[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2353 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 2353

   To revise certain policies of the Army Corps of Engineers for the 
  purpose of improving the Corps' community relations, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 27, 2001

 Mr. Tancredo (for himself, Mr. Largent, Mr. Bartlett of Maryland, Mr. 
 Gilchrest, Mr. Terry, and Mr. Hefley) introduced the following bill; 
       which was referred to the Committee on Transportation and 
                             Infrastructure

_______________________________________________________________________

                                 A BILL


 
   To revise certain policies of the Army Corps of Engineers for the 
  purpose of improving the Corps' community relations, 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. SHORT TITLE.

    This Act may be cited as the ``Army Corps of Engineers Reform and 
Community Relations Improvement Act of 2001''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The United States Army Corps of Engineers is the 
        primary Federal agency responsible for developing and managing 
        the Nation's harbors, waterways, shorelines and water 
        resources.
            (2) The United States has a backlog of more than 
        $54,000,000,000 for water development projects, $38,000,000,000 
        of which are for projects that have begun construction or 
        preconstruction, engineering, and design but not yet been 
        completed.
            (3) The Corps' civil works program budget for construction 
        of new water development projects in recent years and in the 
        foreseeable future has been approximately $1,500,000,000.
            (4) Due to the large disparity between budget authority for 
        authorized water resources projects and the actual annual 
        funding levels, the current method of developing project 
        construction schedules based upon optimum funding levels is 
        unrealistic and does not reflect the likely true costs and 
        benefits of constructing most Corps' projects.
            (5) At the current rate of funding for the civil works 
        construction program, it would take more than 50 years to 
        eliminate the current backlog, not accounting for the water 
        development needs of the next 50 years.
            (6) It is in the national economic interest for the Corps 
        to manage the Nation's harbors, waterways, shorelines, and 
        water resources in the most efficient manner practically 
        feasible and with the highest level of fiscal discipline.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To restore communication and cooperation between the 
        Army Corps of Engineers and State and local governments.
            (2) To improve relations between the Army Corps of 
        Engineers and communities neighboring its project sites.
            (3) To ensure that the Nation's Federal water resources 
        investments are economically justified.
            (4) To reduce the backlog of authorized projects.
            (5) To establish new criteria for projects.
            (6) To modernize the calculation of costs and benefits by 
        the Army Corps of Engineers.
            (7) To prioritize Army Corps of Engineers construction 
        spending.
            (8) To share the costs of water resources investments with 
        project beneficiaries.

SEC. 3. COMMUNITY RELATIONS IMPROVEMENT PLAN.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of the Army, acting through the Chief of Engineers (in this 
Act referred to as the ``Secretary'') shall prepare and transmit to 
Congress a report that includes the following:
            (1) A list of all federally owned lands under the 
        jurisdiction of the Secretary.
            (2) A list of such lands that no longer serve a project 
        purpose or that possess no demonstrated compelling program or 
        project need.
            (3) A plan regarding cost-sharing for rehabilitation, 
        modification, operation, and maintenance of recreation 
        facilities at water resources projects under the jurisdiction 
        of the Secretary that are leased by non-Federal interests.

SEC. 4. PUBLIC HEARINGS.

    (a) In General.--Before the Secretary or any other public or 
private entity commences any work at a water resources project under 
the jurisdiction of the Secretary, the Secretary shall hold in the 
vicinity of the project a public hearing for the purpose of receiving 
public comments on the proposed work and the project.
    (b) Hearing as Additional Requirement.--A hearing under this 
section shall be in addition to any hearing otherwise required for 
compliance with the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.) or any other law.
    (c) Inclusion of Project Studies.--The comments received in a 
public hearing held under this section with respect to a water 
resources project shall be included in any feasibility report, general 
reevaluation study, environmental impact statement, or other decision 
document recommending major construction, rehabilitation, project 
modification, or major and substantial change in operating and 
management practices prepared for the project.

SEC. 5. INDEPENDENT REVIEW.

