that includes
participation by an attainment or competi-
tive county; or
(ii) any other type of project.
(4) ISOLATED AREAS OF DISTRESS.—For a des-
ignation of an isolated area of distress for assistance
to be effective, the designation shall be supported—
(A) by the most recent Federal data avail-
able; or
(B) if no recent Federal data are available,
by the most recent data available through the
government of the State in which the isolated
area of distress is located.
SEC. 210. DEVELOPMENT PLANNING PROCESS.
(a) STATE DEVELOPMENT PLAN.—In accordance
with policies established by the Authority, each State
member shall submit an annual development plan for the
area of the region represented by the State member to
assist the Authority in determining funding priorities
under section 205(b).
(b) CONSULTATION WITH INTERESTED PARTIES.—
In carrying out the development planning process (includ-
ing the selection of programs and projects for assistance),
a State shall—
(1) consult with—
(A) local development districts; and
(B) local units of government;
(2) take into consideration the goals, objectives,
priorities, and recommendations of the entities de-
scribed in paragraph (1); and
(3) solicit input on and take into consideration
the potential impact of the State development plan
on the binational region.
(c) PUBLIC PARTICIPATION.—
(1) IN GENERAL.—The Authority and applica-
ble State and local development districts shall en-
courage and assist, to the maximum extent prac-
ticable, public participation in the development, revi-
sion, and implementation of all plans and programs
under this Act.
(2) REGULATIONS.—The Authority shall de-
velop guidelines for providing public participation
described in paragraph (1), including public hear-
ings.
(d) REGIONAL DEVELOPMENT PLAN.—The Author-
ity shall prepare an annual regional development plan
that—
(1) is based on State development plans sub-
mitted under subsection (a);
(2) takes into account—
(A) the input of the private sector, aca-
demia, and nongovernmental organizations; and
(B) the potential impact of the regional de-
velopment plan on the binational region;
(3) establishes 5-year goals for the development
of the region;
(4) identifies and recommends to the States—
(A) potential multistate or multicounty
projects that further the goals for the region;
and
(B) potential development projects for the
binational region; and
(5) identifies and recommends to the Authority
for funding demonstration projects under section
207.
TITLE III—ADMINISTRATION
SEC. 301. PROGRAM DEVELOPMENT CRITERIA.
(a) IN GENERAL.—In considering programs and
projects to be provided assistance under this Act, and in
establishing a priority ranking of the requests for assist-
ance provided to the Authority, the Authority shall follow
procedures that ensure, to the maximum extent prac-
ticable, consideration of—
(1) the relationship of the project or class of
projects to overall regional development;
(2) the per capita income and poverty and un-
employment rates in an area;
(3) the financial resources available to the ap-
plicants for assistance seeking to carry out the
project, with emphasis on ensuring that projects are
adequately financed to maximize the probability of
successful economic development;
(4) the socioeconomic importance of the project
or class of projects in relation to other projects or
classes of projects that may be in competition for
the same funds;
(5) the prospects that the project for which as-
sistance is sought will improve, on a continuing rath-
er than a temporary basis, the opportunities for em-
ployment, the average level of income, or the eco-
nomic development of the area to be served by the
project; and
(6) the extent to which the project design pro-
vides for detailed outcome measurements by which
grant expenditures and the results of the expendi-
tures may be evaluated.
(b) NO RELOCATION ASSISTANCE.—No financial as-
sistance authorized by this Act shall be used to assist a
person or entity in relocating from 1 area to another, ex-
cept that financial assistance may be used as otherwise
authorized by this Act to attract businesses from outside
the region to the region.
(c) MAINTENANCE OF EFFORT.—Funds may be pro-
vided for a program or project in a State under this Act
only if the Authority determines that the level of Federal
or State financial assistance provided under a law other
than this Act, for the same type of program or project
in the same area of the State within the region, will not
be reduced as a result of funds made available by this Act.
SEC. 
302. 