    (a) Projects Subject to Independent Review.--
            (1) In general.--The Secretary shall ensure that 
        feasibility reports, general reevaluation studies, and 
        environmental impact statements for each water resources 
        project described in paragraph (2) are subject to review by an 
        independent panel of experts established under this section.
            (2) Projects subject to review.--A project shall be subject 
        to review under paragraph (1) if--
                    (A) the project has an estimated total cost of more 
                than $25,000,000, including mitigation costs;
                    (B) the Governor of an affected State requests the 
                establishment of an independent panel of experts for 
                the project;
                    (C) the Director of the United States Fish and 
                Wildlife Service determines that the project is likely 
                to have significant adverse impacts on fish or wildlife 
                after implementation of proposed mitigation plans; or
                    (D) the Secretary determines that the project is 
                controversial under paragraph (3).
            (3) Controversial projects.--
                    (A) In general.--The Secretary shall determine that 
                a project is controversial for purposes of paragraph 
                (2)(D) if the Secretary finds that--
                            (i) there is a significant public dispute 
                        as to the size, nature, or effects of the 
                        project; or
                            (ii) there is a significant public dispute 
                        as to the economic or environmental costs or 
                        benefits of the project.
                    (B) Written requests.--The Secretary shall 
                determine whether or not a project is controversial 
                within 30 days of the date of receipt of a written 
                request of an interested party or on the initiative of 
                the Secretary.
            (4) Affected state defined.--In paragraph (2)(B), the term 
        ``affected State'' as used with respect to a project means a 
        State or a part thereof that is at least partially within the 
        drainage basin in which the project is located and would be 
        economically or environmentally affected as a consequence of 
        the project.
    (b) Director of Independent Review.--
            (1) Appointment.--The Inspector General of the Department 
        of Army shall appoint in the Office of the Inspector General a 
        Director of Independent Review (in this section referred to as 
        the ``Director''). The term of a Director appointed under this 
        subsection shall be 3 years.
            (2) Qualifications.--The Inspector General shall select the 
        Director from among individuals who are distinguished scholars 
        in biology, engineering, economics, or another discipline 
        related to water resources management.
            (3) Limitation on appointments.--The Inspector General 
        shall not appoint an individual to serve as the Director if the 
        individual has a financial or close professional association 
        with any organization or group with a strong financial or 
        organizational interest in a water resources project that, on 
        the date of appointment, is under construction, in the 
        preconstruction, engineering, and design phase, or under 
        feasibility or reconnaissance study by the Army Corps of 
        Engineers.
            (4) Terms.--An individual may not serve for more than 1 
        term as the Director.
            (5) Duties.--The Director shall establish a panel of 
        experts to review each project subject to review under 
        subsection (a).
    (c) Establishment of Panels.--
            (1) In general.--As soon as practicable after the Secretary 
        selects a preferred alternative for a project subject to review 
        under subsection (a) in a formal draft feasibility report, 
        draft general reevaluation report, or draft environmental 
        impact statement, the Director shall establish a panel of 
        experts to review the project.
            (2) Membership.--A panel of experts established by the 
        Director for a project shall be composed of not less than 5 and 
        not more than 9 independent experts who represent a balance of 
        areas of expertise, including biologists, engineers, and 
        economists.
            (3) Limitation on appointments.--The Director shall not 
        appoint an individual to serve on a panel of experts for a 
        project if the individual has a financial or close professional 
        association with any organization or group with a strong 
        financial or organizational interest in the project.
            (4) Consultation.--The Director shall consult with the 
        National Academy of Sciences in developing lists of individuals 
        to serve on panels of experts under this section.
            (5) Compensation.--An individual serving on a panel of 
        experts under this section shall be compensated at a rate of 
        pay to be determined by the Inspector General.
            (6) Travel expenses.--An individual serving on a panel of 
        experts under this section shall receive travel expenses, 
        including per diem in lieu of subsistence, as authorized by law 
        for persons serving intermittently in Government service under 
        subchapter I of chapter 57 of title 5, United States Code, 
        while away from their homes and places of business in the 
        performance of services for the panel of experts.
    (d) Duties of Panels.--A panel of experts established for a project 
under this section shall--
            (1) review each feasibility study, general reevaluation 
        study, and environmental impact statement prepared for the 
        project;
            (2) assess the adequacy of the economic and scientific 
        models used by the Secretary in reviewing the project to ensure 
        that--
                    (A) multiple methods of economic analysis have been 
                used, and the best available scientific methods of 
                analysis have been used; and
                    (B) any regional effects on navigation systems have 
                been examined;
            (3) receive written and oral comments of a technical nature 
        concerning the project from the public;
            (4) submit to the Secretary a report containing the panel's 
        economic, engineering, and environmental analysis of the 
        project, including the panel's conclusions on the feasibility 
        study, general reevaluation study, or environmental impact 
        statement with particular emphasis on areas of public 
        controversy; and
            (5) within 30 days after the issuance of a final 
        feasibility study, final general reevaluation study, or final 
        environmental impact statement, but prior to the entry of a 
        record of decision, the independent review panel shall submit 
        to the Secretary a brief report stating its views on the extent 
        to which the final analysis adequately addresses issues or 
        concerns raised by the panel's earlier evaluation.
    (e) Duration of Project Reviews.--Not later than 180 days after the 
date of establishment of a panel of experts for a project under this 
section, the panel shall complete its review of the project and all of 
its other duties with respect to the project (other than duties 
described in subsection (d)(5)).
    (f) Recommendations of Panel.--
            (1) Consideration by secretary.--After receiving a report 
        on a project from a panel of experts under this section and 
        before entering a final record of decision for the project, the 
        Secretary shall consider any recommendations contained in the 
        report and prepare a written explanation for any 
        recommendations not adopted. Recommendations and findings that 
        are inconsistent with recommendations and findings of an 
        independent review panel shall not be entitled to deference in 
        a judicial proceeding.
            (2) Public review; transmittal to congress.--After 
        receiving a report on a project from a panel of experts under 
        this section (including a report under subsection (d)(5)), the 
        Secretary shall--
                    (A) make a copy of the report (and any written 
                explanation of the Secretary on recommendations 
                contained in the report) available for public review 
                under section 6; and
                    (B) include a copy of the report (and any such 
                written explanation) in any report transmitted to 
                Congress concerning the project.
    (g) Costs.--
            (1) Limit on cost of review.--The cost of conducting a 
        review of a project under this section shall not exceed--
                    (A) $250,000 for a project if the total real cost 
                in current year dollars of the project is less than 
                $50,000,000; and
                    (B) one-half of one percent of the total real cost 
                in current year dollars of the project if such total 
                real cost is $50,000,000 or more.
            (2) Treatment.--For purposes of paragraph (1), the cost of 
        conducting an independent review under this section shall be 
        treated as part of the total cost of the project.
            (3) Waiver of limit.--The Secretary may waive a limitation 
        set forth in paragraph (1) if the Secretary determines that the 
        waiver is appropriate.
    (h) Applicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act (5 U.S.C. App.) shall apply to a panel of 
experts established under this section.