APPROVAL 
OF 
DEVELOPMENT 
PLANS 
AND
PROJECTS.
(a) IN GENERAL.—A State or regional development
plan or any multistate subregional plan that is proposed
for development under this Act shall be reviewed by the
Authority.
(b) EVALUATION BY STATE MEMBER.—An applica-
tion for a grant or any other assistance for a project under
this Act shall be made through and evaluated for approval
by the State member of the Authority representing the
applicant.
(c) CERTIFICATION.—An application for a grant or
other assistance for a project shall be approved only on
certification by the State member that the application for
the project—
(1) describes ways in which the project complies
with any applicable State development plan;
(2) meets applicable criteria under section 301;
(3) provides adequate assurance that the pro-
posed project will be properly administered, oper-
ated, and maintained; and
(4) otherwise meets the requirements of this
Act.
(d) VOTES FOR DECISIONS.—On certification by a
State member of the Authority of an application for a
grant or other assistance for a specific project under this
section, an affirmative vote of the Authority under section
101(d) shall be required for approval of the application.
SEC. 303. CONSENT OF STATES.
Nothing in this Act requires any State to engage in
or accept any program under this Act without the consent
of the State.
SEC. 304. RECORDS.
(a) RECORDS OF THE AUTHORITY.—
(1) IN GENERAL.—The Authority shall main-
tain accurate and complete records of all trans-
actions and activities of the Authority.
(2) AVAILABILITY.—All records of the Author-
ity shall be available for audit and examination by
the Comptroller General of the United States (in-
cluding authorized representatives of the Comp-
troller General).
(b) RECORDS OF RECIPIENTS OF FEDERAL ASSIST-
ANCE.—
(1) IN GENERAL.—A recipient of Federal funds
under this Act shall, as required by the Authority,
maintain accurate and complete records of trans-
actions and activities financed with Federal funds
and report to the Authority on the transactions and
activities.
(2) AVAILABILITY.—All records required under
paragraph (1) shall be available for audit by the
Comptroller General of the United States and the
Authority (including authorized representatives of
the Comptroller General and the Authority).
(c) ANNUAL AUDIT.—The Comptroller General of the
United States shall audit the activities, transactions, and
records of the Authority on an annual basis.
SEC. 305. ANNUAL REPORT.
(a) IN GENERAL.—Not later than 180 days after the
end of each fiscal year, the Authority shall submit to the
President and to Congress a report describing the activi-
ties carried out under this Act.
(b) CONTENTS.—
(1) IN GENERAL.—The report shall include—
(A) an evaluation of the progress of the
Authority—
(i) in meeting the goals set forth in
the regional development plan and the
State development plans; and
(ii) in working with other Federal
agencies and the border programs adminis-
tered by the Federal agencies;
(B) examples of notable projects in each
State;
(C) a description of all demonstration
projects funded under section 306(b) during the
fiscal year preceding submission of the report;
and
(D) any policy recommendations approved
by the Authority.
(2) INITIAL REPORT.—In addition to the con-
tents specified in paragraph (1), the initial report
submitted under this section shall include—
(A) a determination as to whether the cre-
ation of a loan fund to be administered by the
Authority is necessary; and
(B) if the Authority determines that a loan
fund is necessary—
(i) a request for the authority to es-
tablish a loan fund; and
(ii) a description of the eligibility cri-
teria and performance requirements for the
loans.
SEC. 306. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appro-
priated to the Authority to carry out this Act, to remain
available until expended—
(1) $50,000,000 for fiscal year 2003;
(2) $75,000,000 for fiscal year 2004;
(3) $90,000,000 for fiscal year 2005; and
(4) $92,000,000 for fiscal year 2006.
(b) DEMONSTRATION
PROJECTS.—Of the funds
made available under subsection (a), $5,000,000 for each
fiscal year shall be available to the Authority to carry out
section 207.
SEC. 307. TERMINATION OF AUTHORITY.
The authority provided by this Act terminates effec-
tive October 1, 2006.
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