SEC. 6. PUBLIC ACCESS TO INFORMATION AND DATA.

    (a) In General.--The Secretary shall ensure that all information 
and data related to the analysis of a water resources project by the 
Corps of Engineers, whether in final or draft form and including all 
supporting data and information that the Corps of Engineers has 
considered in its analysis, is made available to any person upon 
request and, to the maximum extent practicable, to the public on the 
Internet.
    (b) Types of Information.--Information about a water resources 
project to be made available under subsection (a) shall include any 
information that has been made available to the project sponsor and all 
data used by the Corps of Engineers in its justification and analysis 
of the project.
    (c) Exception for Trade Secrets.--
            (1) In general.--The Secretary shall not make information 
        available under subsection (a) that the Secretary determines to 
        be a trade secret of the person or entity that supplied the 
        information to the Corps of Engineers.
            (2) Criteria for trade secrets.--For purposes of this 
        subsection, the Secretary shall consider information to be a 
        trade secret only if--
                    (A) the person or entity that supplied the 
                information to the Corps of Engineers has not disclosed 
                the information to any other person or entity, other 
                than--
                            (i) an officer or employee of the United 
                        States or a State or local government;
                            (ii) an employee of such person or entity; 
                        or
                            (iii) a person or entity that is bound by a 
                        confidentiality agreement, and the person or 
                        entity that supplied the information has taken 
                        reasonable measures to protect the 
                        confidentiality of such information and intends 
                        to continue to take such measures;
                    (B) the information is not required to be 
                disclosed, or otherwise made available, to the public 
                under any other Federal or State law; and
                    (C) disclosure of the information is likely to 
                cause substantial harm to the competitive position of 
                the person or entity that supplied the information.
    (d) Report on the Water Resources Construction Backlog.--
            (1) In general.--Not later than 1 year after enactment of 
        this Act, the Secretary shall transmit to Congress a list of 
        all water resources projects in the construction backlog, 
        consisting of the uncompleted portion of any project authorized 
        by law for funding from the Construction, General 
        appropriations account or the construction portion of the Flood 
        Control, Mississippi River and Tributaries appropriations 
        account. Each project on this list shall be accompanied by 
        information on--
                    (A) the total real cost in current year dollars of 
                the project and the fully funded total cost of the 
                project in current year dollars;
                    (B) the benefit-to-cost ratio of the project;
                    (C) the remaining additional benefits and the 
                remaining additional costs to complete construction of 
                the project and the ratio of remaining benefits to 
                remaining costs;
                    (D) the year the last major studies of the 
                project's feasibility and designs were completed;
                    (E) the date of the last year of economic data that 
                was included in the latest analysis of the project's 
                feasibility and justification;
                    (F) the status of each project as either--
                            (i) reconnaissance;
                            (ii) preconstruction, engineering, and 
                        design;
                            (iii) construction; or
                            (iv) not funded and active, deferred, or 
                        inactive; and
                    (G) the information described in paragraph (2) for 
                each particular type of project.
            (2) Information for particular project type.--The 
        information transmitted under paragraph (1) for each of the 
        following project types shall include the following:
                    (A) For a flood damage reduction project--
                            (i) the extent to which the project 
                        reflects national flood damage reduction 
                        priorities as established by the Federal 
                        Emergency Management Agency;
                            (ii) the level of flood protection provided 
                        and the relative amount of protection provided 
                        to and benefits derived from protecting urban 
                        property and agricultural property; and
                            (iii) the extent to which the project 
                        restores natural aquatic ecosystem functions 
                        and avoids adverse environmental impacts and 
                        risk.
                    (B) For a navigation project--
                            (i)(I) the extent to which the project's 
                        economic benefits are based on existing levels 
                        of traffic rather than projected growth in 
                        traffic; and
                            (II) the level of certainty in a growth 
                        projection if the justification for the project 
                        is based on such projected growth; and
                            (ii) the extent of the project's likely 
                        environmental benefits, including extent of 
                        remediation of contaminated sediments or reuse 
                        of dredge material to restore aquatic habitat, 
and extent of the project's adverse environmental impacts and risk.
                    (C) For an environmental restoration project--
                            (i) the cost effectiveness of the project 
                        in achieving environmental results;
                            (ii) the extent to which the project 
                        restores natural hydrologic processes and the 
                        spatial extent of aquatic habitat and otherwise 
                        produces self-sustaining environmental 
                        benefits; and
                            (iii) the extent to which the project 
                        addresses critical national conservation 
                        priorities, including preservation and 
                        enhancement of endangered and threatened 
                        species.
            (3) Measurement and reporting.--The Secretary shall use 
        objective and quantifiable standards for measuring and 
        reporting the information required in paragraph (2). In any 
        case in which such information cannot feasibly be quantified, 
        the required information shall be reported through an objective 
        description of the project's benefits and impacts.
            (4) Availability to the public and updates.--The list and 
        any information transmitted to Congress under paragraphs (1) 
        and (2) shall be made available to any person upon request and 
        to the public on the Internet. The list shall also be updated 
        and retransmitted to Congress annually.
            (5) Definitions.--In this subsection, the following 
        definitions apply:
                    (A) Active.--The term ``active'', as used with 
                respect to a project, means the project has received 
                preconstruction, engineering, and design or 
                construction funding, is economically justified, and is 
                supported by the non-Federal sponsor.
                    (B) Deferred.--The term ``deferred'', as used with 
                respect to a project, means the project has doubtful 
                economic justification, requires restudy to determine 
                its economic feasibility, or is a project for which the 
                non-Federal sponsor is currently unable to provide 
                required cooperation.
                    (C) Inactive.--The term ``inactive'', as used with 
                respect to a project, means the project is not 
                economically justified because costs outweigh projected 
                benefits, no longer meets current and prospective 
                needs, or is not actively supported by the non-Federal 
                sponsor.

SEC. 7. MODERN PROJECT CRITERIA.

    (a) Negative Benefits.--
            (1) Incorporation.--When evaluating a civil works project's 
        national economic development benefits, the Secretary shall 
        incorporate into the benefit-to-cost analysis for the project 
        the negative benefits of the project activities under study, 
        including any negative benefits of such activities on any 
        federally managed lands or infrastructure and on private lands 
        enrolled in the conservation reserve program or wetlands 
        reserve program.
            (2) Definition.--In this subsection, the term ``negative 
        benefits'' includes net adverse impacts to flood control, 
        navigation, recreation (including, but not limited to, hunting, 
        fishing, tourism, boating, and wildlife watching), water 
        supply, irrigation, hydropower, and any other public benefit 
        derived from a Federal waterway or adjacent lands.
    (b) Efficient Management and Operating Practices.--
            (1) In general.--The Secretary shall not include in the 
        benefits base for justifying a water resources project any 
        benefits that could reasonably be achieved through better and 
        more efficient management or operating practices by a Federal 
        agency or the project beneficiaries.
            (2) Evaluations.--In any feasibility report, general 
        reevaluation study, environmental impact statement, or other 
        decision document recommending major construction, 
        rehabilitation, or project modification, the Secretary shall 
        include a management and operating practices evaluation that 
        takes into consideration the requirements of paragraph (1).
    (c) Limitation Upon Competition With the Private Sector.--
            (1) In general.--Any civil works project the primary 
        benefits of which are not for flood damage reduction, 
        navigation, or environmental restoration, shall not be 
        recommended for construction by the Secretary if--
                    (A) there exist corporations or other 
                nongovernmental entities in the United States with 
                significant relevant experience in the particular 
                project activity under consideration by the Secretary; 
                or
                    (B) similar project activities have been undertaken 
                by nongovernmental entities within the last 10 years.
            (2) Evaluations.--In any feasibility report, general 
        reevaluation study, environmental impact statement or other 
        decision document recommending major construction, 
        rehabilitation, or modification of a civil works project, the 
        Secretary shall include a private sector competition evaluation 
        that takes into consideration the requirements of paragraph 
        (1).
    (d) Recommendation of Projects.--Beginning in fiscal year 2003, in 
the case of a civil works project that is subject to a benefit-cost 
analysis (including any project that has been contingently authorized 
subject to a favorable report from the Chief of Engineers), the 
Secretary shall only recommend the project for authorization by 
Congress, and shall only choose the project as a recommended 
alternative in any record of decision or environmental impact statement 
if the project, in addition to meeting any other criteria required by 
law, has projected benefits that are at least 1.5 times as great as the 
project's estimated total cost.
    (e) Realistic Construction Scheduling.--Not later than 1 year after 
the date of enactment of this Act, the Secretary shall revise, in 
consultation with the National Academy of Sciences, the principles and 
guidelines of the Corps of Engineers to--
            (1) direct the Corps to give preference in economic 
        analyses to project alternatives that maximize the rate of 
        return of national economic development benefits to investment 
        over alternatives that maximize net national economic 
        development benefits;
            (2) provide guidance on how to implement paragraph (1); and
            (3) require the Corps to document and report to the 
        Secretary incremental components of project alternatives and 
        their effect on the overall benefits and costs of a project.

SEC. 8. REGIONAL IMPACTS OF PORT AND HARBOR PROJECTS.

    (a) In General.--It is the intent of Congress that federally funded 
port maintenance and expansion projects maximize national economic 
development goals while minimizing adverse regional economic and 
environmental impacts.
    (b) Principles and Guidelines.--Not later than 1 year after the 
date of enactment of this Act, the Secretary shall revise, in 
consultation with the National Academy of Sciences, the principles and 
guidelines of the Corps of the Engineers to provide that feasibility 
studies, general reevaluation studies, and environmental impact 
statements for a port or harbor project give detailed and thorough 
consideration to the project's--
            (1) economic impacts upon other United States ports in the 
        same region; and
            (2) cumulative environmental impacts within the region.
    (c) Regions.--The regions referred to in subsection (b) are the 
North Atlantic, South Atlantic, Great Lakes, Gulf of Mexico, South 
Pacific, and North Pacific regions of the United States.

SEC. 9. REDUCTION OF THE CONSTRUCTION BACKLOG.

    Section 1001 of the Water Resources Development Act of 1986 (33 
U.S.C. 579a) is amended to read as follows:

``SEC. 1001. PROJECT DEAUTHORIZATIONS.

    ``(a) Inactive Projects.--
            ``(1) List.--The Secretary shall transmit annually to 
        Congress a list of inactive projects.
            ``(2) Deauthorization.--Any inactive project shall not be 
        authorized after the last day of the 1-year period beginning on 
        the date of transmittal of the list under paragraph (1) that 
        includes such project unless Congress takes action to 
        reauthorize the project or separable element during such 1-year 
        period.
            ``(3) Definition.--In this subsection, the term `inactive 
        project' means a project or a separate element of a project 
        that is not economically justified because costs outweigh 
        projected benefits, no longer meets current and prospective 
        needs, or is not actively supported by the non-Federal sponsor.
    ``(b) Projects Never Under Construction.--
            ``(1) List.--The Secretary shall transmit annually to 
        Congress a list of projects and separable elements of projects 
        not subject to subsection (a) that have been authorized for 
        construction, but for which no funds have been obligated for 
        construction of the project or separable element during the 4 
        consecutive fiscal years preceding the transmittal of such 
        list.
            ``(2) Deauthorization.--Any water resources project 
        authorized for construction and any separable element of such a 
        project not subject to subsection (a) shall not be authorized 
        after the last day of the 7-year period beginning on the date 
        of the project or separable element's most recent authorization 
        or reauthorization unless during such period funds are 
        obligated for construction of the project or separable element.
    ``(c) Projects Where Construction Has Been Suspended.--
            ``(1) List.--The Secretary shall transmit annually to 
        Congress a list of projects and separable elements of projects 
        not subject to subsection (a) that have been authorized for 
        construction, and for which funds have been obligated for 
        construction of the project or separable element but not during 
        the 2 consecutive fiscal years preceding the date of 
        transmittal of such list.
            ``(2) Deauthorization.--Any water resources project and any 
        separable element of such a project not subject to subsection 
        (a) for which funds have been obligated for construction of the 
        project or separable element shall not be authorized if funds 
        appropriated specifically for construction of the project or 
        separable element (either in statute or in the accompanying 
        legislative report language) are not obligated for construction 
        of the project or separable element during any 5 consecutive 
        fiscal years subsequent to the last fiscal year in which funds 
        were obligated for construction of the project.
    ``(d) Congressional Notifications.--Upon transmission of a list 
under subsection (a), (b), or (c), the Secretary shall notify each 
Senator in whose State, and each Member of the House of Representatives 
in whose district, a project or separable element on the list is or 
would be located.
    ``(e) Final Deauthorization List.--The Secretary shall publish 
annually in the Federal Register a list of all projects or separable 
elements deauthorized under subsections (a), (b), and (c).
    ``(f) Definitions.--
            ``(1) Construction of the project or separable element.--In 
        this section, the term `construction of a project or separable 
        element of a project' means--
                    ``(A) as used with respect to a nonstructural flood 
                control project, the acquisition of lands, easements, 
                and rights-of-way primarily to relocate structures or 
                the performance of physical work under a construction 
                contract for other nonstructural measures;
                    ``(B) as used with respect to an environmental 
                protection and restoration project, the acquisition of 
                lands, easements, and rights-of-way primarily to 
                facilitate the restoration of wetlands or similar 
                habitats or the performance of physical work under a 
                construction contract to modify existing project 
                facilities or to construct new environmental protection 
                and restoration measures; and
                    ``(C) as used with respect to any water resources 
                project that is not described in subparagraph (A) or 
                (B) or both, the performance of physical work under a 
                construction contract.
            ``(2) Physical work under a construction contract.--As used 
        in this subsection, in no case shall the term `physical work 
        under a construction contract' include activities related to 
        project planning, engineering and design, relocation, or the 
        acquisition of lands, easements, and rights-of-way.''.

SEC. 10. COST-SHARING.

    (a) Flood Damage Reduction.--Subsections (a) and (b) of section 103 
of the Water Resources Development Act of 1986 (33 U.S.C. 2213(a) and 
(b)) are each amended by striking ``35'' and inserting ``50''.
    (b) Inland Waterways Construction.--Section 102(a) of the Water 
Resources Development Act of 1986 (33 U.S.C. 2212(a)) is amended--
            (1) by striking ``One-half of the costs of construction'' 
        and inserting ``Forty-five percent of the costs of 
        construction''; and
            (2) by striking ``One-half of such costs shall be paid only 
        from amounts appropriated from the Inland Waterways Trust 
        Fund.'' and inserting ``Forty-five percent of such costs shall 
        be paid only from amounts appropriated from the Inland 
        Waterways Trust Fund. Ten percent of such costs shall be paid 
        by non-Federal cost-sharing partners and or the affected 
        States.''.
    (c) Inland Waterways Operations and Maintenance.--Section 102(b) of 
the Water Resources Development Act of 1986 (33 U.S.C. 2212(b)) is 
amended by striking ``100 percent'' and inserting ``87.5 percent. 12.5 
percent of the costs of operation and maintenance shall be paid only 
from amounts appropriated from the Inland Waterway Trust Fund.''.
    (d) Beach Replacement.--Section 103(d)(2) of the Water Resources 
Development Act of 1986 (33 U.S.C. 2213(d)(2)) is amended by striking 
subparagraph (A) and inserting the following:
                    ``(A) In general.--In the case of a project 
                authorized for construction after December 31, 1999, or 
                for which a feasibility study is completed after that 
                date, the non-Federal cost of the periodic nourishment 
                of the project or any measure for shore protection or 
                beach erosion control for the project shall be 65 
                percent.''.
                                 <all>